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LABOR CODAL

(For 2012 Bar Exams)

Compiled by: Bingo Telan


NOTE: = What I THINK is part of the bar syllabus.

PRELIMINARY TITLE

Chapter I
GENERAL PROVISIONS

ARTICLE 1. Name of Decree. - This Decree shall be known as the "Labor Code of the
Philippines".

ART. 2. Date of effectivity. - This Code shall take effect six (6) months after its
promulgation.

ART. 3. Declaration of basic policy. - The State shall afford protection to labor, promote
full employment, ensure equal work opportunities regardless of sex, race or creed and
regulate the relations between workers and employers. The State shall assure the rights
of workers to self-organization, collective bargaining, security of tenure, and just and
humane conditions of work.

[CONSTI ART 13] Section 3. The State shall afford full protection to labor, local and
overseas, organized and unorganized, and promote full employment and equality of
employment opportunities for all.
It shall guarantee the rights of all workers to self-organization, collective
bargaining and negotiations, and peaceful concerted activities, including the right to strike
in accordance with law. They shall be entitled to security of tenure, humane conditions of
work, and a living wage. They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers
and employers and the preferential use of voluntary modes in settling disputes, including
conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers,
recognizing the right of labor to its just share in the fruits of production and the right of
enterprises to reasonable returns to investments, and to expansion and growth.

[CIVIL CODE] Art. 1700. The relations between capital and labor are not merely
contractual. They are so impressed with public interest that labor contracts must yield to
the common good. Therefore, such contracts are subject to the special laws on labor
unions, collective bargaining, strikes and lockouts, closed shop, wages, working
conditions, hours of labor and similar subjects.

ART. 4. Construction in favor of labor. - All doubts in the implementation and


interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor.

[CIVIL CODE] Art. 1702. In case of doubt, all labor legislation and all labor contracts shall
be construed in favor of the safety and decent living for the laborer.

ART. 5. Rules and regulations. - The Department of Labor and other government
agencies charged with the administration and enforcement of this Code or any of its parts
shall promulgate the necessary implementing rules and regulations. Such rules and
regulations shall become effective fifteen (15) days after announcement of their adoption
in newspapers of general circulation.

ART. 6. Applicability. - All rights and 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. (As amended by Presidential Decree No. 570-A,
November 1, 1974).
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[CONSTI ART. 2]
Section 9. The State shall promote a just and dynamic social order that will ensure the
prosperity and independence of the nation and free the people from poverty through
policies that provide adequate social services, promote full employment, a rising standard
of living, and an improved quality of life for all.

Section 10. The State shall promote social justice in all phases of national development.

Section 11. The State values the dignity of every human person and guarantees full
respect for human rights.

Section 13. The State recognizes the vital role of the youth in nation-building and shall
promote and protect their physical, moral, spiritual, intellectual, and social well-being. It
shall inculcate in the youth patriotism and nationalism, and encourage their involvement in
public and civic affairs.

Section 14. The State recognizes the role of women in nation-building, and shall ensure
the fundamental equality before the law of women and men.

Section 18. The State affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare.

Section 20. The State recognizes the indispensable role of the private sector, encourages
private enterprise, and provides incentives to needed investments.

[CONSTI ART. 3]
Section 1. No person shall be deprived of life, liberty, or property without due process of
law, nor shall any person be denied the equal protection of the laws.

Section 4. No law shall be passed abridging the freedom of speech, of expression, or of


the press, or the right of the people peaceably to assemble and petition the government
for redress of grievances.

Section 8. The right of the people, including those employed in the public and private
sectors, to form unions, associations, or societies for purposes not contrary to law shall
not be abridged.

[CONSTI ART. 13]


Section 1. The Congress shall give highest priority to the enactment of measures that
protect and enhance the right of all the people to human dignity, reduce social, economic,
and political inequalities, and remove cultural inequities by equitably diffusing wealth and
political power for the common good.
To this end, the State shall regulate the acquisition, ownership, use, and disposition of
property and its increments.

Section 2. The promotion of social justice shall include the commitment to create
economic opportunities based on freedom of initiative and self-reliance.

Section 14. The State shall protect working women by providing safe and healthful
working conditions, taking into account their maternal functions, and such facilities and
opportunities that will enhance their welfare and enable them to realize their full potential
in the service of the nation.

Chapter II
EMANCIPATION OF TENANTS

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ART. 7. Statement of Objectives. Inasmuch as the old concept of land ownership by a
few has spawned valid and legitimate grievances that gave rise to violent conflict and
social tension and the redress of such legitimate grievances being one of the fundamental
objectives of the New Society, it has become imperative to start reformation with the
emancipation of the tiller of the soil from his bondage.

ART. 8. Transfer of lands to tenant-workers. - Being a vital part of the labor force,
tenant-farmers on private agricultural lands primarily devoted to rice and corn under a
system of share crop or lease tenancy whether classified as landed estate or not shall be
deemed owner of a portion constituting a family-size farm of five (5) hectares, if not
irrigated and three (3) hectares, if irrigated.
In all cases, the land owner may retain a n area of not more than seven (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 tenant-farmer, the value of the land shall be equivalent to two
and one-half (2-1/2) times the average harvest of three (3) normal crop years immediately
preceding the promulgation of Presidential Decree No. 27 on October 21, 1972.
The total cost of the land, including interest at the rate of six percent (6%) per
annum, shall be paid by the tenant in fifteen (15) years of fifteen (15) equal annual
amortizations.
In case of default, the amortization due shall be paid by the farmers cooperative
in which the defaulting tenant-farmer is a member, with the cooperative having a right of
recourse against him.
The government shall guarantee such amortizations with shares of stock in
government-owned and government-controlled corporations.

ART. 10. Conditions of ownership. - No title to the land acquired by the tenant-farmer
under Presidential Decree No. 27 shall be actually issued to him unless and until he has
become a full-fledged member of a duly recognized farmers cooperative.
Title to the land acquired pursuant to Presidential Decree No. 27 or the Land
Reform Program of the Government shall not be transferable except by hereditary
succession or to the Government in accordance with the provisions of Presidential Decree
No. 27, the Code of Agrarian Reforms and other existing laws and regulations.

ART. 11. Implementing agency. - The Department of Agrarian Reform shall promulgate
the necessary rules and regulations to implement the provisions of this Chapter.

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BOOK ONE
PRE-EMPLOYMENT

Art. 12. Statement of objectives. It is the policy of the State:


a. To promote and maintain a state of full employment through improved manpower
training, allocation and utilization;
b. To protect every citizen desiring to work locally or overseas by securing for him
the best possible terms and conditions of employment;
c. To facilitate a free choice of available employment by persons seeking work in
conformity with the national interest;
d. To facilitate and regulate the movement of workers in conformity with the 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 offices and rationalize the
participation of the private sector in the recruitment and placement of workers,
locally and overseas, to serve national development objectives;
g. To insure careful selection of Filipino workers for overseas employment in order
to protect the good name of the Philippines abroad.

Title I
RECRUITMENT AND PLACEMENT OF WORKERS
Chapter I
GENERAL PROVISIONS
Art. 13. Definitions.
a. "Worker" means any member of the labor force, whether employed or
unemployed.
b. "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.
c. "Private fee-charging employment agency" means any person or entity engaged
in recruitment and placement of workers for a fee which is charged, directly or
indirectly, from the workers or employers or both.
d. "License" means a document issued by the Department of Labor authorizing a
person or entity to operate a private employment agency.

(w) License - refers to the document issued by the Secretary of Labor and Employment
authorizing a person, partnership or corporation to operate a private recruitment/manning
agency.

e. "Private recruitment entity" means any person or association engaged in the


recruitment and placement of workers, locally or overseas, without charging,
directly or indirectly, any fee from the workers or employers.
f. "Authority" means a document issued by the Department of Labor authorizing a
person or association to engage in recruitment and placement activities as a
private recruitment entity.

(b) Authority - refers to a document issued by the Secretary of Labor and Employment
authorizing the officers, personnel, agents or representatives of a licensed
recruitment/manning agency to conduct recruitment and placement activities in a place
stated in the license or in a specified place.

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g. "Seaman" means any person employed in a vessel engaged in maritime
navigation.
h. "Overseas employment" means employment of a worker outside the Philippines.
i. "Emigrant" means any person, worker or otherwise, who emigrates to a foreign
country by virtue of an immigrant visa or resident permit or its equivalent in the
country of destination.

Art. 14. Employment promotion. The Secretary of Labor shall have the power and
authority:
a. To organize and establish new employment offices in addition to the existing
employment offices under the Department of Labor as the need arises;
b. To organize and establish a nationwide job clearance and information system to
inform applicants registering with a particular employment office of job
opportunities in other parts of the country as well as job opportunities abroad;
c. To develop and 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
d. To require any person, establishment, organization or institution to submit such
employment information as may be prescribed by the Secretary of Labor.

Art. 15. Bureau of Employment Services.


a. The Bureau of Employment Services shall be primarily responsible for
developing and monitoring a comprehensive employment program. It shall have
the power and duty:
1. To formulate and develop plans and programs to implement the
employment promotion objectives of this Title;
2. To establish and maintain a registration and/or licensing system to
regulate private sector participation in the recruitment and placement of
workers, locally and overseas, and to secure the best possible terms
and conditions of employment for Filipino contract workers and
compliance therewith under such rules and regulations as may be
issued by the Minister of Labor;
3. To formulate and develop employment programs designed to benefit
disadvantaged groups and communities;
4. To establish and maintain a registration and/or work permit system to
regulate the employment of aliens;
5. To develop a labor market information system in aid of proper
manpower and development planning;
6. To develop a responsive vocational guidance and testing system in aid
of proper human resources allocation; and
7. To maintain a central registry of skills, except seamen.
b. (Superseded by Exec. Order 797, May 1, 1982).
c. The Minister of Labor shall have the power to impose and collect fees based on
rates recommended by the Bureau of Employment Services. Such fees shall be
deposited in the National Treasury as a special account of the General Fund, for
the promotion of the objectives of the Bureau of Employment Services, subject to
the provisions of Section 40 of Presidential Decree No. 1177.

Art. 16. Private recruitment. Except as provided in Chapter II of this Title, no person or
entity other than the public employment offices, shall engage in the recruitment and
placement of workers.

Art. 17. Overseas Employment Development Board. An Overseas Employment


Development Board is hereby created to undertake, in cooperation with relevant entities
and agencies, a systematic program for overseas employment of Filipino workers in
excess of domestic needs and to protect their rights to fair and equitable employment
practices. It shall have the power and duty:

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1. To promote the overseas employment of Filipino workers through a
comprehensive market promotion and development program;
2. To secure the best possible terms and conditions of employment of Filipino
contract workers on a government-to-government basis and to ensure
compliance therewith;
3. To recruit and place workers for overseas employment on a government-to-
government arrangement and in such other sectors as policy may dictate; and
4. To act as secretariat for the Board of Trustees of the Welfare and Training Fund
for Overseas Workers.

Art. 18. Ban on direct-hiring. No employer may hire a Filipino worker for overseas
employment except through the Boards and entities authorized by the Secretary of Labor.
Direct-hiring by members of the diplomatic corps, international organizations and such
other employers as may be allowed by the Secretary of Labor is exempted from this
provision.

Art. 19. Office of Emigrant Affairs.


a. Pursuant to the national policy to maintain close ties with Filipino migrant
communities and promote their welfare as well as establish a data bank in aid of
national manpower policy formulation, an Office of Emigrant Affairs is hereby
created in the Department of Labor. The Office shall be a unit at the Office of the
Secretary and shall initially be manned and operated by such personnel and
through such funding as are available within the Department and its attached
agencies. Thereafter, its appropriation shall be made part of the regular General
Appropriations Decree.
b. The office shall, among others, promote the well-being of emigrants and maintain
their close link to the homeland by:
1. serving as a liaison with migrant communities;
2. provision of welfare and cultural services;
3. promote and facilitate re-integration of migrants into the national
mainstream;
4. promote economic; political and cultural ties with the communities; and
5. generally to undertake such activities as may be appropriate to enhance
such cooperative links.

Art. 20. National Seamen Board.


a. Repealed by EO 797
b. (Impliedly Repealed by Section 10 RA 8042 Labor Arbiters of NLRC have
exclusive and original jurisdiction to hear and decide claims arising from EE-ER
relationship) The Board shall have original and exclusive jurisdiction over all
matters or cases including money claims, involving employer-employee relations,
arising out of or by virtue of any law or contracts involving Filipino seamen for
overseas employment. [This part not repealed] The decisions of the Board shall
be appealable to the National Labor Relations Commission upon the same
grounds provided in Article 223 hereof. The decisions of the National Labor
Relations Commission shall be final and inappealable.

[RA 8042 as amended by RA 10022] SEC. 10. Money Claims. - Notwithstanding any
provision of law to the contrary, the Labor Arbiters of the National Labor Relations
Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide,
within ninety (90) calendar days after the filing of the complaint, the claims arising out of
an employer-employee relationship or by virtue of any law or contract involving Filipino
workers for overseas deployment including claims for actual, moral, exemplary and other
forms of damage. Consistent with this mandate, the NLRC shall endeavor to update and
keep abreast with the developments in the global services industry.
XXX

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Art. 21. Foreign service role and participation. To provide ample protection to Filipino
workers abroad, the labor attaches, the labor reporting officers duly designated by the
Secretary of Labor and the Philippine diplomatic or consular officials concerned shall,
even without prior instruction or advice from the home office, exercise the power and duty:
a. To provide all Filipino workers within their jurisdiction assistance on all matters
arising out of employment;
b. To insure that Filipino workers are not exploited or discriminated against;
c. To verify and certify as requisite to authentication that the terms and conditions of
employment in contracts involving Filipino workers are in accordance with the
Labor Code and rules and regulations of the Overseas Employment
Development Board and National Seamen Board;
d. To make continuing studies or researches and recommendations on the various
aspects of the employment market within their jurisdiction;
e. To gather and analyze information on the employment situation and its probable
trends, and to make such information available; and
f. To perform such other duties as may be required of them from time to time.

Art. 22. Mandatory remittance of foreign exchange earnings. It shall be mandatory for
all Filipino workers abroad to remit a portion of their foreign exchange earnings to their
families, dependents, and/or beneficiaries in the country in accordance with rules and
regulations prescribed by the Secretary of Labor.

[EO 857: ]
Sec. 1. It shall be mandatory for every Filipino contract worker abroad to remit regularly a
portion of his foreign exchange earnings to his beneficiary in the Philippines through the
Philippine banking system. Licensed agencies and other entities authorized by the
Ministry of Labor and Employment to recruit Filipino workers for overseas employment are
similarly required to remit their workers' earnings as provided for in this Order.

Art. 23. (Repealed?? By EO 247) Composition of the Boards.


a. The OEDB shall be composed of the Secretary of Labor and Employment as
Chairman, the Undersecretary of Labor as Vice-Chairman, and a representative
each of the Department of Foreign Affairs, the Department of National Defense,
the Central Bank, the Department of Education, Culture and Sports, the National
Manpower and Youth Council, the Bureau of Employment Services, a workers
organization and an employers organization and the Executive Director of the
OEDB as members.
b. The National Seamen Board shall be composed of the Secretary of Labor and
Employment as Chairman, the Undersecretary of Labor as Vice-Chairman, the
Commandant of the Philippine Coast Guard, and a representative each of the
Department of Foreign Affairs, the Department of Education, Culture and Sports,
the Central Bank, the Maritime Industry Authority, the Bureau of Employment
Services, a national shipping association and the Executive Director of the NSB
as members.
The members of the Boards shall receive allowances to be determined
by the Board which shall not be more than P2,000.00 per month.
c. The Boards shall be attached to the Department of Labor for policy and program
coordination. They shall each be assisted by a Secretariat headed by an
Executive Director who shall be a Filipino citizen with sufficient experience in
manpower administration, including overseas employment activities. The
Executive Director shall be appointed by the President of the Philippines upon
the recommendation of the Secretary of Labor and shall receive an annual salary
as fixed by law. The Secretary of Labor shall appoint the other members of the
Secretariat.
d. The Auditor General shall appoint his representative to the Boards to audit their
respective accounts in accordance with auditing laws and pertinent rules and
regulations.

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Art. 24. (Repealed?? By EO 247) Boards to issue rules and collect fees. The Boards
shall issue appropriate rules and regulations to carry out their functions. They shall have
the power to impose and collect fees from employers concerned, which shall be deposited
in the respective accounts of said Boards and be used by them exclusively to promote
their objectives.

Chapter II
REGULATION OF RECRUITMENT AND PLACEMENT ACTIVITIES

Art. 25. Private sector participation in the recruitment and placement of workers.
Pursuant to national development objectives and in order to harness and maximize the
use of private sector resources and initiative in the development and implementation of a
comprehensive employment program, the private employment sector shall participate in
the recruitment and placement of workers, locally and overseas, under such guidelines,
rules and regulations as may be issued by the Secretary of Labor.

Art. 26. Travel agencies prohibited to recruit. Travel agencies and sales agencies of
airline companies are prohibited from engaging in the business of recruitment and
placement of workers for overseas employment whether for profit or not.

Art. 27. Citizenship requirement. Only Filipino citizens or corporations, partnerships or


entities at least seventy-five percent (75%) of the authorized and voting capital stock of
which is owned and controlled by Filipino citizens shall be permitted to participate in the
recruitment and placement of workers, locally or overseas.

Art. 28. Capitalization. All applicants for authority to hire or renewal of license to recruit
are required to have such substantial capitalization as determined by the Secretary of
Labor.

Art. 29. Non-transferability of license or authority. No license or authority shall be used


directly or indirectly by any person other than the one in whose favor it was issued or at
any place other than that stated in the license or authority be transferred, conveyed or
assigned to any other person or entity. Any transfer of business address, appointment or
designation of any agent or representative including the establishment of additional offices
anywhere shall be subject to the prior approval of the Department of Labor.

Art. 30. Registration fees. The Secretary 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 or authority shall post such cash and surety
bonds as determined by the Secretary of Labor to guarantee compliance with prescribed
recruitment procedures, rules and regulations, and terms and conditions of employment
as may be appropriate.

Art. 32. Fees to be paid by workers. Any person applying with a private fee-charging
employment agency for employment assistance shall not be charged any fee until he has
obtained employment through its efforts or has actually commenced employment. Such
fee shall be always covered with the appropriate receipt clearly showing the amount paid.
The Secretary of Labor shall promulgate a schedule of allowable fees.

Art. 33. Reports on employment status. Whenever the public interest requires, the
Secretary of Labor may direct all persons or entities within the coverage of this Title to
submit a report on the status of employment, including job vacancies, details of job
requisitions, separation from jobs, wages, other terms and conditions and other
employment data.

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Art. 34. Prohibited practices. It shall be unlawful for any individual, entity, licensee, or
holder of authority:
a. To charge or accept, directly or indirectly, any amount greater than that specified
in the schedule of allowable fees prescribed by the Secretary of Labor, or to
make a worker pay any amount greater than that actually received by him as a
loan or advance;
b. To furnish or publish any false notice or information or document in relation to
recruitment or employment;
c. To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under this
Code.
d. To induce or attempt to induce a worker already employed to quit his
employment in order to offer him to another unless the transfer is designed to
liberate the worker from oppressive terms and conditions of employment;
e. To influence or to attempt to influence any person or entity not to employ any
worker who has not applied for employment through his agency;
f. To engage in the recruitment or placement of workers in jobs harmful to public
health or morality or to the dignity of the Republic of the Philippines;
g. To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his
duly authorized representatives;
h. To fail to file reports on the status of employment, placement vacancies,
remittance of foreign exchange earnings, separation from jobs, departures and
such other matters or information as may be required by the Secretary of Labor.
i. To substitute or alter employment contracts approved and verified by the
Department of Labor from the time of actual signing thereof by the parties up to
and including the periods of expiration of the same without the approval of the
Secretary of Labor;
j. To become an officer or member of the Board of any corporation engaged in
travel agency or to be engaged directly or indirectly in the management of a
travel agency; and
k. To withhold or deny travel documents from applicant workers before departure
for monetary or financial considerations other than those authorized under this
Code and its implementing rules and regulations.

Art. 35. Suspension and/or cancellation of license or authority. The Minister of Labor
shall have the power to suspend or cancel any license or authority to recruit employees for
overseas employment for violation of rules and regulations issued by the Ministry of Labor,
the Overseas Employment Development Board, or for violation of the provisions of this
and other applicable laws, General Orders and Letters of Instructions.

Chapter III
MISCELLANEOUS PROVISIONS

Art. 36. Regulatory power. The Secretary of Labor shall have the power to restrict and
regulate the recruitment and placement activities of all agencies within the coverage of
this Title and is hereby authorized to issue orders and promulgate rules and regulations to
carry out the objectives and implement the provisions of this Title.

Art. 37. Visitorial Power. The Secretary of Labor or his duly authorized representatives
may, at any time, inspect the premises, books of accounts and records of any person or
entity covered by this Title, require it to submit reports regularly on prescribed forms, and
act on violation of any provisions of this Title.

Art. 38. Illegal recruitment.


a. Any recruitment activities, including the prohibited practices enumerated under
Article 34 of this Code, to be undertaken by non-licensees or non-holders of
authority, shall be deemed illegal and punishable under Article 39 of this Code.

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The Department of Labor and Employment or any law enforcement officer may
initiate complaints under this Article.
b. Illegal recruitment when committed by a syndicate or in large scale shall be
considered an offense involving economic sabotage and shall be penalized in
accordance with Article 39 hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by
a group of three (3) or more persons conspiring and/or confederating with one
another in carrying out any unlawful or illegal transaction, enterprise or scheme
defined under the first paragraph hereof. Illegal recruitment is deemed committed
in large scale if committed against three (3) or more persons individually or as a
group.
c. The Secretary of Labor and Employment or his duly authorized representatives
shall have the power to cause the arrest and detention of such non-licensee or
non-holder of authority if after investigation it is determined that his activities
constitute a danger to national security and public order or will lead to further
exploitation of job-seekers. The Secretary shall order the search of the office or
premises and seizure of documents, paraphernalia, properties and other
implements used in illegal recruitment activities and the closure of companies,
establishments and entities found to be engaged in the recruitment of workers for
overseas employment, without having been licensed or authorized to do so.

[RA 8042 as amended by RA 10022]


SEC. 6. Definition. - For purposes of this Act, 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 non-licensee or non-holder of authority
contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise
known as the Labor Code of the Philippines: Provided, That any such non-licensee or
non-holder who, in any manner, offers or promises for a fee employment abroad to two or
more persons shall be deemed so engaged. It shall likewise include the following acts,
whether committed by any person, whether a non-licensee, non-holder, licensee or holder
of authority:
(a) To charge or accept directly or indirectly any amount greater than that
specified in the schedule of allowable fees prescribed by the Secretary of
Labor and Employment, or to make a worker pay or acknowledge any amount
greater than that actually received by him as a loan or advance;
(b) To furnish or publish any false notice or information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony, information or document or commit any
act of misrepresentation for the purpose of securing a license or authority
under the Labor Code, or for the purpose of documenting hired workers with
the POEA, which include the act of reprocessing workers through a job order
that pertains to nonexistent work, work different from the actual overseas
work, or work with a different employer whether registered or not with the
POEA;
(d) To include or attempt to induce a worker already employed to quit his
employment in order to offer him another unless the transfer is designed to
liberate a worker from oppressive terms and conditions of employment;
(e) To influence or attempt to influence any person or entity not to employ any
worker who has not applied for employment through his agency or who has
formed, joined or supported, or has contacted or is supported by any union or
workers' organization;
(f) To engage in the recruitment or placement of workers in jobs harmful to public
health or morality or to the dignity of the Republic of the Philippines;
(h) To fail to submit reports on the status of employment, placement vacancies,
remittance of foreign exchange earnings, separation from jobs, departures

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and such other matters or information as may be required by the Secretary of
Labor and Employment;
(i) To substitute or alter to the prejudice of the worker, employment contracts
approved and verified by the Department of Labor and Employment from the
time of actual signing thereof by the parties up to and including the period of
the expiration of the same without the approval of the Department of Labor
and Employment;
(j) For an officer or agent of a recruitment or placement agency to become an
officer or member of the Board of any corporation engaged in travel agency or
to be engaged directly or indirectly in the management of travel agency;
(k) To withhold or deny travel documents from applicant workers before
departure for monetary or financial considerations, or for any other reasons,
other than those authorized under the Labor Code and its implementing rules
and regulations;
(l) Failure to actually deploy a contracted worker without valid reason as
determined by the Department of Labor and Employment;
(m) Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where
the deployment does not actually take place without the worker's fault. Illegal
recruitment when committed by a syndicate or in large scale shall be
considered an offense involving economic sabotage; and
(n) To allow a non-Filipino citizen to head or manage a licensed
recruitment/manning agency.
Illegal recruitment is deemed committed by a syndicate if carried out by a group
of three (3) or more persons conspiring or confederating with one another. It is deemed
committed in large scale if committed against three (3) or more persons individually or as
a group.
In addition to the acts enumerated above, it shall also be unlawful for any person
or entity to commit the following prohibited acts:
(1) Grant a loan to an overseas Filipino worker with interest exceeding eight
percent (8%) per annum, which will be used for payment of legal and
allowable placement fees and make the migrant worker issue, either
personally or through a guarantor or accommodation party, postdated checks
in relation to the said loan;
(2) Impose a compulsory and exclusive arrangement whereby an overseas
Filipino worker is required to avail of a loan only from specifically designated
institutions, entities or persons;
(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino
worker after the latter's employment contract has been prematurely
terminated through no fault of his or her own;
(4) Impose a compulsory and exclusive arrangement whereby an overseas
Filipino worker is required to undergo health examinations only from
specifically designated medical clinics, institutions, entities or persons, except
in the case of a seafarer whose medical examination cost is shouldered by
the principal/shipowner;
(5) Impose a compulsory and exclusive arrangement whereby an overseas
Filipino worker is required to undergo training, seminar, instruction or
schooling of any kind only from specifically designated institutions, entities or
persons, except for recommendatory trainings mandated by
principals/shipowners where the latter shoulder the cost of such trainings;
(6) For a suspended recruitment/manning agency to engage in any kind of
recruitment activity including the processing of pending workers' applications;
and
(7) For a recruitment/manning agency or a foreign principal/employer to pass on
the overseas Filipino worker or deduct from his or her salary the payment of
the cost of insurance fees, premium or other insurance related charges, as
provided under the compulsory worker's insurance coverage.

11
The persons criminally liable for the above offenses are the principals,
accomplices and accessories. In case of juridical persons, the officers having ownership,
control, management or direction of their business who are responsible for the
commission of the offense and the responsible employees/agents thereof shall be liable.
"In the filing of cases for illegal recruitment or any of the prohibited acts under this section,
the Secretary of Labor and Employment, the POEA Administrator or their duly authorized
representatives, or any aggrieved person may initiate the corresponding criminal action
with the appropriate office. For this purpose, the affidavits and testimonies of operatives or
personnel from the Department of Labor and Employment, POEA and other law
enforcement agencies who witnessed the acts constituting the offense shall be sufficient
to prosecute the accused.
In the prosecution of offenses punishable under this section, the public
prosecutors of the Department of Justice shall collaborate with the anti-illegal recruitment
branch of the POEA and, in certain cases, allow the POEA lawyers to take the lead in the
prosecution. The POEA lawyers who act as prosecutors in such cases shall be entitled to
receive additional allowances as may be determined by the POEA Administrator.
"The filing of an offense punishable under this Act shall be without prejudice to the filing of
cases punishable under other existing laws, rules or regulations.

[IRR: RA 8042 as amended by RA 10022]


Section 2. Crime Involving Economic Sabotage. Illegal recruitment is deemed committed
by a syndicate if carried out by a group of three (3) or more persons conspiring or
confederating with one another. It is deemed committed in large scale if committed against
three (3) or more persons individually or as a group.

Art. 39. Penalties.


a. The penalty of life imprisonment and a fine of One Hundred Thousand Pesos
(P100,000.00) shall be imposed if illegal recruitment constitutes economic
sabotage as defined herein;
b. Any licensee or holder of authority found violating or causing another to violate
any provision of this Title or its implementing rules and regulations shall, upon
conviction thereof, suffer the penalty of imprisonment of not less than two years
nor more than five years or a fine of not less than P10,000 nor more than
P50,000, or both such imprisonment and fine, at the discretion of the court;
c. Any person who is neither a licensee nor a holder of authority under this Title
found violating any provision thereof or its implementing rules and regulations
shall, upon conviction thereof, suffer the penalty of imprisonment of not less than
four years nor more than eight years or a fine of not less than P20,000 nor more
than P100,000 or both such imprisonment and fine, at the discretion of the court;
d. If the offender is a corporation, partnership, association or entity, the penalty
shall be imposed upon the officer or officers of the corporation, partnership,
association or entity responsible for violation; and if such officer is an alien, he
shall, in addition to the penalties herein prescribed, be deported without further
proceedings;
e. In every case, conviction shall cause and carry the automatic revocation of the
license or authority and all the permits and privileges granted to such person or
entity under this Title, and the forfeiture of the cash and surety bonds in favor of
the Overseas Employment Development Board or the National Seamen Board,
as the case may be, both of which are authorized to use the same exclusively to
promote their objectives.

[RA 8042 as amended by RA 10022]


SEC. 10. Money Claims.
XXX
The liability of the principal/employer and the recruitment/placement agency for
any and all claims under this section shall be joint and several. This provision shall be
incorporated in the contract for overseas employment and shall be a condition precedent
12
for its approval. The performance bond to de filed by the recruitment/placement agency,
as provided by law, shall be answerable for all money claims or damages that may be
awarded to the workers. If the recruitment/placement agency is a juridical being, the
corporate officers and directors and partners as the case may be, shall themselves be
jointly and solidarily liable with the corporation or partnership for the aforesaid claims and
damages.
Such liabilities shall continue during the entire period or duration of the
employment contract and shall not be affected by any substitution, amendment or
modification made locally or in a foreign country of the said contract.
Any compromise/amicable settlement or voluntary agreement on money claims
inclusive of damages under this section shall be paid within thirty (30) days from approval
of the settlement by the appropriate authority.
In case of termination of overseas employment without just, valid or authorized
cause as defined by law or contract, or any unauthorized deductions from the migrant
worker's salary, the worker shall be entitled to the full reimbursement if his placement fee
and the deductions made with interest at twelve percent (12%) per annum, plus his
salaries for the unexpired portion of his employment contract or for three (3) months for
every year of the unexpired term, whichever is less.
In case of a final and executory judgment against a foreign employer/principal, it
shall be automatically disqualified, without further proceedings, from participating in the
Philippine Overseas Employment Program and from recruiting and hiring Filipino workers
until and unless it fully satisfies the judgment award.
Noncompliance with the mandatory periods for resolutions of case provided
under this section shall subject the responsible officials to any or all of the following
penalties:
(a) The salary of any such official who fails to render his decision or resolution
within the prescribed period shall be, or caused to be, withheld until the said
official complies therewith;
(b) Suspension for not more than ninety (90) days; or
(c) Dismissal from the service with disqualification to hold any appointive public
office for five (5) years.
Provided, however, That the penalties herein provided shall be without prejudice
to any liability which any such official may have incurred under other existing laws or rules
and regulations as a consequence of violating the provisions of this paragraph."

SEC. 7. Penalties. -
(a) Any person found guilty of illegal recruitment shall suffer the penalty of
imprisonment of not less than twelve (12) years and one (1) day but not more than twenty
(20) years and a fine of not less than One million pesos (P1,000,000.00) nor more than
Two million pesos (P2,000,000.00).
(b) The penalty of life imprisonment and a fine of not less than Two million pesos
(P2,000,000.00) nor more than Five million pesos (P5,000,000.00) shall be imposed if
illegal recruitment constitutes economic sabotage as defined therein.
"Provided, however, That the maximum penalty shall be imposed if the person illegally
recruited is less than eighteen (18) years of age or committed by a non-licensee or non-
holder of authority.
(c) Any person found guilty of any of the prohibited acts shall suffer the penalty of
imprisonment of not less than six (6) years and one (1) day but not more than twelve (12)
years and a fine of not less than Five hundred thousand pesos (P500,000.00) nor more
than One million pesos (P1,000,000.00).
If the offender is an alien, he or she shall, in addition to the penalties herein
prescribed, be deported without further proceedings.
In every case, conviction shall cause and carry the automatic revocation of the
license or registration of the recruitment/manning agency, lending institutions, training
school or medical clinic.

[RA 8042] SEC. 9. VENUE. - A criminal action arising from illegal recruitment as defined
herein shall be filed with the Regional Trial Court of the province or city where the offense
13
was committed or where the offended party actually resides at the same time of the
commission of the offense: Provided, That the court where the criminal action is first filed
shall acquire jurisdiction to the exclusion of other courts. Provided, however, That the
aforestated provisions shall also apply to those criminal actions that have already been
filed in court at the time of the effectivity of this Act.

SEC. 12. PRESCRIPTIVE PERIODS. - Illegal recruitment cases under this Act shall
prescribe in five (5) years: Provided, however, That illegal recruitment cases involving
economic sabotage as defined herein shall prescribe in twenty (20) years.

Title II
EMPLOYMENT OF NON-RESIDENT ALIENS

Art. 40. Employment permit of non-resident aliens. Any alien seeking admission to the
Philippines for employment purposes and any domestic or foreign employer who desires
to engage an alien for employment in the Philippines shall obtain an employment permit
from the Department of Labor.
The employment permit may be issued to a non-resident alien or to the applicant
employer after a determination of the non-availability of a person in the Philippines who is
competent, able and willing at the time of application to perform the services for which the
alien is desired.
For an enterprise registered in preferred areas of investments, said employment
permit may be issued upon recommendation of the government agency charged with the
supervision of said registered enterprise.

Art. 41. Prohibition against transfer of employment.


a. After the issuance of an employment permit, the alien shall not transfer to
another job or change his employer without prior approval of the Secretary of
Labor.
b. Any non-resident alien who shall take up employment in violation of the provision
of this Title and its implementing rules and regulations shall be punished in
accordance with the provisions of Articles 289 and 290 of the Labor Code.
In addition, the alien worker shall be subject to deportation after service
of his sentence.

Art. 42. Submission of list. Any employer employing non-resident foreign nationals on
the effective date of this Code shall submit a list of such nationals to the Secretary of
Labor within thirty (30) days after such date indicating their names, citizenship, foreign and
local addresses, nature of employment and status of stay in the country. The Secretary of
Labor shall then determine if they are entitled to an employment permit.

14
BOOK TWO
HUMAN RESOURCES DEVELOPMENT PROGRAM

Title I
NATIONAL MANPOWER DEVELOPMENT PROGRAM

Chapter I
NATIONAL POLICIES AND ADMINISTRATIVE MACHINERY
FOR THEIR IMPLEMENTATION

ART. 43. Statement of objective. - It is the objective of this Title to develop human
resources, establish training institutions, and formulate such plans and programs as will
ensure efficient allocation, development and utilization of the nations manpower and
thereby promote employment and accelerate economic and social growth.

ART. 44. Definitions. - As used in this Title:


(a) "Manpower" shall mean that portion of the nations population which has actual or
potential capability to contribute directly to the production of goods and services.
(b) "Entrepreneurship" shall mean training for self-employment or assisting individual or
small industries within the purview of this Title.

ART. 45. National Manpower and Youth Council; Composition.- To carry out the
objectives of this Title, the National Manpower and Youth Council, which is attached to the
Department of Labor for policy and program coordination and hereinafter referred to as
the Council, shall be composed of the Secretary of Labor as ex-officio chairman, the
Secretary of Education and Culture as ex-officio vice-chairman, and as ex-
officio members, the Secretary of Economic Planning, the Secretary of Natural Resources,
the Chairman of the Civil Service Commission, the Secretary of Social Welfare, the
Secretary of Local Government, the Secretary of Science and Technology, the Secretary
of Trade and Industry and the Director-General of the Council. The Director General shall
have no vote.
In addition, the President shall appoint the following members from the private
sector: two (2) representatives of national organizations of employers; two (2)
representatives of national workers organizations; and one representative of national
family and youth organizations, each for a term of three (3) years.

ART. 46. National Manpower Plan. - The Council shall formulate a long-term national
manpower plan for the optimum allocation, development and utilization of manpower for
employment, entrepreneurship and economic and social growth. This manpower plan
shall, after adoption by the Council, be updated annually and submitted to the President
for his approval. Thereafter, it shall be the controlling plan for the development of
manpower resources for the entire country in accordance with the national development
plan. The Council shall call upon any agency of the Government or the private sector to
assist in this effort.

ART. 47. National Manpower Skills Center. - The Council shall establish a National
Manpower Skills Center and regional and local training centers for the purpose of
promoting the development of skills. The centers shall be administered and operated
under such rules and regulations as may be established by the Council.

ART. 48. Establishment and formulation of skills standards. - There shall be national
skills standards for industry trades to be established by the Council in consultation with
employers and workers organizations and appropriate government authorities. The
Council shall thereafter administer the national skills standards.

15
ART. 49. Administration of training programs. - The Council shall provide, through the
Secretariat, instructor training, entrepreneurship development, training in vocations, trades
and other fields of employment, and assist any employer or organization in training
schemes designed to attain its objectives under rules and regulations which the Council
shall establish for this purpose.
The Council shall exercise, through the Secretariat, authority and jurisdiction
over, and administer, on-going technical assistance programs and/or grants-in-aid for
manpower and youth development including those which may be entered into between the
Government of the Philippines and international and foreign organizations and nations, as
well as persons and organizations in the Philippines.
In order to integrate the national manpower development efforts, all manpower
training schemes as provided for in this Code shall be coordinated with the Council,
particularly those having to do with the setting of skills standards. For this purpose,
existing manpower training programs in the government and in the private sector shall be
reported to the Council which may regulate such programs to make them
conform with national development programs.
This Article shall not include apprentices, learners and handicapped workers as
governed by appropriate provisions of this Code.

ART. 50. Industry boards. - The Council shall establish industry boards to assist in the
establishment of manpower development schemes, trades and skills standards and such
other functions as will provide direct participation of employers and workers in
the fulfillment of the Councils objectives, in accordance with guidelines to be established
by the Council and in consultation with the National Economic and Development Authority.
The maintenance and operations of the industry boards shall be financed through a
funding scheme under such rates of fees and manners of collection and disbursements as
may be determined by the Council.

ART. 51. Employment service training functions. - The Council shall utilize the
employment service of the Department of Labor for the placement of its graduates. The
Bureau of Employment Services shall render assistance to the Council in the
measurement of unemployment and underemployment, conduct of local manpower
resource surveys and occupational studies including an inventory of the labor force,
establishment and maintenance without charge of a national register of technicians who
have successfully completed a training program under this Act, and skilled manpower
including its publication, maintenance of an adequate and up-to-date system of
employment information.

ART. 52. Incentive Scheme. - An additional deduction from taxable income of one-half
(1/2) of the value of labor training expenses incurred for development programs shall be
granted to the person or enterprise concerned provided that such development programs,
other than apprenticeship, are approved by the Council and the deduction does not
exceed ten percent (10%) of the direct labor wage.
There shall be a review of the said scheme two years after its implementation.

ART. 53. Council Secretariat. - The Council shall have a Secretariat headed by a
Director-General who shall be assisted by a Deputy Director-General, both of whom shall
be career administrators appointed by the President of the Philippines on recommendation
of the Secretary of Labor. The Secretariat shall be under the administrative supervision of
the Secretary of Labor and shall have an Office of Manpower Planning and Development,
an Office of Vocational Preparation, a National Manpower Skills Center, regional
manpower development offices and such other offices as may be necessary.
The Director-General shall have the rank and emoluments of an undersecretary
and shall serve for a term of ten (10) years. The Executive-Directors of the Office of
Manpower Planning and Development, the Office of Vocational Preparation and the
National Manpower Skills Center shall have the rank and emoluments of a bureau director
and shall be subject to Civil Service Law, rules and regulations. The Director-General,
Deputy Director-General and Executive Directors shall be natural-born citizens, between
16
thirty and fifty years of age at the time of appointment, with a masters degree or its
equivalent, and experience in national planning and development of human resources.
The Executive Director of the National Manpower Skills Center shall, in addition to the
foregoing qualifications, have undergone training in center management. Executive
Directors shall be appointed by the President on the recommendations of the Secretary
of Labor and Employment.
The Director-General shall appoint such personnel necessary to carry out the
objectives, policies and functions of the Council subject to Civil Service rules. The regular
professional and technical personnel shall be exempt from WAPCO rules and regulations.
The Secretariat shall have the following functions and responsibilities:
(a) To prepare and recommend the manpower plan for approval by the
Council;
(b) To recommend allocation of resources for the implementation of the
manpower plan as approved by the Council;
(c) To carry out the manpower plan as the implementing arm of the Council;
(d) To effect the efficient performance of the functions of the Council and the
achievement of the objectives of this Title;
(e) To determine specific allocation of resources for the projects to be
undertaken pursuant to approved manpower plans;
(f) To submit to the Council periodic reports on progress and accomplishment
of work programs;
(g) To prepare for approval by the Council an annual report to the President
on plans, programs and projects on manpower and out-of-school youth
development;
(h) To enter into agreements to implement approved plans and programs and
perform any and all such acts as will fulfill the objectives of this Code as
well as ensure the efficient performance of the functions of the Council;
and
(i) To perform such other functions as may be authorized by the Council.

ART. 54. Regional manpower development offices. - The Council shall create regional
manpower development offices which shall determine the manpower needs of the
industry, agriculture and other sectors of the economy within their respective jurisdictions;
provide the Councils central planners with the data for updating the national manpower
plan; recommend programs for the regional level agencies engaged in manpower and
youth development within the policies formulated by the Council; and administer and
supervise Secretariat training programs within the region and perform such other functions
as may be authorized by the Council.

ART. 55. Consultants and technical assistance, publication and research. - In


pursuing its objectives, the Council is authorized to set aside a portion of its appropriation
for the hiring of the services of qualified consultants, and/or private organizations for
research work and publication. It shall avail itself of the services of the Government as
may be required.

ART. 56. Rules and regulations. - The Council shall define its broad functions and issue
appropriate rules and regulations necessary to implement the provision of this Code.

Title II
TRAINING AND EMPLOYMENT
OF SPECIAL WORKERS

Chapter I
APPRENTICES
ART. 57. Statement of objectives. - This Title aims:
(1) To help meet the demand of the economy for trained manpower;
(2) To establish a national apprenticeship program through the participation of employers,
workers and government and non-government agencies; and
17
(3) To establish apprenticeship standards for the protection of apprentices.

ART. 58. Definition of Terms. - As used in this Title:


(a) "Apprenticeship" means practical training on the job supplemented by related
theoretical instruction.

[IRR: BOOK 2 RULE 6] SECTION 2. Definition of terms -


(a) "Apprenticeship" means any training on the job supplemented by related theoretical
instructions involving apprenticeable occupations and trades as may be approved by
the Secretary of Labor and Employment.

(b) An "apprentice" is a worker who is covered by a written apprenticeship agreement with


an individual employer or any of the entities recognized under this Chapter.
(c) An "apprenticeable occupation" means any trade, form of employment or occupation
which requires more than three (3) months of practical training on the job
supplemented by related theoretical instruction.

[IRR: BOOK 2 RULE 6] SECTION 2. Definition of terms -


(d) "Apprenticeable occupation" means any trade, form of employment or occupation
approved for apprenticeship by the Secretary of Labor and Employment, which
requires for proficiency more than three months of practical training on the job
supplemented by related theoretical instructions.

(d) "Apprenticeship agreement" is an employment contract wherein the employer binds


himself to train the apprentice and the apprentice in turn accepts the terms of training.

ART. 59. Qualifications of apprentice. - To qualify as an apprentice, a person shall:


(a) Be at least fourteen (14) years of age;
(b) Possess vocational aptitude and capacity for appropriate tests; and
(c) Possess the ability to comprehend and follow oral and written instructions.
Trade and industry associations may recommend to the Secretary
of Labor appropriate educational requirements for different occupations.

ART. 60. Employment of apprentices. - Only employers in the highly technical industries
may employ apprentices and only inapprenticeable occupations approved by the
Secretary of Labor and Employment. (As amended by Section 1, Executive Order No.
111, December 24, 1986).

[IRR: BOOK 2 RULE 6] SECTION 2. Definition of terms -


(j) "Highly Technical Industries" means trade, business, enterprise, industry, or other
activity, which is engaged in the application of advanced technology.

ART. 61. Contents of apprenticeship agreements. - Apprenticeship agreements,


including the wage rates of apprentices, shall conform to the rules issued by the Secretary
of Labor and Employment. The period of apprenticeship shall not exceed six months.
Apprenticeship agreements providing for wage rates below the legal minimum wage,
which in no case shall start below 75 percent of the applicable minimum wage, may be
entered into only in accordance with apprenticeship programs duly approved by the
Secretary of Labor and Employment. The Department shall develop standard model
programs of apprenticeship. (As amended by Section 1, Executive Order No. 111,
December 24, 1986).

[DOLE Circular No. 2, Series of 2006] Apprenticeship period should not be less than
three (3) months but not over six (6) months)

18
ART. 62. Signing of apprenticeship agreement. -Every apprenticeship agreement shall
be signed by the employer or his agent, or by an authorized representative of any of the
recognized organizations, associations or groups and by the apprentice.
An apprenticeship agreement with a minor shall be signed in his behalf by his
parent or guardian, if the latter is not available, by an authorized representative of the
Department of Labor, and the same shall be binding during its lifetime.
Every apprenticeship agreement entered into under this Title shall be ratified by
the appropriate apprenticeship committees, if any, and a copy thereof shall be furnished
both the employer and the apprentice.

ART. 63. Venue of apprenticeship programs. - Any firm, employer, group or


association, industry organization or civic group wishing to organize an apprenticeship
program may choose from any of the following apprenticeship schemes as the training
venue for apprentice:
(a) Apprenticeship conducted entirely by and within the sponsoring firm,
establishment or entity;
(b) Apprenticeship entirely within a Department of Labor and Employment
training center or other public training institution; or
(c) Initial training in trade fundamentals in a training center or other institution with
subsequent actual work participation within the sponsoring firm or entity during
the final stage of training.

ART. 64. Sponsoring of apprenticeship program. - Any of the apprenticeship schemes


recognized herein may be undertaken or sponsored by a single employer or firm or by a
group or association thereof or by a civic organization. Actual training of apprentices may
be undertaken:
(a) In the premises of the sponsoring employer in the case of individual
apprenticeship programs;
(b) In the premises of one or several designated firms in the case of programs
sponsored by a group or association of employers or by a civic organization; or
(c) In a Department of Labor and Employment training center or other public training
institution.

ART. 65. Investigation of violation of apprenticeship agreement. - Upon complaint of


any interested person or upon its own initiative, the appropriate agency of the Department
of Labor and Employment or its authorized representative shall investigate any violation of
an apprenticeship agreement pursuant to such rules and regulations as may be
prescribed by the Secretary of Labor and Employment.

ART. 66. Appeal to the Secretary of Labor and Employment. - The decision of the
authorized agency of the Department of Labor and Employment may be appealed by any
aggrieved person to the Secretary of Labor and Employment within five (5) days from
receipt of the decision. The decision of the Secretary of Labor and Employment shall be
final and executory.

ART. 67. Exhaustion of administrative remedies. - No person shall institute any action
for the enforcement of any apprenticeship agreement or damages for breach of any such
agreement, unless he has exhausted all available administrative remedies.

ART. 68. Aptitude testing of applicants. - Consonant with the minimum qualifications of
apprentice-applicants required under this Chapter, employers or entities with duly
recognized apprenticeship programs shall have primary responsibility for providing
appropriate aptitude tests in the selection of apprentices. If they do not have adequate
facilities for the purpose, the Department of Labor and Employment shall perform the
service free of charge.

ART. 69. Responsibility for theoretical instruction. - Supplementary theoretical


instruction to apprentices in cases where the program is undertaken in the plant may be
19
done by the employer. If the latter is not prepared to assume the responsibility, the same
may be delegated to an appropriate government agency.

ART. 70. Voluntary organization of apprenticeship programs; exemptions.


(a) The organization of apprenticeship program shall be primarily a voluntary undertaking
by employers;
(b) When national security or particular requirements of economic development so
demand, the President of the Philippines may require compulsory training of
apprentices in certain trades, occupations, jobs or employment levels where shortage
of trained manpower is deemed critical as determined by the Secretary of Labor and
Employment. Appropriate rules in this connection shall be promulgated by the
Secretary of Labor and Employment as the need arises; and
(c) Where services of foreign technicians are utilized by private companies
in apprenticeable trades, said companies are required to set up appropriate
apprenticeship programs.

ART. 71. Deductibility of training costs. - An additional deduction from taxable income
of one-half (1/2) of the value of labor training expenses incurred for developing the
productivity and efficiency of apprentices shall be granted to the person or enterprise
organizing an apprenticeship program: Provided, That such program is duly recognized by
the Department of Labor and Employment: Provided, further, That such deduction shall
not exceed ten (10%) percent of direct labor wage: and Provided, finally, That the person
or enterprise who wishes to avail himself or itself of this incentive should pay his
apprentices the minimum wage.

ART. 72. Apprentices without compensation. - The Secretary of Labor and


Employment may authorize the hiring of apprentices without compensation whose training
on the job is required by the school or training program curriculum or as requisite for
graduation or board examination.

Chapter II
LEARNERS

ART. 73. Learners defined. - Learners are persons hired as trainees in semi-skilled and
other industrial occupations which are non-apprenticeable and which may be learned
through practical training on the job in a relatively short period of time which shall not
exceed three (3) months.

ART. 74. When learners may be hired. - Learners may be employed when no
experienced workers are available, the employment of learners is necessary to prevent
curtailment of employment opportunities, and the employment does not create unfair
competition in terms of labor costs or impair or lower working standards.

ART. 75. Learnership agreement. - Any employer desiring to employ learners shall enter
into a learnership agreement with them, which agreement shall include:
(a) The names and addresses of the learners;
(b) The duration of the learnership period, which shall not exceed three (3) months;
(c) The wages or salary rates of the learners which shall begin at not less than
seventy-five percent (75%) of the applicable minimum wage; and
(d) A commitment to employ the learners if they so desire, as regular employees upon
completion of the learnership. All learners who have been allowed or suffered to
work during the first two (2) months shall be deemed regular employees if
training is terminated by the employer before the end of the stipulated period
through no fault of the learners.
The learnership agreement shall be subject to inspection by the Secretary
of Labor and Employment or his duly authorized representative.

20
[IRR: BOOK 2 RULE 7] SECTION 6. Employment of minors as learners. A minor
below fifteen (15) years of age shall not be eligible for employment as a learner. Those
below eighteen (18) years of age may only be employed in non-hazardous occupations.

ART. 76. Learners in piecework. - Learners employed in piece or incentive-rate jobs


during the training period shall be paid in full for the work done.

ART. 77. Penalty clause. - Any violation of this Chapter or its implementing rules and
regulations shall be subject to the general penalty clause provided for in this Code. (See
ART. 288)

Chapter III
HANDICAPPED WORKERS

ART. 78. Definition. - Handicapped workers are those whose earning capacity is
impaired by age or physical or mental deficiency or injury.

[RA 7277 as amended by RA 9442] SECTION 4. Definition of Terms


(a). Persons with Disability (handicapped workers) are those suffering from restriction of
different abilities, as a result of a mental, physical or sensory impairment, to perform an
activity in the manner or within the range considered normal for a human being;

ART. 79. When employable. - Handicapped workers may be employed when their
employment is necessary to prevent curtailment of employment opportunities and when it
does not create unfair competition in labor costs or impair or lower working standards.

ART. 80. Employment agreement. - Any employer who employs handicapped workers
shall enter into an employment agreement with them, which agreement shall include:
a. The names and addresses of the handicapped workers to be employed;
b. The rate to be paid the handicapped workers which shall not be less than seventy
five (75%) percent of the applicable legal minimum wage;
c. The duration of employment period; and
d. The work to be performed by handicapped workers.
The employment agreement shall be subject to inspection by the Secretary
of Labor or his duly authorized representative.

ART. 81. Eligibility for apprenticeship. - Subject to the appropriate provisions of this
Code, handicapped workers may be hired as apprentices or learners if their handicap is
not such as to effectively impede the performance of job operations in the particular
occupations for which they are hired.

[RA 7277] SECTION 7. Apprenticeship - Subject to the provision of the Labor Code as
amended, disabled persons shall be eligible as apprentices or learners; Provided, That
their handicap is not much as to effectively impede the performance of job operations in
the particular occupation for which they are hired; Provided, further, That after the lapse of
the period of apprenticeship if found satisfactory in the job performance, they shall be
eligible for employment.

SECTION 8. Incentives for Employer


(a) To encourage the active participation of the private sector in promoting the
welfare of disabled persons and to ensure gainful employment for qualified disabled
persons, adequate incentives shall be provided to private entities which employ disabled
persons.
(b). Private entities that employ disabled persons who meet the required skills or
qualifications, either as regular employee, apprentice or learner, shall be entitled to an
additional deduction, from their gross income, equivalent to twenty-five percent (25%) of

21
the total amount paid as salaries and wages to disabled persons: Provided, however, That
such entities present proof as certified by the Department of Labor and Employment that
disabled person are under their employ. Provided, further, That the disabled employee is
accredited with the Department of Labor and Employment and the Department of Health
as to his disability, skills and qualifications.
(c). Private entities that improved or modify their physical facilities in order to
provide reasonable accommodation for disabled persons shall also be entitled to an
additional deduction from their net taxable income, equivalent to fifty percent (50%) of the
direct costs of the improvements or modifications. This section, however, does not apply
to improvements or modifications of facilities required under Batas Pambansa Bilang 344.

TITLE TWO
RIGHTS AND PRIVILEGES OF DISABLED PERSONS

SECTION 5. Equal Opportunity for Employment - No disabled


persons shall be denied access to opportunities for suitable employment. A qualified
disabled employee shall be subject to the same terms and conditions of employment and
the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a
qualified able-bodied person. Five percent (5%) of all casual, emergency and contractual
positions in the Department of Social Welfare and Development; Health; Education,
Culture and Sports; and other government agencies, offices or corporations engaged in
social development shall be reserved for disabled persons.

TITLE THREE
PROHIBITION ON DISCRIMINATION AGAINST DISABLED PERSONS

SECTION 32. Discrimination on Employment - No entity, whether public or private,


shall discriminate against a qualified disabled person by reason of disability in regard to
job application procedures, the hiring, promotion, or discharge of employees, employee
compensation, job training, and other terms, conditions, and privileges of employment.
The following constitute acts of discrimination:
(a). Limiting, segregating or classifying a disabled job applicant in such a manner
that adversely affects his work opportunities;
(b). Using qualification standards, employment tests or other selection criteria
that screen out or tend to screen out a disabled person unless such
standards, tests or other selection criteria are shown to be job-related for the
position on question and are consistent with business necessity;
(c). Utilizing standards, criteria, or methods of administration that:
1). have the effect of discrimination on the basis of disability; or
2). perpetuate the discrimination of others who are subject to common
administrative control;
(d). Providing less compensation, such as salary, wage or other forms of
remuneration and fringe benefits, to a qualified disabled employee, by reason
of his disability, than the amount to which a non-disabled person performing
the same work is entitled;
(e). Favoring a non-disabled employee over a qualified disabled employee with
respect to promotion, training opportunities, study and scholarship grants,
solely on account of the latters disability;
(f). Re-assigning or transferring a disabled employee to a job or position he
cannot perform by reason of his disability;
(g). Dismissing or terminating the services of a disabled employee by reason of
his disability unless the employer can prove that he impairs the satisfactory
performance of the work involve to the prejudice of the business entities;
Provided, however, That the employer first sought provide reasonable
accommodations for disabled persons;
(h). Failing to select or administer in the effective manner employment tests
which accurately reflect the skills, aptitude or other factor of the disabled

22
applicant or employee that such test purports to measure, rather than the
impaired sensory, manual or speaking skills of such applicant or employee, if
any; and
(i). Excluding disabled persons from membership in labor unions or similar
organization.

23
BOOK THREE
CONDITIONS OF EMPLOYMENT

Title I
WORKING CONDITIONS
AND REST PERIODS

Chapter I
HOURS OF WORK

ART. 82. Coverage. - The provisions of this Title shall apply to employees in all
establishments and undertakings whether for profit or not, but not to government
employees, managerial employees, field personnel, members of the family of the
employer who are dependent on him for support, domestic helpers, persons in the
personal service of another, and workers who are paid by results as determined by the
Secretary of Labor in appropriate regulations.
As used herein, "managerial employees" refer to those whose primary duty
consists of the management of the establishment in which they are employed or of a
department or subdivision thereof, and to other officers or members of the managerial
staff.
"Field personnel" shall refer to non-agricultural employees who regularly perform
their duties away from the principal place of business or branch office of the employer and
whose actual hours of work in the field cannot be determined with reasonable certainty.

[IRR BOOK 3 RULE 1]


SECTION 2. Exemption. The provisions of this Rule shall not apply to the following
persons if they qualify for exemption under the conditions set forth herein:
(a) Government employees whether employed by the National Government or
any of its political subdivision, including those employed in government-owned
and/or controlled corporations;
(b) Managerial employees, if they meet all of the following conditions:
(1) Their primary duty consists of the management of the establishment
in which they are employed or of a department or sub-division
thereof.
(2) They customarily and regularly direct the work of two or more
employees therein.
(3) They have the authority to hire or fire employees of lower rank; or
their suggestions and recommendations as to hiring and firing and as
to the promotion or any other change of status of other employees,
are given particular weight.
(c) Officers or members of a managerial staff if they perform the following duties
and responsibilities:
(1) The primary duty consists of the performance of work directly related
to management policies of their employer;
(2) Customarily and regularly exercise discretion and independent
judgment; and
(3) Regularly and directly assist a proprietor or a managerial
employee whose primary duty consists of the management of the
execute under general supervision work along specialized or
technical lines requiring special training, experience, or knowledge;
or execute, under general supervision, special assignments and
tasks; and
(4) Who do not devote more than 20 percent of their hours worked in a
work week to activities which are not directly and closely related to
the performance of the work described in paragraphs (1), (2) and (3)
above.
24
(d) Domestic servants and persons in the personal service of another if they
perform such services in the employer's home which are usually necessary or
desirable for the maintenance and enjoyment thereof, or minister to the
personal comfort, convenience, or safety of the employer as well as the
members of his employer's household.
(e) Workers who are paid by results, including those who are paid on piece-work,
"takay," "pakiao" or task basis, and other non-time work if their output rates
are in accordance with the standards prescribed under Section 8, Rule VII,
Book Three of these regulations, or where such rates have been fixed by the
Secretary of Labor and Employment in accordance with the aforesaid Section.
(f) Non-agricultural field personnel if they regularly perform their duties away from
the principal or branch office or place of business of the employer and whose
actual hours of work in the field cannot be determined with reasonable
certainty.

ART. 83. Normal hours of work. - The normal hours of work of any employee shall not
exceed eight (8) hours a day.
Health personnel in cities and municipalities with a population of at least one
million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred
(100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week,
exclusive of time for meals, except where the exigencies of the service require that such
personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be
entitled to an additional compensation of at least thirty percent (30%) of their regular wage
for work on the sixth day. For purposes of this Article, "health personnel" shall include
resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers,
laboratory technicians, paramedical technicians, psychologists, midwives, attendants and
all other hospital or clinic personnel.

RULE I-A
Hours of Work of Hospital and Clinic Personnel

SECTION 1. General statement on coverage. This Rule shall apply to:


(a) All hospitals and clinics, including those with a bed capacity of less than one hundred
(100) which are situated in cities or municipalities with a population of one million or more;
and
(b) All hospitals and clinics with a bed capacity of at least one hundred (100), irrespective
of the size of the population of the city or municipality where they may be situated.

SECTION 5. Regular working hours. The regular working hours of any person
covered by this Rule shall not be more than eight (8) hours in any one day nor more than
forty (40) hours in any one week.

SECTION 6. Regular working days. The regular working days of covered employees
shall not be more than five days in a work week. The work week may begin at any hour
and on any day, including Saturday or Sunday, designated by the employer.
Employers are not precluded from changing the time at which the work day or work week
begins, provided that the change is not intended to evade the requirements of this Rule.

SECTION 7. Overtime work. Where the exigencies of the service so require as


determined by the employer, any employee covered by this Rule may be scheduled to
work for more than five (5) days or forty (40) hours a week, provided that the employee is
paid for the overtime work an additional compensation equivalent to his regular wage plus
at least thirty percent (30%) thereof, subject to the provisions of this Book on the payment
of additional compensation for work performed on special and regular holidays and on rest
days.

COMPRESSED WORKWEEK (CWW)


25
[DO 02-09]
The following are the flexible work arrangements which may be considered, among
others:

Compressed Workweek refers to one where the normal workweek is reduced to less than
six (6) days but the total number of work-hours of 48 hours per week shall remain. The
normal workday is increased to more than eight hours but not to exceed twelve hours,
without corresponding overtime premium. The concept can be adjusted accordingly
depending on the normal workweek of the company pursuant to the provisions of
Department Advisory No. 02, series of 2004, dated 2 December 2004.
XXX

[DO 02-04]
Conditions. DOLE shall recognize CWW schemes adopted in accordance with the
following:
1. The CWW scheme is undertaken as a result of an express and voluntary
agreement of majority of the covered employees or their duly authorized representatives.
This agreement may be expressed through collective bargaining or other legitimate
workplace mechanisms of participation such as labor-management councils, employee
assemblies or referenda.
2. In firms using substances, chemicals and processes or operating under
conditions where there are airborne contaminants, human carcinogens or noise prolonged
exposure to which may pose hazards to the employees' health and safety, there must be a
certification from an accredited health and safety organization or practitioner or from the
firm's safety committee that work beyond eight hours is within threshold limits or tolerable
levels of exposure, as set in the OSHS.
3. The employer shall notify DOLE, through the Regional Office having
jurisdiction over the workplace, of the adoption of th CWW scheme. The notice shall be in
DOLE CWW Report Form attached to this Advisory.

Effects. A CWW scheme which complies with the foregoing conditions shall have the
following effects:
1. Unless there is a more favorable practice existing in the firm, work beyond
eight hours will not be compensable by overtime premium provided the total number of
hours worked per day shall not exceed twelve (12) hours. In any case, any work
performed beyond 12 hours a day or 48 hours a week shall be subject to overtime
premium.
2. Consistent with Articles 85 of the Labor Code, employees under a CWW
scheme are entitled to meal periods of not less than sixty (60) minutes. Nothing herein
shall impair the right of employees to rest days as well as to holiday pay, rest day pay or
leaves in accordance with law or applicable collective bargaining agreement or company
policy.
3. Adoption of the CWW scheme shall in no case result in diminution of existing
benefits. Reversion to the normal eight-hour workday shall not constitute a diminution of
benefits. The reversion shall be considered a legitimate exercise of management
prerogative, provided that the employer shall give the employees prior notice of such
reversion within a reasonable period of time.

ART. 84. Hours worked. - Hours worked shall include (a) all time during which an
employee is required to be on duty or to be at a prescribed workplace; and (b) all time
during which an employee is suffered or permitted to work.
Rest periods of short duration during working hours shall be counted as hours
worked.

[IRR BOOK 3 RULE 1]


SECTION 7. Meal and Rest Periods XXX Rest periods or coffee breaks running from
five (5) to twenty (20) minutes shall be considered as compensable working time.
26
[IRR BOOK 3 RULE 1]
SECTION 4. Principles in determining hours worked. The following general
principles shall govern in determining whether the time spent by an employee is
considered hours worked for purposes of this Rule:
(a) All hours are hours worked which the employee is required to give his
employer, regardless of whether or not such hours are spent in productive labor or involve
physical or mental exertion.
(b) An employee need not leave the premises of the work place in order that his
rest period shall not be counted, it being enough that he stops working, may rest
completely and may leave his work place, to go elsewhere, whether within or outside the
premises of his work place.
(c) If the work performed was necessary, or it benefited the employer, or the
employee could not abandon his work at the end of his normal working hours because he
had no replacement, all time spent for such work shall be considered as hours worked, if
the work was with the knowledge of his employer or immediate supervisor.
(d) The time during which an employee is inactive by reason of interruptions in
his work beyond his control shall be considered working time either if the imminence of the
resumption of work requires the employee's presence at the place of work or if the interval
is too brief to be utilized effectively and gainfully in the employee's own interest.

SECTION 5. Waiting time.


(a) Waiting time spent by an employee shall be considered as working time if
waiting is an integral part of his work or the employee is required or engaged by the
employer to wait.
(b) An employee who is required to remain on call in the employer's premises or
so close thereto that he cannot use the time effectively and gainfully for his own purpose
shall be considered as working while on call. An employee who is not required to leave
word at his home or with company officials where he may be reached is not working while
on call.

SECTION 6. Lectures, meetings, training programs. Attendance at lectures,


meetings, training programs, and other similar activities shall not be counted as working
time if all of the following conditions are met:
(a) Attendance is outside of the employee's regular working hours;
(b) Attendance is in fact voluntary; and
(c) The employee does not perform any productive work during such attendance.

ART. 85. Meal periods. - Subject to such regulations as the Secretary of Labor may
prescribe, it shall be the duty of every employer to give his employees not less than sixty
(60) minutes time-off for their regular meals.

[IRR BOOK 3 RULE 1]


SECTION 7. Meal and Rest Periods. Every employer shall give his employees,
regardless of sex, not less than one (1) hour time-off for regular meals, except in the
following cases when a meal period of not less than twenty (20) minutes may be given by
the employer provided that such shorter meal period is credited as compensable hours
worked of the employee:
(a) Where the work is non-manual work in nature or does not involve strenuous
physical exertion;
(b) Where the establishment regularly operates not less than sixteen (16) hours a
day;
(c) In case of actual or impending emergencies or there is urgent work to be
performed on machineries, equipment or installations to avoid serious loss which the
employer would otherwise suffer; and
(d) Where the work is necessary to prevent serious loss of perishable goods.
XXX
27
ART. 86. Night shift differential. - Every employee shall be paid a night shift differential
of not less than ten percent (10%) of his regular wage for each hour of work performed
between ten oclock in the evening and six oclock in the morning.

[IRR BOOK 3 RULE 2: Night Shift Differential]


SECTION 1. Coverage. This Rule shall apply to all employees except:
(a) Those of the government and any of its political subdivisions, including
government-owned and/or controlled corporations;
(b) Those of retail and service establishments regularly employing not more than
five (5) workers;
(c) Domestic helpers and persons in the personal service of another;
(d) Managerial employees as defined in Book Three of this Code;
(e) Field personnel and other employees whose time and performance is
unsupervised by the employer including those who are engaged on task or
contract basis, purely commission basis, or those who are paid a fixed
amount for performing work irrespective of the time consumed in the
performance thereof.

SECTION 3. Additional compensation. Where an employee is permitted or suffered


to work on the period covered after his work schedule, he shall be entitled to his regular
wage plus at least twenty-five per cent (25%) and an additional amount of no less than ten
per cent (10%) of such overtime rate for each hour or work performed between 10 p.m. to
6 a.m.

SECTION 4. Additional compensation on scheduled rest day/special holiday. An


employee who is required or permitted to work on the period covered during rest days
and/or special holidays not falling on regular holidays, shall be paid a compensation
equivalent to his regular wage plus at least thirty (30%) per cent and an additional amount
of not less than ten (10%) per cent of such premium pay rate for each hour of work
performed.

SECTION 5. Additional compensation on regular holidays. For work on the period


covered during regular holidays, an employee shall be entitled to his regular wage during
these days plus an additional compensation of no less than ten (10%) per cent of such
premium rate for each hour of work performed.

ART. 87. Overtime work. - Work may be performed beyond eight (8) hours a day
provided that the employee is paid for the overtime work, an additional compensation
equivalent to his regular wage plus at least twenty-five percent (25%) thereof. Work
performed beyond eight hours on a holiday or rest day shall be paid an additional
compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at
least thirty percent (30%) thereof.

[IRR BOOK 3 RULE 1]


SECTION 9. Premium and overtime pay for holiday and rest day work.
(a) Except employees referred to under Section 2 of this Rule, an employee who is
permitted or suffered to work on special holidays or on his designated rest days not falling
on regular holidays, shall be paid with an additional compensation as premium pay of not
less than thirty percent (30%) of his regular wage. For work performed in excess of eight
(8) hours on special holidays and rest days not falling on regular holidays, an employee
shall be paid an additional compensation for the overtime work equivalent to his rate for
the first eight hours on a special holiday or rest day plus at least thirty percent (30%)
thereof.

(c) The payment of additional compensation for work performed on regular holidays shall
be governed by Rule IV, Book Three, of these Rules.
28
[IRR BOOK 3 RULE 4]
SECTION 5. Overtime pay for holiday work. For work performed in excess of eight
hours on a regular holiday, an employee shall be paid an additional compensation for the
overtime work equivalent to his rate for the first eight hours on such holiday work plus at
least 30% thereof.
Where the regular holiday work exceeding eight hours falls on the scheduled rest
day of the employee, he shall be paid an additional compensation for the overtime work
equivalent to his regular holiday-rest day for the first 8 hours plus 30% thereof. The
regular holiday rest day rate of an employee shall consist of 200% of his regular daily
wage rate plus 30% thereof.

ART. 88. Undertime not offset by overtime. - Undertime work on any particular day
shall not be offset by overtime work on any other day. Permission given to the employee
to go on leave on some other day of the week shall not exempt the employer from paying
the additional compensation required in this Chapter.

ART. 89. Emergency overtime work. - Any employee may be required by the employer
to perform overtime work in any of the following cases:
(a) When the country is at war or when any other national or local emergency has
been declared by the National Assembly or the Chief Executive;
(b) When it is necessary to prevent loss of life or property or in case of imminent
danger to public safety due to an actual or impending emergency in the locality
caused by serious accidents, fire, flood, typhoon, earthquake, epidemic, or other
disaster or calamity;
(c) When there is urgent work to be performed on machines, installations, or
equipment, in order to avoid serious loss or damage to the employer or some
other cause of similar nature;
(d) When the work is necessary to prevent loss or damage to perishable goods; and
(e) Where the completion or continuation of the work started before the eighth hour is
necessary to prevent serious obstruction or prejudice to the business or
operations of the employer.
Any employee required to render overtime work under this Article shall be paid
the additional compensation required in this Chapter.

[IRR: BOOK 3 RULE 1]


SECTION 10. Compulsory overtime work
XXX
(f) When overtime work is necessary to avail of favorable weather or environmental
conditions where performance or quality of work is dependent thereon.

ART. 90. Computation of additional compensation. - For purposes of computing


overtime and other additional remuneration as required by this Chapter, the "regular
wage" of an employee shall include the cash wage only, without deduction on account of
facilities provided by the employer.

Chapter II
WEEKLY REST PERIODS

ART. 91. Right to weekly rest day.

29
(a) It shall be the duty of every employer, whether operating for profit or not, to provide
each of his employees a rest period of not less than twenty-four (24) consecutive
hours after every six (6) consecutive normal work days.
(b) The employer shall determine and schedule the weekly rest day of his employees
subject to collective bargaining agreement and to such rules and regulations as the
Secretary of Labor and Employment may provide. However, the employer shall
respect the preference of employees as to their weekly rest day when such
preference is based on religious grounds.

[IRR: BOOK 3 RULE 3]


SECTION 4. Preference of employee. The preference of the employee as to his
weekly day of rest shall be respected by the employer if the same is based on religious
grounds. The employee shall make known his preference to the employer in writing at
least seven (7) days before the desired effectivity of the initial rest day so preferred.
Where, however, the choice of the employee as to his rest day based on
religious grounds will inevitably result in serious prejudice or obstruction to the operations
of the undertaking and the employer cannot normally be expected to resort to other
remedial measures, the employer may so schedule the weekly rest day of his choice for at
least two (2) days in a month.

ART. 92. When employer may require work on a rest day. - The employer may require
his employees to work on any day:
(a) In case of actual or impending emergencies caused by serious accident, fire,
flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss
of life and property, or imminent danger to public safety;
(b) In cases of urgent work to be performed on the machinery, equipment, or
installation, to avoid serious loss which the employer would otherwise suffer;
(c) In the event of abnormal pressure of work due to special circumstances, where the
employer cannot ordinarily be expected to resort to other measures;
(d) To prevent loss or damage to perishable goods;
(e) Where the nature of the work requires continuous operations and the stoppage of
work may result in irreparable injury or loss to the employer; and
(f) Under other circumstances analogous or similar to the foregoing as determined by
the Secretary of Labor and Employment.

[IRR: BOOK 3 RULE 3]


SECTION 6. When work on rest day authorized. An employer may require any of his
employees to work on his scheduled rest day for the duration of the following emergencies
and exceptional conditions:
(a) In case of actual or impending emergencies caused by serious accident, fire,
flood, typhoon, earthquake, epidemic or other disaster or calamity, to prevent loss of life or
property, or in cases of force majeure or imminent danger to public safety;
(b) In case of urgent work to be performed on machineries, equipment or
installations to avoid serious loss which the employer would otherwise suffer;
(c) In the event of abnormal pressure of work due to special circumstances,
where the employer cannot ordinarily be expected to resort to other measures;
(d) To prevent serious loss (Note: no damage) of perishable goods;
(e) Where the nature of the work is such that the employees have to work
continuously for seven (7) days in a week or more, as in the case of the crew members of
a vessel to complete a voyage and in other similar cases; and
(f) When the work is necessary to avail of favorable weather or environmental
conditions where performance or quality of work is dependent thereon.
No employee shall be required against his will to work on his scheduled rest day
except under circumstances provided in this Section: Provided, However, that where an
employee volunteers to work on his rest day under other circumstances, he shall express
such desire in writing, subject to the provisions of Section 7 hereof regarding additional
compensation.
30
ART. 93. Compensation for rest day, Sunday or holiday work.
(a) Where an employee is made or permitted to work on his scheduled rest day, he shall
be paid an additional compensation of at least thirty percent (30%) of his regular
wage. An employee shall be entitled to such additional compensation for work
performed on Sunday only when it is his established rest day.
(b) When the nature of the work of the employee is such that he has no regular workdays
and no regular rest days can be scheduled, he shall be paid an additional
compensation of at least thirty percent (30%) of his regular wage for work performed
on Sundays and holidays.
(c) Work performed on any special holiday shall be paid an additional compensation of at
least thirty percent (30%) of the regular wage of the employee. Where such holiday
work falls on the employees scheduled rest day, he shall be entitled to an additional
compensation of at least fifty per cent (50%) of his regular wage.
(d) Where the collective bargaining agreement or other applicable employment contract
stipulates the payment of a higher premium pay than that prescribed under this
Article, the employer shall pay such higher rate.

[IRR BOOK 3 RULE 4]


SECTION 4. Compensation for holiday work. Any employee who is permitted or
suffered to work on any regular holiday, not exceeding eight (8) hours, shall be paid at
least two hundred percent (200%) of his regular daily wage. If the holiday work falls on the
scheduled rest day of the employee, he shall be entitled to an additional premium pay of
at least 30% of his regular holiday rate of 200% based on his regular wage rate.

Chapter III
HOLIDAYS, SERVICE INCENTIVE LEAVES
AND SERVICE CHARGES

ART. 94. Right to holiday pay.


(a) Every worker shall be paid his regular daily wage during regular holidays, except in
retail and service establishments regularly employing less than ten (10) workers;
(b) The employer may require an employee to work on any holiday but such employee
shall be paid a compensation equivalent to twice his regular rate; and
(c) As used in this Article, "holiday" includes: New Years Day, Maundy Thursday, Good
Friday, Eidul Fitr, the ninth of April (Araw ng Kagitingan), the first of May (Labor
Day), the twelfth of June (Independence Day), National Heroes Day, the thirtieth of
November (Bonifacio Day), the twenty-fifth (Christmas Day) and thirtieth of December
(Rizal Day) and the day designated by law for holding a general election. (Amended
by RA 9492 and 9849)

Book 3 RULE 4
Holidays with Pay
SECTION 1. Coverage. Note: Same as Night Shift Differential
This Rule shall apply to all employees except:
(a) Those of the government and any of its political subdivisions, including
government-owned and/or controlled corporations;
(b) Those of retail and service establishments regularly employing not more than
five (5) workers;
(c) Domestic helpers and persons in the personal service of another;
(d) Managerial employees as defined in Book Three of this Code;
(e) Field personnel and other employees whose time and performance is
unsupervised by the employer including those who are engaged on task or
contract basis, purely commission basis, or those who are paid a fixed
amount for performing work irrespective of the time consumed in the
performance thereof.

31
SECTION 2. Status of employees paid by the month. Employees who are uniformly
paid by the month, irrespective of the number of working days therein, with a salary of not
less than the statutory or established minimum wage shall be paid for all days in the
month whether worked or not.
For this purpose, the monthly minimum wage shall not be less than the statutory
minimum wage multiplied by 365 days divided by twelve.

SECTION 3. Holiday Pay. Every employer shall pay his employees their regular daily
wage for any worked regular holidays.
(Note: Follow Art. 94 for the holidays) As used in the rule, the term 'regular
holiday' shall exclusively refer to: New Year's Day, Maundy Thursday, Good Friday, the
ninth of April, the first of May, the twelfth of June, the last Sunday of August, the thirtieth of
November, the twenty-fifth and thirtieth of December. Nationwide special days shall
include the first of November and the last day of December.
As used in this Rule legal or regular holiday and special holiday shall now be
referred to as 'regular holiday' and 'special day', respectively.

SECTION 4. Compensation for holiday work. Any employee who is permitted or


suffered to work on any regular holiday, not exceeding eight (8) hours, shall be paid at
least two hundred percent (200%) of his regular daily wage. If the holiday work falls on the
scheduled rest day of the employee, he shall be entitled to an additional premium pay of
at least 30% of his regular holiday rate of 200% based on his regular wage rate.

SECTION 5. Overtime pay for holiday work. For work performed in excess of eight
hours on a regular holiday, an employee shall be paid an additional compensation for the
overtime work equivalent to his rate for the first eight hours on such holiday work plus at
least 30% thereof.
Where the regular holiday work exceeding eight hours falls on the scheduled rest
day of the employee, he shall be paid an additional compensation for the overtime work
equivalent to his regular holiday-rest day for the first 8 hours plus 30% thereof. The
regular holiday rest day rate of an employee shall consist of 200% of his regular daily
wage rate plus 30% thereof.

SECTION 6. Absences.
(a) All covered employees shall be entitled to the benefit provided herein when
they are on leave of absence with pay. Employees who are on leave of absence without
pay on the day immediately preceding a regular holiday may not be paid the required
holiday pay if he has not worked on such regular holiday.
(b) Employees shall grant the same percentage of the holiday pay as the benefit
granted by competent authority in the form of employee's compensation or social security
payment, whichever is higher, if they are not reporting for work while on such benefits.
(c) Where the day immediately preceding the holiday is a non-working day in the
establishment or the scheduled rest day of the employee, he shall not be deemed to be on
leave of absence on that day, in which case he shall be entitled to the holiday pay if he
worked on the day immediately preceding the non-working day or rest day.

SECTION 7. Temporary or periodic shutdown and temporary cessation of work.


(a) In cases of temporary or periodic shutdown and temporary cessation of work
of an establishment, as when a yearly inventory or when the repair or cleaning of
machineries and equipment is undertaken, the regular holidays falling within the period
shall be compensated in accordance with this Rule.
(b) The regular holiday during the cessation of operation of an enterprise due to
business reverses as authorized by the Secretary of Labor and Employment may not be
paid by the employer.

SECTION 8. Holiday pay of certain employees.

32
(a) Private school teachers, including faculty members of colleges and
universities, may not be paid for the regular holidays during semestral vacations. They
shall, however, be paid for the regular holidays during Christmas vacation;
(b) Where a covered employee is paid by results or output, such as payment on
piece work, his holiday pay shall not be less than his average daily earnings for the last
seven (7) actual working days preceding the regular holiday; Provided, However, that in
no case shall the holiday pay be less than the applicable statutory minimum wage rate.
(c) Seasonal workers may not be paid the required holiday pay during off-season
when they are not at work.
(d) Workers who have no regular working days shall be entitled to the benefits
provided in this Rule.

SECTION 9. Regular holiday falling on rest days or Sundays.


(a) A regular holiday falling on the employee's rest day shall be compensated
accordingly.
(b) Where a regular holiday falls on a Sunday, the following day shall be
considered a special holiday for purposes of the Labor Code, unless said day is also a
regular holiday.

SECTION 10. Successive regular holidays. Where there are two (2) successive
regular holidays, like Holy Thursday and Good Friday, an employee may not be paid for
both holidays if he absents himself from work on the day immediately preceding the first
holiday, unless he works on the first holiday, in which case he is entitled to his holiday pay
on the second holiday.

ART. 95. Right to service incentive leave.


(a) Every employee who has rendered at least one year of service shall be entitled to a
yearly service incentive leave of five days with pay.

SECTION 3. Definition of certain terms. The term "at least one-year service" shall
mean service for not less than 12 months, whether continuous or broken reckoned from
the date the employee started working, including authorized absences and paid regular
holidays unless the working days in the establishment as a matter of practice or policy, or
that provided in the employment contract is less than 12 months, in which case said
period shall be considered as one year.

(b) This provision shall not apply to those who are already enjoying the benefit herein
provided, those enjoying vacation leave with pay of at least five days and those
employed in establishments regularly employing less than ten employees or in
establishments exempted from granting this benefit by the Secretary of Labor and
Employment after considering the viability or financial condition of such
establishment.

Book 3 RULE 5
Service Incentive Leave
SECTION 1. Coverage. This rule shall apply to all employees except:
(a) Those of the government and any of its political subdivisions, including
government-owned and controlled corporations;
(b) Domestic helpers and persons in the personal service of another;
(c) Managerial employees as defined in Book Three of this Code;
(d) Field personnel and other employees whose performance is unsupervised by
the employer including those who are engaged on task or contract basis, purely
commission basis, or those who are paid a fixed amount for performing work irrespective
of the time consumed in the performance thereof;
(e) Those who are already enjoying the benefit herein provided;
(f) Those enjoying vacation leave with pay of at least five days; and

33
(g) Those employed in establishments regularly employing less than ten
employees.

(c) The grant of benefit in excess of that provided herein shall not be made a subject of
arbitration or any court or administrative action.

SECTION 5. Treatment of benefit. The service incentive leave shall be commutable to


its money equivalent if not used or exhausted at the end of the year.

ART. 96. Service charges. - All service charges collected by hotels, restaurants and
similar establishments shall be distributed at the rate of eighty-five percent (85%) for all
covered employees and fifteen percent (15%) for management. The share of the
employees shall be equally distributed among them. In case the service charge is
abolished, the share of the covered employees shall be considered integrated in their
wages.

BOOK 3 - RULE 6
Service Charges
SECTION 1. Coverage. This rule shall apply only to establishments collecting service
charges such as hotels, restaurants, lodging houses, night clubs, cocktail lounge,
massage clinics, bars, casinos and gambling houses, and similar enterprises, including
those entities operating primarily as private subsidiaries of the Government.

SECTION 2. Employees covered. This rule shall apply to all employees of covered
employers, regardless of their positions, designations or employment status, and
irrespective of the method by which their wages are paid except to managerial employees.
As used herein, a "managerial employee" shall mean one who is vested with
powers or prerogatives to lay down and execute management policies and/or to hire,
transfer, suspend, lay-off, recall, discharge, assign, or discipline employees or to
effectively recommend such managerial actions. All employees not falling within this
definition shall be considered rank-and-file employees.

SECTION 3. Distribution of service charges. All service charges collected by


covered employers shall be distributed at the rate of 85% for the employees and 15% for
the management. The 85% shall be distributed equally among the covered employees.
The 15% shall be for the disposition by management to answer for losses and breakages
and distribution to managerial employees at the discretion of the management in the latter
case.

SECTION 4. Frequency of distribution. The shares referred to herein shall be


distributed and paid to the employees not less than once every two (2) weeks or twice a
month at intervals not exceeding sixteen (16) days.

SECTION 5. Integration of service charges. In case the service charges is abolished


the share of covered employees shall be considered integrated in their wages. The basis
of the amount to be integrated shall be the average monthly share of each employee for
the past twelve (12) months immediately preceding the abolition of withdrawal of such
charges.

th
[Revised Guidelines: PD 851: 13 Month Pay]
Section 1 of Presidential Decree No. 851 is hereby modified to the extent that all
employers are hereby required to pay all their rank-and-file employees a 13th month pay
not later than December 24 of every year."

3. Who are Rank-and File Employees.

34
The Labor Code distinguishes a rank-and-file employee from a managerial employee. It
provides that a managerial employee is one who is vested with powers of prerogatives to
lay down and execute management policies and/or to hire, transfer, suspend, lay-off,
recall discharge, assign or discipline employees, or to effectively recommend such
managerial actions. All employees not falling within this definition are considered rank-
and-file employees.
The above distinction shall be used as guide for the purpose of determining who
are rank-and-file employees entitled to the mandated 13th month pay.

2. Exempted Employers.
The following employers are still not covered by P.D. No. 851:
a. The Government and any of its political subdivisions, including government-
owned and controlled corporations, excepts those corporations operating
essentially as private subsidiaries of the Government;
b. Employers already paying their employees a 13th month pay or more in a
calendar year or its equivalent at the time of this issuance;
c. Employers of household helpers and persons in the personal service of
another in relation to such workers; and
d. Employers of those who are paid on purely commission, boundary, or task
basis, and those who are paid a fixed amount for performing specific work,
irrespective of the time consumed in the performance thereof, except where
the workers are paid on piece-rate basis in which case the employer shall
grant the required 13th month pay to such workers.
As used herein, workers paid on piece-rate basis shall refer to those who are
paid a standard amount for every piece or unit of work produced that is more or less
regularly replicated, without regard to the time spent in producing the same.
The term "its equivalent" as used on paragraph (b) hereof shall include
Christmas bonus, mid-year bonus, cash bonuses and other payments amounting to not
less than 1/12 of the basic salary but shall not include cash and stock dividends, cost of
living allowances and all other allowances regularly enjoyed by the employee, as well as
non-monetary benefits. Where an employer pays less than required 1/12th of the
employees basic salary, the employer shall pay the difference.

4. Amount and payment of 13th Month Pay


(a) Minimum of the Amount. The minimum 13th month pay required by law
shall not be less than one-twelfth of the total basic salary earned by an employee within a
calendar year.
XXX
The "basic salary" of an employee for the purpose of computing the 13th month
pay shall include all remunerations or earning paid by this employer for services rendered
but does not include allowances and monetary benefits which are not considered or
integrated as part of the regular or basic salary, such as the cash equivalent of unused
vacation and sick leave credits, overtime, premium, night differential and holiday pay, and
cost-of-living allowances. However, these salary-related benefits should be included as
part of the basic salary in the computation of the 13th month pay if by individual or
collective agreement, company practice or policy, the same are treated as part of the
basic salary of the employees.
(b) Time of Payment. The required 13th month pay shall be paid not later
than December 24 of each year. An employer, however, may give to his employees one
half () of the required 13th month pay before the opening of the regular school year and
the other half on before the 24th of December of every year. The frequency of payment of
this monetary benefit may be the subject of agreement between the employer and the
recognized/collective bargaining agent of the employees.

5. 13th Month Pay for Certain Types of Employees.


(a) Employees Paid by Results. Employees who are paid on piece work basis
are by law entitled to the 13th month pay.

35
Employees who are paid a fixed or guaranteed wage plus commission are also
entitled to the mandated 13th month pay, based on their total earnings during the calendar
year, i.e., on both their fixed or guaranteed wage and commission.
(b) Those with Multiple Employers. Government employees working part time
in a private enterprise, including private educational institutions, as well as employees
working in two or more private firms, whether on full or part time basis, are entitled to the
required 13th month pay from all their private employers regardless of their total earnings
from each or all their employers.
(c) Private School Teachers. Private school teachers, including faculty
members of universities and colleges, are entitled to the required 13th month pay,
regardless of the number of months they teach or are paid within a year, if they have
rendered service for at least one (1) month within a year.

6. 13th Month Pay of Resigned or Separated Employee.


An employee who has resigned or whose services were terminated at any time
before the time for payment of the 13th month pay is entitled to this monetary benefit in
proportion to the length of time he worked during the year, reckoned from the time he
started working during the calendar year up to the time of his resignation or termination
from the service. Thus, if he worked only from January up to September his proportionate
13th month pay should be equivalent of 1/12 his total basic salary he earned during that
period.
The payment of the 13th month pay may be demanded by the employee upon
the cessation of employer-employee relationship. This is consistent with the principle of
equity that as the employer can require the employee to clear himself of all liabilities and
property accountability, so can the employee demand the payment of all benefits due him
upon the termination of the relationship.

7. Non-inclusion in Regular Wage.


The mandated 13th month pay need not be credited as part of regular wage of employees
for purposes of determining overtime and premium pays, fringe benefits insurance fund,
Social Security, Medicare and private retirement plans.

Title II
WAGES

Chapter I

PRELIMINARY MATTERS
ART. 97. Definitions. - As used in this Title:
(a) "Person" means an individual, partnership, association, corporation, business trust,
legal representatives, or any organized group of persons.
(b) "Employer" includes any person acting directly or indirectly in the interest of an
employer in relation to an employee and shall include the government and all its
branches, subdivisions and instrumentalities, all government-owned or controlled
corporations and institutions, as well as non-profit private institutions, or
organizations.
(c) "Employee" includes any individual employed by an employer.
(d) "Agriculture" includes farming in all its branches and, among other things, includes
cultivation and tillage of soil, dairying, the production, cultivation, growing and
harvesting of any agricultural and horticultural commodities, the raising of livestock or
poultry, and any practices performed by a farmer on a farm as an incident to or in
conjunction with such farming operations, but does not include the manufacturing or
processing of sugar, coconuts, abaca, tobacco, pineapples or other farm products.
(e) "Employ" includes to suffer or permit to work.
(f) "Wage" paid to any employee shall mean the remuneration or earnings, however
designated, capable of being expressed in terms of money, whether fixed or
ascertained on a time, task, piece, or commission basis, or other method of

36
calculating the same, which is payable by an employer to an employee under a
written or unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair and reasonable value, as
determined by the Secretary of Labor and Employment, of board, lodging, or other
facilities customarily furnished by the employer to the employee. "Fair and reasonable
value" shall not include any profit to the employer, or to any person affiliated with the
employer.

(a) "Affiliate" refers to an independent union affiliated with a federation, national union or a
chartered local which was subsequently granted independent registration but did not
disaffiliate from its federation, reported to the Regional Office and the Bureau in
accordance with Rule III, Sections 6 and 7 of these Rules.

[BOOK 3 RULE 7-A]


Section 5. Facilities. The term facilities as used in this Rule shall include articles or
services for the benefit of the employee or his family but shall not include tools of the trade
or articles or service primarily for the benefit of the employer or necessary to the conduct
of the employers business.

Section 7. Acceptance of facilities. In order that the cost of facilities furnished by the
employer may be charged against an employee, his acceptance of such facilities must be
voluntary.

Supplements Extra remuneration or special privileges or benefits given to or received


by the laborers over and above their ordinary earnings or wages. (SMCLI v. CSAI)

ART. 98. Application of Title. - This Title shall not apply to farm tenancy or leasehold,
domestic service and persons working in their respective homes in needle work or in any
cottage industry duly registered in accordance with law.

[IRR: Book 3 Rule 7]


Section 3. Coverage. This rule shall not apply to the following persons:
(a) Household or domestic helpers, including family drivers and persons in the personal
service of another;
(b) Homeworkers engaged in needlework;
(c) Workers employed in any establishment duly registered with the national Cottage
Industries and Development Authority in accordance with RA 3470, provided that
such workers perform the work in their respective homes;
(d) Workers in any duly registered cooperative when so recommended by the Bureau of
Cooperative Development and upon approval of the Secretary of Labor; 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
without serious loss or prejudice to its operation except through its exemption from
the requirements of this Rule. The exemption shall be subject to such terms and
conditions and for such period of time as the Secretary of Labor may prescribe.

Chapter II
MINIMUM WAGE RATES

ART. 99. Regional minimum wages. - The minimum wage rates for agricultural and non-
agricultural employees and workers in each and every region of the country shall be those

37
prescribed by the Regional Tripartite Wages and Productivity Boards. (As amended by
Section 3, Republic Act No. 6727, June 9, 1989).

ART. 100. Prohibition against elimination or diminution of benefits. - Nothing in this


Book shall be construed to eliminate or in any way diminish supplements, or other
employee benefits being enjoyed at the time of promulgation of this Code.

ART. 101. Payment by results. The Secretary of Labor and Employment shall regulate
the payment of wages by results, including pakyao, piecework, and other non-time work,
in order to ensure the payment of fair and reasonable wage rates, preferably through time
and motion studies or in consultation with representatives of workers and employers
organizations.

Chapter III
PAYMENT OF WAGES

ART. 102. Forms of payment. - No employer shall pay the wages of an employee by
means of promissory notes, vouchers, coupons, tokens, tickets, chits, or any object other
than legal tender, even when expressly requested by the employee.
Payment of wages by check or money order shall be allowed when such manner
of payment is customary on the date of effectivity of this Code, or is necessary because of
special circumstances as specified in appropriate regulations to be issued by the
Secretary of Labor and Employment or as stipulated in a collective bargaining agreement.

ART. 103. Time of payment. - Wages shall be paid at least once every two (2) weeks or
twice a month at intervals not exceeding sixteen (16) days. If on account of force
majeure or circumstances beyond the employers control, payment of wages on or within
the time herein provided cannot be made, the employer shall pay the wages immediately
after such force majeure or circumstances have ceased. No employer shall make payment
with less frequency than once a month.
The payment of wages of employees engaged to perform a task which cannot be
completed in two (2) weeks shall be subject to the following conditions, in the absence of
a collective bargaining agreement or arbitration award:
(1) That payments are made at intervals not exceeding sixteen (16) days, in
proportion to the amount of work completed;
(2) That final settlement is made upon completion of the work.

ART. 104. Place of payment. - Payment of wages shall be made at or near the place of
undertaking, except as otherwise provided by such regulations as the Secretary
of Labor and Employment may prescribe under conditions to ensure greater protection of
wages.

ART. 105. Direct payment of wages. - Wages shall be paid directly to the workers to
whom they are due, except:
(a) In cases of force majeure rendering such payment impossible or under other
special circumstances to be determined by the Secretary of Labor and
Employment in appropriate regulations, in which case, the worker may be paid
through another person under written authority given by the worker for the
purpose; or
(b) Where the worker has died, in which case, the employer may pay the wages of
the deceased worker to the heirs of the latter without the necessity of intestate
proceedings. The claimants, if they are all of age, shall execute an affidavit
attesting to their relationship to the deceased and the fact that they are his heirs,
to the exclusion of all other persons. If any of the heirs is a minor, the affidavit
shall be executed on his behalf by his natural guardian or next-of-kin. The
affidavit shall be presented to the employer who shall make payment through the
Secretary of Labor and Employment or his representative. The representative of
the Secretary of Labor and Employment shall act as referee in dividing the
38
amount paid among the heirs. The payment of wages under this Article shall
absolve the employer of any further liability with respect to the amount paid.

ART. 106. Contractor or subcontractor. - Whenever an employer enters into a contract


with another person for the performance of the formers work, the employees of the
contractor and of the latters subcontractor, if any, shall be paid in accordance with the
provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his
employees in accordance with this Code, the employer shall be jointly and severally liable
with his contractor or subcontractor to such employees to the extent of the work performed
under the contract, in the same manner and extent that he is liable to employees directly
employed by him.
The Secretary of Labor and Employment may, by appropriate regulations, restrict
or prohibit the contracting-out of labor to protect the rights of workers established under
this Code. In so prohibiting or restricting, he may make appropriate distinctions
between labor-only contracting and job contracting as well as differentiations within these
types of contracting and determine who among the parties involved shall be considered
the employer for purposes of this Code, to prevent any violation or circumvention of any
provision of this Code.
There is "labor-only" contracting where the person supplying workers to an
employer does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers recruited and placed by such
person are performing activities which are directly related to the principal business of such
employer. In such cases, the person or intermediary shall be considered merely as an
agent of the employer who shall be responsible to the workers in the same manner and
extent as if the latter were directly employed by him.

[DO No. 18-A, Series of 2011: RULES IMPLEMENTING ARTICLES 106 TO 109 OF
THE LABOR CODE, AS AMENDED]

Section 2. Coverage. These Rules shall apply to all parties of contracting and
subcontracting arrangements where employer-employee relationships exist. It shall also
apply to cooperatives engaging in contracting or subcontracting arrangements.
Contractors and subcontractors referred to in these Rules are prohibited from
engaging in recruitment and placement activities as defined in Article 13(b) of the Labor
Code, whether for local or overseas employment.

Section 4. Legitimate contracting or subcontracting. Contracting or subcontracting


shall be legitimate if all the following circumstances concur:
(a) The contractor must be registered in accordance with these Rules and carries
a distinct and independent business and undertakes to perform the job, work or service on
its own responsibility, according to its own manner and method, and free from control and
direction of the principal in all matters connected with the performance of the work except
as to the results thereof;
(b) The contractor has substantial capital and/or investment; and
(c) The Service Agreement ensures compliance with all the rights and benefits
under Labor Laws.

Section 6. Prohibition against labor-only contracting. Labor-only contracting is hereby


declared prohibited. For this purpose, labor only contracting shall refer to an arrangement
where:
(a) The contractor does not have substantial capital or investments in the form of
tools, equipment, machineries, work premises, among others, and the employees
recruited and placed are performing activities which are usually necessary or desirable to
the operation of the company, or directly related to the main business of the principal
within a definite or predetermined period, regardless of whether such job, work or service
is to be performed or completed within or outside the premises of the principal; or

39
(b) The contractor does not exercise the right to control over the performance of
the work of the employee.

Section 27. Effects of finding of labor-only contracting and/or violation of Sections


7. 8 or 9 of the Rules. A finding by competent authority of labor-only contracting shall
render the principal jointly and severally liable with the contractor to the latter's employees,
in the same manner and extent that the principal is liable to employees directly hired by
him/her, as provided in Article 106 of the Labor Code, as amended.
A finding of commission of any of the prohibited activities in Section 7, or
violation of either Sections 8 or 9 hereof, shall render the principal the direct employer of
the employees of the contractor or subcontractor, pursuant to Article 109 of the Labor
Code, as amended.

Section 3. Definition of terms. The following terms as used in these Rules, shall mean:
(a) Bond/s refers to the bond under Article 108 of the Labor Code that the
principal may require from the contractor to be posted equal to the cost of labor under
contract. The same may also refer to the security or guarantee posted by the principal for
the payment of the services of the contractors under the Service Agreement.
(b) Cabo refers to a person or group of persons or to a labor group which, in the
guise of a labor organization, cooperative or any entity, supplies workers to an employer,
with or without any monetary or other consideration, whether in the capacity of an agent of
the employer or as an ostensible independent contractor.
(c) Contracting or Subcontracting refers to an arrangement whereby a
principal agrees to put out or farm out with a contractor the performance or completion of
a specific job, work or service within a definite or predetermined period, regardless of
whether such job, work or service is to be performed or completed within or outside the
premises of the principal.
(d) Contractor refers to any person or entity, including a cooperative, engaged
in a legitimate contracting or subcontracting arrangement providing either services, skilled
workers, temporary workers, or a combination of services to a principal under a Service
Agreement.
(e) Contractors employee includes one employed by a contractor to perform or
complete a job, work, or service pursuant to a Service Agreement with a principal. It shall
also refer to regular employees of the contractor whose functions are not dependent on
the performance or completion of a specific job, work or service within a definite period of
time, i.e., administrative staff.
(f) In-house agency refers to a contractor which is owned, managed, or
controlled directly or indirectly by the principal or one where the principal owns/represents
any share of stock, and which operates solely or mainly for the principal.
(g) Net Financial Contracting Capacity (NFCC)1 refers to the formula to
determine the financial capacity of the contractor to carry out the job, work or services
sought to be undertaken under a Service Agreement. NFCC is current assets minus
current liabilities multiplied by K, which stands for contract duration equivalent to: 10 for
one year or less; 15 for more than one (1) year up to two (2) years; and 20 for more than
two (2) years, minus the value of all outstanding or ongoing projects including contracts to
be started.
1 Refers to the formula set out in the Implementing Rules and Regulations of
Republic Act No. 9184, or An Act Providing for the Modernization, Standardization and
Regulation of the Procurement Activities of the Government and For Other Purposes.
(h) Principal refers to any employer, whether a person or entity, including
government agencies and government-owned and controlled-corporations, who/which
puts out or farms out a job, service or work to a contractor.
(i) Right to control refers to the right reserved to the person for whom the
services of the contractual workers are performed, to determine not only the end to be
achieved, but also the manner and means to be used in reaching that end.

40
(j) Service Agreement refers to the contract between the principal and
contractor containing the terms and conditions governing the performance or completion
of a specific job, work or service being farmed out for a definite or predetermined period.
(k) Solidary liability refers to the liability of the principal, pursuant to the
provision of Article 109 of the Labor Code, as direct employer together with the contractor
for any violation of any provision of the Labor Code.
It also refers to the liability of the principal, in the same manner and extent that
he/she is liable to his/her direct employees, to the extent of the work performed under the
contract when the contractor fails to pay the wages of his/her employees, as provided in
Article 106 of the Labor Code, as amended.
(l) "Substantial capital refers to paid-up capital stocks/shares of at least Three
Million Pesos (P3, 000,000.00) in the case of corporations, partnerships and cooperatives;
in the case of single proprietorship, a net worth of at least Three Million Pesos (P3,
000,000.00).
(m) Trilateral Relationship refers to the relationship in a contracting or
subcontracting arrangement where there is a contract for a specific job, work or service
between the principal and the contractor, and a contract of employment between the
contractor and its workers. There are three (3) parties involved in these arrangements: the
principal who decides to farm out a job, work or service to a contractor; the contractor who
has the capacity to independently undertake the performance of the job, work or service;
and the contractual workers engaged by the contractor to accomplish the job, work or
service.

Section 7. Other Prohibitions. Notwithstanding Section 6 of these Rules, the following


are hereby declared prohibited for being contrary to law or public policy:
A. Contracting out of jobs, works or services when not done in good faith and not
justified by the exigencies of the business such as the following:
(1) Contracting out of jobs, works or services when the same results in
the termination or reduction of regular employees and reduction of
work hours or reduction or splitting of the bargaining unit.
(2) Contracting out of work with a Cabo.
(3) Taking undue advantage of the economic situation or lack of
bargaining strength of the contractors employees, or undermining
their security of tenure or basic rights, or circumventing the
provisions of regular employment, in any of the following instances:
(i) Requiring them to perform functions which are currently
being performed by the regular employees of the principal;
and
(ii) Requiring them to sign, as a precondition to employment or
continued employment, an antedated resignation letter; a
blank payroll; a waiver of labor standards including
minimum wages and social or welfare benefits; or a
quitclaim releasing the principal, contractor or from any
liability as to payment of future claims.
(4) Contracting out of a job, work or service through an in-house
agency.
(5) Contracting out of a job, work or service that is necessary or
desirable or directly related to the business or operation of the
principal by reason of a strike or lockout whether actual or imminent.
(6) Contracting out of a job, work or service being performed by union
members when such will interfere with, restrain or coerce employees
in the exercise of their rights to self-organization as provided in Art.
248 (c) of the Labor Code, as amended.
(7) Repeated hiring of employees under an employment contract of
short duration or under a Service Agreement of short duration with
the same or different contractors, which circumvents the Labor Code
provisions on Security of Tenure.

41
(8) Requiring employees under a subcontracting arrangement to sign a
contract fixing the period of employment to a term shorter than the
term of the Service Agreement, unless the contract is divisible into
phases for which substantially different skills are required and this is
made known to the employee at the time of engagement.
(9) Refusal to provide a copy of the Service Agreement and the
employment contracts between the contractor and the employees
deployed to work in the bargaining unit of the principals certified
bargaining agent to the sole and exclusive bargaining agent (SEBA).
(10) Engaging or maintaining by the principal of subcontracted
employees in excess of those provided for in the applicable
Collective Bargaining Agreement (CBA) or as set by the Industry
Tripartite Council (ITC).
B. Contracting out of jobs, works or services analogous to the above when not
done in good faith and not justified by the exigencies of the business.

Section 8. Rights of contractors employees. All contractors employees, whether


deployed or assigned as reliever, seasonal, week-ender, temporary, or promo jobbers,
shall be entitled to all the rights and privileges as provided for in the Labor Code, as
amended, to include the following:
(a) Safe and healthful working conditions;
(b) Labor standards such as but not limited to service incentive leave, rest days,
overtime pay, holiday pay, 13th month pay, and separation pay as may be
provided in the Service Agreement or under the Labor Code;
(c) Retirement benefits under the SSS or retirement plans of the contractor, if
there is any;
(d) Social security and welfare benefits;
(e) Self-organization, collective bargaining and peaceful concerted activities; and
(f) Security of tenure.

Section 9. Required contracts under these Rules.


(a) Employment contract between the contractor and its employee.
Notwithstanding any oral or written stipulations to the contrary, the contract
between the contractor and its employee shall be governed by the provisions of Articles
279 and 280 of the Labor Code, as amended. It shall include the following terms and
conditions:
i. The specific description of the job, work or service to be performed by
the employee;
ii. The place of work and terms and conditions of employment, including
a statement of the wage rate applicable to the individual employee;
and
iii. The term or duration of employment that must be co-extensive with
the Service Agreement or with the specific phase of work for which
the employee is engaged.
The contractor shall inform the employee of the foregoing terms and conditions of
employment in writing on or before the first day of his/her employment.
(b) Service Agreement between the principal and the contractor. The Service
Agreement shall include the following:
i. The specific description of the job, work or service being
subcontracted.
ii. The place of work and terms and conditions governing the contracting
arrangement, to include the agreed amount of the services to be
rendered, the standard administrative fee of not less than ten percent
(10%) of the total contract cost.
iii. Provisions ensuring compliance with all the rights and benefits of the
employees under the Labor Code and these Rules on: provision for
safe and healthful working conditions; labor standards such as,

42
service incentive leave, rest days, overtime pay, 13th month pay and
separation pay; retirement benefits; contributions and remittance of
SSS, Philhealth, PagIbig Fund, and other welfare benefits; the right to
self-organization, collective bargaining and peaceful concerted action;
and the right to security of tenure.
iv. A provision on the Net Financial Contracting Capacity of the
contractor, which must be equal to the total contract cost.
v. A provision on the issuance of the bond/s as defined in Section 3(m)
renewable every year.
vi. The contractor or subcontractor shall directly remit monthly the
employers share and employees contribution to the SSS, ECC,
Philhealth and Pagibig.
vii. The term or duration of engagement. The Service Agreement must
conform to the DOLE Standard Computation and Standard Service
Agreement, which form part of these Rules as Annexes A and B.

Section 10. Duties of the principal. Pursuant to the authority of the Secretary of Labor
and Employment to restrict or prohibit the contracting of labor to protect the rights of the
workers and to ensure compliance with the provisions of the Labor Code, as amended,
the principal, as the indirect employer or the user of the services of the contractor, is
hereby required to observe the provisions of these Rules.

Section 11. Security of tenure of contractors employees. It is understood that all


contractors employees enjoy security of tenure regardless of whether the contract of
employment is co-terminus with the service agreement, or for a specific job, work or
service, or phase thereof.

Section 12. Observance of required standards of due process; requirements of


notice. In all cases of termination of employment, the standards of due process laid down
in Article 277(b) of the Labor Code, as amended, and settled jurisprudence on the
matter2, must be observed. Thus, the following is hereby set out to clarify the standards of
due process that must be observed:

2 King of Kings Transport, Inc., Claire dela Fuente, and Melissa Lim, vs. Santiago O.
Mamac, G.R. No. 166208, (29 June 2007); and Felix B. Perez and Amante G. Doria v.
Philippine Telegraph and Telephone Company and Jose Luis Santiago, G.R. No. 152048,
(7 April 2009), (en banc Decision).

I. For termination of employment based on just causes as defined in Article 282 of the
Code, the requirement of two written notices served on the employee shall observe the
following:
(A) The first written notice should contain:
(1) The specific causes or grounds for termination;
(2) Detailed narration of the facts and circumstances that will serve as
basis for the charge against the employee. A general description of the
charge will not suffice;
(3) The company rule, if any, that is violated and/or the ground under
Art. 282 that is being charged against the employee; and
(4) A directive that the employee is given opportunity to submit a written
explanation within a reasonable period.
Reasonable period should be construed as a period of at least five (5) calendar
days from receipt of the notice to give the employee an opportunity to study the
accusation, consult a union official or lawyer, gather data and evidence, and decide on the
defenses against the complaint.
(B) After serving the first notice, the employer should afford the employee ample
opportunity to be heard and to defend himself/herself with the assistance of his/her
representative if he/she so desires, as provided in Article 277(b) of the Labor Code, as
amended.
43
Ample opportunity to be heard means any meaningful opportunity (verbal or
written) given to the employee to answer the charges against him/her and submit
evidence in support of his/her defense, whether in a hearing, conference or some other
fair, just and reasonable way. A formal hearing or conference becomes mandatory only
when requested by the employee in writing or substantial evidentiary disputes exist or a
company rule or practice requires it, or when similar circumstances justify it.
(C) After determining that termination of employment is justified, the employer
contractor shall serve the employee a written notice of termination indicating that: (1) all
circumstances involving the charge against the employees have been considered; and (2)
the grounds have been established to justify the severance of their employment. The
foregoing notices shall be served on the employees last known address.

II. For termination of employment based on authorized causes defined in Article 283 of the
Labor Code, the requirement of due process shall be deemed complied with upon service
of a written notice to the employee and the appropriate regional office of the Department
of Labor and Employment at least thirty days before the effectivity of the termination,
specifying the ground or grounds for termination.

III. If the termination is brought about by the completion of the contract or phase thereof,
no prior notice is required. If the termination is brought about by the failure of a
probationary employee to meet the reasonable standards of the employer, which was
made known to the employee at the time of his/her employment, it shall be sufficient that a
written notice is served upon the employee within a reasonable time prior to the expiration
of the probationary period.

Section 13. Effect of termination of employment. The termination of employment of the


contractor employee prior to the expiration of the Service Agreement shall be governed by
Articles 282, 283 and 284 of the Labor Code.
In case the termination of employment is caused by the pre-termination of the
Service Agreement not due to authorized causes under Article 283, the right of the
contractor employee to unpaid wages and other unpaid benefits including unremitted legal
mandatory contributions, e.g., SSS, Philhealth, Pag-ibig, ECC, shall be borne by the party
at fault, without prejudice to the solidary liability of the parties to the Service Agreement.
Where the termination results from the expiration of the service agreement, or
from the completion of the phase of the job, work or service for which the employee is
engaged, the latter may opt for payment of separation benefits as may be provided by law
or the Service Agreement, without prejudice to his/her entitlement to the completion
bonuses or other emoluments, including retirement benefits whenever applicable.

Section 14. Mandatory Registration and Registry of Legitimate Contractors.


Consistent with the authority of the Secretary of Labor and Employment to restrict or
prohibit the contracting out of labor to protect the rights of workers, it shall be mandatory
for all persons or entities, including cooperatives, acting as contractors, to register with the
Regional Office of the Department of Labor and Employment (DOLE) where it principally
operates.
Failure to register shall give rise to the presumption that the contractor is
engaged in labor-only contracting.
Accordingly, the registration system governing contracting arrangements and
implemented by the Regional Offices of the DOLE is hereby established, with the Bureau
of Working Conditions (BWC) as the central registry.
NOTE: Did not put Secs. 15-41 anymore.

ART. 107. Indirect employer. - The provisions of the immediately preceding article shall
likewise apply to any person, partnership, association or corporation which, not being an
employer, contracts with an independent contractor for the performance of any work, task,
job or project.

44
ART. 108. Posting of bond. - An employer or indirect employer may require the
contractor or subcontractor to furnish a bond equal to the cost of labor under contract, on
condition that the bond will answer for the wages due the employees should the contractor
or subcontractor, as the case may be, fail to pay the same.

ART. 109. Solidary liability. - The provisions of existing laws to the contrary
notwithstanding, every employer or indirect employer shall be held responsible with his
contractor or subcontractor for any violation of any provision of this Code. For purposes of
determining the extent of their civil liability under this Chapter, they shall be considered as
direct employers.

[DO No. 18-A, Series of 2011]


Section 5. Trilateral relationship in contracting arrangements; Solidary liability. In
legitimate contracting or subcontracting arrangement there exists:
(a) An employer-employee relationship between the contractor and the
employees it engaged to perform the specific job, work or service being contracted; and
(b) A contractual relationship between the principal and the contractor as
governed by the provisions of the Civil Code.
In the event of any violation of any provision of the Labor Code, including the
failure to pay wages, there exists a solidary liability on the part of the principal and the
contractor for purposes of enforcing the provisions of the Labor Code and other social
legislation, to the extent of the work performed under the employment contract.
However, the principal shall be deemed the direct employer of the contractors
employee in cases where there is a finding by a competent authority of labor-only
contracting, or commission of prohibited activities as provided in Section 7, or a violation
of either Sections 8 or 9 hereof.

ART. 110. Worker preference in case of bankruptcy. - In the event of bankruptcy or


liquidation of an employers business, his workers shall enjoy first preference as regards
their wages and other monetary claims, any provisions of law to the contrary
notwithstanding. Such unpaid wages and monetary claims shall be paid in full before
claims of the government and other creditors may be paid. (As amended by Section 1,
Republic Act No. 6715, March 21, 1989).

ART. 111. Attorneys fees.


(a) In cases of unlawful withholding of wages, the culpable party may be assessed
attorneys fees equivalent to ten percent of the amount of wages recovered.
(b) It shall be unlawful for any person to demand or accept, in any judicial or administrative
proceedings for the recovery of wages, attorneys fees which exceed ten percent of
the amount of wages recovered.

SECTION 11. Attorney's fees. Attorney's fees in any judicial or administrative


proceedings for the recovery of wages shall not exceed 10 percent of the amount
awarded. The fees may be deducted from the total amount due the winning party.

NOTE: For Union Service Fees, check Article 222.

Chapter IV
PROHIBITIONS REGARDING WAGES

ART. 112. Non-interference in disposal of wages. - No employer shall limit or otherwise


interfere with the freedom of any employee to dispose of his wages. He shall not in any
manner force, compel, or oblige his employees to purchase merchandise, commodities or
45
other property from any other person, or otherwise make use of any store or services of
such employer or any other person.

ART. 113. Wage deduction. - No employer, in his own behalf or in behalf of any person,
shall make any deduction from the wages of his employees, except:
(a) In cases where the worker is insured with his consent by the employer, and the
deduction is to recompense the employer for the amount paid by him as premium
on the insurance;
(b) For union dues, in cases where the right of the worker or his union to check-off
has been recognized by the employer or authorized in writing by the individual
worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the
Secretary of Labor and Employment.

SECTION 13. Wages deduction. Deductions from the wages of the employees may
be made by the employer in any of the following cases:
(a) When the deductions are authorized by law, including deductions for the
insurance premiums advanced by the employer in behalf of the employee as well as union
dues where the right to check-off has been recognized by the employer or authorized in
writing by the individual employee himself.
(b) When the deductions are with the written authorization of the employees for
payment to the third person and the employer agrees to do so; Provided, That the latter
does not receive any pecuniary benefit, directly or indirectly, from the transaction.

ART. 114. Deposits for loss or damage. - No employer shall require his worker to make
deposits from which deductions shall be made for the reimbursement of loss of or damage
to tools, materials, or equipment supplied by the employer, except when the employer is
engaged in such trades, occupations or business where the practice of making deductions
or requiring deposits is a recognized one, or is necessary or desirable as determined by
the Secretary of Labor and Employment in appropriate rules and regulations.

SECTION 14. Deduction for loss or damage. Where the employer is engaged in a
trade, occupation or business where the practice of making deductions or requiring
deposits is recognized to answer for the reimbursement of loss or damage to tools,
materials, or equipment supplied by the employer to the employee, the employer may
make wage deductions or require the employees to make deposits from which deductions
shall be made, subject to the following conditions:
(a) That the employee concerned is clearly shown to be responsible for the loss
or damage;
(b) That the employee is given reasonable opportunity to show cause why
deduction should not be made;
(c) That the amount of such deduction is fair and reasonable and shall not
exceed the actual loss or damage; and
(d) That the deduction from the wages of the employee does not exceed 20
percent of the employee's wages in a week.

ART. 115. Limitations. - No deduction from the deposits of an employee for the actual
amount of the loss or damage shall be made unless the employee has been heard
thereon, and his responsibility has been clearly shown.

ART. 116. Withholding of wages and kickbacks prohibited. - It shall be unlawful for
any person, directly or indirectly, to withhold any amount from the wages of a worker or
induce him to give up any part of his wages by force, stealth, intimidation, threat or by any
other means whatsoever without the workers consent.

46
[CIVIL CODE] Art. 1706. Withholding of the wages, except for a debt due, shall not be
made by the employer.

ART. 117. Deduction to ensure employment. - It shall be unlawful to make any


deduction from the wages of any employee for the benefit of the employer or his
representative or intermediary as consideration of a promise of employment or retention in
employment.

ART. 118. Retaliatory measures. - It shall be unlawful for an employer to refuse to pay or
reduce the wages and benefits, discharge or in any manner discriminate against any
employee who has filed any complaint or instituted any proceeding under this Title or has
testified or is about to testify in such proceedings.

ART. 119. False reporting. - It shall be unlawful for any person to make any statement,
report, or record filed or kept pursuant to the provisions of this Code knowing such
statement, report or record to be false in any material respect.

Chapter V
WAGE STUDIES, WAGE AGREEMENTS
AND WAGE DETERMINATION

ART. 120. Creation of National Wages and Productivity Commission. - There is


hereby created a National Wages and Productivity Commission, hereinafter referred to as
the Commission, which shall be attached to the Department of Labor and Employment
(DOLE) for policy and program coordination. (As amended by Republic Act No. 6727,
June 9, 1989).

ART. 121. Powers and functions of the Commission. - The Commission shall have the
following powers and functions:
(a) To act as the national consultative and advisory body to the President of the
Philippines and Congress on matters relating to wages, incomes and
productivity;
(b) To formulate policies and guidelines on wages, incomes and productivity
improvement at the enterprise, industry and national levels;
(c) To prescribe rules and guidelines for the determination of appropriate minimum
wage and productivity measures at the regional, provincial, or industry levels;
(d) To review regional wage levels set by the Regional Tripartite Wages and
Productivity Boards to determine if these are in accordance with prescribed
guidelines and national development plans;
(e) To undertake studies, researches and surveys necessary for the attainment of its
functions and objectives, and to collect and compile data and periodically
disseminate information on wages and productivity and other related information,
including, but not limited to, employment, cost-of-living, labor costs, investments
and returns;
(f) To review plans and programs of the Regional Tripartite Wages and Productivity
Boards to determine whether these are consistent with national development
plans;
(g) To exercise technical and administrative supervision over the Regional Tripartite
Wages and Productivity Boards;
(h) To call, from time to time, a national tripartite conference of representatives of
government, workers and employers for the consideration of measures to
promote wage rationalization and productivity; and
(i) To exercise such powers and functions as may be necessary to implement this
Act.
The Commission shall be composed of the Secretary of Labor and Employment
as ex-officio chairman, the Director-General of the National Economic and Development
Authority (NEDA) as ex-officio vice-chairman, and two (2) members each from workers

47
and employers sectors who shall be appointed by the President of the Philippines upon
recommendation of the Secretary of Labor and Employment to be made on the basis of
the list of nominees submitted by the workers and employers sectors, respectively, and
who shall serve for a term of five (5) years. The Executive Director of the Commission
shall also be a member of the Commission.
The Commission shall be assisted by a Secretariat to be headed by an Executive
Director and two (2) Deputy Directors, who shall be appointed by the President of the
Philippines, upon the recommendation of the Secretary of Labor and Employment.
The Executive Director shall have the same rank, salary, benefits and other
emoluments as that of a Department Assistant Secretary, while the Deputy Directors shall
have the same rank, salary, benefits and other emoluments as that of a Bureau Director.
The members of the Commission representing labor and management shall have the
same rank, emoluments, allowances and other benefits as those prescribed by law for
labor and management representatives in the Employees Compensation
Commission. (As amended by Republic Act No. 6727, June 9, 1989).

ART. 122. Creation of Regional Tripartite Wages and Productivity Boards. - There is
hereby created Regional Tripartite Wages and Productivity Boards, hereinafter referred to
as Regional Boards, in all regions, including autonomous regions as may be established
by law. The Commission shall determine the offices/headquarters of the respective
Regional Boards.
The Regional Boards shall have the following powers and functions in their
respective territorial jurisdictions:
(a) To develop plans, programs and projects relative to wages, incomes and
productivity improvement for their respective regions;
(b) To determine and fix minimum wage rates applicable in their regions, provinces or
industries therein and to issue the corresponding wage orders, subject to
guidelines issued by the Commission;
(c) To undertake studies, researches, and surveys necessary for the attainment of
their functions, objectives and programs, and to collect and compile data on
wages, incomes, productivity and other related information and periodically
disseminate the same;
(d) To coordinate with the other Regional Boards as may be necessary to attain the
policy and intention of this Code;
(e) To receive, process and act on applications for exemption from prescribed wage
rates as may be provided by law or any Wage Order; and
(f) To exercise such other powers and functions as may be necessary to carry out
their mandate under this Code.
Implementation of the plans, programs, and projects of the Regional Boards
referred to in the second paragraph, letter (a) of this Article, shall be through the
respective regional offices of the Department of Labor and Employment within their
territorial jurisdiction; Provided, however, That the Regional Boards shall have technical
supervision over the regional office of the Department of Labor and Employment with
respect to the implementation of said plans, programs and projects.
Each Regional Board shall be composed of the Regional Director of the
Department of Labor and Employment as chairman, the Regional Directors of the National
Economic and Development Authority and the Department of Trade and Industry as vice-
chairmen and two (2) members each from workers and employers sectors who shall be
appointed by the President of the Philippines, upon the recommendation of the Secretary
of Labor and Employment, to be made on the basis of the list of nominees submitted by
the workers and employers sectors, respectively, and who shall serve for a term of five
(5) years.
Each Regional Board to be headed by its chairman shall be assisted by a
Secretariat. (As amended by Republic Act No. 6727, June 9, 1989).

ART. 123. Wage Order. - Whenever conditions in the region so warrant, the Regional
Board shall investigate and study all pertinent facts; and based on the standards and
criteria herein prescribed, shall proceed to determine whether a Wage Order should be
48
issued. Any such Wage Order shall take effect after fifteen (15) days from its complete
publication in at least one (1) newspaper of general circulation in the region.
In the performance of its wage-determining functions, the Regional Board shall
conduct public hearings/consultations, giving notices to employees and employers
groups, provincial, city and municipal officials and other interested parties.
Any party aggrieved by the Wage Order issued by the Regional Board may
appeal such order to the Commission within ten (10) calendar days from the publication of
such order. It shall be mandatory for the Commission to decide such appeal within sixty
(60) calendar days from the filing thereof.
The filing of the appeal does not stay the order unless the person appealing such
order shall file with the Commission, an undertaking with a surety or sureties satisfactory
to the Commission for the payment to the employees affected by the order of the
corresponding increase, in the event such order is affirmed. (As amended by Republic Act
No. 6727, June 9, 1989).

1
* [NWPC Guidelines No. 1 Series of 2007: Amended Rules of Procedure in Minimum
Wage Fixing]
RULE III
CONDUCT OF HEARINGS/CONSULTATIONS

Section 1. Public Hearings/Consultations. Prior to the issuance of a wage order, public


hearings shall be conducted giving notices to employees' and employers' groups,
provincial, city and municipal officials and other interested parties. The Board may also
conduct consultations with concerned sectors/industries.

Section 2. Who may Conduct. Hearings may be conducted by the Board en banc or by a
duly authorized committee thereof wherein each sector shall be represented. The
presence of the Regional Chairman or any of the Vice Chairmen shall be required. If
unable to attend, Board Members may send observers. The Board shall determine the
date/s, place/s and time of the hearings which shall be opened to the public except as
otherwise, requested by a party and so determined by the Board.

Sections 3. Order of Hearing. As much as practicable, the petitioner/s shall present


his/their evidence first, followed by the oppositor/s. The Board may then call on other
persons to present their view and submit position papers and other supporting documents.

Section 4. Manner and Duration of Hearings. Public hearings shall be conducted in a


manner that shall ensure that all sectors and parties who stand to be directly affected by
the Board are given the widest opportunity to be heard. Pursuant to this, the hearings shall
be conducted in each province in the region as far as practicable.
Hearings shall be concluded within forty five (45) days from the date of initial hearing
except when conditions in the region warrant otherwise.

Section 5. Records of Proceedings. The Board Secretariat shall keep records/minutes of


all Board proceedings, duly noted by the members of the Board.

Section 6. Non-applicability of Technical Rules. The Board shall not be bound strictly by
technical rules of evidence and procedures.

Section 7. Prohibition Against Injunction. No preliminary or permanent injunction or


temporary restraining order may be issued by any court, tribunal or any other entity
against any proceeding before the Commission or Board.

RULE IV
WAGE ORDER

1
Not sure kung kasama to.
49
Section 1. Issuance of Wage Order. Within thirty (30) days after conclusion of the last
hearing, the Board shall decide on the merits of the petition, and where appropriate, issue
a wage order establishing the regional minimum wage rates to be paid by employers
which shall in no case be lower than the applicable statutory minimum wage rates. The
Wage Order may include wages by industry, province or locality as may be deemed
necessary by the Board, provided, however, that such wage rates shall not be lower than
the regional minimum wage rates.
The Board shall furnish the Commission a copy of the decision on the petition or
the Wage Order.

Section 2. Contents of Wage Order. A Wage Order shall specify the region, province, or
industry to which the minimum wage rates prescribed under the Order shall apply and
provide exemptions, if any, subject to guidelines issued by the Commission.

Section 3. Frequency of Wage Order. Any Wage Order issued by the Board may not be
disturbed for a period of twelve (12) months from its effectivity, and no petition for wage
increase shall be entertained within the said period. In the event, however, that
supervening conditions, such as extraordinary increase in prices of petroleum products
and basic goods/services, demand a review of the minimum wage rates as determined by
the Board and confirmed by the Commission, the Board shall proceed to exercise its wage
fixing function even before the expiration of the said period.

Section 4. Review of Wage Order. The Commission shall review the Wage Order issued
by the Board prior to publication.

Section 5. Effectivity. A Wage Order shall be published only after its review by the
Commission and shall take effect fifteen (15) days after its publication in at least one (1)
newspaper of general circulation in the region.

Section 6. Implementing Rules/Regulations. The Board shall submit for approval of the
Secretary of Labor and Employment upon recommendation of the Commission, the
necessary Implementing Rules and Regulations not later than ten (10) days from the
review of the Wage Order by the Commission.
The Secretary of Labor and Employment shall act on the Implementing Rules
within a period of twenty (20) days from receipt of the said Implementing Rules from the
Commission. Once approved, the Board shall cause the publication of the Implementing
Rules and Regulations in at least one (1) newspaper of general circulation in the region.

Section 7. Correction of Error. The Board may, motu proprio or upon manifestation of any
party, proceed to correct any patent error, errors in computation or typographical errors in
any Wage Order.

Section 8. Amendments to Wage Order. In case of substantive changes in the Wage


Order, the Board must comply with the required procedures provided under Section 1 of
Rule II and Section 4 of Rule IV.

RULE V
APPEAL

Section 1. Appeal to the Commission. Not later than ten (10) days from the date of
publication of the Order, any party aggrieved by a Wage Order issued by the Board may
appeal such Order to the Commission by filing a verified appeal with the Board in three (3)
printed legible copies. The appeal shall be accompanied by a memorandum of appeal
which shall state the grounds relied upon, the arguments in support of the appeal and the
relief being sought.

50
The Board shall serve notice of the appeal to concerned parties. Failure to file an
appeal within the reglementary period fixed under this section or to submit the required
documents shall be a ground for dismissal of the appeal.
A motion for reconsideration on the Wage Order filed with the Board shall be treated as an
appeal subject to the requisites for the perfection of appeal under this Rules.

Section 2. Grounds for Appeal. An appeal may be filed on the following grounds:
a) non-conformity with prescribed guidelines and/or procedures;
b) questions of law;
c) grave abuse of discretion.

Section 3. Transmittal of Records. Immediately upon receipt of the appeal, the Board
Secretariat shall transmit to the Commission Secretariat the appeal and a copy of the
subject Wage Order together with the complete records of the case and all relevant
documents.

Section 4. Period to Act on Appeal. The Commission shall decide on the appeal within
sixty (60) days from the filing of said appeal.

Section 5. Effect of Appeal. The filing of the appeal does not operate to stay the Order
unless the party appealing such Order shall file with the Commission an undertaking with
a surety or sureties satisfactory to the Commission for payment to employees affected by
the Order of the corresponding increase, in the event such Order is affirmed.

[RA 6727 as amended by RA 8188]


Section 12. Any person, corporation, trust, firm, partnership, association or entity which
refuses or fails to pay any of the prescribed increases or adjustments in the wage
rates made in accordance with this Act shall be punished by a fine not less than Twenty-
five thousand pesos (P25,000) nor more than One hundred thousand pesos (P100,000)
or imprisonment of not less than two (2) years nor more than four (4) years, or both
such fine and imprisonment at the discretion of the court: Provided, That any person
convicted under this Act shall not be entitled to the benefits provided for under the
Probation Law.
The employer concerned shall be ordered to pay an amount equivalent to double
the unpaid benefits owing to the employees: Provided, That payment of indemnity shall
not absolve the employer from the criminal liability imposable under this Act.
If the violation is committed by a corporation, trust or firm, partnership, association or
any other entity the penalty of imprisonment shall be imposed upon the entity's
responsible officers, including, but not limited to, the president, vice-president, chief
executive officer, general manager, managing director or partner.

ART. 124. Standards/Criteria for minimum wage fixing. - The regional minimum wages
to be established by the Regional Board shall be as nearly adequate as is economically
feasible to maintain the minimum standards of living necessary for the health, efficiency
and general well-being of the employees within the framework of the national economic
and social development program. In the determination of such regional minimum wages,
the Regional Board shall, among other relevant factors, consider the following:
(a) The demand for living wages;
(b) Wage adjustment vis--vis the consumer price index;
(c) The cost of living and changes or increases therein;
(d) The needs of workers and their families;
(e) The need to induce industries to invest in the countryside;
(f) Improvements in standards of living;
(g) The prevailing wage levels;
(h) Fair return of the capital invested and capacity to pay of employers;
(i) Effects on employment generation and family income; and

51
(j) The equitable distribution of income and wealth along the imperatives of economic
and social development.
The wages prescribed in accordance with the provisions of this Title shall be the
standard prevailing minimum wages in every region. These wages shall include wages
varying with industries, provinces or localities if in the judgment of the Regional Board,
conditions make such local differentiation proper and necessary to effectuate the purpose
of this Title.
Any person, company, corporation, partnership or any other entity engaged in
business shall file and register annually with the appropriate Regional Board, Commission
and the National Statistics Office, an itemized listing of their labor component, specifying
the names of their workers and employees below the managerial level, including learners,
apprentices and disabled/handicapped workers who were hired under the terms
prescribed in the employment contracts, and their corresponding salaries and wages.
Where the application of any prescribed wage increase by virtue of a law or wage
order issued by any Regional Board results in distortions of the wage structure within an
establishment, the employer and the union shall negotiate to correct the distortions. Any
dispute arising from wage distortions shall be resolved through the grievance procedure
under their collective bargaining agreement and, if it remains unresolved, through
voluntary arbitration. Unless otherwise agreed by the parties in writing, such dispute shall
be decided by the voluntary arbitrators within ten (10) calendar days from the time said
dispute was referred to voluntary arbitration.
In cases where there are no collective agreements or recognized labor unions,
the employers and workers shall endeavor to correct such distortions. Any dispute
arising therefrom shall be settled through the National Conciliation and Mediation Board
and, if it remains unresolved after ten (10) calendar days of conciliation, shall be referred
to the appropriate branch of the National Labor Relations Commission (NLRC). It shall be
mandatory for the NLRC to conduct continuous hearings and decide the dispute within
twenty (20) calendar days from the time said dispute is submitted for compulsory
arbitration.
The pendency of a dispute arising from a wage distortion shall not in any way
delay the applicability of any increase in prescribed wage rates pursuant to the provisions
of law or wage order.
As used herein, a wage distortion shall mean a situation where an increase in
prescribed wage rates results in the elimination or severe contraction of intentional
quantitative differences in wage or salary rates between and among employee groups in
an establishment as to effectively obliterate the distinctions embodied in such wage
structure based on skills, length of service, or other logical bases of differentiation.
All workers paid by result, including those who are paid on
piecework, takay, pakyaw or task basis, shall receive not less than the prescribed wage
rates per eight (8) hours of work a day, or a proportion thereof for working less than eight
(8) hours.
All recognized learnership and apprenticeship agreements shall be considered
automatically modified insofar as their wage clauses are concerned to reflect the
prescribed wage rates. (As amended by Republic Act No. 6727, June 9, 1989).

2
* [NWPC Guidelines No. 1 Series of 2007: Amended Rules of Procedure in Minimum
Wage Fixing]
RULE II
MINIMUM WAGE FIXING

Section 1. Conduct of Wage and Productivity Studies. The Board shall, subject to
guidelines issued by the Commission, conduct continuing studies of wage rates,
productivity and other conditions in the region, provinces or industries therein. The Board
shall investigate and study all pertinent facts, and based on standards and criteria

2
Not sure kung kasama to.
52
prescribed under Section 2 of this Rule, shall determine whether a wage order should be
issued.

Section 2. Standards/Criteria for Minimum Wage Fixing. The minimum wage rates to be
established by the Board shall be as nearly adequate as is economically feasible to
maintain the minimum standards of living necessary for the health, efficiency and general
well-being of the workers within the framework of national economic and social
development goals. In the determination of regional minimum wages, the Board shall,
among other relevant factors, consider the following:
(a) Needs of workers and their families
1) Demand for living wages
2) Wage adjustment vis--vis the consumer price index
3) Cost of living and changes therein
4) Needs of workers and their families
5) Improvements in standards of living
(b) Capacity to pay
1) Fair return on capital invested and capacity to pay of employers
2) Productivity
(c) Comparable wages and incomes
1) Prevailing wage levels
(d) Requirements of economic and social development
1) Need to induce industries to invest in the countryside
2) Effects on employment generation and family income
3) Equitable distribution of income and wealth along the imperatives of
economic and social development.

Section 3. Procedures in Minimum Wage Fixing

(a) Motu Proprio by the Board


Whenever conditions in the region, province or industry so warrant, the Board may, motu
proprio or as directed by the Commission, initiate action or
inquiry to determine whether a wage order should be issued. The Board shall conduct
public hearings in the manner prescribed under this Rule and Rule III. The Board may also
conduct consultations with concerned sectors/industries.

(b) By Virtue of a Petition Filed.


1) Form and Content of Petition
Any party may file a verified petition for wage increase with the
appropriate Board in three (3) printed legible copies which shall contain the
following:
(a) name/s, and address/es of petitioner/s and signature/s of authorized
official/s;
(b) grounds relied upon to justify the increase being sought;
(c) amount of wage increase being sought;
(d) area and/or industry covered.

2) Board Action
The Board, shall within fifteen (15) calendar days from receipt of a
petition, evaluate the same. If the petition conforms with the requirements
prescribed in the preceding sub-section and other requirements under this Rules,
the Board shall conduct public hearings in the manner prescribed under this Rule
and Rule III to determine whether a wage order should be issued.

3) Publication of Notice of Petition/Public Hearing.


A notice of the petition and/or public hearing shall be published in a
newspaper of general circulation in the region and/or posted in public places as
determined by the Board. The notice shall include the name/s and address/es of
the petitioner/s, the subject of the petition and the date/s, place/s and time of the
53
hearings. The publication or posting shall be made at least fifteen (15) days
before the date of initial hearing and shall be in accordance with the prescribed
form attached as Annex "A".

4) Opposition.
Any party may file his opposition to the petition on or before the initial
hearing, copy furnished the petitioner/s. The opposition shall be filed with the
appropriate Board in three (3) printed legible copies which shall contain the
following:
(a) name/s and address/es of the oppositor/s and signature/s of
authorized official/s;
(b) reasons or grounds for the opposition; and
(c) relief sought.

5. Consolidation of Petitions.
If there is more than one petition filed, the Board may, motu proprio or
on motion of any party, consolidate these for purposes of conducting joint
hearings or proceedings to expedite resolution of petitions. Petitions received
after publication of an earlier petition need not go through the publication/posting
requirement.

6. Assistance of Other Government and Private Organizations.


The Board may enlist the assistance and cooperation of any government agency
or private person or organization to furnish information in aid of its wage function.

RULE VII
WAGE DISTORTION

Section 1. Correction of Wage Distortion. Where the application of any prescribed wage
increase by virtue of a Wage Order issued by the Board results in distortions of the wage
structure within an establishment, the employer and the union shall negotiate to correct
the distortions. Any dispute arising from wage distortions shall be resolved through the
grievance procedure under their collective bargaining agreement and, if it remains
unresolved, through voluntary arbitration. Unless otherwise agreed by the parties in
writing, such dispute shall be decided by the voluntary arbitrator or panel of voluntary
arbitrators within ten (10) days from the time said dispute was referred to voluntary
arbitration.
In cases where there are no collective agreements or recognized labor unions,
the employers and workers shall endeavor to correct such distortions. Any dispute arising
therefrom shall be settled through the National Conciliation and Mediation Board and, if it
remains unresolved after ten (10) days of conciliation, shall be referred to the appropriate
branch of the National labor Relations Commission (NLRC). It shall be mandatory for the
NLRC to conduct continuous hearings and decide the dispute within twenty (20) days from
the time said dispute is submitted for compulsory arbitration. The pendency of a dispute
arising from a wage distortion shall not in any way delay the applicability of any increase in
prescribed wage rates pursuant to the provisions of the Wage Order.

ART. 125. Freedom to bargain. - No wage order shall be construed to prevent workers in
particular firms or enterprises or industries from bargaining for higher wages with their
respective employers. (As amended by Republic Act No. 6727, June 9, 1989).

ART. 126. Prohibition against injunction. No preliminary or permanent injunction or


temporary restraining order may be issued by any court, tribunal or other entity against
any proceedings before the Commission or the Regional Boards. (As amended by
Republic Act No. 6727, June 9, 1989).

54
ART. 127. Non-diminution of benefits. - No wage order issued by any regional board
shall provide for wage rates lower than the statutory minimum wage rates prescribed by
Congress. (As amended by Republic Act No. 6727, June 9, 1989).

Chapter VI
ADMINISTRATION AND ENFORCEMENT

ART. 128. Visitorial and enforcement power. (Compare with ART. 274)
(a) The Secretary of Labor and Employment or his duly authorized representatives,
including labor regulation officers, shall have access to employers records and
premises at any time of the day or night whenever work is being undertaken therein,
and the right to copy therefrom, to question any employee and investigate any fact,
condition or matter which may be necessary to determine violations or which may aid
in the enforcement of this Code and of any labor law, wage order or rules and
regulations issued pursuant thereto.
3
(b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary,
and in cases where the relationship of employer-employee still exists, the Secretary
of Labor and Employment or his duly authorized representatives shall have the power
to issue compliance orders to give effect to the labor standards provisions of this
Code and other labor legislation based on the findings of labor employment and
enforcement officers or industrial safety engineers made in the course of inspection.
The Secretary or his duly authorized representatives shall issue writs of execution to
the appropriate authority for the enforcement of their orders, except in cases where
the employer contests the findings of the labor employment and enforcement officer
and raises issues supported by documentary proofs which were not considered in the
course of inspection. (As amended by Republic Act No. 7730, June 2, 1994).
An order issued by the duly authorized representative of the Secretary
of Labor and Employment under this Article may be appealed to the latter. In case
said order involves a monetary award, an appeal by the employer may be perfected
only upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Secretary of Labor and Employment in the amount
equivalent to the monetary award in the order appealed from. (As amended by
Republic Act No. 7730, June 2, 1994).
(c) The Secretary of Labor and Employment may likewise order stoppage of work or
suspension of operations of any unit or department of an establishment when non-
compliance with the law or implementing rules and regulations poses grave and
imminent danger to the health and safety of workers in the workplace. Within twenty-
four hours, a hearing shall be conducted to determine whether an order for the
stoppage of work or suspension of operations shall be lifted or not. In case the
violation is attributable to the fault of the employer, he shall pay the employees
concerned their salaries or wages during the period of such stoppage of work or
suspension of operation.
(d) It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise
render ineffective the orders of the Secretary of Labor and Employment or his duly
authorized representatives issued pursuant to the authority granted under this Article,
and no inferior court or entity shall issue temporary or permanent injunction or
restraining order or otherwise assume jurisdiction over any case involving the
enforcement orders issued in accordance with this Article.
(e) Any government employee found guilty of violation of, or abuse of authority, under this
Article shall, after appropriate administrative investigation, be subject to summary
dismissal from the service.
(f) The Secretary of Labor and Employment may, by appropriate regulations, require
employers to keep and maintain such employment records as may be necessary in
aid of his visitorial and enforcement powers under this Code.

3
Article. 217. Jurisdiction of the Labor Arbiters and the Commission.
55
ART. 129. Recovery of wages, simple money claims and other benefits. - Upon
complaint of any interested party, the Regional Director of the Department of Labor and
Employment or any of the duly authorized hearing officers of the Department is
empowered, through summary proceeding and after due notice, to hear and decide any
matter involving the recovery of wages and other monetary claims and benefits, including
legal interest, owing to an employee or person employed in domestic or household service
or househelper under this Code, arising from employer-employee relations: Provided, That
such complaint does not include a claim for reinstatement: Provided further, That the
aggregate money claims of each employee or househelper does not exceed Five
thousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or
resolve the complaint within thirty (30) calendar days from the date of the filing of the
same. Any sum thus recovered on behalf of any employee or househelper pursuant to this
Article shall be held in a special deposit account by, and shall be paid on order of, the
Secretary of Labor and Employment or the Regional Director directly to the employee
or househelper concerned. Any such sum not paid to the employee
or househelper because he cannot be located after diligent and reasonable effort to locate
him within a period of three (3) years, shall be held as a special fund of the Department
of Labor and Employment to be used exclusively for the amelioration and benefit of
workers.
Any decision or resolution of the Regional Director or hearing officer pursuant to
this provision may be appealed on the same grounds provided in Article 223 of this Code,
within five (5) calendar days from receipt of a copy of said decision or resolution, to the
National Labor Relations Commission which shall resolve the appeal within ten (10)
calendar days from the submission of the last pleading required or allowed under its rules.
The Secretary of Labor and Employment or his duly authorized representative may
supervise the payment of unpaid wages and other monetary claims and benefits, including
legal interest, found owing to any employee or househelper under this Code.(As amended
by Section 2, Republic Act No. 6715, March 21, 1989).

Title III
WORKING CONDITIONS FOR
SPECIAL GROUPS OF EMPLOYEES

Chapter I
EMPLOYMENT OF WOMEN

ART. 130. Nightwork prohibition. Repealed (RA 10151)

ART. 131. Exceptions. Repealed (RA 10151)


*NOTE: Renumbered from here onwards but I kept the original numbered provisions to
avoid confusion (e.g. Art 132 should be 130, etc.)

ART. 132. Facilities for women. - The Secretary of Labor and Employment shall
establish standards that will ensure the safety and health of women employees. In
appropriate cases, he shall, by regulations, require any employer to:
(a) Provide seats proper for women and permit them to use such seats when they are
free from work and during working hours, provided they can perform their duties
in this position without detriment to efficiency;
(b) To establish separate toilet rooms and lavatories for men and women and provide
at least a dressing room for women;
(c) To establish a nursery in a workplace for the benefit of the women employees
therein; and
(d) To determine appropriate minimum age and other standards for retirement or
termination in special occupations such as those of flight attendants and the like.

ART. 133. Maternity leave benefits.


(a) (No longer applies)

56
(b) The maternity leave shall be extended without pay on account of illness medically
certified to arise out of the pregnancy, delivery, abortion or miscarriage, which
renders the woman unfit for work, unless she has earned unused leave credits from
which such extended leave may be charged.

SECTION 9. Payment of extended maternity leave. When so requested by the


woman employee, the extension of her maternity leave beyond the four-week post-
delivery leave shall be paid by the employer from her unused vacation and/or sick leave
credits, if any, or allowed without pay in the absence of such leave credits, where the
extended leave is due to illness medically certified to arise out of her pregnancy, delivery,
complete abortion or miscarriage which renders her unfit for work.

(c) (No longer applies)

[RA 8282: Social Security Act of 1997]


SEC. 14-A. Maternity Leave Benefit. A female member who has paid at least three (3)
monthly contributions in the twelve-month period immediately preceding the semester of
her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to one
hundred percent (100%) of her average daily salary credit for sixty (60) days or seventy-
eight (78) days in case of caesarian delivery, subject to the following conditions:
(a) That the employee shall have notified her employer of her pregnancy and the
probable date of her childbirth, which notice shall be transmitted to the SSS in accordance
with the rules and regulations it may provide;
(b) The full payment shall be advanced by the employer within thirty (30) days
from the filing of the maternity leave application;
(c) That payment of daily maternity benefits shall be a bar to the recovery of
sickness benefits provided by this Act for the same period for which daily maternity
benefits have been received;
(d) That the maternity benefits provided under this section shall be
paid only for the first four (4) deliveries or miscarriages;
(e) That the SSS shall immediately reimburse the employer of one hundred
percent (100%) of the amount of maternity benefits advanced to the employee by the
employer upon receipt of satisfactory proof of such payment and legality thereof; and
(f) That if an employee member should give birth or suffer miscarriage without
the required contributions having been remitted for her by her employer to the SSS, or
without the latter having been previously notified by the employer of the time of the
pregnancy, the employer shall pay to the SSS damages equivalent to the benefits which
said employee member would otherwise have been entitled to.

[RA 8187: Paternity Leave Act of 1996]


SECTION 2. Notwithstanding any law, rules and regulations to the contrary, every married
male employee in the private and public sectors shall be entitled to a paternity leave of
seven (7) days with full pay for the first four (4) deliveries of the legitimate spouse with
whom he is cohabiting. The male employee applying for paternity leave shall notify his
employer of the pregnancy of his legitimate spouse and the expected date of such
delivery.
For purposes, of this Act, delivery shall include childbirth or any miscarriage.

SECTION 3. Definition of Term. - For purposes of this Act, Paternity Leave refers to
the benefits granted to a married male employee allowing him not to report for work for
seven (7) days but continues to earn the compensation therefor, on the condition that his
spouse has delivered a child or suffered a miscarriage for purposes of enabling him to
effectively lend support to his wife in her period of recovery and/or in the nursing of the
newly-born child.

[RA 8972: Solo Parents Welfare Act of 2000]

57
Section 3. Definition of Terms. - Whenever used in this Act, the following terms shall
mean as follows:
(a) "Solo parent" - any individual who falls under any of the following categories:
(1) A woman who gives birth as a result of rape and other crimes
against chastity even without a final conviction of the
offender: Provided, That the mother keeps and raises the child;
(2) Parent left solo or alone with the responsibility of parenthood due to
death of spouse;
(3) Parent left solo or alone with the responsibility of parenthood while
the spouse is detained or is serving sentence for a criminal
conviction for at least one (1) year;
(4) Parent left solo or alone with the responsibility of parenthood due to
physical and/or mental incapacity of spouse as certified by a public
medical practitioner;
(5) Parent left solo or alone with the responsibility of parenthood due to
legal separation or de facto separation from spouse for at least one
(1) year, as long as he/she is entrusted with the custody of the
children;
(6) Parent left solo or alone with the responsibility of parenthood due to
declaration of nullity or annulment of marriage as decreed by a court
or by a church as long as he/she is entrusted with the custody of the
children;
(7) Parent left solo or alone with the responsibility of parenthood due to
abandonment of spouse for at least one (1) year;
(8) Unmarried mother/father who has preferred to keep and rear her/his
child/children instead of having others care for them or give them up
to a welfare institution;
(9) Any other person who solely provides parental care and support to a
child or children;
(10) Any family member who assumes the responsibility of head of
family as a result of the death, abandonment, disappearance or
prolonged absence of the parents or solo parent.
A change in the status or circumstance of the parent claiming benefits under this
Act, such that he/she is no longer left alone with the responsibility of parenthood, shall
terminate his/her eligibility for these benefits.

Section 6. Flexible Work Schedule. - The employer shall provide for a flexible working
schedule for solo parents: Provided, That the same shall not affect individual and
company productivity: Provided, further, That any employer may request exemption from
the above requirements from the DOLE on certain meritorious grounds.

Section 7. Work Discrimination. - No employer shall discriminate against any solo parent
employee with respect to terms and conditions of employment on account of his/her
status.

Section 8. Parental Leave. - In addition to leave privileges under existing laws, parental
leave of not more than seven (7) working days every year shall be granted to any solo
parent employee who has rendered service of at least one (1) year.

[RA 9262: VAWC]


SECTION 43. Entitled to Leave. Victims under this Act shall be entitled to take a paid
leave of absence up to ten (10) days in addition to other paid leaves under the Labor
Code and Civil Service Rules and Regulations, extendible when the necessity arises as
specified in the protection order.

[IRR: RA 9262]

58
Section 42. Ten-day paid leave in addition to other leave benefits. - At any time during
the application of any protection order, investigation, prosecution and/or trial of the
criminal case, a victim of VAWC who is employed shall be entitled to a paid leave of up to
ten (10) days in addition to other paid leaves under the Labor Code and Civil Service
Rules and Regulations and other existing laws and company policies, extendible when the
necessity arises as specified in the protection order. The Punong Barangay/kagawad or
prosecutor or the Clerk of Court, as the case may be, shall issue a certification at no cost
to the woman that such an action is pending, and this is all that is required for the
employer to comply with the 10-day paid leave. For government employees, in addition to
the aforementioned certification, the employee concerned must file an application for
leave citing as basis R.A. 9262. The administrative enforcement of this leave entitlement
shall be considered within the jurisdiction of the Regional Director of the DOLE under
Article 129 of the Labor Code of the Philippines, as amended, for employees in the private
sector, and the Civil Service Commission, for government employees.
The availment of the ten day-leave shall be at the option of the woman
employee, which shall cover the days that she has to attend to medical and legal
concerns. Leaves not availed of are noncumulative and not convertible to cash.
The employer/agency head who denies the application for leave, and who shall
prejudice the victim-survivor or any person for assisting a co-employee who is a victim-
survivor under the Act shall be held liable for discrimination and violation of R.A 9262.
The provision of the Labor Code and the Civil Service Rules and Regulations
shall govern the penalty to be imposed on the said employer/agency head.

Article 134. Family Planning Services; Incentives for Family Planning.


(a) Establishments which are required by law to maintain a clinic or infirmary shall provide free
family planning services to their employees which shall include, but not be limited to, the
application or use of contraceptive pills and intrauterine devices.

SECTION 11. Family planning services. Employers who habitually employ more than
two hundred (200) workers in any locality shall provide free family-planning services to
their employees and their spouses which shall include but not limited to, the application or
use of contraceptives.

(b) In coordination with other agencies of the government engaged in the promotion of family
planning, the Department of Labor and Employment shall develop and prescribe incentive
bonus schemes to encourage family planning among female workers in any establishment
or enterprise.

Article 135. Discrimination Prohibited. It shall be unlawful for any employer to discriminate
against any woman employee with respect to terms and conditions of employment solely on
account of her sex.
The following are acts of discrimination:
(a) Payment of a lesser compensation, including wage, salary or other form of
remuneration and fringe benefits, to a female employee as against a male
employee, for work of equal value; and
(b) Favoring a male employee over a female employee with respect to promotion,
training opportunities, study and scholarship grants solely on account of their
sexes.
Criminal liability for the willful commission of any unlawful act as provided in this
Article or any violation of the rules and regulations issued pursuant to Section 2 (of RA 6725)
hereof shall be penalized as provided in Articles 288 and 289 of this Code: Provided, That the
institution of any criminal action under this provision shall not bar the aggrieved employee from
filing an entirely separate and distinct action for money claims, which may include claims for
damages and other affirmative reliefs. The actions hereby authorized shall proceed
independently of each other. (As amended by Republic Act No. 6725, May 12, 1989).

59
Art. 136. Stipulation against marriage. It shall be unlawful for an employer to require as
a condition of employment or continuation of employment that a woman employee shall
not get married, or to stipulate expressly or tacitly that upon getting married, a woman
employee shall be deemed resigned or separated, or to actually dismiss, discharge,
discriminate or otherwise prejudice a woman employee merely by reason of her marriage.

Article 137. Prohibited Acts. It shall be unlawful for any employer:


(1) To deny any woman employee the benefits provided for in this Chapter or to discharge
any woman employed by him for the purpose of preventing her from enjoying any of
the benefits provided under this Code;
(2) To discharge such woman on account of her pregnancy, or while on leave or in
confinement due to her pregnancy;
(3) To discharge or refuse the admission of such woman upon returning to her work for
fear that she may again be pregnant.

SECTION 13. Prohibited acts. It shall be unlawful for any employer:


(a) To discharge any woman employed by him for the purpose of preventing such
woman from enjoying the maternity leave, facilities and other benefits provided under the
Code;
(b) To discharge such woman employee on account of her pregnancy, or while
on leave or in confinement due to her pregnancy;
(c) To discharge or refuse the admission of such woman upon returning to her
work for fear that she may be pregnant;
(d) To discharge any woman or child or any other employee for having filed a
complaint or having testified or being about to testify under the Code; and
(e) To require as a condition for a continuation of employment that a woman
employee shall not get married or to stipulate expressly or tacitly that upon getting
married, a woman employee shall be deemed resigned or separated, or to actually
dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by
reason of her marriage.

Article 138. Classification of Certain Women Workers. Any woman who is permitted or
suffered to work, with or without compensation, in any night club, cocktail lounge, massage
clinic, bar or similar establishments under the effective control or supervision of the employer
for a substantial period of time as determined by the Secretary of Labor and Employment, shall
be considered as an employee of such establishment for purposes of labor and social
legislation.

[RA 7877: Anti-Sexual Harassment Act]


Sec. 3. Work, Education or Training-related Sexual Harassment Defined. Work,
education or training-related sexual harassment is committed by an employee, manager,
supervisor, agent of the employer, teacher, instructor, professor, coach, trainor, or any
other person who, having authority, influence or moral ascendancy over another in a work
or training or education environment, demands, requests or otherwise requires any sexual
favor from the other, regardless of whether the demand, request or requirement for
submission is accepted by the object of said Act.
(a) In a work-related or employment environment, sexual harassment is committed
when:
(1) The sexual favor is made as a condition in the hiring or in the employment, re-
employment or continued employment of said individual, or in granting said
individual favorable compensation, terms, conditions, promotions, or
privileges; or the refusal to grant the sexual favor results in limiting,
segregating or classifying the employee which in a way would discriminate,
deprive or diminish employment opportunities or otherwise adversely affect
said employee;
(2) The above acts would impair the employees rights or privileges under
existing labor laws; or
60
(3) The above acts would result in an intimidating, hostile, or offensive
environment for the employee.
(b) In an education or training environment, sexual harassment is committed:
(1) Against one who is under the care, custody or supervision of the offender;
(2) Against one whose education, training, apprenticeship or tutorship is
entrusted to the offender;
(3) When the sexual favor is made a condition to the giving of a passing grade, or
the granting of honors and scholarships, or the payment of a stipend,
allowance or other benefits, privileges, or considerations; or
(4) When the sexual advances result in an intimidating, hostile or offensive
environment for the student, trainee or apprentice.
Any person who directs or induces another to commit any act of sexual
harassment as herein defined, or who cooperates in the commission thereof by another
without which it would not have been committed, shall also be held liable under this Act.

Sec.4. Duty of the Employer or Head of Office in a Work-related, Education or


Training Environment. It shall be the duty of the employer or the head of the work-
related, educational or training environment or institution, to prevent or deter the
commission of acts of sexual harassment and to provide the procedures for the resolution,
settlement or prosecution of acts of sexual harassment. Towards this end, the employer or
head of office shall:
(a) Promulgate appropriate rules and regulations in consultation with the jointly
approved by the employees or students or trainees, through their duly
designated representatives, prescribing the procedure for the investigation or
sexual harassment cases and the administrative sanctions therefor.
Administrative sanctions shall not be a bar to prosecution in the proper courts for
unlawful acts of sexual harassment.
The said rules and regulations issued pursuant to this section (a) shall include,
among others, guidelines on proper decorum in the workplace and educational or training
institutions.
(b) Create a committee on decorum and investigation of cases on sexual
harassment. The committee shall conduct meetings, as the case may be, with
other officers and employees, teachers, instructors, professors, coaches,
trainors and students or trainees to increase understanding and prevent
incidents of sexual harassment. It shall also conduct the investigation of the
alleged cases constituting sexual harassment.
In the case of a work-related environment, the committee shall be composed of at
least one (1) representative each from the management, the union, if any, the employees
from the supervisory rank, and from the rank and file employees.
In the case of the educational or training institution, the committee shall be composed
of at least one (1) representative from the administration, the trainors, teachers,
instructors, professors or coaches and students or trainees, as the case maybe.
The employer or head of office, educational or training institution shall disseminate or
post a copy of this Act for the information of all concerned.

Sec. 5. Liability of the Employer, Head of Office, Educational or Training Institution.


The employer or head of office, educational training institution shall be solidarily liable
for damage arising from the acts of sexual harassment committed in the employment,
education or training environment if the employer or head of office, educational or training
institution is informed of such acts by the offended party and no immediate action is taken
thereon.

[RA 7699: Limited Portability Law]


Sec. 3. Provisions of any general or special law or rules and regulations to the contrary
notwithstanding, a covered worker who transfers employment from one sector to another
or is employed in both sectors shall have his credible services or contributions in both

61
Systems credited to his service or contribution record in each of the Systems and shall be
totalized for purposes of old-age, disability, survivorship and other benefits in case the
covered member does not qualify for such benefits in either or both Systems without
totalization: Provided, however, That overlapping periods of membership shall be credited
only once for purposes of totalization.

Sec. 4. All contributions paid by such member personally, and those that were paid by his
employers to both Systems shall be considered in the processing of benefits which he can
claim from either or both Systems: Provided, however, That the amount of benefits to be
paid by one System shall be in proportion to the number of contributions actually remitted
to that System.

Chapter II
EMPLOYMENT OF MINORS

Article 139. Minimum Employable Age.


(a) No child below fifteen (15) years of age shall be employed, except when he works directly
under the sole responsibility of his parents or guardian, and his employment does not in
any way interfere with his schooling.
(b) Any person between fifteen (15) and eighteen (18) years of age may be employed for such
number of hours and such periods of the day as determined by the Secretary of Labor and
Employment in appropriate regulations.
(c) The foregoing provisions shall in no case allow the employment of a person below eighteen
(18) years of age in an undertaking which is hazardous or deleterious in nature as
determined by the Secretary of Labor and Employment.

[RA 7610 as amended by RA 9231]


Sec. 12. Employment of Children - Children below fifteen (15) years of age shall not be
employed except:
1) When a child works directly under the sole responsibility of his/her parents or
legal guardian and where only members of his/her family are employed: Provided,
however, That his/her employment neither endangers his/her life, safety, health, and
morals, nor impairs his/her normal development: Provided, further, That the parent or legal
guardian shall provide the said child with the prescribed primary and/or secondary
education; or
2) Where a child's employment or participation in public entertainment or
information through cinema, theater, radio, television or other forms of media is
essential: Provided, That the employment contract is concluded by the child's parents or
legal guardian, with the express agreement of the child concerned, if possible, and the
approval of the Department of Labor and Employment: Provided, further, That the
following requirements in all instances are strictly complied with:
(a) The employer shall ensure the protection, health, safety, morals and
normal development of the child;
(b) The employer shall institute measures to prevent the child's
exploitation or discrimination taking into account the system and
level of remuneration, and the duration and arrangement of working
time; and
(c) The employer shall formulate and implement, subject to the approval
and supervision of competent authorities, a continuing program for
training and skills acquisition of the child.
In the above-exceptional cases where any such child may be employed, the
employer shall first secure, before engaging such child, a work permit from the
Department of Labor and Employment which shall ensure observance of the above
requirements.
For purposes of this Article, the term "child" shall apply to all persons under
eighteen (18) years of age."

62
Sec. 12-A. Hours of Work of a Working Child. - Under the exceptions provided in
Section 12 of this Act, as amended:
(1) A child below fifteen (15) years of age may be allowed to work for not more
than twenty (20) hours a week: Provided, That the work shall not be more than four (4)
hours at any given day;
(2) A child fifteen (15) years of age but below eighteen (18) shall not be allowed
to work for more than eight (8) hours a day, and in no case beyond forty (40) hours a
week;
(3) No child below fifteen (15) years of age shall be allowed to work between
eight o'clock in the evening and six o'clock in the morning of the following day and no child
fifteen (15) years of age but below eighteen (18) shall be allowed to work between ten
o'clock in the evening and six o'clock in the morning of the following day.

Sec. 12-B. Ownership, Usage and Administration of the Working Child's Income. -
The wages, salaries, earnings and other income of the working child shall belong to
him/her in ownership and shall be set aside primarily for his/her support, education or
skills acquisition and secondarily to the collective needs of the family: Provided, That not
more than twenty percent (20%) of the child's income may be used for the collective
needs of the family.
The income of the working child and/or the property acquired through the work of
the child shall be administered by both parents. In the absence or incapacity of either of
the parents, the other parent shall administer the same. In case both parents are absent
or incapacitated, the order of preference on parental authority as provided for under the
Family Code shall apply.

Sec. 12-C. Trust Fund to Preserve Part of the Working Child's Income. - The parent
or legal guardian of a working child below eighteen (18) years of age shall set up a trust
fund for at least thirty percent (30%) of the earnings of the child whose wages and salaries
from work and other income amount to at least two hundred thousand pesos
(P200,000.00) annually, for which he/she shall render a semi-annual accounting of the
fund to the Department of Labor and Employment, in compliance with the provisions of
this Act. The child shall have full control over the trust fund upon reaching the age of
majority.

Sec. 12-D. Prohibition Against Worst Forms of Child Labor. - No child shall be
engaged in the worst forms of child labor. The phrase "worst forms of child labor" shall
refer to any of the following:
(1) All forms of slavery, as defined under the "Anti-trafficking in Persons Act of
2003", or practices similar to slavery such as sale and trafficking of children, debt bondage
and serfdom and forced or compulsory labor, including recruitment of children for use in
armed conflict; or
(2) The use, procuring, offering or exposing of a child for prostitution, for the
production of pornography or for pornographic performances; or
(3) The use, procuring or offering of a child for illegal or illicit activities, including
the production and trafficking of dangerous drugs and volatile substances prohibited under
existing laws; or
(4) Work which, by its nature or the circumstances in which it is carried out, is
hazardous or likely to be harmful to the health, safety or morals of children, such that it:
a) Debases, degrades or demeans the intrinsic worth and dignity of a
child as a human being; or
b) Exposes the child to physical, emotional or sexual abuse, or is found
to be highly stressful psychologically or may prejudice morals; or
c) Is performed underground, underwater or at dangerous heights; or
d) Involves the use of dangerous machinery, equipment and tools such
as power-driven or explosive power-actuated tools; or

63
e) Exposes the child to physical danger such as, but not limited to the
dangerous feats of balancing, physical strength or contortion, or
which requires the manual transport of heavy loads; or
f) Is performed in an unhealthy environment exposing the child to
hazardous working conditions, elements, substances, co-agents or
processes involving ionizing, radiation, fire, flammable substances,
noxious components and the like, or to extreme temperatures, noise
levels, or vibrations; or
g) Is performed under particularly difficult conditions; or
h) Exposes the child to biological agents such as bacteria, fungi,
viruses, protozoans, nematodes and other parasites; or
i) Involves the manufacture or handling of explosives and other
pyrotechnic products.

Sec. 14. Prohibition on the Employment of Children in Certain Advertisements. - No


child shall be employed as a model in any advertisement directly or indirectly promoting
alcoholic beverages, intoxicating drinks, tobacco and its byproducts, gambling or any form
of violence or pornography."

Article 140. Prohibition Against Child Discrimination. - No employer shall discriminate


against any person in respect to terms and conditions of employment on account of his age.

Chapter III
EMPLOYMENT OF HOUSEHELPERS

Article 141. Coverage. - This Chapter shall apply to all persons rendering services in
households for compensation.
Domestic or household service shall mean service in the employers home which is
usually necessary or desirable for the maintenance and enjoyment thereof and includes
ministering to the personal comfort and convenience of the members of the employers
household, including services of family drivers.

SECTION 1. General statement on coverage.


(a) The provisions of this Rule shall apply to all househelpers whether employed
on full or part-time basis.
(b) The term "househelper" as used herein is synonymous to the term "domestic
servant" and shall refer to any person, whether male or female, who renders services in
and about the employer's home and which services are usually necessary or desirable for
the maintenance and enjoyment thereof, and ministers exclusively to the personal comfort
and enjoyment of the employer's family.

SECTION 2. Method of payment not determinant. The provisions of this Rule shall
apply irrespective of the method of payment of wages agreed upon by the employer and
househelper, whether it be hourly, daily, weekly, or monthly, or by piece or output basis.

Article 142. Contract of Domestic Service. The original contract of domestic service shall
not last for more than two (2) years but it may be renewed for such periods as may be agreed
upon by the parties.

Article 143. Minimum Wage. (a) Househelpers shall be paid the following minimum wage
rates:
(1) Eight hundred pesos (P800.00) a month for househelpers in Manila, Quezon, Pasay,
and Caloocan cities and municipalities of Makati, San
Juan, Mandaluyong, Muntinlupa, Navotas, Malabon, Paranaque, Las Pias, Pasig,
Marikina, Valenzuela, Taguig and Pateros in Metro Manila and in highly urbanized
cities;

64
(2) Six hundred fifty pesos (P650.00) a month for those in other chartered cities and first-
class municipalities; and
(3) Five hundred fifty pesos (P550.00) a month for those in other municipalities.
Provided, That the employers shall review the employment contracts of
their househelpers every three (3) years with the end in view of improving the terms and
conditions thereof.
Provided, further, That those househelpers who are receiving at least One thousand
pesos (P1,000.00) shall be covered by the Social Security System (SSS) and be entitled to all
the benefits provided thereunder. (As amended by Republic Act No. 7655, August 19, 1993).

Article 144. Minimum Cash Wage. The minimum wage rates prescribed under this Chapter
shall be the basic cash wages which shall be paid to the househelpers in addition to lodging,
food and medical attendance.

Article 145. Assignment to Non-Household Work. No househelper shall be assigned to


work in a commercial, industrial or agricultural enterprise at a wage or salary rate lower than
that provided for agricultural or non-agricultural workers as prescribed herein.

Article 146. Opportunity for Education. If the househelper is under the age of eighteen
(18) years, the employer shall give him or her an opportunity for at least elementary education.
The cost of education shall be part of the househelpers compensation, unless there is a
stipulation to the contrary.

Article 147. Treatment of Househelpers. The employer shall treat the house helper in a
just and humane manner. In no case shall physical violence be used upon the house helper.

Article 148. Board, Lodging, and Medical Attendance. The employer shall furnish
the househelper, free of charge, suitable and sanitary living quarters as well as adequate food
and medical attendance.

SECTION 3. Children of househelpers. The children and relatives of a househelper


who live under the employer's roof and who share the accommodations provided for the
househelpers by the employer shall not be deemed as househelpers if they are not
otherwise engaged as such and are not required to perform any substantial household
work.

Article 149. Indemnity for Unjust Termination of Services. If the period of household
service is fixed, neither the employer nor the househelper may terminate the contract before
the expiration of the term, except for a just cause. If the househelper is unjustly dismissed, he
or she shall be paid the compensation already earned plus that for fifteen (15) days by way of
indemnity.
If the househelper leaves without justifiable reason, he or she shall forfeit any unpaid
salary due him or her not exceeding fifteen (15) days.

Article 150. Service of Termination Notice. If the duration of the household service is not
determined either in stipulation or by the nature of the service, the employer or the house
helper may give notice to put an end to the relationship five (5) days before the intended
termination of the service.

Article 151. Employment Certification. Upon the severance of the household service
relation, the employer shall give the househelper a written statement of the nature and duration
of the service and his or her efficiency and conduct as househelper.

Article 152. Employment Record. The employer may keep such records as he may deem
necessary to reflect the actual terms and conditions of employment of his househelper, which
the latter shall authenticate by signature or thumbmark upon request of the employer.

65
SECTION 16. Funeral expenses. In case of death of the househelper, the employer
shall bear the funeral expenses commensurate to the standards of life of the deceased.

SECTION 17. Disposition of the househelper's body. Unless so desired by the


househelper or by his or her guardian with court approval, the transfer or use of the body
of the deceased househelper for purposes other than burial is prohibited. When so
authorized by the househelper, the transfer, use and disposition of the body shall be in
accordance with the provisions of Republic Act No. 349.

Chapter IV
EMPLOYMENT OF HOMEWORKERS

[DO 05-92]
Section 1. General statement on coverage. This Rule shall apply to any person who
performs industrial homework for an employer, contractor or subcontractor.

Section 2. Definitions. As used in this Rule, the following terms shall have the meanings
indicated thereunder:
(a) Industrial Homework is a system of production under which work for an employer or
contractor is carried out by a homeworker at his/her home. Materials may or may not be
furnished by the employer or contractor.
It differs from regular factory production principally in that, it is a decentralized form of
production where there is ordinarily very little supervision or regulation of methods of work.

Article 153. Regulation of Industrial Homeworkers. - The employment of


industrial homeworkers and field personnel shall be regulated by the government through the
appropriate regulations issued by the Secretary of Labor and Employment to ensure the
general welfare and protection of homeworkers and field personnel and the industries
employing them.

Article 154. Regulations of Secretary of Labor. The regulations or orders to be issued


pursuant to this Chapter shall be designed to assure the minimum terms and conditions of
employment applicable to the industrial homeworkers or field personnel involved.

Article 155. Distribution of Homework. For purposes of this Chapter,


the employer of homeworkers includes any person, natural or artificial who, for his account or
benefit, or on behalf of any person residing outside the country, directly or indirectly, or through
an employee, agent contractor, sub-contractor or any other person:
(1) Delivers, or causes to be delivered, any goods, articles or materials to be processed or
fabricated in or about a home and thereafter to be returned or to be disposed of or
distributed in accordance with his directions; or
(2) Sells any goods, articles or materials to be processed or fabricated in or about a home
and then rebuys them after such processing or fabrication, either by himself or
through some other person.

Section 6. Payment for homework. Immediately upon receipt of the finished goods or
articles, the employer shall pay the homeworker or contractor or subcontractor, as the case
may be, for the work performed less the corresponding homeworkers share of SSS,
MEDICARE and ECC premium contributions which shall be remitted by the
contractor/subcontractor or employer to the SSS with the employers share. However, where
payment is made to a contractor or subcontractor, the homeworker shall likewise be paid
immediately after the goods or articles have been collected from the workers.

Section 8. Deductions. No employer, contractor, or subcontractor shall make any deduction


from the homeworkers earnings for the value of materials which have been lost, destroyed,
soiled or otherwise damaged unless the following conditions are met.

66
(a) The homeworker concerned is clearly shown to be responsible for the loss or
damage;
(b) The homeworker is given reasonable opportunity to show cause why deductions
should not be made;
(c) The amount of such deduction is fair and reasonable and shall not exceed the actual
loss or damage; and
(d) The deduction is made at such rate that the amount deducted does not exceed 20%
of the homeworkers earnings in a week.

Section 9. Conditions for payment of work.


(a) The employer may require the homeworker to redo once the work which has been
improperly executed without having to pay the stipulated rate again.
(b) An employer, contractor, or subcontractor need not pay the homeworker for any work
which has been done on goods and articles which have been returned for reasons attributable
to the fault of the homeworker.

Section 13. Prohibitions for homework. No homework shall be performed on the following:
(1) explosives, fireworks and articles of like character; (2) drugs and poisons; and (3) other
articles, the processing of which requires exposure to toxic substances.

*NOTE: New Chapter via RA 10151


Chapter V
EMPLOYMENT OF NIGHT WORKERS

Art. 154. Coverage. This chapter shall apply to all persons, who shall be employed or
permitted or suffered to work at night, except those employed in agriculture, stock raising,
fishing, maritime transport and inland navigation, during a period of not less than seven (7)
consecutive hours, including the interval from midnight to five oclock in the morning, to be
determined by the Secretary of Labor and Employment, after consulting the workers
representatives/labor organizations and employers.
Night worker means any employed person whose work requires performance of
a substantial number of hours of night work which exceeds a specified limit. This limit shall
be fixed by the Secretary of Labor after consulting the workers representatives/labor
organizations and employers.

[IRR: RA 10151]
Section 2. Definition. As used herein, night worker means any employed person
whose work covers the period from 10PM to 6AM the following morning provided that the
worker performs no less than seven (7) consecutive work hours.

Art. 155. Health Assessment, At their request, workers shall have the right to undergo
a health assessment without charge and to receive advice on how to reduce or avoid
health problems associated with their work:
(a) Before taking up an assignment as a night worker;
(b) At regular intervals during such an assignment; and
(c) If they experience health problems during such an assignment which are not
caused by factors other than the performance of night work.
With the exception of a finding of unfitness for night work, the findings of such
assessments shall not be transmitted to others without the workers consent and shall not
be used to their detriment.

Section 3. Health Assessment. XXX With the exception of a finding of unfitness for
night work, the findings of such assessments shall be confidential and shall not be used to
their detriment, subject however to applicable company policies.

67
Art. 156. Mandatory Facilities. Suitable first-aid facilities shall be made available for
workers performing night work, including arrangements where such workers, where
necessary, can be taken immediately to a place for appropriate treatment. The employers
are likewise required to provide safe and healthful working conditions and adequate or
reasonable facilities such as sleeping or resting quarters in the establishment and
transportation from the work premises to the nearest point of their residence subject to
exceptions and guidelines to be provided by the DOLE.

Art. 157. Transfer. Night workers who are certified as unfit for night work, due to health
reasons, shall be transferred, whenever practicable, to a similar job for which they are fit
to work.
If such transfer to a similar job is not practicable, these workers shall be granted
the same benefits as other workers who are unable to work, or to secure employment
during such period.
A night worker certified as temporarily unfit for night work shall be given the same
protection against dismissal or notice of dismissal as other workers who are prevented
from working for reasons of health.

Section 5. Transfer. Night workers who are certified by competent physician, as unfit to
render night work, due to health reasons, shall be transferred to a job for which they are fit
to work whenever practicable. The transfer of the employee must be similar or equivalent
position and in good faith.
If such transfer is not practicable or the workers are unable to render night work
for a continuous period of not less than six (6) months upon the certification of a
competent public health authority, these workers shall be granted the same company
benefits as other workers who are unable to work due to illness.
A night worker certified as temporarily unfit for night work for a period of less than
six (6) months shall be given the same protection against dismissal or notice of dismissal
as other workers who are prevented from working for health reasons.

Art. 158. Women Night Workers. Measures shall be taken to ensure that an
alternative to night work is available to women workers who would otherwise be called
upon to perform such work:
(a) Before and after childbirth, for a period of at least sixteen (16) weeks, which shall
be divided between the time before and after childbirth;
(b) For additional periods, in respect of which a medical certificate is produced stating
that said additional periods are necessary for the health of the mother or child:
(1) During pregnancy;
(2) During a specified time beyond the period, after childbirth is fixed pursuant to
subparagraph (a) above, the length of which shall be determined by the
DOLE after consulting the labor organizations and employers.
During the periods referred to in this article:
(i) A woman worker shall not be dismissed or given notice of dismissal, except for just
or authorized causes provided for in this Code that are not connected with
pregnancy, childbirth and childcare responsibilities.
(ii) A woman worker shall not lose the benefits regarding her status, seniority, and
access to promotion which may attach to her regular night work position.
Pregnant women and nursing mothers may he allowed to work at night only if a
competent physician, other than the company physician, shall certify their fitness to render
night work, and specify, in the ease of pregnant employees, the period of the pregnancy
that they can safely work.
The measures referred to in this article may include transfer to day work where
this is possible, the provision of social security benefits or an extension of maternity leave.
The provisions of this article shall not have the effect of reducing the protection and
benefits connected with maternity leave under existing laws.

68
Section 6. Alternative measures to night work for pregnant and nursing employees.
Employers shall ensure that measures shall be undertaken to provide an alternative to
night work for pregnant and nursing employees who would otherwise be called upon to
perform such work. Such measures may include the transfer to day work, where it is
possible, as well as the provision of social security benefits or an extension of maternity
leave.
(a) Transfer to day work. As far as practicable, pregnant or nursing employees
shall be assigned to day work, before or after childbirth for a period of at least sixteen (16)
weeks which shall be divided between the time before and after childbirth.
Medical certificate issued by competent physician (i.e. obstetrician/gynecologist,
pediatrician, etc.) is necessary for the grant of:
i. additional periods of assignment to day work during pregnancy or after
childbirth other than the period mentioned in the foregoing paragraph,
provided that the length of additional period should not be more than
four (4) weeks or for a longer period as may be agreed upon by the
employer and the worker
ii. extension of maternity leave; and
iii. clearance to render night work.
(b) Provision of social benefits. Social security benefits, such as paid maternity
leave shall be provided to women workers in accordance with the provisions of RA 8282
(Social Security Act of 1997) and other existing company policies or collective bargaining
agreement.
(c) Extension of maternity leave. Where the transfer to day work is not possible,
a woman employee may be allowed to extend, as recommended by a competent
physician, her maternity leave without pay or using earned leave credits of the worker, if
any.

Section 8. Protection against dismissal and loss of benefits attached to


employment status, seniority and access to promotion. Where no alternative work
can be provided to a woman employee who is not in a position to render night work, she
shall be allowed to go on leave or on extended maternity leave, using her earned leave
credits.
A woman employee shall not be dismissed for reasons of pregnancy, childbirth
and childcare responsibilities as defined under this Rule. She shall not lose the benefits
regarding her employment status, seniority, and access to promotion which may attach to
her regular night work position.

Art. 159. Compensation. The compensation for night workers in the form of working
time, pay or similar benefits shall recognize the exceptional nature of night work.

Section 9. Compensation. The night workers compensation shall include but not be
limited to working time, pay and benefits under the Labor Code, as amended and under
th
existing laws, such as service incentive leave, rest day, night differential pay, 13 month
pay, and other benefits provided for by law, company policy or CBA.

Art. 160. Social Services.Appropriate social services shall be provided for night
workers and, where necessary, for workers performing night work.

Art. 161. Night Work Schedules. Before introducing work schedules requiring the
services of night workers, the employer shall consult the workers representatives/labor
organizations concerned on the details of such schedules and the forms of organization of
night work that are best adapted to the establishment and its personnel, as well as on the
occupational health measures and social services which are required. In establishments
employing night workers, consultation shall take place regularly.

69
Section 10. Night work schedules. The employer shall at its own initiatives, consult
the recognized workers representatives or union in the establishment on the details of the
night work schedules.
In establishments employing night workers, consultation shall take place
regularly and appropriate changes of work schedule shall be agreed upon before it is
implemented.

*NOTE: Renumbered from here onwards but I kept the original numbered provisions to
avoid confusion.

70
BOOK FOUR
HEALTH, SAFETY AND SOCIAL WELFARE BENEFITS

Title I
MEDICAL, DENTAL
AND OCCUPATIONAL SAFETY

Chapter I
MEDICAL AND DENTAL SERVICES

Article 156. First-Aid Treatment. Every employer shall keep in his establishment such first-
aid medicines and equipment as the nature and conditions of work may require, in accordance
with such regulations as the Department of Labor and Employment shall prescribe.
The employer shall take steps for the training of a sufficient number of employees in
first-aid treatment.

Article 157. Emergency Medical and Dental Services. It shall be the duty of every
employer to furnish his employees in any locality with free medical and dental attendance and
facilities consisting of:
(a) The services of a full-time registered nurse when the number of employees exceeds
fifty (50) but not more than two hundred (200) except when the employer does not
maintain hazardous workplaces, in which case, the services of a graduate first-aider
shall be provided for the protection of workers, where no registered nurse is available.
The Secretary of Labor and Employment shall provide by appropriate regulations, the
services that shall be required where the number of employees does not exceed fifty
(50) and shall determine by appropriate order, hazardous workplaces for purposes of
this Article;
(b) The services of a full-time registered nurse, a part-time physician and dentist, and an
emergency clinic, when the number of employees exceeds two hundred (200) but not
more than three hundred (300); and
(c) The services of a full-time physician, dentist and a full-time registered nurse as well as
a dental clinic and an infirmary or emergency hospital with one bed capacity for every
one hundred (100) employees when the number of employees exceeds three
hundred (300).
In cases of hazardous workplaces, no employer shall engage the services of a
physician or a dentist who cannot stay in the premises of the establishment for at least two (2)
hours, in the case of those engaged on part-time basis, and not less than eight (8) hours, in the
case of those employed on full-time basis. Where the undertaking is non-hazardous in nature,
the physician and dentist may be engaged on retainer basis, subject to such regulations as the
Secretary of Labor and Employment may prescribe to insure immediate availability of medical
and dental treatment and attendance in case of emergency. (As amended by Section 26,
Presidential Decree No. 570-A, November 1, 1974).

Article 158. When Emergency Hospital Not Required. The requirement for an emergency
hospital or dental clinic shall not be applicable in case there is a hospital or dental clinic which
is accessible from the employers establishment and he makes arrangement for the reservation
therein of the necessary beds and dental facilities for the use of his employees.

Article 159. Health Program. The physician engaged by an employer shall, in addition to his
duties under this Chapter, develop and implement a comprehensive occupational health
program for the benefit of the employees of his employer.

Article 160. Qualifications of Health Personnel. The physicians, dentists and nurses
employed by employers pursuant to this Chapter shall have the necessary training in industrial
medicine and occupational safety and health. The Secretary of Labor and Employment, in

71
consultation with industrial, medical, and occupational safety and health associations, shall
establish the qualifications, criteria and conditions of employment of such health personnel.

ART. 161. Assistance of employer. - It shall be the duty of any employer to provide all
the necessary assistance to ensure the adequate and immediate medical and dental
attendance and treatment to an injured or sick employee in case of emergency.

Chapter II
OCCUPATIONAL HEALTH AND SAFETY

ART. 162. Safety and health standards. - The Secretary of Labor and Employment shall,
by appropriate orders, set and enforce mandatory occupational safety and health
standards to eliminate or reduce occupational safety and health hazards in all workplaces
and institute new, and update existing, programs to ensure safe and healthful working
conditions in all places of employment.

ART. 163. Research. - It shall be the responsibility of the Department of Labor and
Employment to conduct continuing studies and research to develop innovative methods,
techniques and approaches for dealing with occupational safety and health problems; to
discover latent diseases by establishing causal connections between diseases and work
in environmental conditions; and to develop medical criteria which will assure insofar as
practicable that no employee will suffer impairment or diminution in health, functional
capacity, or life expectancy as a result of his work and working conditions.

ART. 164. Training programs. - The Department of Labor and Employment shall develop
and implement training programs to increase the number and competence of personnel in
the field of occupational safety and industrial health.

ART. 165. Administration of safety and health laws.


(a) The Department of Labor and Employment shall be solely responsible for the
administration and enforcement of occupational safety and health laws, regulations
and standards in all establishments and workplaces wherever they may be located;
however, chartered cities may be allowed to conduct industrial safety inspections of
establishments within their respective jurisdictions where they have adequate facilities
and competent personnel for the purpose as determined by the Department
of Labor and Employment and subject to national standards established by the latter.
(b) The Secretary of Labor and Employment may, through appropriate regulations, collect
reasonable fees for the inspection of steam boilers, pressure vessels and pipings and
electrical installations, the test and approval for safe use of materials, equipment and
other safety devices and the approval of plans for such materials, equipment and
devices. The fee so collected shall be deposited in the national treasury to the credit
of the occupational safety and health fund and shall be expended exclusively for the
administration and enforcement of safety and other labor laws administered by the
Department of Labor and Employment.

Title II
EMPLOYEES COMPENSATION
AND STATE INSURANCE FUND
Chapter I
POLICY AND DEFINITIONS

ART. 166. Policy. - The State shall promote and develop a tax-exempt employees
compensation program whereby employees and their dependents, in the event of work-
connected disability or death, may promptly secure adequate income benefit and medical
related benefits.

ART. 167. Definition of terms. - As used in this Title, unless the context indicates
otherwise:
72
(a) "Code" means the Labor Code of the Philippines instituted under Presidential
Decree Numbered four hundred forty-two, as amended.
(b) "Commission" means the Employees Compensation Commission created under
this Title.
(c) "SSS" means the Social Security System created under Republic Act Numbered
Eleven hundred sixty-one, as amended.
(d) "GSIS" means the Government Service Insurance System created under
Commonwealth Act Numbered One hundred eighty-six, as amended.
(e) "System" means the SSS or GSIS, as the case may be.
(f) "Employer" means any person, natural or juridical, employing the services of the
employee.
(g) "Employee" means any person compulsorily covered by the GSIS under
Commonwealth Act Numbered One hundred eighty-six, as amended, including
the members of the Armed Forces of the Philippines, and any person employed
as casual, emergency, temporary, substitute or contractual, or any person
compulsorily covered by the SSS under Republic Act Numbered Eleven hundred
sixty-one, as amended.
(h) "Person" means any individual, partnership, firm, association, trust, corporation or
legal representative thereof.
(i) "Dependent" means the legitimate, legitimated or legally adopted or acknowledged
natural child who is unmarried, not gainfully employed, and not over twenty-one
(21) years of age or over twenty-one (21) years of age provided he is
incapacitated and incapable of self-support due to a physical or mental defect
which is congenital or acquired during minority; the legitimate spouse living with
the employee and the parents of said employee wholly dependent upon him for
regular support.
(j) "Beneficiaries" means the dependent spouse until he/she remarries and dependent
children, who are the primary beneficiaries. In their absence, the dependent
parents and subject to the restrictions imposed on dependent children, the
illegitimate children and legitimate descendants, who are the secondary
beneficiaries: Provided, That the dependent acknowledged natural child shall be
considered as a primary beneficiary when there are no other dependent children
who are qualified and eligible for monthly income benefit.

[RA 8282: SSS]


(k) Beneficiaries The dependent spouse until he or she remarries, the dependent
legitimate, legitimated or legally adopted, and illegitimate children, who shall be
the primary beneficiaries of the member: Provided, That the dependent
illegitimate children shall be entitled to fifty percent (50%) of the share of the
legitimate, legitimated or legally adopted children: Provided, further, That in the
absence of the dependent legitimate, legitimated children of the member, his/her
dependent illegitimate children shall be entitled to one hundred percent (100%) of
the benefits. In their absence, the dependent parents who shall be the secondary
beneficiaries of the member. In the absence of all the foregoing, any other
person designated by the member as his/her secondary beneficiary.

[RA 8291: GSIS]


(f) Dependents- Dependents shall be the following: (a) the legitimate spouse
dependent for support upon the member or pensioner; (b) the legitimate, legitimated,
legally adopted child, including the illegitimate child, who is unmarried, not gainfully
employed, not over the age of majority, or is over the age of majority but
incapacitated and incapable of self-support due to a mental or physical defect
acquired prior to age of majority; and (c) the parents dependent upon the member for
support;

(g) Primary beneficiaries- The legal dependent spouse until he/she remarries and the
dependent children;
73
(h) Secondary beneficiaries- The dependent parents and, subject to the restrictions
on dependent children, the legitimate descendants

(k) "Injury" means any harmful change in the human organism from any accident
arising out of and in the course of the employment.
(l) "Sickness" means any illness definitely accepted as an occupational disease listed
by the Commission, or any illness caused by employment subject to proof that
the risk of contracting the same is increased by working conditions. For this
purpose, the Commission is empowered to determine and approve occupational
diseases and work-related illnesses that may be considered compensable based
on peculiar hazards of employment.
(m) "Death" means loss of life resulting from injury or sickness.
(n) "Disability" means loss or impairment of a physical or mental function resulting
from injury or sickness.
(o) "Compensation" means all payments made under this Title for income benefits
and medical or related benefits.
(p) "Income benefit" means all payments made under this Title to the providers of
medical care, rehabilitation services and hospital care.
(q) "Medical benefit" means all payments made under this Title to the providers of
medical care, rehabilitation services and hospital care.
(r) "Related benefit" means all payments made under this Title for appliances and
supplies.
(s) "Appliances" means crutches, artificial aids and other similar devices.
(t) "Supplies" means medicine and other medical, dental or surgical items.
(u) "Hospital" means any medical facility, government or private, authorized by law,
an active member in good standing of the Philippine Hospital Association and
accredited by the Commission.
(v) "Physician" means any doctor of medicine duly licensed to practice in the
Philippines, an active member in good standing of the Philippine Medical
Association and accredited by the Commission.
(w) "Wages" or "Salary", insofar as they refer to the computation of benefits defined in
Republic Act No. 1161, as amended, for SSS and Presidential Decree No. 1146,
as amended, for GSIS, respectively, except that part in excess of Three
Thousand Pesos.
(x) "Monthly salary credit" means the wage or salary base for contributions as
provided in Republic Act Numbered Eleven hundred sixty-one, as amended, or
the wages or salary.
(y) "Average monthly salary credit" in the case of the SSS means the result obtained
by dividing the sum of the monthly salary credits in the sixty-month period
immediately following the semester of death or permanent disability by sixty (60),
except where the month of death or permanent disability falls within eighteen (18)
calendar months from the month of coverage, in which case, it is the result
obtained by dividing the sum of all monthly salary credits paid prior to the month
of contingency by the total number of calendar months of coverage in the same
period.
(z) "Average daily salary credit" in the case of the SSS means the result obtained by
dividing the sum of the six (6) highest monthly salary credits in the twelve-month
period immediately preceding the semester of sickness or injury by one hundred
eighty (180), except where the month of injury falls within twelve (12) calendar
months from the first month of coverage, in which case it is the result obtained by
dividing the sum of all monthly salary credits by thirty (30) times the number of
calendar months of coverage in the period.
In the case of the GSIS, the average daily salary credit shall be the actual daily salary
or wage, or the monthly salary or wage divided by the actual number of working
days of the month of contingency.

74
(aa) "Quarter" means a period of three (3) consecutive months ending on the last
days of March, June, September and December.
(bb) "Semester" means a period of two consecutive quarters ending in the quarter of
death, permanent disability, injury or sickness.
(cc) "Replacement ratio" - The sum of twenty percent and the quotient obtained by
dividing three hundred by the sum of three hundred forty and the average
monthly salary credit.
(dd) "Credited years of service" - For a member covered prior to January, 1975,
nineteen hundred seventy-five minus the calendar year of coverage, plus the
number of calendar years in which six or more contributions have been paid from
January, 1975 up to the calendar year containing the semester prior to the
contingency. For a member covered on or after January, 1975, the number of
calendar years in which six or more contributions have been paid from the year
of coverage up to the calendar year containing the semester prior to the
contingency.
(ee) "Monthly income benefit" means the amount equivalent to one hundred fifteen
percent of the sum of the average monthly salary credit multiplied by the
replacement ratio, and one and a half percent of the average monthly salary
credit for each credited year of service in excess of ten years: Provided, That the
monthly income benefit shall in no case be less than two hundred fifty pesos.

Chapter II
COVERAGE AND LIABILITY

ART. 168. Compulsory coverage. - Coverage in the State Insurance Fund shall be
compulsory upon all employers and their employees not over sixty (60) years of age:
Provided, That an employee who is over (60) years of age and paying contributions to
qualify for the retirement or life insurance benefit administered by the System shall be
subject to compulsory coverage.

[RA 8282: Social Security Act of 1997]


SEC. 9. Coverage.
(a) Coverage in the SSS shall be compulsory upon all employees not over sixty
(60) years of age and their employers: Provided, That in the case of domestic helpers,
their monthly income shall not be less than One thousand pesos (P1,000.00) a month:
Provided, further, That any benefit already earned by the employees under private benefit
plans existing at the time of the approval of this Act shall not be discontinued, reduced or
otherwise impaired: Provided, further, That private plans which are existing and in force at
the time of compulsory coverage shall be integrated with the plan of the SSS in such a
way where the employers contribution to his private plan is more than that required of him
in this Act, he shall pay to the SSS only the contribution required of him and he shall
continue his contribution to such private plan less his contribution to the SSS so that the
employers total contribution to his benefit plan and to the SSS shall be the same as his
contribution to his private benefit plan before the compulsory coverage: Provided, further,
That any changes, adjustments, modifications, eliminations or improvements in the
benefits to be available under the remaining private plan, which may be necessary to
adopt by reason of the reduced contributions thereto as a result of the integration, shall be
subject to agreements between the employers and employees concerned: Provided,
further, That the private benefit plan which the employer shall continue for his employees
shall remain under the employers management and control unless there is an existing
agreement to the contrary: Provided, finally, That nothing in this Act shall be construed as
a limitation on the right of employers and employees to agree on and adopt benefits which
are over and above those provided under this Act.
(b) Spouses who devote full time to managing the household and family affairs,
unless they are also engaged in other vocation or employment which is subject to
mandatory coverage, may be covered by the SSS on a voluntary basis.

75
(c) Filipinos recruited by foreign-based employers for employment abroad may
be covered by the SSS on a voluntary basis.

SEC. 9-A. Compulsory Coverage of the Self-Employed. Coverage in the SSS shall
also be compulsory upon such self-employed persons as may be determined by the
Commission under such rules and regulations as it may prescribe, including but not limited
to the following:
1. All self-employed professionals;
2. Partners and single proprietors of businesses;
3. Actors and actresses, directors, scriptwriters and news correspondents who do
not fall within the definition of the term employee in Section 8 (d) of this Act;
4. Professional athletes, coaches, trainers and jockeys; and
5. Individual farmers and fishermen.
Unless otherwise specified herein, all provisions of
this Act applicable to covered employees shall also be applicable to the covered self-
employed persons.

[RA 8291: GSIS Act of 1997]


SEC. 3. Compulsory Membership. - Membership in the GSIS shall be compulsory for all
employees receiving compensation who have not reached the compulsory retirement age,
irrespective of employment status, except members of the Armed Forces of the
Philippines and the Philippine National Police, subject to the condition that they must
settle first their financial obligation with the GSIS, and contractuals who have no employer
and employee relationship with the agencies they serve.
Except for the members of the judiciary and constitutional commissions who shall
have life insurance only, all members of the GSIS shall have life insurance, retirement,
and all other social security protections such as disability, survivorship, separation, and
unemployment benefits.

[IRR: RA 8291]
RULE II MEMBERSHIP OF THE GSIS

Section 2. Compulsory Membership


2.1. All government personnel, whether elective or appointive, irrespective of status of
appointment, provided they are receiving fixed monthly compensation and have not
reached the mandatory retirement age of 65 years, are compulsorily covered as members
of the GSIS and shall be required to pay contributions.

2.2. However, employees who have reached the retirement age of 65 or more shall also
be covered, subject to the following rules:
An employee who is already beyond the mandatory retirement age of 65 shall be
compulsorily covered and be required to pay both the life and retirement premiums under
the following situations:
1. An elective official who at the time of election to public office is below
65 years of age and will be 65 years or more at the end of his term of office, including the
period/s of his re-election to public office thereafter without interruption.
2. Appointive officials who, before reaching the mandatory age of 65, are
appointed to government position by the President of the Republic of the Philippines and
shall remain in government service at age beyond 65.

2.3. Contractual employees including casuals and other employees with an employee-
government agency relationship are also compulsorily covered, provided they are
receiving fixed monthly compensation and rendering the required number of working
hours for the month.

2.4. Classes of Membership Membership in the GSIS is classified either by type or


status of membership.
76
2.4.1 As to type of members, there are regular and special members:

a. Regular Members are those employed by the government of the


Republic of the Philippines, national or local, legislative bodies,
government-owned and controlled corporations (GOCC) with original
charters, government financial institutions (GFIs), except uniformed
personnel of the Armed Forces of the Philippines, the Philippine
National Police, Bureau of Jail Management and Penology (BJMP)
and Bureau of Fire Protection (BFP), who are required by law to remit
regular monthly contributions to the GSIS.
b. Special Members are constitutional commissioners, members of the
judiciary, including those with equivalent ranks, who are required by
law to remit regular monthly contributions for life insurance policies to
the GSIS in order to answer for their life insurance benefits defined
under RA 8291.

2.4.2. As to status of membership, there are active and inactive members.


a. Active member refers to a member of the GSIS, whether regular or
special, who is still in the government service and together with the
government agency to which he belongs, is required to pay the
monthly contribution.
b. Inactive member a member who is separated from the service
either by resignation, retirement, disability, dismissal from the service,
retrenchment or, who is deemed retired from the service under this
Act.

Section 3 Exclusion from Compulsory Coverage


3.1 The following employees are excluded from compulsory coverage:
3.1.1. Uniformed personnel of the Armed Forces of the Philippines (AFP),
Philippine National Police (PNP), Bureau of Fire Protection (BFP) and
Bureau of Jail Management and Penology (BJMP);
3.1.2. Barangay and Sanggunian Officials who are not receiving fixed monthly
compensation;
3.1.3. Contractual Employees who are not receiving fixed monthly compensation;
and
3.1.4. Employees who do not have monthly regular hours of work and are not
receiving fixed monthly compensation.

ART. 169. Foreign employment. - The Commission shall ensure adequate coverage of
Filipino employees employed abroad, subject to regulations as it may prescribe.

ART. 170. Effective date of coverage. - Compulsory coverage of the employer during
the effectivity of this Title shall take effect on the first day of his operation, and that of the
employee, on the date of his employment.

[RA 8282]
SEC. 10. Effective Date of Coverage. Compulsory coverage of the employer shall take
effect on the first day of his operation and that of the employee on the day of his
employment: Provided, That the compulsory coverage of the self-employed person shall
take effect upon his registration with the SSS.

SEC. 11. Effect of Separation from Employment. When an employee under


compulsory coverage is separated from employment, his employers contribution on his
account and his obligation to pay contributions arising from that employment shall cease
at the end of the month of separation, but said employee shall be credited with all
contributions paid on his behalf and entitled to benefits according to the provisions of this

77
Act. He may, however, continue to pay the total contributions to maintain his right to full
benefit.

SEC. 11-A. Effect of Interruption of Business or Professional Income. If the self-


employed realizes no income in any given month, he shall not be required to pay
contributions for that month. He may, however, be allowed to continue paying
contributions under the same rules and regulations applicable to a separated employee
member: Provided, That no retroactive payment of contributions shall be allowed other
than as prescribed under Section Twenty-two-A hereof.

[RA 8291: GSIS Act]


SEC. 4. Effect of Separation from the Service. - A member separated from the service
shall continue to be a member, and shall be entitled to whatever benefits he has qualified
to in the event of any contingency compensable under this Act.

ART. 171. Registration. - Each employer and his employees shall register with the
System in accordance with its regulations.

ART. 172. Limitation of liability. - The State Insurance Fund shall be liable for
compensation to the employee or his dependents, except when the disability or death was
occasioned by the employees intoxication, willful intention to injure or kill himself or
another, notorious negligence, or otherwise provided under this Title.

ART. 173. Extent of liability. - Unless otherwise provided, the liability of the State
Insurance Fund under this Title shall be exclusive and in place of all other liabilities of the
employer to the employee, his dependents or anyone otherwise entitled to receive
damages on behalf of the employee or his dependents. The payment of compensation
under this Title shall not bar the recovery of benefits as provided for in Section 699 of the
Revised Administrative Code, Republic Act Numbered Eleven hundred sixty-one, as
amended, Republic Act Numbered Forty-eight hundred sixty-four as amended, and other
laws whose benefits are administered by the System or by other agencies of the
government. (As amended by Presidential Decree No. 1921).

ART. 174. Liability of third party/ies.


(a) When the disability or death is caused by circumstances creating a legal liability
against a third party, the disabled employee or the dependents, in case of his death,
shall be paid by the System under this Title. In case benefit is paid under this Title,
the System shall be subrogated to the rights of the disabled employee or the
dependents, in case of his death, in accordance with the general law (Civil Code).
(b) Where the System recovers from such third party damages in excess of those paid or
allowed under this Title, such excess shall be delivered to the disabled employee or
other persons entitled thereto, after deducting the cost of proceedings and expenses
of the System.

ART. 175. Deprivation of the benefits. - Except as otherwise provided under this Title,
no contract, regulation or device whatsoever shall operate to deprive the employee or his
dependents of any part of the income benefits and medical or related services granted
under this Title. Existing medical services being provided by the employer shall be
maintained and continued to be enjoyed by their employees.

Chapter III
ADMINISTRATION

ART. 176. Employees Compensation Commission.


(a) To initiate, rationalize, and coordinate the policies of the employees compensation
program, the Employees Compensation Commission is hereby created to be
composed of five ex-officio members, namely: the Secretary of Labor and
78
Employment as Chairman, the GSIS General Manager, the SSS Administrator, the
Chairman of the Philippine Medical Care Commission, and the Executive Director of
the ECC Secretariat, and two appointive members, one of whom shall represent the
employees and the other, the employers, to be appointed by the President of the
Philippines for a term of six years. The appointive member shall have at least five
years experience in workmens compensation or social security programs. All
vacancies shall be filled for the unexpired term only. (As amended by Section 19 [c],
Executive Order No. 126).
(b) The Vice Chairman of the Commission shall be alternated each year between the
GSIS General Manager and the SSS Administrator. The presence of four members
shall constitute a quorum. Each member shall receive a per diem of two hundred
pesos for every meeting that is actually attended by him, exclusive of actual, ordinary
and necessary travel and representation expenses. In his absence, any member may
designate an official of the institution he serves on full-time basis as his
representative to act in his behalf. (As amended by Section 2, Presidential Decree
No. 1368).
(c) The general conduct of the operations and management functions of the GSIS or SSS
under this Title shall be vested in its respective chief executive officers, who shall be
immediately responsible for carrying out the policies of the Commission.
(d) The Commission shall have the status and category of a government corporation, and
it is hereby deemed attached to the Department of Labor and Employment for policy
coordination and guidance. (As amended by Section 2, Presidential Decree No.
1368).

ART. 177. Powers and duties. - The Commission shall have the following powers and
duties:
(a) To assess and fix a rate of contribution from all employers;
(b) To determine the rate of contribution payable by an employer whose records show
a high frequency of work accidents or occupational diseases due to failure by the
said employer to observe adequate safety measures;
(c) To approve rules and regulations governing the processing of claims and the
settlement of disputes arising therefrom as prescribed by the System;
(d) To initiate policies and programs toward adequate occupational health and safety
and accident prevention in the working environment, rehabilitation other than
those provided for under Article 190 hereof, and other related programs and
activities, and to appropriate funds therefor; (As amended by Section 3,
Presidential Decree No. 1368).
(e) To make the necessary actuarial studies and calculations concerning the grant of
constant help and income benefits for permanent disability or death and the
rationalization of the benefits for permanent disability and death under the Title
with benefits payable by the System for similar contingencies: Provided, That the
Commission may upgrade benefits and add new ones subject to approval of the
President: and Provided, further, That the actuarial stability of the State
Insurance Fund shall be guaranteed: Provided, finally, That such increases in
benefits shall not require any increases in contribution, except as provided for in
paragraph (b) hereof; (As amended by Section 3, Presidential Decree No. 1641).
(f) To appoint the personnel of its staff, subject to civil service law and rules, but
exempt from WAPCO law and regulations;
(g) To adopt annually a budget of expenditures of the Commission and its staff
chargeable against the State Insurance Fund: Provided, That the SSS and GSIS
shall advance on a quarterly basis, the remittances of allotment of the loading
fund for the Commissions operational expenses based on its annual budget as
duly approved by the Department of Budget and Management; (As amended by
Section 3, Presidential Decree No. 1921).
(h) To have the power to administer oath and affirmation, and to issue subpoena and
subpoena duces tecum in connection with any question or issue arising from
appealed cases under this Title;
(i) To sue and be sued in court;
79
(j) To acquire property, real or personal, which may be necessary or expedient for the
attainment of the purposes of this Title;
(k) To enter into agreements or contracts for such services and as may be needed for
the proper, efficient and stable administration of the program;
(l) To perform such other acts as it may deem appropriate for the attainment of the
purposes of the Commission and proper enforcement of the provisions of this
Title. (As amended by Section 18, Presidential Decree No. 850).

ART. 178. Management of funds. - All revenues collected by the System under this Title
shall be deposited, invested, administered and disbursed in the same manner and under
the same conditions, requirements and safeguards as provided by Republic Act
Numbered eleven hundred sixty-one, as amended, with regard to such other funds as
are thereunder being paid to or collected by the SSS and GSIS, respectively: Provided,
That the Commission, SSS and GSIS may disburse each year not more than twelve
percent of the contribution and investment earnings collected for operational expenses,
including occupational health and safety programs, incidental to the carrying out of this
Title.

ART. 179. Investment of funds. - Provisions of existing laws to the contrary


notwithstanding, all revenues as are not needed to meet current operational expenses
under this Title shall be accumulated in a fund to be known as the State Insurance Fund,
which shall be used exclusively for payment of the benefits under this Title, and no
amount thereof shall be used for any other purpose. All amounts accruing to the State
Insurance Fund, which is hereby established in the SSS and GSIS, respectively, shall be
deposited with any authorized depository bank approved by the Commission, or invested
with due and prudent regard for the liquidity needs of the System. (As amended by
Section 4, Presidential Decree No. 1368).

ART. 180. Settlement of claims. - The System shall have original and exclusive
jurisdiction to settle any dispute arising from this Title with respect to coverage, entitlement
to benefits, collection and payment of contributions and penalties thereon, or any other
matter related thereto, subject to appeal to the Commission, which shall decide appealed
cases within twenty (20) working days from the submission of the evidence.

ART. 181. Review. - (*No longer applies) Decisions, orders or resolutions of the
Commission may be reviewed on certiorari by the Supreme Court on question of law upon
petition of an aggrieved party within ten (10) days from notice thereof.

[RULES OF COURT: Rule 43: APPEALS FROM THE COURT OF TAX APPEALS AND
QUASI-JUDICIAL AGENCIES TO THE COURT OF APPEALS
SECTION 1. Scope.This Rule shall apply to appeals from judgments or final orders of
the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or
authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions.
Among these agencies are the Civil Service Commission, Central Board of Assessment
Appeals, Securities and Exchange Commission, Office of the President, Land Registration
Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents,
Trademarks and Technology Transfer, National Electrification Administration, Energy
Regulatory Board, National Telecommunications Commission, Department of Agrarian
Reform under Republic Act No. 6657, Government Service Insurance System,
Employees Compensation Commission, Agricultural Inventions Board, Insurance
Commission, Philippine Atomic Energy Commission, Board of Investments, Construction
Industry Arbitration Commission, and voluntary arbitrators authorized by law.

[RA 8282: SSS Act]


SEC. 5. Settlement of Disputes.
(b) Appeal to Courts. Any decision of the Commission, in the absence of an
appeal therefrom as herein provided, shall become final and executory fifteen (15) days
80
after the date of notification, and judicial review thereof shall be permitted only after any
party claiming to be aggrieved thereby has exhausted his remedies before the
Commission. The Commission shall be deemed to be a party to any judicial action
involving any such decision, and may be represented by an attorney employed by the
Commission, or when requested by the Commission, by the Solicitor General or any
public prosecutors.
(c) Court Review. The decision of the Commission upon any disputed matter
may be reviewed both upon the law and the facts by the Court of Appeals. For the
purpose of such review, the procedure concerning appeals from the Regional Trial Court
shall be followed as far as practicable and consistent with the purposes of this Act. Appeal
from a decision of the Commission must be taken within fifteen (15) days from notification
of such decision. If the decision of the Commission involves only questions of law, the
same shall be reviewed by the Supreme Court. No appeal bond shall be required. The
case shall be heard in a summary manner, and shall take precedence over all cases,
except that in the Supreme Court, criminal cases wherein life imprisonment or death has
been imposed by the trial court shall take precedence. No appeal shall act as a
supersedeas or a stay of the order of the Commission unless the Commission itself, or the
Court of Appeals or the Supreme Court, shall so order.

[RA 8291: GSIS Act]


SEC. 31. Appeals. - Appeals from any decision or award of the Board shall be governed
by Rules 43 and 45 of the 1997 Rules of Civil Procedure adopted by the Supreme Court
on April 8, 1997 which will take effect on July 1, 1997: Provided, That pending cases and
those filed prior to July 1, 1997 shall be governed by the applicable rules of
procedure: Provided, further, That the appeal shall take precedence over all other cases
except criminal cases when the penalty of life imprisonment or death or reclusion
perpetua is imposable.
The appeal shall not stay the execution of the order or award unless ordered by
the Board, by the Court of Appeals or by the Supreme Court and the appeal shall be
without prejudice to the special civil action of certiorari when proper.

ART. 182. Enforcement of decisions. - (a) Any decision, order or resolution of the
Commission shall become final and executory if no appeal is taken therefrom within ten
(10) days from notice thereof. All awards granted by the Commission in cases appealed
from decisions of the System shall be effected within fifteen days from receipt of notice.
(b) In all other cases, decisions, orders and resolutions of the Commission which have
become final and executory shall be enforced and executed in the same manner as
decisions of the Court of First Instance, and the Commission shall have the power to issue
to the city or provincial sheriff or to the sheriff whom it may appoint, such writs of
execution as may be necessary for the enforcement of such decisions, orders or
resolutions, and any person who shall fail or refuse to comply therewith shall, upon
application by the Commission, be punished by the proper court for contempt.

[RA 8282: SSS Act]


SEC. 5. Settlement of Disputes.
(d) Execution of Decisions. The Commission may, motu proprio or on motion of any
interested party, issue a writ of execution to enforce any of its decisions or awards, after it
has become final and executory, in the same manner as the decision of the Regional Trial
Court by directing the city or provincial sheriff or the sheriff whom it may appoint to enforce
such final decision or execute such writ; and any person who shall fail or refuse to comply
with such decision, award or writ, after being required to do so shall, upon application by
the Commission pursuant to Rule 71 of the Rules of Court, be punished for contempt.

[RA 8291: GSIS Act]


SEC. 32. Execution of Decision. - When no appeal is perfected and there is no order to
stay by the Board, by the Court of Appeals or by the Supreme Court, any decision or
award of the Board shall be enforced and executed in the same manner as decisions of

81
the Regional Trial Court. For this purpose, the Board shall have the power to issue to the
city or provincial sheriff or its appointed sheriff such writs of execution as may be
necessary for the enforcement of such decision or award, and any person who shall fail or
refuse to comply with such decision, award, writ or process after being required to do so
shall, upon application by the GSIS, be punished for contempt.

Chapter IV
CONTRIBUTIONS

ART. 183. Employers contributions.


(a) Under such regulations as the System may prescribe, beginning as of the last day of
the month when an employees compulsory coverage takes effect and every month
thereafter during his employment, his employer shall prepare to remit to the System a
contribution equivalent to one percent of his monthly salary credit.
(b) The rate of contribution shall be reviewed periodically and subject to the limitations
herein provided, may be revised as the experience in risk, cost of administration and
actual or anticipated as well as unexpected losses, may require.
(c) Contributions under this Title shall be paid in their entirety by the employer and any
contract or device for the deductions of any portion thereof from the wages or salaries
of the employees shall be null and void.
(d) When a covered employee dies, becomes disabled or is separated from employment,
his employers obligation to pay the monthly contribution arising from that
employment shall cease at the end of the month of contingency and during such
months that he is not receiving wages or salary.

ART. 184. Government guarantee. - The Republic of the Philippines guarantees the
benefits prescribed under this Title, and accepts general responsibility for the solvency of
the State Insurance Fund. In case of any deficiency, the same shall be covered by
supplemental appropriations from the national government.

Chapter V
MEDICAL BENEFITS

ART. 185. Medical services. - Immediately after an employee contracts sickness or


sustains an injury, he shall be provided by the System during the subsequent period of his
disability with such medical services and appliances as the nature of his sickness or injury
and progress of his recovery may require, subject to the expense limitation prescribed by
the Commission.

ART. 186. Liability. - The System shall have the authority to choose or order a change of
physician, hospital or rehabilitation facility for the employee, and shall not be liable for
compensation for any aggravation of the employees injury or sickness resulting from
unauthorized changes by the employee of medical services, appliances, supplies,
hospitals, rehabilitation facilities or physicians.

ART. 187. Attending physician. - Any physician attending an injured or sick employee
shall comply with all the regulations of the System and submit reports in prescribed forms
at such time as may be required concerning his condition or treatment. All medical
information relevant to the particular injury or sickness shall, on demand, be made
available to the employee or the System. No information developed in connection with
treatment or examination for which compensation is sought shall be considered as
privileged communication.

ART. 188. Refusal of examination or treatment. - If the employee unreasonably refuses


to submit to medical examination or treatment, the System shall stop the payment of
further compensation during such time as such refusal continues. What constitutes an
unreasonable refusal shall be determined by the System which may, on its own initiative,

82
determine the necessity, character and sufficiency of any medical services furnished or to
be furnished.

ART. 189. Fees and other charges. - All fees and other charges for hospital services,
medical care and appliances, including professional fees, shall not be higher than those
prevailing in wards of hospitals for similar services to injured or sick persons in general
and shall be subject to the regulations of the Commission. Professional fees shall only be
appreciably higher than those prescribed under Republic Act Numbered sixty-one hundred
eleven, as amended, otherwise known as the Philippine Medical Care Act of 1969.

ART. 190. Rehabilitation services.


(a) The System shall, as soon as practicable, establish a continuing program, for the
rehabilitation of injured and handicapped employees who shall be entitled to
rehabilitation services, which shall consist of medical, surgical or hospital treatment,
including appliances if they have been handicapped by the injury, to help them
become physically independent.
(b) As soon as practicable, the System shall establish centers equipped and staffed to
provide a balanced program of remedial treatment, vocational assessment and
preparation designed to meet the individual needs of each handicapped employee to
restore him to suitable employment, including assistance as may be within its
resources, to help each rehabilitee to develop his mental, vocational or social
potential.

Chapter VI
DISABILITY BENEFITS

ART. 191. Temporary total disability.


(a) Under such regulations as the Commission may approve, any employee under this
Title who sustains an injury or contracts sickness resulting in temporary total disability
shall, for each day of such a disability or fraction thereof, be paid by the System an
income benefit equivalent to ninety percent of his average daily salary credit, subject
to the following conditions: the daily income benefit shall not be less than Ten Pesos
nor more than Ninety Pesos, nor paid for a continuous period longer than one
hundred twenty days, except as otherwise provided for in the Rules, and the System
shall be notified of the injury or sickness.(As amended by Section 2, Executive Order
No. 179).
(b) The payment of such income benefit shall be in accordance with the regulations of the
Commission. (As amended by Section 19, Presidential Decree No. 850).

Sec. 2. Disability
(a) A total disability is temporary if as a result of the injury or sickness the employee is
unable to perform any gainful occupation for a continuous period not exceeding 120 days,
except as otherwise provided for in Rule X of these Rules.

ART. 192. Permanent total disability.


(a) Under such regulations as the Commission may approve, any employee under this
Title who contracts sickness or sustains an injury resulting in his permanent total
disability shall, for each month until his death, be paid by the System during such a
disability, an amount equivalent to the monthly income benefit, plus ten percent
thereof for each dependent child, but not exceeding five, beginning with the youngest
and without substitution: Provided, That the monthly income benefit shall be the new
amount of the monthly benefit for all covered pensioners, effective upon approval of
this Decree.
(b) The monthly income benefit shall be guaranteed for five years, and shall be suspended
if the employee is gainfully employed, or recovers from his permanent total disability,
or fails to present himself for examination at least once a year upon notice by the

83
System, except as otherwise provided for in other laws, decrees, orders or Letters of
Instructions. (As amended by Section 5, Presidential Decree No. 1641).
(c) The following disabilities shall be deemed total and permanent:
(1) Temporary total disability lasting continuously for more than one hundred twenty
days, except as otherwise provided for in the Rules;
(2) Complete loss of sight of both eyes;
(3) Loss of two limbs at or above the ankle or wrist;
(4) Permanent complete paralysis of two limbs;
(5) Brain injury resulting in incurable imbecility or insanity; and
(6) Such cases as determined by the Medical Director of the System and approved by
the Commission.
(d) The number of months of paid coverage shall be defined and approximated by a
formula to be approved by the Commission.

Sec. 2. Disability
(b) A disability is total and permanent if as a result of the injury or sickness the employee
is unable to perform any gainful occupation for a continuous period exceeding 120 days,
except as otherwise provided for in Rule X of these Rules.

ART. 193. Permanent partial disability.


(a) Under such regulations as the Commission may approve, any employee under this
Title who contracts sickness or sustains an injury resulting in permanent partial
disability shall, for each month not exceeding the period designated herein, be paid
by the System during such a disability an income benefit for permanent total disability.
(b) The benefit shall be paid for not more than the period designated in the following
schedules:
Complete and permanent No. of Months
loss of the use of
One thumb - 10
One index finger - 8
One middle finger - 6
One ring finger - 5
One little finger - 3
One big toe - 6
One toe - 3
One arm - 50
One hand - 39
One foot - 31
One leg - 46
One ear - 10
Both ears - 20
Hearing of one ear - 10
Hearing of both ears - 50
Sight of one eye - 25
(c) A loss of a wrist shall be considered as a loss of the hand, and a loss of an elbow shall
be considered as a loss of the arm. A loss of an ankle shall be considered as loss of a
foot, and a loss of a knee shall be considered as a loss of the leg. A loss of more than
one joint shall be considered as a loss of one-half of the whole finger or toe:
Provided, That such a loss shall be either the functional loss of the use or physical
loss of the member. (As amended by Section 7, Presidential Decree No. 1368).
(d) In case of permanent partial disability less than the total loss of the member specified
in the preceding paragraph, the same monthly income benefit shall be paid for a
portion of the period established for the total loss of the member in accordance with
the proportion that the partial loss bears to the total loss. If the result is a decimal
fraction, the same shall be rounded off to the next higher integer.

84
(e) In cases of simultaneous loss of more than one member or a part thereof as specified
in this Article, the same monthly income benefit shall be paid for a period equivalent
to the sum of the periods established for the loss of the member or the part thereof. If
the result is a decimal fraction, the same shall be rounded off to the next higher
integer.
(f) In cases of injuries or illnesses resulting in a permanent partial disability not listed in the
preceding schedule, the benefit shall be an income benefit equivalent to the
percentage of the permanent loss of the capacity to work. (As added by Section 7,
Presidential Decree No. 1368).
(g) Under such regulations as the Commission may approve, the income benefit payable
in case of permanent partial disability may be paid in monthly pension or in lump sum
if the period covered does not exceed one year. (As added by Section 7, Presidential
Decree No. 1368).

Sec. 2. Disability
(c) A disability is partial and permanent if as a result of the injury or sickness the employee
suffers a permanent partial loss of the use of any part of his body.

Chapter VII
DEATH BENEFITS

ART. 194. Death.


(a) Under such regulations as the Commission may approve, the System shall pay to the
primary beneficiaries upon the death of the covered employee under this Title, an
amount equivalent to his monthly income benefit, plus ten percent thereof for each
dependent child, but not exceeding five, beginning with the youngest and without
substitution, except as provided for in paragraph (j) of Article 167 hereof: Provided,
however, That the monthly income benefit shall be guaranteed for five years:
Provided, further, That if he has no primary beneficiary, the System shall pay to his
secondary beneficiaries the monthly income benefit but not to exceed sixty months:
Provided, finally, That the minimum death benefit shall not be less than fifteen
thousand pesos. (As amended by Section 4, Presidential Decree No. 1921).
(b) Under such regulations as the Commission may approve, the System shall pay to the
primary beneficiaries upon the death of a covered employee who is under permanent
total disability under this Title, eighty percent of the monthly income benefit and his
dependents to the dependents pension: Provided, That the marriage must have been
validly subsisting at the time of disability: Provided, further, That if he has no primary
beneficiary, the System shall pay to his secondary beneficiaries the monthly pension
excluding the dependents pension, of the remaining balance of the five-year
guaranteed period: Provided, finally, That the minimum death benefit shall not be less
than fifteen thousand pesos. (As amended by Section 4, Presidential Decree No.
1921).
(c) The monthly income benefit provided herein shall be the new amount of the monthly
income benefit for the surviving beneficiaries upon the approval of this decree. (As
amended by Section 8, Presidential Decree No. 1368).
(d) Funeral benefit. - A funeral benefit of Three thousand pesos (P3,000.00) shall be paid
upon the death of a covered employee or permanently totally disabled pensioner. (As
amended by Section 3, Executive Order No. 179).

[RA 8282: SSS Act]


SEC. 13. Death Benefits. Upon the death of a member who has paid at least thirty-six
(36) monthly contributions prior to the semester of death, his primary beneficiaries shall be
entitled to the monthly pension: Provided, That if he has no primary beneficiaries, his
secondary beneficiaries shall be entitled to a lump sum benefit equivalent to thirty-six (36)
times the monthly pension. If he has not paid the required thirty-six (36) monthly
contributions, his primary or secondary beneficiaries shall be entitled to a lump sum

85
benefit equivalent to the monthly pension times the number of monthly contributions paid
to the SSS or twelve (12) times the monthly pension, whichever is higher.

[RA 8291: GSIS]


SURVIVORSHIP BENEFITS
SEC. 20. Survivorship Benefits. - When a member or pensioner dies, the beneficiaries
shall be entitled to survivorship benefits provided in Sections 21 and 22 hereunder subject
to the conditions therein provided for. The survivorship pension shall consist of:
(1) the basic survivorship pension which is fifty percent (50%) of the basic
monthly pension; and
(2) the dependent childrens pension not exceeding fifty percent (50%) of the
basic monthly pension

SEC. 21. Death of a Member.


(a) Upon the death of a member, the primary beneficiaries shall be entitled to:
(1) survivorship pension: Provided, That the deceased:
(i) was in the service at the time of his death; or
(ii) if separated from the service, has at least three (3) years of service
at the time of his death and has paid thirty-six (36) monthly
contributions within the five-year period immediately preceding his
death; or has paid a total of at least one hundred eighty (180)
monthly contributions prior to his death; or
(2) the survivorship pension plus a cash payment equivalent to one hundred
percent (100%) of his average monthly compensation for every year of
service: Provided, That the deceased was in the service at the time of his
death with at least three (3) years of service; or
(3) a cash payment equivalent to one hundred percent (100%) of his average
monthly compensation for each year of service he paid contributions, but not
less than Twelve thousand pesos (P12,000.00): Provided, That the deceased
has rendered at least three (3) years of service prior to his death but does not
qualify for the benefits under item (1) or (2) of this paragraph.
(b) The survivorship pension shall be paid as follows:
(1) when the dependent spouse is the only survivor, he/she shall receive the
basic survivorship pension for life or until he/she remarries;
(2) when only dependent children are the survivors, they shall be entitled to the
basic survivorship pension for as long as they are qualified, plus the
dependent childrens pension equivalent to ten percent (10%) of the basic
monthly pension for every dependent child not exceeding five (5), counted
from the youngest and without substitution;
(3) when the survivors are the dependent spouse and the dependent children,
the dependent spouse shall receive the basic survivorship pension for life or
until he/she remarries, and the dependent children shall receive the
dependent childrens pension mentioned in the immediately preceding
paragraph (2) hereof.
(c) In the absence of primary beneficiaries, the secondary beneficiaries shall be entitled to:
(1) the cash payment equivalent to one hundred percent (100%) of his average
monthly compensation for each year of service he paid contributions, but not
less than Twelve thousand pesos (P12,000.00): Provided, That the member is
in the service at the time of his death and has at least three (3) years of
service; or
(2) in the absence of secondary beneficiaries, the benefits under this paragraph
shall be paid to his legal heirs.
(d) For purposes of the survivorship benefits, legitimate children shall include legally
adopted and legitimated children.

SEC. 22. Death of a Pensioner. - Upon the death of an old-age pensioner or a member
receiving the monthly income benefit for permanent disability, the qualified beneficiaries

86
shall be entitled to the survivorship pension defined in Section 20 of this Act, subject to the
provisions of paragraph (b) of Section 21 hereof. When the pensioner dies within the
period covered by the lump sum, the survivorship pension shall be paid only after the
expiration of the said period.

Chapter VIII
PROVISIONS COMMON TO INCOME BENEFITS

ART. 195. Relationship and dependency. - All questions of relationship and


dependency shall be determined as of the time of death.

ART. 196. Delinquent contributions.


(a) An employer who is delinquent in his contributions shall be liable to the System for the
benefits which may have been paid by the System to his employees or their dependents,
and any benefit and expenses to which such employer is liable shall constitute a lien on all
his property, real or personal, which is hereby declared to be preferred to any credit,
except taxes. The payment by the employer of the lump sum equivalent of such liability
shall absolve him from the payment of the delinquent contribution and penalty thereon
with respect to the employee concerned.
(b) Failure or refusal of the employer to pay or remit the contribution herein prescribed
shall not prejudice the right of the employee or his dependents to the benefits under this
Title. If the sickness, injury, disability or death occurs before the System receives any
report of the name of his employee, the employer shall be liable to the System for the
lump sum equivalent to the benefits to which such employee or his dependents may be
entitled.

ART. 197. Second injuries. - If any employee under permanent partial disability suffers
another injury which results in a compensable disability greater than the previous injury,
the State Insurance Fund shall be liable for the income benefit of the new disability:
Provided, That if the new disability is related to the previous disability, the System shall be
liable only for the difference in income benefits.

ART. 198. Assignment of benefits. - No claim for compensation under this Title is
transferable or liable to tax, attachment, garnishment, levy or seizure by or under any legal
process whatsoever, either before or after receipt by the person or persons entitled
thereto, except to pay any debt of the employee to the System.

ART. 199. Earned benefits. - Income benefits shall, with respect to any period of
disability, be payable in accordance with this Title to an employee who is entitled to
receive wages, salaries or allowances for holidays, vacation or sick leaves and any other
award of benefit under a collective bargaining or other agreement.

ART. 200. Safety devices. - In case the employees injury or death was due to the failure
of the employer to comply with any law or to install and maintain safety devices or to take
other precautions for the prevention of injury, said employer shall pay the State Insurance
Fund a penalty of twenty-five percent (25%) of the lump sum equivalent of the income
benefit payable by the System to the employee. All employers, specially those who should
have been paying a rate of contribution higher than required of them under this Title, are
enjoined to undertake and strengthen measures for the occupational health and safety of
their employees.

ART. 201. Prescriptive period. - No claim for compensation shall be given due course
unless said claim is filed with the System within three (3) years from the time the cause of
action accrued.(As amended by Section 5, Presidential Decree No. 1921).

ART. 202. Erroneous payment.

87
(a) If the System in good faith pays income benefit to a dependent who is inferior in right
to another dependent or with whom another dependent is entitled to share, such
payments shall discharge the System from liability, unless and until such other
dependent notifies the System of his claim prior to the payments.
(b) In case of doubt as to the respective rights of rival claimants, the System is hereby
empowered to determine as to whom payments should be made in accordance with
such regulations as the Commission may approve. If the money is payable to a minor
or incompetent, payment shall be made by the System to such person or persons as
it may consider to be best qualified to take care and dispose of the minors or
incompetents property for his benefit.

ART. 203. Prohibition. - No agent, attorney or other person pursuing or in charge of the
preparation or filing of any claim for benefit under this Title shall demand or charge for his
services any fee, and any stipulation to the contrary shall be null and void. The retention
or deduction of any amount from any benefit granted under this Title for the payment of
fees for such services is prohibited. Violation of any provision of this Article shall be
punished by a fine of not less than five hundred pesos nor more than five thousand pesos,
or imprisonment for not less than six months nor more than one year, or both, at the
discretion of the court.

ART. 204. Exemption from levy, tax, etc. - All laws to the contrary notwithstanding, the
State Insurance Fund and all its assets shall be exempt from any tax, fee, charge, levy, or
customs or import duty and no law hereafter enacted shall apply to the State Insurance
Fund unless it is provided therein that the same is applicable by expressly stating its
name.

Chapter IX
RECORDS, REPORTS AND PENAL PROVISIONS

ART. 205. Record of death or disability.


(a) All employers shall keep a logbook to record chronologically the sickness, injury or
death of their employees, setting forth therein their names, dates and places of the
contingency, nature of the contingency and absences. Entries in the logbook shall be
made within five days from notice or knowledge of the occurrence of the contingency.
Within five days after entry in the logbook, the employer shall report to the System
only those contingencies he deems to be work-connected.
(b) All entries in the employers logbook shall be made by the employer or any of his
authorized official after verification of the contingencies or the employees absences
for a period of a day or more. Upon request by the System, the employer shall furnish
the necessary certificate regarding information about any contingency appearing in
the logbook, citing the entry number, page number and date. Such logbook shall be
made available for inspection to the duly authorized representative of the System.
(c) Should any employer fail to record in the logbook an actual sickness, injury or death of
any of his employees within the period prescribed herein, give false information or
withhold material information already in his possession, he shall be held liable for fifty
percent of the lump sum equivalent of the income benefit to which the employee may
be found to be entitled, the payment of which shall accrue to the State Insurance
Fund.
(d) In case of payment of benefits for any claim which is later determined to be fraudulent
and the employer is found to be a party to the fraud, such employer shall reimburse
the System the full amount of the compensation paid.

ART. 206. Notice of sickness, injury or death. - Notice of sickness, injury or death shall
be given to the employer by the employee or by his dependents or anybody on his behalf
within five days from the occurrence of the contingency. No notice to the employer shall
be required if the contingency is known to the employer or his agents or representatives.

ART. 207. Penal provisions.


88
(a) The penal provisions of Republic Act Numbered Eleven Hundred Sixty-One, as
amended, and Commonwealth Act Numbered One Hundred Eighty-Six, as amended,
with regard to the funds as are thereunder being paid to, collected or disbursed by the
System, shall be applicable to the collection, administration and disbursement of the
Funds under this Title. The penal provisions on coverage shall also be applicable.
(b) Any person who, for the purpose of securing entitlement to any benefit or payment
under this Title, or the issuance of any certificate or document for any purpose
connected with this Title, whether for him or for some other person, commits fraud,
collusion, falsification, misrepresentation of facts or any other kind of anomaly, shall
be punished with a fine of not less than five hundred pesos nor more than five
thousand pesos and an imprisonment for not less than six months nor more than one
year, at the discretion of the court.
(c) If the act penalized by this Article is committed by any person who has been or is
employed by the Commission or System, or a recidivist, the imprisonment shall not be
less than one year; if committed by a lawyer, physician or other professional, he shall,
in addition to the penalty prescribed herein, be disqualified from the practice of his
profession; and if committed by any official, employee or personnel of the
Commission, System or any government agency, he shall, in addition to the penalty
prescribed herein, be dismissed with prejudice to re-employment in the government
service.

ART. 208. Applicability. - This Title shall apply only to injury, sickness, disability or death
occurring on or after January 1, 1975.

ART. 208-A. Repeal. - All existing laws, Presidential Decrees and Letters of Instructions
which are inconsistent with or contrary to this Decree, are hereby repealed: Provided, That
in the case of the GSIS, conditions for entitlement to benefits shall be governed by
the Labor Code, as amended: Provided, however, That the formulas for computation of
benefits, as well as the contribution base, shall be those provided under Commonwealth
Act Numbered One Hundred Eighty-Six, as amended by Presidential Decree No. 1146,
plus twenty percent thereof. (As added by Section 9, Presidential Decree No. 1368 [May
1, 1978] and subsequently amended by Section 7, Presidential Decree No. 1641).

Title III
MEDICARE

ART. 209. Medical care. - The Philippine Medical Care Plan shall be implemented as
provided under Republic Act Numbered Sixty-One Hundred Eleven, as amended.

Title IV
ADULT EDUCATION

ART. 210. Adult education. - Every employer shall render assistance in the
establishment and operation of adult education programs for their workers and employees
as prescribed by regulations jointly approved by the Department of Labor and
Employment and the Department of Education, Culture and Sports.

89
BOOK FIVE
LABOR RELATIONS

Title I
POLICY AND DEFINITIONS

Chapter I
POLICY

Article. 211. Declaration of Policy.


A. It is the policy of the State:
(a) To promote and emphasize the primacy of free collective bargaining and
negotiations, including voluntary arbitration, mediation and conciliation, as modes
of settling labor or industrial disputes;
(b) To promote free trade unionism as an instrument for the enhancement of
democracy and the promotion of social justice and development;
(c) To foster the free and voluntary organization of a strong and
united labor movement;
(d) To promote the enlightenment of workers concerning their rights and obligations
as union members and as employees;
(e) To provide an adequate administrative machinery for the expeditious settlement
of labor or industrial disputes;
(f) To ensure a stable but dynamic and just industrial peace; and
(g) To ensure the participation of workers in decision and policy-making processes
affecting their rights, duties and welfare.
B. To encourage a truly democratic method of regulating the relations between the
employers and employees by means of agreements freely entered into through
collective bargaining, no court or administrative agency or official shall have the
power to set or fix wages, rates of pay, hours of work or other terms and conditions of
employment, except as otherwise provided under this Code. (As amended by Section
3, Republic Act No. 6715, March 21, 1989).

Chapter II
DEFINITIONS

Article. 212. Definitions.


(a) "Commission" means the National Labor Relations Commission or any of its divisions,
as the case may be, as provided under this Code.
(b) "Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions in
the regional offices established under Presidential Decree No. 1, in the Department
of Labor.
(c) "Board" means the National Conciliation and Mediation Board established under
Executive Order No. 126.
(d) "Council" means the Tripartite Voluntary Arbitration Advisory Council established under
Executive Order No. 126, as amended.
(e) "Employer" includes any person acting in the interest of an employer, directly or
indirectly. The term shall not include any labor organization or any of its officers or
agents except when acting as employer.
(f) "Employee" includes any person in the employ of an employer. The term shall not be
limited to the employees of a particular employer, unless the Code so explicitly states.
It shall include any individual whose work has ceased as a result of or in connection
with any current labor dispute or because of any unfair labor practice if he has not
obtained any other substantially equivalent and regular employment.
(g) "Labor organization" means any union or association of employees which exists in
whole or in part for the purpose of collective bargaining or of dealing with employers
concerning terms and conditions of employment.
90
(h) "Legitimate labor organization" means any labor organization duly registered with the
Department of Labor and Employment, and includes any branch or local thereof.
(i) "Company union" means any labor organization whose formation, function or
administration has been assisted by any act defined as unfair labor practice by this
Code.
(j) "Bargaining representative" means a legitimate labor organization whether or not
employed by the employer.
(k) "Unfair labor practice" means any unfair labor practice as expressly defined by the
Code.
(l) "Labor dispute" includes any controversy or matter concerning terms and conditions of
employment or the association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions of employment,
regardless of whether the disputants stand in the proximate relation of employer and
employee.
(m) "Managerial employee" is one who is vested with the powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees. Supervisory employees are those
who, in the interest of the employer, effectively recommend such managerial actions if
the exercise of such authority is not merely routinary or clerical in nature but requires
the use of independent judgment. All employees not falling within any of the above
definitions are considered rank-and-file employees for purposes of this Book.
(n) "Voluntary Arbitrator" means any person accredited by the Board as such or any
person named or designated in the Collective Bargaining Agreement by the parties to
act as their Voluntary Arbitrator, or one chosen with or without the assistance of the
National Conciliation and Mediation Board, pursuant to a selection procedure agreed
upon in the Collective Bargaining Agreement, or any official that may be authorized
by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the
written request and agreement of the parties to a labor dispute.
(o) "Strike" means any temporary stoppage of work by the concerted action of employees
as a result of an industrial or labor dispute.
(p) "Lockout" means any temporary refusal of an employer to furnish work as a result of
an industrial or labor dispute.
(q) "Internal union dispute" includes all disputes or grievances arising from any violation of
or disagreement over any provision of the constitution and by laws of a union,
including any violation of the rights and conditions of union membership provided for
in this Code.
(r) "Strike-breaker" means any person who obstructs, impedes, or interferes with by force,
violence, coercion, threats, or intimidation any peaceful picketing affecting wages,
hours or conditions of work or in the exercise of the right of self-organization or
collective bargaining.
(s) "Strike area" means the establishment, warehouses, depots, plants or offices, including
the sites or premises used as runaway shops, of the employer struck against, as well
as the immediate vicinity actually used by picketing strikers in moving to and fro
before all points of entrance to and exit from said establishment. (As amended by
Section 4, Republic Act No. 6715, March 21, 1989).

[IRR BOOK V as amended by D.O. 40-03 (A-G)]


(r) "Employee" refers to any person working for an employer. It includes one whose work
has ceased in connection with any current labor dispute or because of any unfair labor
practice and one who has been dismissed from work but the legality of the dismissal is
being contested in a forum of appropriate jurisdiction.
(s) "Employer" refers to any person or entity who employs the services of others, one for
whom employees work and who pays their wages or salaries. An employer includes
any person directly or indirectly acting in the interest of an employer. It shall also refer
to the enterprise where a labor organization operates or seeks to operate.
(i) Chartered Local refers to a labor organization in the private sector operating at the
enterprise level that acquired legal personality through registration with the Regional

91
Office in accordance with Rule III, Section 2-E of these Rules. (As amended by DO
40-B-03.)
(hh) "Managerial Employee" refers to an employee who is vested with powers or
prerogatives to lay down and execute management policies or to hire, transfer,
suspend, layoff, recall, discharge, assign or discipline employees.
(nn) "Rank-and-File Employee" refers to an employee whose functions are neither
managerial nor supervisory in nature.
(xx) "Supervisory Employee" refers to an employee who, in the interest of the employer,
effectively recommends managerial actions and the exercise of such authority is not
merely routinary or clerical but requires the use of independent judgment.

Title II
NATIONAL LABOR RELATIONS COMMISSION

Chapter I
CREATION AND COMPOSITION

Article 213. National Labor Relations Commission. - There shall be a National Labor
Relations Commission which shall be attached to the Department of Labor and Employment
solely for program and policy coordination only, composed of a Chairman and twenty-three
(23) Members.
Eight (8) members each shall be chosen only from among the nominees of the
workers and employers organizations, respectively. The Chairman and the seven (7)
remaining members shall come from the public sector, with the latter to be chosen
preferably from among the incumbent Labor Arbiters.
Upon assumption into office, the members nominated by the workers and
employers organizations shall divest themselves of any affiliation with or interest in the
federation or association to which they belong.
The Commission may sit en banc or in eight (8) divisions, each composed of
three (3) members. The Commission shall sit en banc only for purposes of promulgating
rules and regulations governing the hearing and disposition of cases before any of its
divisions and regional branches and formulating policies affecting its administration and
operations. The Commission shall exercise its adjudicatory and all other powers,
functions, and duties through its divisions. Of the eight (8) divisions, the first, second, third,
fourth, fifth and sixth divisions shall handle cases coming from the National Capital Region
and other parts of Luzon; and the seventh and eighth divisions, cases from the Visayas
and Mindanao, respectively: Provided, That the Commission sitting en banc may, on
temporary or emergency basis, allow cases within the jurisdiction of any division to be
heard and decided by any other division whose docket allows the additional workload and
such transfer will not expose litigants to unnecessary additional expenses. The divisions of
the Commission shall have exclusive appellate jurisdiction over cases within their
respective territorial jurisdiction.
The concurrence of two (2) Commissioners of a division shall be necessary for
the pronouncement of a judgment or resolution. Whenever the required membership in a
division is not complete and the concurrence of two (2) Commissioners to arrive at a
judgment or resolution cannot be obtained, the Chairman shall designate such number of
additional Commissioners from the other divisions as may be necessary.
The conclusions of a division on any case submitted to it for decision shall be
reached in consultation before the case is assigned to a member for the writing of the
opinion. It shall be mandatory for the division to meet for purposes of the consultation
ordained therein. A certification to this effect signed by the Presiding Commissioner of the
division shall be issued, and a copy thereof attached to the record of the case and served
upon the parties.
The Chairman shall be the Presiding Commissioner of the first division, and the
seven (7) other members from the public sector shall be the Presiding Commissioners of
the second, third, fourth, fifth, sixth, seventh and eight divisions, respectively. In case of

92
the effective absence or incapacity of the Chairman, the Presiding Commissioner of the
second division shall be the Acting Chairman.
The Chairman, aided by the Executive Clerk of the Commission, shall have
administrative supervision over the Commission and its regional branches and all its
personnel, including the Labor Arbiters.
The Commission, when sitting en banc, shall be assisted by the same Executive
Clerk, and, when acting thru its Divisions, by said Executive Clerk for its first division and
seven (7) other Deputy Executive Clerks for the second, third, fourth fifth, sixth, seventh
and eighth divisions, respectively, in the performance of such similar or equivalent
functions and duties as are discharged by the Clerk of Court and Deputy Clerks of Court
of the Court of Appeals.
The Commission and its eight (8) divisions shall be assisted by the Commission
Attorneys in its appellate and adjudicatory functions whose term shall be coterminous with
the Commissioners with whom they are assigned. The Commission Attorneys shall be
members of the Philippine Bar with at least one (1) year experience or exposure in the
field of labor-management relations. They shall receive annual salaries and shall be
entitled to the same allowances and benefits as those falling under Salary Grade twenty-
six (SG 26). There shall be as many Commission Attorneys as may be necessary for the
effective and efficient operations of the Commission but in no case more than three (3)
assigned to the Office of the Chairman and each Commissioner.
No Labor Arbiter shall be assigned to perform the functions of the Commission
Attorney nor detailed to the office of any Commissioner. (As amended by Section 1,
Republic Act No. 9347 [July 27, 2006] and as previously amended by Republic Act No.
7700 and Section 5, Republic Act No. 6715).

Article 214. Headquarters, Branches and Provincial Extension Units. - The Commission
and its first, second, third, fourth, fifth and sixth divisions shall have their main offices in
Metropolitan Manila, and the seventh and eighth divisions in the cities of Cebu and Cagayan
de Oro, respectively. The Commission shall establish as many regional branches as there are
regional offices of the Department of Labor and Employment, sub-regional branches or
provincial extension units. There shall be as many Labor Arbiters as may be necessary for the
effective and efficient operation of the Commission. (As amended by Section 2, Republic Act
No. 9347 [July 27, 2006] and previously amended by Section 6, Republic Act No. 6715 [March
21, 1989]).

Article 215. Appointment and Qualifications. The Chairman and other Commissioners
shall be members of the Philippine Bar and must have been engaged in the practice of law in
the Philippines for at least fifteen (15) years, with at least five (5) years experience or exposure
in the field of labor-management relations, and shall preferably be residents of the region
where they shall hold office. The Labor Arbiters shall likewise be members of the Philippine Bar
and must have been engaged in the practice of law in the Philippines for at least ten (10) years,
with at least five (5) years experience or exposure in the field of labor-management relations.
The Chairman and the other Commissioners and the Labor Arbiters shall hold
office during good behavior until they reach the age of sixty-five (65) years, unless sooner
removed for cause as provided by law or become incapacitated to discharge the duties of
their office; Provided, however, That the President of the Republic of the Philippines may
extend the services of the Commissioners and Labor Arbiters up to the maximum age of
seventy (70) years upon the recommendation of the Commission en banc.
The Chairman, the Division Presiding Commissioners and other Commissioners
shall all be appointed by the President. Appointment to any vacancy in a specific division
shall come only from the nominees of the sector which nominated the predecessor. The
Labor Arbiters shall also be appointed by the President, upon recommendation of the
Commission en banc to a specific arbitration branch, preferably in the region where they
are residents, and shall be subject to the Civil Service Law, rules and regulations:
Provided, that the Labor Arbiters who are presently holding office in the region where they
are residents shall be deemed appointed thereat.
The Chairman and the Commission, shall appoint the staff and employees of the
Commission, and its regional branches as the needs of the service may require, subject to
93
the Civil Service Law, rules and regulations, and upgrade their current salaries, benefits
and other emoluments in accordance with law. (As amended by Section 3, Republic Act
No. 9347 [July 27, 2006] and as previously amended by Section 7, Republic Act No. 6715
[March 21, 1989]).

Article 216. Salaries, benefits and other emoluments. The Chairman and members of the
Commission shall have the same rank, receive an annual salary equivalent to, and be entitled
to the same allowances, retirement and benefits as, those of the Presiding Justice and
Associate Justices of the Court of Appeals, respectively. Labor Arbiters shall have the same
rank, receive an annual salary equivalent to and be entitled to the same allowances, retirement
and other benefits and privileges as those of the judges of the regional trial courts. In no case,
however, shall the provision of this Article result in the diminution of the existing salaries,
allowances and benefits of the aforementioned officials. (As amended by Section 4, Republic
Act No. 9347 [July 27, 2006] and as previously amended by Section 8, Republic Act No. 6715
[March 21, 1989]).

Chapter II
POWERS AND DUTIES

Article. 217. Jurisdiction of the Labor Arbiters and the Commission.


(a) Except as otherwise provided under this Code, the Labor Arbiters shall have original
and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the
submission of the case by the parties for decision without extension, even in the
absence of stenographic notes, the following cases involving all workers, whether
agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including questions
involving the legality of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims arising from employer-employee relations,
including those of persons in domestic or household service, involving an amount
exceeding five thousand pesos (P5,000.00) regardless of whether accompanied
with a claim for reinstatement.
(b) The Commission shall have exclusive appellate jurisdiction over all cases decided
by Labor Arbiters.
(c) Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of company
personnel policies shall be disposed of by the Labor Arbiter by referring the same to
the grievance machinery and voluntary arbitration as may be provided in said
agreements. (As amended by Section 9, Republic Act No. 6715, March 21, 1989).

[2011 NLRC New Rules of Procedure]


RULE V PROCEEDINGS BEFORE LABOR ARBITERS

SECTION 1. JURISDICTION OF LABOR ARBITERS. - Labor Arbiters shall have original


and exclusive jurisdiction to hear and decide the following cases involving all workers,
whether agricultural or non-agricultural:
a) Unfair labor practice cases;
b) Termination disputes;

94
c) If accompanied with a claim for reinstatement, those cases that workers may
file involving wages, rates of pay, hours of work and other terms and
conditions of employment;
d) Claims for actual, moral, exemplary and other forms of damages arising from
employer-employee relations;
e) Cases arising from any violation of Article 264 of the Labor Code, as
amended, including questions involving the legality of strikes and lockouts;
f) Except claims for employees compensation not included in the next
succeeding paragraph, social security, medicare, and maternity benefits, all
other claims arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding Five
Thousand Pesos (P5,000.00), whether or not accompanied with a claim for
reinstatement;
g) Wage distortion disputes in unorganized establishments not voluntarily settled
by the parties pursuant to Republic Act No. 6727;
h) Enforcement of compromise agreements when there is non-compliance by
any of the parties pursuant to Article 227 of the Labor Code, as amended;
i) Money claims arising out of employer-employee relationship or by virtue of any
law or contract, involving Filipino workers for overseas deployment, including
claims for actual, moral, exemplary and other forms of damages as provided
by Section 10 of RA 8042, as amended by RA 10022; and
j) Other cases as may be provided by law.
Cases arising from the interpretation or implementation of collective bargaining
agreements and those arising from the interpretation or enforcement of company
personnel policies shall be disposed of by the Labor Arbiter by referring the same to the
grievance machinery and voluntary arbitration, as may be provided in said agreements.

RULE VI APPEALS

SECTION 1. PERIODS OF APPEAL. - Decisions, awards, or orders of the Labor Arbiter


shall be final and executory unless appealed to the Commission by any or both parties
within ten (10) calendar days from receipt thereof; and in case of decisions or resolutions
of the Regional Director of the Department of Labor and Employment pursuant to Article
129 of the Labor Code, within five (5) calendar days from receipt thereof. If the 10th or 5th
day, as the case may be, falls on a Saturday, Sunday or holiday, the last day to perfect
the appeal shall be the first working day following such Saturday, Sunday or holiday.
No motion or request for extension of the period within which to perfect an appeal
shall be allowed. (1a)

SECTION 2. GROUNDS. - The appeal may be entertained only on any of the following
grounds:
a) If there is prima facie evidence of abuse of discretion on the part of the Labor
Arbiter or Regional Director;
b) If the decision, award or order was secured through fraud or coercion,
including graft and corruption;
c) If made purely on questions of law; and/or
d) If serious errors in the findings of facts are raised which, if not corrected, would
cause grave or irreparable damage or injury to the appellant. (2a)

SECTION 3. WHERE FILED. - The appeal shall be filed with the Regional Arbitration
Branch or Regional Office where the case was heard and decided.

Article. 218. Powers of the Commission. - The Commission shall have the power and
authority:
(a) To promulgate rules and regulations governing the hearing and disposition of
cases before it and its regional branches, as well as those pertaining to its
internal functions and such rules and regulations as may be necessary to carry
95
out the purposes of this Code; (As amended by Section 10, Republic Act No.
6715, March 21, 1989).
(b) To administer oaths, summon the parties to a controversy, issue subpoenas
requiring the attendance and testimony of witnesses or the production of such
books, papers, contracts, records, statement of accounts, agreements, and
others as may be material to a just determination of the matter under
investigation, and to testify in any investigation or hearing conducted in
pursuance of this Code;

SECTION 7. POWER TO ADMINISTER OATH. - The Chairman, Members of the


Commission, the Executive Clerk, the Deputy Executive Clerks, the Executive Labor
Arbiters, the Labor Arbiters, and other persons designated or commissioned by the
Chairman of the Commission, shall have the power to administer oath on all matters or
proceedings related to the performance of their duties.

(c) To conduct investigation for the determination of a question, matter or controversy


within its jurisdiction, proceed to hear and determine the disputes in the absence
of any party thereto who has been summoned or served with notice to appear,
conduct its proceedings or any part thereof in public or in private, adjourn its
hearings to any time and place, refer technical matters or accounts to an expert
and to accept his report as evidence after hearing of the parties upon due notice,
direct parties to be joined in or excluded from the proceedings, correct, amend,
or waive any error, defect or irregularity whether in substance or in form, give all
such directions as it may deem necessary or expedient in the determination of
the dispute before it, and dismiss any matter or refrain from further hearing or
from determining the dispute or part thereof, where it is trivial or where further
proceedings by the Commission are not necessary or desirable; and
(d) To hold any person in contempt directly or indirectly and impose appropriate
penalties therefor in accordance with law.
A person guilty of misbehavior in the presence of or so near the
Chairman or any member of the Commission or any Labor Arbiter as to obstruct
or interrupt the proceedings before the same, including disrespect toward said
officials, offensive personalities toward others, or refusal to be sworn, or to
answer as a witness or to subscribe an affidavit or deposition when lawfully
required to do so, may be summarily adjudged in direct contempt by said officials
and punished by fine not exceeding five hundred pesos (P500) or imprisonment
not exceeding five (5) days, or both, if it be the Commission, or a member
thereof, or by a fine not exceeding one hundred pesos (P100) or imprisonment
not exceeding one (1) day, or both, if it be a Labor Arbiter.
The person adjudged in direct contempt by a Labor Arbiter may appeal
to the Commission and the execution of the judgment shall be suspended
pending the resolution of the appeal upon the filing by such person of a bond on
condition that he will abide by and perform the judgment of the Commission
should the appeal be decided against him. Judgment of the Commission on
direct contempt is immediately executory and unappealable. Indirect contempt
shall be dealt with by the Commission or Labor Arbiter in the manner prescribed
under Rule 71 of the Revised Rules of Court; and (As amended by Section 10,
Republic Act No. 6715, March 21, 1989).

RULE IX CONTEMPT

SECTION 1. DIRECT CONTEMPT. - The Chairman or any Commissioner or Labor Arbiter


may summarily adjudge guilty of direct contempt any person committing any act of
misbehavior in the presence of or so near the Chairman or any Commissioner or Labor
Arbiter as to obstruct or interrupt the proceedings before the same, including disrespect
toward said officials, offensive acts toward others, or refusal to be sworn or to answer as a
witness or to subscribe to an affidavit or deposition when lawfully required to do so. If the
96
offense is committed against the Commission or any member thereof, the same shall be
punished by a fine not exceeding Five Hundred Pesos (P500.00) or imprisonment not
exceeding five (5) days, or both; and, if the offense is committed against any Labor
Arbiter, the same shall be punished by a fine not exceeding One Hundred Pesos
(P100.00) or imprisonment not exceeding one (1) day, or both.
Any person adjudged guilty of direct contempt by a Labor Arbiter may, within a
period of five (5) calendar days from notice of the judgment, appeal the same to the
Commission and the execution of said judgment shall be suspended pending resolution of
the appeal upon the filing by said person of a bond on condition that he will abide by and
perform the judgment should the appeal be decided against him/her. A judgment of the
Commission on direct contempt shall be immediately executory and inappealable.

SECTION 2. INDIRECT CONTEMPT.. - The Commission or any Labor Arbiter pursuant to


Article 218 (d) of the Labor Code may cite any person for indirect contempt and impose
the appropriate penalty under any of the following grounds:
a) Misbehavior of any officer or employee in the performance of his/her official
duties or in his/her official transaction;
b) Disobedience of, or resistance to, a lawful writ, order or decision;
c) Any abuse of, or any unlawful interference with the processes or proceedings
not constituting direct contempt;
d) Any improper conduct tending, directly or indirectly, to impede, obstruct or
degrade the administration of justice;
e) Assuming to be an attorney or a representative of party without authority;
f) Failure to obey a subpoena duly served; or
g) Other grounds analogous to the foregoing.

A. Where charge to be filed.- Where the charge for indirect contempt has been
committed against the Commission or against an Officer appointed by it, the charge may
be filed with the Commission. Where such contempt has been committed against the
Labor Arbiter, the charge may be filed with the Regional Arbitration Branch subject to
appeal to the Commission in the same manner as provided in Section 1 of this Rule.

(e) To enjoin or restrain any actual or threatened commission of any or all prohibited
or unlawful acts or to require the performance of a particular act in
any labor dispute which, if not restrained or performed forthwith, may cause
grave or irreparable damage to any party or render ineffectual any decision
in favor of such party: Provided, That no temporary or permanent injunction in
any case involving or growing out of a labor dispute as defined in this Code shall
be issued except after hearing the testimony of witnesses, with opportunity for
cross-examination, in support of the allegations of a complaint made under oath,
and testimony in opposition thereto, if offered, and only after a finding of fact by
the Commission, to the effect:
(1) That prohibited or unlawful acts have been threatened and will be committed
and will be continued unless restrained, but no injunction or temporary
restraining order shall be issued on account of any threat, prohibited or
unlawful act, except against the person or persons, association or
organization making the threat or committing the prohibited or unlawful act or
actually authorizing or ratifying the same after actual knowledge thereof;
(2) That substantial and irreparable injury to complainants property will follow;
(3) That as to each item of relief to be granted, greater injury will be inflicted upon
complainant by the denial of relief than will be inflicted upon defendants by
the granting of relief;
(4) That complainant has no adequate remedy at law; and
(5) That the public officers charged with the duty to protect complainants
property are unable or unwilling to furnish adequate protection.
Such hearing shall be held after due and personal notice thereof has
been served, in such manner as the Commission shall direct, to all known

97
persons against whom relief is sought, and also to the Chief Executive and other
public officials of the province or city within which the unlawful acts have been
threatened or committed, charged with the duty to protect complainants property:
Provided, however, that if a complainant shall also allege that, unless a
temporary restraining order shall be issued without notice, a substantial and
irreparable injury to complainants property will be unavoidable, such a temporary
restraining order may be issued upon testimony under oath, sufficient, if
sustained, to justify the Commission in issuing a temporary injunction upon
hearing after notice. Such a temporary restraining order shall be effective for no
longer than twenty (20) days and shall become void at the expiration of said
twenty (20) days. No such temporary restraining order or temporary injunction
shall be issued except on condition that complainant shall first file an undertaking
with adequate security in an amount to be fixed by the Commission sufficient to
recompense those enjoined for any loss, expense or damage caused by the
improvident or erroneous issuance of such order or injunction, including all
reasonable costs, together with a reasonable attorneys fee, and expense
of defense against the order or against the granting of any injunctive relief sought
in the same proceeding and subsequently denied by the Commission.
The undertaking herein mentioned shall be understood to constitute an
agreement entered into by the complainant and the surety upon which an order
may be rendered in the same suit or proceeding against said complainant and
surety, upon a hearing to assess damages, of which hearing, complainant and
surety shall have reasonable notice, the said complainant and surety submitting
themselves to the jurisdiction of the Commission for that purpose. But nothing
herein contained shall deprive any party having a claim or cause of action under
or upon such undertaking from electing to pursue his ordinary remedy by suit at
law or in equity: Provided, further, That the reception of evidence for the
application of a writ of injunction may be delegated by the Commission to any of
its Labor Arbiters who shall conduct such hearings in such places as he may
determine to be accessible to the parties and their witnesses and shall submit
thereafter his recommendation to the Commission.(As amended by Section 10,
Republic Act No. 6715, March 21, 1989).

RULE X INJUNCTION

SECTION 1. INJUNCTION IN ORDINARY LABOR DISPUTES. - A preliminary injunction


or restraining order may be granted by the Commission through its Divisions pursuant to
the provisions of paragraph (e) of Article 218 of the Labor Code, as amended, when it is
established on the basis of the sworn allegations in the petition that the acts complained of
involving or arising from any labor dispute before the Commission, which, if not restrained
or performed forthwith, may cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party.
A certification of non-forum shopping shall accompany the petition for injunction.
The writ of preliminary injunction or temporary restraining order shall become effective
only upon posting of the required cash bond in the amount to be determined by the
Commission to answer for any damage that may be suffered by the party enjoined, if it is
finally determined that the petitioner is not entitled thereto.

SECTION 2. INJUNCTION IN STRIKES OR LOCKOUTS. - A preliminary or permanent


injunction may be granted by the Commission only after hearing the testimony of
witnesses and with opportunity for cross-examination in support of the allegations of the
complaint or petition made under oath, and testimony by way of opposition thereto, if
offered, and only after a finding of fact by the Commission:
a) That prohibited or unlawful acts have been threatened and will be committed
and will be continued unless restrained, but no injunction or temporary
restraining order shall be issued on account of any threat, prohibited or
unlawful act, except against the person or persons, association or organization

98
making the threat or committing the prohibited or unlawful act or actually
authorizing or ratifying the same after actual knowledge thereof.
b) That substantial and irreparable injury to petitioner's property will follow;
c) That as to each item of relief to be granted, greater injury will be inflicted upon
the petitioner by the denial of relief than will be inflicted upon respondents by
the granting of relief;
d) That petitioner has no adequate remedy at law; and
e) That the public officers charged with the duty to protect petitioner's property
are unable or unwilling to furnish adequate protection.

Article. 219. Ocular inspection. - The Chairman, any Commissioner, Labor Arbiter or
their duly authorized representatives, may, at any time during working hours, conduct an
ocular inspection on any establishment, building, ship or vessel, place or premises,
including any work, material, implement, machinery, appliance or any object therein, and
ask any employee, laborer, or any person, as the case may be, for any information or data
concerning any matter or question relative to the object of the investigation.

[Article. 220. Compulsory arbitration. - (Repealed by Section 16,


Batas Pambansa Bilang 130, August 21, 1981).

Article. 221. Technical rules not binding and prior resort to amicable settlement. - In
any proceeding before the Commission or any of the Labor Arbiters, the rules of evidence
prevailing in courts of law or equity shall not be controlling and it is the spirit and intention
of this Code that the Commission and its members and the Labor Arbiters shall use every
and all reasonable means to ascertain the facts in each case speedily and objectively and
without regard to technicalities of law or procedure, all in the interest of due process. In
any proceeding before the Commission or any Labor Arbiter, the parties may be
represented by legal counsel but it shall be the duty of the Chairman, any Presiding
Commissioner or Commissioner or any Labor Arbiter to exercise complete control of the
proceedings at all stages.
Any provision of law to the contrary notwithstanding, the Labor Arbiter shall exert
all efforts towards the amicable settlement of a labor dispute within his jurisdiction on or
before the first hearing. The same rule shall apply to the Commission in the exercise of its
original jurisdiction. (As amended by Section 11, Republic Act No. 6715, March 21, 1989).

Article. 222. Appearances and Fees.


(a) Non-lawyers may appear before the Commission or any Labor Arbiter only:
1. If they represent themselves; or
2. If they represent their organization or members thereof.

SECTION 6. APPEARANCES.
a) A lawyer appearing for a party is presumed to be properly authorized for that
purpose. In every case, he/she shall indicate in his/her pleadings and motions his/her
Attorney's Roll Number, as well as his/her PTR and IBP numbers for the current year and
MCLE compliance.
b) A non-lawyer may appear in any of the proceedings before the Labor Arbiter
or Commission only under the following conditions:
(1) he/she represents himself/herself as party to the case;
(2) he/she represents a legitimate labor organization, as defined under
Article 212 and 242 of the Labor Code, as amended, which is a party
to the case: Provided, that he/she presents to the Commission or
Labor Arbiter during the mandatory conference or initial hearing: (i) a
certification from the Bureau of Labor Relations (BLR) or Regional
Office of the Department of Labor and Employment attesting that the
organization he/she represents is duly registered and listed in the
roster of legitimate labor organizations; (ii) a verified certification
issued by the secretary and attested to by the president of the said

99
organization stating that he/she is authorized to represent the said
organization in the said case; and (iii) a copy of the resolution of the
board of directors of the said organization granting him such authority;
(3) he/she represents a member or members of a legitimate labor
organization that is existing within the employer's establishment, who
are parties to the case: Provided, that he/she presents: (i) a verified
certification attesting that he/she is authorized by such member or
members to represent them in the case; and (ii) a verified certification
issued by the secretary and attested to by the president of the said
organization stating that the person or persons he/she is representing
are members of their organization which is existing in the employer's
establishment;
(4) he/she is a duly-accredited member of any legal aid office
recognized by the Department of Justice or Integrated Bar of the
Philippines: Provided, that he/she (i) presents proof of his/her
accreditation; and (ii) represents a party to the case;
(5) he/she is the owner or president of a corporation or establishment
which is a party to the case: Provided, that he/she presents: (i) a
verified certification attesting that he/she is authorized to represent
said corporation or establishment; and (ii) a copy of the resolution of
the board of directors of said corporation, or other similar resolution
or instrument issued by said establishment, granting him/her such
authority.
c) Appearances of a non-lawyer in contravention of this section shall not be
recognized in any proceedings before the Labor Arbiter or the Commission.
d) Appearances may be made orally or in writing. In both cases, the complete
name and office address of counsel or authorized representative shall be
made of record and the adverse party or his counsel or authorized
representative properly notified.
e) In case of change of address, the counsel or representative shall file a notice
of such change, copy furnished the adverse party and counsel or
representative, if any.
f) Any change or withdrawal of counsel or authorized representative shall be
made in accordance with the Rules of Court.

(b) No attorneys fees, negotiation fees or similar charges of any kind arising from any
collective bargaining agreement shall be imposed on any individual member of the
contracting union: Provided, However, that attorneys fees may be charged against
union funds in an amount to be agreed upon by the parties. Any contract, agreement
or arrangement of any sort to the contrary shall be null and void. (As amended by
Presidential Decree No. 1691, May 1, 1980).

Chapter III
APPEAL

Article. 223. Appeal. - Decisions, awards, or orders of the Labor Arbiter are final
and executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders. Such appeal may be
entertained only on any of the following grounds:
(a) If there is prima facie evidence of abuse of discretion on the part of
the Labor Arbiter;
(b) If the decision, order or award was secured through fraud or coercion, including
graft and corruption;
(c) If made purely on questions of law; and
(d) If serious errors in the findings of facts are raised which would cause grave or
irreparable damage or injury to the appellant.

100
In case of a judgment involving a monetary award, an appeal by the employer
may be perfected only upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in the amount equivalent to the
monetary award in the judgment appealed from.
In any event, the decision of the Labor Arbiter reinstating a dismissed or
separated employee, insofar as the reinstatement aspect is concerned, shall immediately
be executory, even pending appeal. The employee shall either be admitted back to work
under the same terms and conditions prevailing prior to his dismissal or separation or, at
the option of the employer, merely reinstated in the payroll. The posting of a bond by the
employer shall not stay the execution for reinstatement provided herein.
To discourage frivolous or dilatory appeals, the Commission or the Labor Arbiter
shall impose reasonable penalty, including fines or censures, upon the erring parties.
In all cases, the appellant shall furnish a copy of the memorandum of appeal to the other
party who shall file an answer not later than ten (10) calendar days from receipt thereof.
The Commission shall decide all cases within twenty (20) calendar days from receipt of
the answer of the appellee. The decision of the Commission shall be final
and executory after ten (10) calendar days from receipt thereof by the parties.
Any law enforcement agency may be deputized by the Secretary of Labor and
Employment or the Commission in the enforcement of decisions, awards or orders. (As
amended by Section 12, Republic Act No. 6715, March 21, 1989).

RULE VI APPEALS

SECTION 1. PERIODS OF APPEAL. - Decisions, awards, or orders of the Labor Arbiter


shall be final and executory unless appealed to the Commission by any or both parties
within ten (10) calendar days from receipt thereof; and in case of decisions or resolutions
of the Regional Director of the Department of Labor and Employment pursuant to Article
129 of the Labor Code, within five (5) calendar days from receipt thereof. If the 10th or 5th
day, as the case may be, falls on a Saturday, Sunday or holiday, the last day to perfect
the appeal shall be the first working day following such Saturday, Sunday or holiday.
No motion or request for extension of the period within which to perfect an appeal
shall be allowed. (1a)

SECTION 2. GROUNDS. - The appeal may be entertained only on any of the following
grounds:
a) If there is prima facie evidence of abuse of discretion on the part of the Labor
Arbiter or Regional Director;
b) If the decision, award or order was secured through fraud or coercion,
including graft and corruption;
c) If made purely on questions of law; and/or
d) If serious errors in the findings of facts are raised which, if not corrected, would
cause grave or irreparable damage or injury to the appellant. (2a)

SECTION 3. WHERE FILED. - The appeal shall be filed with the Regional Arbitration
Branch or Regional Office where the case was heard and decided.

SECTION 4. REQUISITES FOR PERFECTION OF APPEAL.


a) The appeal shall be:
(1) filed within the reglementary period provided in Section 1 of this
Rule;
(2) verified by the appellant himself/herself in accordance with Section
4, Rule 7 of the Rules of Court, as amended;
(3) in the form of a memorandum of appeal which shall state the
grounds relied upon and the arguments in support thereof, the relief
prayed for, and with a statement of the date the appellant received
the appealed decision, award or order;
(4) in three (3) legibly typewritten or printed copies; and

101
(5) accompanied by:
i) proof of payment of the required appeal fee and legal
research fee;
ii) posting of a cash or surety bond as provided in Section 6 of
this Rule; and
iii) proof of service upon the other parties.
b) A mere notice of appeal without complying with the other requisites
aforestated shall not stop the running of the period for perfecting an appeal.
c) The appellee may file with the Regional Arbitration Branch or Regional Office
where the appeal was filed, his/her answer or reply to appellant's
memorandum of appeal, not later than ten (10) calendar days from receipt
thereof. Failure on the part of the appellee who was properly furnished with a
copy of the appeal to file his/her answer or reply within the said period may be
construed as a waiver on his/her part to file the same.
d) Subject to the provisions of Article 218 of the Labor Code, once the appeal is
perfected in accordance with these Rules, the Commission shall limit itself to
reviewing and deciding only the specific issues that were elevated on appeal.

SECTION 6. BOND. - In case the decision of the Labor Arbiter or the Regional Director
involves a monetary award, an appeal by the employer may be perfected only upon the
posting of a bond, which shall either be in the form of cash deposit or surety bond
equivalent in amount to the monetary award, exclusive of damages and attorney's fees.

SECTION 9. FILING OF APPEAL; EFFECT. - Without prejudice to immediate


reinstatement pending appeal under Section 6 of Rule XI, once an appeal is filed, the
Labor Arbiter loses jurisdiction over the case. All pleadings and motions pertaining to the
appealed case shall thereafter be addressed to and filed with the Commission.

SECTION 15. MOTIONS FOR RECONSIDERATION. - Motion for reconsideration of any


decision, resolution or order of the Commission shall not be entertained except when
based on palpable or patent errors; provided that the motion is filed within ten (10)
calendar days from receipt of decision, resolution or order, with proof of service that a
copy of the same has been furnished, within the reglementary period, the adverse party;
and provided further, that only one such motion from the same party shall be entertained.

Article. 224. Execution of decisions, orders or awards.


(a) The Secretary of Labor and Employment or any Regional Director, the Commission or
any Labor Arbiter, or Med-Arbiter or Voluntary Arbitrator may, motu proprio or on
motion of any interested party, issue a writ of execution on a judgment within five (5)
years from the date it becomes final and executory, requiring a sheriff or a duly
deputized officer to execute or enforce final decisions, orders or awards of the
Secretary of Labor and Employment or regional director, the Commission,
the Labor Arbiter or med-arbiter, or voluntary arbitrators. In any case, it shall be the
duty of the responsible officer to separately furnish immediately the counsels of
record and the parties with copies of said decisions, orders or awards. Failure to
comply with the duty prescribed herein shall subject such responsible officer to
appropriate administrative sanctions.
(b) The Secretary of Labor and Employment, and the Chairman of the Commission may
designate special sheriffs and take any measure under existing laws to ensure
compliance with their decisions, orders or awards and those of the Labor Arbiters and
voluntary arbitrators, including the imposition of administrative fines which shall not be
less than P500.00 nor more than P10,000.00. (As amended by Section 13, Republic
Act No. 6715, March 21, 1989).

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RULE XXIV
EXECUTION OF DECISIONS, AWARDS OR ORDERS
Section 1. Execution of decisions, orders or awards.
(a) The Secretary or the Bureau or Regional Director, the Labor Arbiter, the Med-
Arbiter or Voluntary Arbitrator may, upon his/her own initiative or on motion of any
interested party, issue a writ of execution on a judgment within five (5) years from the date
it becomes final and executory, requiring the Sheriff or the duly deputized officer to
execute or enforce their respective final decisions, orders and awards.
(b) The Secretary and the Chairman of the Commission may designate special
sheriffs and take any measure under existing laws to ensure compliance with their
decisions, orders or awards and those of the Labor Arbiters and voluntary arbitrators,
including the imposition of administrative fines, which shall not be less than five hundred
(P500.00) pesos nor more than ten thousand (P10,000.00) pesos.
(c) Alternatively, the Secretary, the Commission, any Labor Arbiter, the Regional
Director or the Director of the Bureau of Labor Relations in appropriate cases may
deputize the Philippine National Police or any law enforcement agencies in the
enforcement of final awards, orders or decisions.

[2011 NLRC New Rules of Procedure]


SECTION 2. EXECUTION BY MOTION OR BY INDEPENDENT ACTION.. - Pursuant to
Art. 224 of the Labor Code, a decision or order may be executed on motion within five (5)
years from the date it becomes final and executory. After the lapse of such period, the
judgment shall become dormant, and may only be enforced by an independent action
before the Regional Arbitration Branch of origin and within a period of ten (10) years from
date of its finality.

Article. 225. Contempt powers of the Secretary of Labor. - In the exercise of his
powers under this Code, the Secretary of Labor may hold any person in direct or indirect
contempt and impose the appropriate penalties therefor.

RULE XXIII
CONTEMPT
Section 1. Direct contempt; Person guilty of misbehavior. - A person guilty of
misbehavior in the presence of or so near the Secretary, the Chairman or any member of
the Commission, Bureau Director or any Labor Arbiter as to obstruct or interrupt the
proceedings before the same, including disrespect toward said officials, offensive
personalities toward others, or refusal to be sworn or to answer as a witness or to
subscribe an affidavit or deposition when lawfully required to do so may be summarily
adjudged in direct contempt by said officials and punished by fines not exceeding five
hundred pesos (P500.00) or imprisonment not exceeding five (5) days or both, if it be the
Secretary, the Commission or members thereof, or a fine not exceeding one hundred
pesos (P100.00) or imprisonment not exceeding one (1) day, or both, if it be the Bureau
Director or Labor Arbiter.
The person adjudged in direct contempt by a Labor Arbiter may appeal to the
Commission while the person adjudged in direct contempt by the Bureau Director may
appeal to the Secretary. The execution of the judgment shall be suspended pending the
resolution of the appeal upon the filing by such person of a bond on condition that he will
abide by and perform the judgment should the appeal be decided against him. The
judgment of the Commission and the Secretary is immediately executory and
inappealable.

Section 2. Indirect contempt. - Indirect contempt shall be dealt with by the Secretary,
Commission, Bureau Director or Labor Arbiter in the manner prescribed under Rule 71 of
the Revised Rules of Court.

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Title III
BUREAU OF LABOR RELATIONS

Article. 226. Bureau of Labor Relations. - The Bureau of Labor Relations and
the Labor Relations Divisions in the regional offices of the Department of Labor, shall have
original and exclusive authority to act, at their own initiative or upon request of either or
both parties, on all inter-union and intra-union conflicts, and all disputes, grievances or
problems arising from or affecting labor-management relations in all workplaces, whether
agricultural or non-agricultural, except those arising from the implementation or
interpretation of collective bargaining agreements which shall be the subject of grievance
procedure and/or voluntary arbitration.
The Bureau shall have fifteen (15) working days to act on labor cases before it,
subject to extension by agreement of the parties.(As amended by Section 14, Republic
Act No. 6715, March 21, 1989).

Article. 227. Compromise agreements. - Any compromise settlement, including those


involving labor standard laws, voluntarily agreed upon by the parties with the assistance of
the Bureau or the regional office of the Department of Labor, shall be final and binding
upon the parties. The National Labor Relations Commission or any court, shall not
assume jurisdiction over issues involved therein except in case of non-compliance thereof
or if there is prima facie evidence that the settlement was obtained through fraud,
misrepresentation, or coercion.

[ART. 228. Indorsement of cases to Labor Arbiters. - (Repealed by Section 16,


Batas Pambansa Bilang 130, August 21, 1981).

Article. 229. Issuance of subpoenas. - The Bureau shall have the power to require the
appearance of any person or the production of any paper, document or matter relevant to
a labor dispute under its jurisdiction, either at the request of any interested party or at its
own initiative.

Article. 230. Appointment of bureau personnel. - The Secretary of Labor and


Employment may appoint, in addition to the present personnel of the Bureau and the
Industrial Relations Divisions, such number of examiners and other assistants as may be
necessary to carry out the purpose of the Code. [As amended by Section 15, Republic Act
No. 6715, March 21, 1989].

Article. 231. Registry of unions and file of collective bargaining agreements. - The
Bureau shall keep a registry of legitimate labor organizations. The Bureau shall also
maintain a file of all collective bargaining agreements and other related agreements and
records of settlement of labor disputes and copies of orders and decisions of voluntary
arbitrators. The file shall be open and accessible to interested parties under conditions
prescribed by the Secretary of Labor and Employment, provided that no specific
information submitted in confidence shall be disclosed unless authorized by the Secretary,
or when it is at issue in any judicial litigation, or when public interest or national security so
requires.
Within thirty (30) days from the execution of a Collective Bargaining Agreement,
the parties shall submit copies of the same directly to the Bureau or the Regional Offices
of the Department of Labor and Employment for registration, accompanied with verified
proofs of its posting in two conspicuous places in the place of work and ratification by the
majority of all the workers in the bargaining unit. The Bureau or Regional Offices shall act
upon the application for registration of such Collective Bargaining Agreement within five
(5) calendar days from receipt thereof. The Regional Offices shall furnish the Bureau with
a copy of the Collective Bargaining Agreement within five (5) days from its submission.
The Bureau or Regional Office shall assess the employer for every Collective Bargaining
Agreement a registration fee of not less than one thousand pesos (P1,000.00) or in any
other amount as may be deemed appropriate and necessary by the Secretary
of Labor and Employment for the effective and efficient administration of the Voluntary
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Arbitration Program. Any amount collected under this provision shall accrue to the Special
Voluntary Arbitration Fund.
The Bureau shall also maintain a file and shall undertake or assist in the
publication of all final decisions, orders and awards of the Secretary of Labor and
Employment, Regional Directors and the Commission. (As amended by Section 15,
Republic Act No. 6715, March 21, 1989).

Section 4. Action on the application. - The Regional Office and the Bureau
shall act on applications for registration of collective bargaining agreements within one
day from receipt thereof, either by: (a) approving the application for failure of the
applicant to comply with the requirements for registration.

Where the documents supporting the application are not complete or are not verified
under oath, the Regional Office of the Bureau shall, within one day from receipt of the
application, notify the applicants in writing of the requirements needed to complete the
application. Where the applicants fail to complete the requirements within ten (10) days
from receipt of notice, the application shall be denied without prejudice." (as amended
by Section 1 D.O. 40-D-03)

Section 5. Denial of registration: grounds for appeal. - The denial of


registration shall be in writing, stating in clear terms the reasons therefor and served
upon the applicant union and employer within twenty-four (24) hours from issuance.
The denial by the Regional Office of the registration of single enterprise collective
bargaining agreements may be appealed to the Bureau within ten (10) days from
receipt of the notice of denial. The denial by the Bureau of the registration of multi -
employer collective bargaining agreements may be appealed to the Office of the
Secretary within the same period.

The memorandum of appeal shall be filed with the Regional Office or the
Bureau, as the case may be. The same shall be transmitted, together with the entire
records of the application, to the Bureau or the Office of the Secretary, as the case may
be, within twenty-four (24) hours from receipt of the memorandum of appeal.

Article. 232. Prohibition on certification election. - The Bureau shall not entertain any
petition for certification election or any other action which may disturb the administration of
duly registered existing collective bargaining agreements affecting the parties except
under Articles 253, 253-A and 256 of this Code. (As amended by Section 15, Republic Act
No. 6715, March 21, 1989).

Article. 233. Privileged communication. - Information and statements made at


conciliation proceedings shall be treated as privileged communication and shall not be
used as evidence in the Commission. Conciliators and similar officials shall not testify in
any court or body regarding any matters taken up at conciliation proceedings conducted
by them.

Difference between conciliation and Mediation (From internet)


1. In Mediation a mediator, who is neutral and intermediary, plays an active role
by working out compromise formulas after hearing both the parties. But in case of
conciliation, the role of conciliator, who also plays the role of neutral intermediary, is
to bring the parties together in a frame of mind to forget their animosities and prepare
them for a compromise by adopting amid way approach which may be acceptable to both
the parties in dispute. Thus a conciliator is an active participant in bridging the
gulf between the parties and suggest solution which is acceptable to the parties.
2. The power of conciliator is larger under the arbitration and conciliation act and
whereas the powers of the mediator is too limited as he can only suggest proposals for the
settlement.

105
3. The conciliator can make proposals for settlement, formulate or reformulate the
terms of a possible settlement whereas a mediator would merely facilitate a settlement
between the parties.

RULE 3: NCMB Manual of Procedures


Section 1. Definition of Terms
20. Preventive Mediation Cases refer to the potential labor disputes which are the
subject of a formal or informal request for conciliation and mediation assistance sought by
either or both parties or upon the initiative of the NCMB to avoid the occurrence of actual
labor disputes.

Title IV
LABOR ORGANIZATIONS

Chapter I
REGISTRATION AND CANCELLATION

[BOOK 5 - RULE 3] Section 1. Where to file. - Applications for registration of


independent labor unions, chartered locals, workers' associations shall be filed with the
Regional Office where the applicant principally operates. It shall be processed by the
Labor Relations Division at the Regional Office in accordance with Sections 2-A, 2-C, and
2-E of this Rule.
Applications for registration of federations, national unions or workers'
associations operating in more than one region shall be filed with the Bureau or the
Regional Offices, but shall be processed by the Bureau in accordance with Sections 2-B
and 2-D of this Rule.

Article 234. Requirements of registration. - A federation, national union or industry or


trade union center or an independent union shall acquire legal personality and shall be
entitled to the rights and privileges granted by law to legitimate labor organizations upon
issuance of the certificate of registration based on the following requirements:
(a) Fifty pesos (P50.00) registration fee;
(b) The names of its officers, their addresses, the principal address of the labor
organization, the minutes of the organizational meetings and the list of the
workers who participated in such meetings;
(c) In case the applicant is an independent union, the names of all its members
comprising at least twenty percent (20%) of all the employees in the bargaining
unit where it seeks to operate;
(d) If the applicant union has been in existence for one or more years, copies of its
annual financial reports; and
(e) Four copies of the constitution and by-laws of the applicant union, minutes of its
adoption or ratification, and the list of the members who participated in it. (As
amended by Batas Pambansa Bilang 130, August 21, 1981 and Section 1,
Republic Act No. 9481 which lapsed into law on May 25, 2007 and became
effective on June 14, 2007).

[BOOK 5 - RULE 3] Section 2. Requirements for application. - A. The application for


registration of an independent labor union shall be accompanied by the following
documents:
1) the name of the applicant labor union, its principal address, the name of its
officers and their respective addresses, approximate number of employees in the
bargaining unit where it seeks to operate, with a statement that it is not reported as a
chartered local of any federation or national union;
2) the minutes of the organizational meeting(s) and the list of employees who
participated in the said meeting(s);
3) the name of all its members comprising at least 20% of the employees in the
bargaining unit;
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4) the annual financial reports if the applicant has been in existence for one or
more years, unless it has not collected any amount from the members, in which case a
statement to this effect shall be included in the application;
5) the applicant's constitution and by-laws, minutes of its adoption or ratification,
and the list of the members who participated in it. The list of ratifying members shall be
dispensed with where the constitution and by-laws was ratified or adopted during the
organizational meeting. In such a case, the factual circumstances of the ratification shall
be recorded in the minutes of the organizational meeting(s).

B. The application for registration of federations and national unions shall be


accompanied by the following documents:
1) a statement indicating the name of the applicant labor union, its principal
address, the name of its officers and their respective addresses;
2) the minutes of the organizational meeting(s) and the list of employees who
participated in the said meeting(s);
3) the annual financial reports if the applicant union has been in existence for one
or more years, unless it has not collected any amount from the members, in which case a
statement to this effect shall be included in the application;
4) the applicant union's constitution and by-laws, minutes of its adoption or
ratification, and the list of the members who participated in it. The list of ratifying members
shall be dispensed with where the constitution and by-laws was ratified or adopted during
the organizational meeting(s). In such a case, the factual circumstances of the ratification
shall be recorded in the minutes of the organizational meeting(s);
5) the resolution of affiliation of at least ten (10) legitimate labor organizations,
whether independent unions or chartered locals, each of which must be a duly certified or
recognized bargaining agent in the establishment where it seeks to operate; and
6) the name and addresses of the companies where the affiliates operate and the
list of all the members in each company involved.
Labor organizations operating within an identified industry may also apply for
registration as a federation or national union within the specified industry by submitting to
the Bureau the same set of documents.

C. The application for registration of a workers' association shall be accompanied by the


following documents:
1) the name of the applicant association, its principal address, the name of its
officers and their respective addresses;
2) the minutes of the organizational meeting(s) and the list of members who
participated therein;
3) the financial reports of the applicant association if it has been in existence for
one or more years, unless it has not collected any amount from the members, in which
case a statement to this effect shall be included in the application;
4) the applicant's constitution and by-laws to which must be attached the names
of ratifying members, the minutes of adoption or ratification of the constitution and by-laws
and the date when ratification was made, unless ratification was done in the organizational
meeting(s), in which case such fact shall be reflected in the minutes of the organizational
meeting(s).

D. Application for registration of a workers' association operating in more than one region
shall be accompanied, in addition to the requirements in the preceding subsection, by a
resolution of membership of each member association, duly approved by its board of
directors.

E. A duly-registered federation or national union may directly create a local/chapter by


issuing a charter certificate indicating the establishment of the local/chapter. The
local/chapter shall acquire legal personality only for purposes of filing a petition for
certification election from the date it was issued a charter certificate.

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The local/chapter shall be entitled to all other rights and privileges of a legitimate
labor organization only upon the submission of the following documents in addition to its
charter certificate:
(a) The names of the local/chapters officers, their addresses, and the principal office of
the local/chapter, and
(b) The chapters constitution and by-laws provided, that where the chapters constitution
and by-laws are the same as that of the federation or the national union, this fact shall
be indicated accordingly.
The genuineness and due execution of the supporting requirements shall be
certified under oath by the secretary or treasurer of the local/chapter and attested to by its
president.

Article 234-A. Chartering and creation of a local chapter. - A duly registered federation
or national union may directly create a local chapter by issuing a charter certificate
indicating the establishment of the local chapter. The chapter shall acquire legal
personality only for purposes of filing a petition for certification election from the date it
was issued a charter certificate.
The chapter shall be entitled to all other rights and privileges of a legitimate labor
organization only upon the submission of the following documents in addition to its charter
certificate:
(a) The names of the chapters officers, their addresses, and the principal office of
the chapter; and
(b) The chapters constitution and by-laws: Provided, That where the chapters
constitution and by-laws are the same as that of the federation or the national
union, this fact shall be indicated accordingly.
The additional supporting requirements shall be certified under oath by the
secretary or treasurer of the chapter and attested by its president. (As inserted by Section
2, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became effective on
June 14, 2007).

Article 235. Action on application. - The Bureau shall act on all applications for
registration within thirty (30) days from filing.
All requisite documents and papers shall be certified under oath by the secretary
or the treasurer of the organization, as the case may be, and attested to by its president.

[BOOK 5 - RULE 4] Section 4. Action on the application/notice. - The Regional Office


or the Bureau, as the case may be, shall act on all applications for registration or notice of
change of name, affiliation, merger and consolidation within one (1) day from receipt
either by: (a) approving the application and issuing the certificate of
registration/acknowledging the notice/report; or (b) denying the application/notice for
failure of the applicant to comply with the requirements for registration/notice. (as
Amended by Section 1, D.O. 40-D-05. 13 September 2005)

Article 236. Denial of registration; appeal. - The decision of the Labor Relations
Division in the regional office denying registration may be appealed by the applicant union
to the Bureau within ten (10) days from receipt of notice thereof.

[BOOK 5 - RULE 4] Section 5. Denial of Application/Return of Notice. - Where the


documents supporting the application for registration/notice of change of name, affiliation,
merger and consolidation are incomplete or do not contain the required certification and
attestation, the Regional Office or the Bureau shall, within one (1) day from receipt of the
application/notice, notify the applicant/labor organization concerned in writing of the
necessary requirements and complete the same within thirty (30) days from receipt of
notice. Where the applicant/labor organization concerned fails to complete the
requirements within the time prescribed, the application for registration shall be denied, or
the notice of change of name, affiliation, merger and consolidation returned, without

108
prejudice to filing a new application or notice. as Amended by Section 1, D.O. 40-D-05.
13 September 2005)

Section 2. Who may file. - Any party-in-interest may commence a petition for cancellation
of registration, except in actions involving violations of Article 241, which can only be
commenced by members of the labor organization concerned.

Article 237. Additional requirements for federations or national unions. - If the


applicant for registration is a federation or a national union, it shall, in addition to the
requirements of the preceding Articles, submit the following:
(a) Proof of the affiliation of at least ten (10) locals or chapters, each of which must be
a duly recognized collective bargaining agent in the establishment or industry in
which it operates, supporting the registration of such applicant federation or
national union; and
(b) The names and addresses of the companies where the locals or chapters operate
and the list of all the members in each company involved.

Article 238. Cancellation of registration. - The certificate of registration of any legitimate


labor organization, whether national or local, may be cancelled by the Bureau, after due
hearing, only on the grounds specified in Article 239 hereof. (As amended by Section 3,
Republic Act No. 9481 which lapsed into law on May 25, 2007 and became effective on
June 14, 2007).

[BOOK 5 - RULE 14] Section 1. Cancellation of Registration; Where to file. - Subject


to the requirements of notice and due process, the registration of any legitimate
independent labor union, local/chapter and workers' association may be cancelled by the
Regional Director upon the filing of a petition for cancellation of union registration, or
application by the organization itself for voluntary dissolution.
The petition for cancellation or application for voluntary dissolution shall be filed
in the regional office which issued its certificate of registration or creation.
In the case of federations, national or industry unions and trade union centers,
the Bureau Director may cancel the registration upon the filing of a petition for cancellation
or application for voluntary dissolution in the Bureau of Labor Relations. (As amended by
DO No. 40-F-03 Series of 2008)

Section 2. Who may file. - Any party-in-interest may commence a petition for cancellation
of registration, except in actions involving violations of Article 241, which can only be
commenced by members of the labor organization concerned.

Section 16. Appeal. - The decision of the Med-Arbiter and Regional Director may be
appealed to the Bureau by any of the parties within ten (10) days from receipt thereof,
copy furnished the opposing party. The decision of the Bureau Director in the exercise of
his/her original jurisdiction may be appealed to the Office of the Secretary by any party
within the same period, copy furnished the opposing party.

The appeal shall be verified under oath and shall consist of a memorandum of
appeal specifically stating the grounds relied upon by the appellant, with supporting
arguments and evidence.

Article 238-A. Effect of a petition for cancellation of registration. - A petition for


cancellation of union registration shall not suspend the proceedings for certification
election nor shall it prevent the filing of a petition for certification election.
In case of cancellation, nothing herein shall restrict the right of the union to seek
just and equitable remedies in the appropriate courts. (As inserted by Section 4, Republic
Act No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14,
2007).

109
Article 239. Grounds for cancellation of union registration.- The following may
constitute grounds for cancellation of union registration:
(a) Misrepresentation, false statement or fraud in connection with the adoption or
ratification of the constitution and by-laws or amendments thereto, the minutes of
ratification, and the list of members who took part in the ratification;
(b) Misrepresentation, false statements or fraud in connection with the election of
officers, minutes of the election of officers, and the list of voters;
(c) Voluntary dissolution by the members. (As amended by Section 5, Republic Act
No. 9481 which lapsed into law on May 25, 2007 and became effective on June
14, 2007).

Article 239-A. Voluntary cancellation of registration. - The registration of a legitimate


labor organization may be cancelled by the organization itself: Provided, That at least two-
thirds of its general membership votes, in a meeting duly called for that purpose to
dissolve the organization: Provided, further, That an application to cancel registration is
thereafter submitted by the board of the organization, attested to by the president
thereof.(Inserted as a new provision by Section 6, Republic Act No. 9481 which lapsed
into law on May 25, 2007 and became effective on June 14, 2007).

[BOOK 5 - RULE 14]


Section 6. Prohibited grounds for cancellation of registration. - The inclusion as
union members of employees who are outside the bargaining unit shall not be a ground to
cancel the union registration. The ineligible employees are automatically deemed removed
from the list of membership of the union.
The affiliation of the rank-and-file and supervisory unions operating within the
same establishment to the same federation or national union shall not be a ground to
cancel the registration of either union. (as amended by D.O. 40-F-03. 30 October 2008)

Article 240. Equity of the incumbent. All existing federations and national unions
which meet the qualifications of a legitimate labor organization and none of the grounds
for cancellation shall continue to maintain their existing affiliates regardless of the nature
of the industry and the location of the affiliates.

Chapter II
RIGHTS AND CONDITIONS OF MEMBERSHIP

Article 241. Rights and conditions of membership in a labor organization. The


following are the rights and conditions of membership in a labor organization:
(a) No arbitrary or excessive initiation fees shall be required of the members of a
legitimate labor organization nor shall arbitrary, excessive or oppressive fine and
forfeiture be imposed;
(b) The members shall be entitled to full and detailed reports from their officers and
representatives of all financial transactions as provided for in the constitution and
by-laws of the organization;
(c) The members shall directly elect their officers, including those of the national
union or federation to which they or their union is affiliated, by secret ballot at
intervals of five (5) years. No qualification requirements for candidacy to any
position shall be imposed other than membership in good standing in subject
labor organization. The secretary or any other responsible union officer shall
furnish the Secretary of Labor and Employment with a list of the newly-elected
officers, together with the appointive officers or agents who are entrusted with the
handling of funds, within thirty (30) calendar days after the election of officers or
from the occurrence of any change in the list of officers of the labor organization;
(As amended by Section 16, Republic Act No. 6715, March 21, 1989).
(d) The members shall determine by secret ballot, after due deliberation, any question
of major policy affecting the entire membership of the organization, unless the
nature of the organization or force majeure renders such secret ballot impractical,

110
in which case, the board of directors of the organization may make the decision
in behalf of the general membership;
(e) No labor organization shall knowingly admit as members or continue in
membership any individual who belongs to a subversive organization or who is
engaged directly or indirectly in any subversive activity;
(f) No person who has been convicted of a crime involving moral turpitude shall be
eligible for election as a union officer or for appointment to any position in the
union;
(g) No officer, agent or member of a labor organization shall collect any fees, dues, or
other contributions in its behalf or make any disbursement of its money or funds
unless he is duly authorized pursuant to its constitution and by-laws;
(h) Every payment of fees, dues or other contributions by a member shall be
evidenced by a receipt signed by the officer or agent making the collection and
entered into the record of the organization to be kept and maintained for the
purpose;
(i) The funds of the organization shall not be applied for any purpose or object other
than those expressly provided by its constitution and by-laws or those expressly
authorized by written resolution adopted by the majority of the members at a
general meeting duly called for the purpose;
(j) Every income or revenue of the organization shall be evidenced by a record
showing its source, and every expenditure of its funds shall be evidenced by a
receipt from the person to whom the payment is made, which shall state the date,
place and purpose of such payment. Such record or receipt shall form part of the
financial records of the organization.
Any action involving the funds of the organization shall prescribe after
three (3) years from the date of submission of the annual financial report to the
Department of Labor and Employment or from the date the same should have
been submitted as required by law, whichever comes earlier: Provided, That this
provision shall apply only to a legitimate labor organization which has submitted
the financial report requirements under this Code: Provided, further, that failure of
any labor organization to comply with the periodic financial reports required by
law and such rules and regulations promulgated thereunder six (6) months after
the effectivity of this Act shall automatically result in the cancellation of union
registration of such labor organization; (As amended by Section 16, Republic Act
No. 6715, March 21, 1989).
(k) The officers of any labor organization shall not be paid any compensation other
than the salaries and expenses due to their positions as specifically provided for
in its constitution and by-laws, or in a written resolution duly authorized by a
majority of all the members at a general membership meeting duly called for the
purpose. The minutes of the meeting and the list of participants and ballots cast
shall be subject to inspection by the Secretary of Labor or his duly authorized
representatives. Any irregularities in the approval of the resolutions shall be a
ground for impeachment or expulsion from the organization;
(l) The treasurer of any labor organization and every officer thereof who is responsible
for the account of such organization or for the collection, management,
disbursement, custody or control of the funds, moneys and other properties of
the organization, shall render to the organization and to its members a true and
correct account of all moneys received and paid by him since he assumed office
or since the last day on which he rendered such account, and of all bonds,
securities and other properties of the organization entrusted to his custody or
under his control. The rendering of such account shall be made:
(1) At least once a year within thirty (30) days after the close of its fiscal year;
(2) At such other times as may be required by a resolution of the majority of the
members of the organization; and
(3) Upon vacating his office.
The account shall be duly audited and verified by affidavit and a copy
thereof shall be furnished the Secretary of Labor.

111
(m) The books of accounts and other records of the financial activities of any labor
organization shall be open to inspection by any officer or member thereof during
office hours;
(n) No special assessment or other extraordinary fees may be levied upon the
members of a labor organization unless authorized by a written resolution of a
majority of all the members in a general membership meeting duly called for the
purpose. The secretary of the organization shall record the minutes of the
meeting including the list of all members present, the votes cast, the purpose of
the special assessment or fees and the recipient of such assessment or fees.
The record shall be attested to by the president.
(o) Other than for mandatory activities under the Code, no special assessments,
attorneys fees, negotiation fees or any other extraordinary fees may be checked
off from any amount due to an employee without an individual written
authorization duly signed by the employee. The authorization should specifically
state the amount, purpose and beneficiary of the deduction; and
(p) It shall be the duty of any labor organization and its officers to inform its members
on the provisions of its constitution and by-laws, collective bargaining agreement,
the prevailing labor relations system and all their rights and obligations under
existing labor laws.
For this purpose, registered labor organizations may assess reasonable dues to
finance labor relations seminars and other labor education activities.
Any violation of the above rights and conditions of membership shall be a ground
for cancellation of union registration or expulsion of officers from office, whichever is
appropriate. At least thirty percent (30%) of the members of a union or any member or
members specially concerned may report such violation to the Bureau. The Bureau shall
have the power to hear and decide any reported violation to mete the appropriate penalty.
Criminal and civil liabilities arising from violations of above rights and conditions
of membership shall continue to be under the jurisdiction of ordinary courts.

Chapter III
RIGHTS OF LEGITIMATE
LABOR ORGANIZATIONS

Article 242. Rights of legitimate labor organizations. A legitimate labor organization


shall have the right:
(a) To act as the representative of its members for the purpose of collective
bargaining;
(b) To be certified as the exclusive representative of all the employees in an
appropriate bargaining unit for purposes of collective bargaining;
(c) To be furnished by the employer, upon written request, with its annual audited
financial statements, including the balance sheet and the profit and loss
statement, within thirty (30) calendar days from the date of receipt of the request,
after the union has been duly recognized by the employer or certified as the sole
and exclusive bargaining representative of the employees in the bargaining unit,
or within sixty (60) calendar days before the expiration of the existing collective
bargaining agreement, or during the collective bargaining negotiation;
(d) To own property, real or personal, for the use and benefit of the labor organization
and its members;
(e) To sue and be sued in its registered name; and
(f) To undertake all other activities designed to benefit the organization and its
members, including cooperative, housing, welfare and other projects not contrary
to law.
Notwithstanding any provision of a general or special law to the contrary, the
income and the properties of legitimate labor organizations, including grants,
endowments, gifts, donations and contributions they may receive from fraternal and
similar organizations, local or foreign, which are actually, directly and exclusively used for
their lawful purposes, shall be free from taxes, duties and other assessments. The

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exemptions provided herein may be withdrawn only by a special law expressly repealing
this provision. (As amended by Section 17, Republic Act No. 6715, March 21, 1989).

Article 242-A. Reportorial requirements. - The following are documents required to be


submitted to the Bureau by the legitimate labor organization concerned:
(a) Its constitution and by-laws, or amendments thereto, the minutes of ratification,
and the list of members who took part in the ratification of the constitution and by-
laws within thirty (30) days from adoption or ratification of the constitution and by-
lam or amendments thereto;
(b) Its list of officers, minutes of the election of officers, and list of voters within thirty
(30) days from election;
(c) Its annual financial report within thirty (30) days after the close of every fiscal year;
and
(d) Its list of members at least once a year or whenever required by the Bureau.
Failure to comply with the above requirements shall not be a ground for
cancellation of union registration but shall subject the erring officers or members to
suspension, expulsion from membership, or any appropriate penalty. (As inserted by
Section 7, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became
effective on June 14, 2007).

[BOOK 5 - RULE 5] Section 1. Reporting requirements. - It shall be the duty of every


legitimate labor unions and workers associations to submit to the Regional Office or the
Bureau which issued its certificate of registration or certificate of creation of chartered
local, as the case may be, two (2) copies of each of the following documents:
(a) Its constitution and by-laws or amendments thereto, the minutes of adoption
or ratification and the list of members who took part therein, within 30 days from its
adoption or ratification;
(b) Its list of elected and appointed officers and agents entrusted with the
handling of union funds, the minutes of election of officers, and the list of voters, within
thirty (30) days from the date of election or appointment;
(c) Its annual financial report within thirty (30) days after the close of every fiscal
year; and
(d) Its list of members at least once a year or whenever required by the bureau.
The fiscal year of a labor organization shall coincide with the calendar year,
unless a different period is provided in its constitution and by-laws. (As amended by DO
No. 40-F-03 Series of 2008)

Title V
COVERAGE

Article 243. Coverage and employees right to self-organization. All persons


employed in commercial, industrial and agricultural enterprises and in religious, charitable,
medical, or educational institutions, whether operating for profit or not, shall have the right
to self-organization and to form, join, or assist labor organizations of their own choosing
for purposes of collective bargaining. Ambulant, intermittent and itinerant workers, self-
employed people, rural workers and those without any definite employers may form labor
organizations for their mutual aid and protection. (As amended by Batas Pambansa Bilang
70, May 1, 1980).

Section 2. Who may join labor unions and worker's associations. - All persons
employed in commercial, industrial and agricultural enterprises, including employees of
government owned or controlled corporations without original charters established under
the Corporation Code, as well as employees of religious, charitable, medical or
educational institutions whether operating for profit or not, shall have the right to self-
organization and to form, join or assist labor unions for purposes of collective bargaining:
provided, however, that supervisory employees shall not be eligible for membership in a
labor union of the rank-and-file employees but may form, join or assist separate labor
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unions of their own. Managerial employees shall not be eligible to form, join or assist any
labor unions for purposes of collective bargaining.
Alien employees with valid working permits issued by the Department may
exercise the right to self-organization and join or assist labor unions for purposes of
collective bargaining if they are nationals of a country which grants the same or similar
rights to Filipino workers, as certified by the Department of Foreign Affairs, or which has
ratified either ILO Convention No. 87 and ILO Convention No. 93.
For purposes of this section, any employee, whether employed for a definite
period or not, shall beginning on the first day of his/her service, be eligible for membership
in any labor organization.
All other workers, including ambulant, intermittent and other workers, the self-
employed, rural workers and those without any definite employers may form labor
organizations for their mutual aid and protection and other legitimate purposes except
collective bargaining. (As amended by DO 40-C-05.)

Article 244. Right of employees in the public service. Employees of government


corporations established under the Corporation Code shall have the right to organize and
to bargain collectively with their respective employers. All other employees in the civil
service shall have the right to form associations for purposes not contrary to law. (As
amended by Executive Order No. 111, December 24, 1986).

EO 180: PROVIDING GUIDELINES FOR THE EXERCISE OF THE RIGHT TO


ORGANIZE OF GOVERNMENT EMPLOYEES, CREATING A PUBLIC SECTOR
LABOR-MANAGEMENT COUNCIL, AND FOR OTHER PURPOSES

I. Coverage
Sec. 1. This Executive Order applies to all employees of all branches, subdivisions,
instrumentalities, and agencies, of the Government, including government-owned or
controlled corporations with original charters. For this purpose, employees, covered by
this Executive Order shall be referred to as "government employees".

Sec. 2. All government employees can form, join or assist employees' organizations of
their own choosing for the furtherance and protection of their interests. They can also
form, in conjunction with appropriate government authorities, labor-management
committees, works councils and other forms of workers' participation schemes to achieve
the same objectives.

Sec. 3. High-level employees whose functions are normally considered as policy-making


or managerial or whose duties are of a highly confidential nature shall not be eligible to
join the organization of rank-and-file government employees.

Sec. 4. The Executive Order shall not apply to the members of the Armed Forces of the
Philippines, including police officers, policemen, firemen and jail guards.

II. Protection of the Right to Organize


Sec. 5. Government employees shall not be discriminated against in respect of their
employment by reason of their membership in employees' organizations or participation in
the normal activities of their organization. Their employment shall not be subject to the
condition that they shall not join or shall relinquish their membership in the employees'
organizations.

Sec. 6. Government authorities shall not interfere in the establishment, functioning or


administration of government employees' organizations through acts designed to place
such organizations under the control of government authority.

III. Registration of Employees' Organization

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Sec. 7. Government employees' organizations shall register with the Civil Service
Commission and the Department of Labor and Employment. The application shall be filed
with the Bureau of Labor Relations of the Department which shall process the same in
accordance with the provisions of the Labor Code of the Philippines, as amended.
Applications may also be filed with the Regional Offices of the Department of Labor and
Employment which shall immediately transmit the said applications to the Bureau of Labor
Relations within three (3) days from receipt thereof.

Sec. 8. Upon approval of the application, a registration certificate be issued to the


organization recognizing it as a legitimate employees' organization with the right to
represent its members and undertake activities to further and defend its interest. The
corresponding certificates of registration shall be jointly approved by the Chairman of the
Civil Service Commission and Secretary of Labor and Employment.

IV. Sole and Exclusive Employees' Representatives


Sec. 9. The appropriate organizational unit shall be the employers unit consisting of rank-
and-file employees unless circumstances otherwise require.

Sec. 10. The duly registered employees' organization having the support of the majority of
the employees in the appropriate organizational unit shall be designated as the sole and
exclusive representative of the employees.

Sec. 11. A duly registered employees' organization shall be accorded voluntary


recognition upon a showing that no other employees' organization is registered or is
seeking registration, based on records of the Bureau of Labor Relations, and that the said
organizations has the majority support of the rank-and-file employees in the organizational
unit.

Sec. 12. Where there are two or more duly registered employees' organizations in the
appropriate organizational unit, the Bureau of Labor Relations shall, upon petition, order
the conduct of a certification election and shall certify the winner as the exclusive
representative of the rank-and-file employees in said organization unit.

D. Terms and Conditions of Employment in Government Services


Sec. 13. Terms and conditions of employment or improvements thereof, except those that
are fixed by law, may be the subject of negotiations between duly recognized employees'
organizations and appropriate government authorities.

VI. Peaceful Concerted Activities and Strikes


Sec. 14. The Civil Service laws and rules governing concerted activities and strikes in the
government service shall be observed, subject to any legislation that may be enacted by
Congress.

VII. Public Sector Labor-Management Council


Sec. 15. A Public Sector Labor Management Council, hereinafter referred to as the
Council, is hereby constituted to be composed of the following:
1) Chairman, Civil Service Commission Chairman
2) Secretary, Department of Labor and Employment Vice Chairman
3) Secretary, Department of Finance Member
4) Secretary, Department of Justice Member
5) Secretary, Department of Budget and Management Member
The Council shall implement and administer the provisions of this Executive Order. For
this purpose, the Council shall promulgate the necessary rules and regulations to
implement this Executive Order.

VIII. Settlement of Disputes

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Sec. 16. The Civil Service and labor laws and procedures, whenever applicable, shall be
followed in the resolution of complaints, grievances and cases involving government
employees. In case any dispute remains unresolved after exhausting all the available
remedies under existing laws and procedures, the parties may jointly refer the dispute to
the Council, for appropriate action.

Article 245. Ineligibility of managerial employees to join any labor organization;


Right of Supervisory Employees. - Managerial employees are not eligible to join, assist
or form any labor organization. Supervisory employees shall not be eligible for
membership in the collective bargaining unit of the rank-and-file employees but may join,
assist or form separate collective bargaining units and/or legitimate labor organizations of
their own. The rank-and-file union and the supervisors union operating within the same
establishment may join the same federation or national union. (As amended by Section
18, Republic Act No. 6715, March 21, 1989 and Section 8, Republic Act No. 9481 which
lapsed into law on May 25, 2007 and became effective on June 14, 2007).

Article 245-A. Effect of inclusion as members of employees outside the bargaining


unit. - The inclusion as union members of employees outside the bargaining unit shall not
be a ground for the cancellation of the registration of the union. Said employees are
automatically deemed removed from the list of membership of said union. (Introduced as
new provision by Section 9, Republic Act No. 9481 which lapsed into law on May 25, 2007
and became effective on June 14, 2007).

Article 246. Non-abridgment of right to self-organization. It shall be unlawful for any


person to restrain, coerce, discriminate against or unduly interfere with employees and
workers in their exercise of the right to self-organization. Such right shall include the right
to form, join, or assist labor organizations for the purpose of collective bargaining through
representatives of their own choosing and to engage in lawful concerted activities for the
same purpose or for their mutual aid and protection, subject to the provisions of Article
264 of this Code. (As amended by Batas Pambansa Bilang 70, May 1, 1980).

RULE XXI: LABOR-MANAGEMENT AND OTHER COUNCILS


Section 1. Creation of labor-management and other councils. - The Department shall
promote the formation of labor-management councils in organized and unorganized
establishments to enable the workers to participate in policy and decision-making
processes in the establishment, insofar as said processes will directly affect their rights,
benefits and welfare, except those which are covered by collective bargaining agreements
or are traditional areas of bargaining.
The Department shall promote other labor-management cooperation schemes
and, upon its own initiative or upon the request of both parties, may assist in the
formulation and development of programs and projects on productivity, occupational
safety and health, improvement of quality of work life, product quality improvement, and
other similar scheme.
In line with the foregoing, the Department shall render, among others, the
following services:
(a) Conduct awareness campaigns;
(b) Assist the parties in setting up labor-management structures, functions and
procedures;
(c) Provide process facilitators upon request of the parties; and
(d) Monitor the activities of labor-management structures as may be necessary and
conduct studies on best practices aimed at promoting harmonious labor-management
relations.

Section 2. Selection of representatives. - In organized establishments, the workers'


representatives to the council shall be nominated by the exclusive bargaining
representative. In establishments where no legitimate labor organization exists, the
workers representative shall be elected directly by the employees at large.
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Title VI
UNFAIR LABOR PRACTICES
Chapter I
CONCEPT

Article 247. Concept of unfair labor practice and procedure for prosecution thereof.
Unfair labor practices violate the constitutional right of workers and employees to self-
organization, are inimical to the legitimate interests of both labor and management,
including their right to bargain collectively and otherwise deal with each other in an
atmosphere of freedom and mutual respect, disrupt industrial peace and hinder the
promotion of healthy and stable labor-management relations.
Consequently, unfair labor practices are not only violations of the civil rights of
both labor and management but are also criminal offenses against the State which shall
be subject to prosecution and punishment as herein provided.
Subject to the exercise by the President or by the Secretary of Labor and
Employment of the powers vested in them by Articles 263 and 264 of this Code, the civil
aspects of all cases involving unfair labor practices, which may include claims for actual,
moral, exemplary and other forms of damages, attorneys fees and other affirmative relief,
shall be under the jurisdiction of the Labor Arbiters. The Labor Arbiters shall give utmost
priority to the hearing and resolution of all cases involving unfair labor practices. They
shall resolve such cases within thirty (30) calendar days from the time they are submitted
for decision.
Recovery of civil liability in the administrative proceedings shall bar recovery
under the Civil Code.
No criminal prosecution under this Title may be instituted without a final judgment
finding that an unfair labor practice was committed, having been first obtained in the
preceding paragraph. During the pendency of such administrative proceeding, the running
of the period of prescription of the criminal offense herein penalized shall be considered
interrupted: Provided, however, that the final judgment in the administrative proceedings
shall not be binding in the criminal case nor be considered as evidence of guilt but merely
as proof of compliance of the requirements therein set forth. (As amended by Batas
Pambansa Bilang 70, May 1, 1980 and later further amended by Section 19, Republic Act
No. 6715, March 21, 1989).

Chapter II
UNFAIR LABOR PRACTICES OF EMPLOYERS

Article 248. Unfair labor practices of employers. It shall be unlawful for an employer
to commit any of the following unfair labor practice:
(a) To interfere with, restrain or coerce employees in the exercise of their right to self-
organization;
(b) To require as a condition of employment that a person or an employee shall not
join a labor organization or shall with-draw from one to which he belongs;
(c) To contract out services or functions being performed by union members when
such will interfere with, restrain or coerce employees in the exercise of their
rights to self-organization;
(d) To initiate, dominate, assist or otherwise interfere with the formation or
administration of any labor organization, including the giving of financial or other
support to it or its organizers or supporters;
(e) To discriminate in regard to wages, hours of work and other terms and conditions
of employment in order to encourage or discourage membership in any labor
organization. Nothing in this Code or in any other law shall stop the parties from
requiring membership in a recognized collective bargaining agent as a condition
for employment, except those employees who are already members of another
union at the time of the signing of the collective bargaining agreement.
Employees of an appropriate bargaining unit who are not members of the
recognized collective bargaining agent may be assessed a reasonable fee
117
equivalent to the dues and other fees paid by members of the recognized
collective bargaining agent, if such non-union members accept the benefits under
the collective bargaining agreement: Provided, that the individual authorization
required under Article 242, paragraph (o) of this Code shall not apply to the non-
members of the recognized collective bargaining agent;
(f) To dismiss, discharge or otherwise prejudice or discriminate against an employee
for having given or being about to give testimony under this Code;
(g) To violate the duty to bargain collectively as prescribed by this Code;
(h) To pay negotiation or attorneys fees to the union or its officers or agents as part
of the settlement of any issue in collective bargaining or any other dispute; or
(i) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers and
agents of corporations, associations or partnerships who have actually participated in,
authorized or ratified unfair labor practices shall be held criminally liable. (As amended by
Batas Pambansa Bilang 130, August 21, 1981).

Chapter III
UNFAIR LABOR PRACTICES OF LABOR ORGANIZATIONS

Article 249. Unfair labor practices of labor organizations. - It shall be unfair labor
practice for a labor organization, its officers, agents or representatives:
(a) To restrain or coerce employees in the exercise of their right to self-organization.
However, a labor organization shall have the right to prescribe its own rules with
respect to the acquisition or retention of membership;
(b) To cause or attempt to cause an employer to discriminate against an employee,
including discrimination against an employee with respect to whom membership
in such organization has been denied or to terminate an employee on any ground
other than the usual terms and conditions under which membership or
continuation of membership is made available to other members;
(c) To violate the duty, or refuse to bargain collectively with the employer, provided it
is the representative of the employees;
(d) To cause or attempt to cause an employer to pay or deliver or agree to pay or
deliver any money or other things of value, in the nature of an exaction, for
services which are not performed or not to be performed, including the demand
for fee for union negotiations;
(e) To ask for or accept negotiation or attorneys fees from employers as part of the
settlement of any issue in collective bargaining or any other dispute; or
(f) To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding, only the officers,
members of governing boards, representatives or agents or members of labor
associations or organizations who have actually participated in, authorized or ratified
unfair labor practices shall be held criminally liable. (As amended by Batas Pambansa
Bilang 130, August 21, 1981).

Title VII
COLLECTIVE BARGAINING AND
ADMINISTRATION OF AGREEMENTS

Article 250. Procedure in collective bargaining. The following procedures shall be


observed in collective bargaining:
(a) When a party desires to negotiate an agreement, it shall serve a written notice
upon the other party with a statement of its proposals. The other party shall make
a reply thereto not later than ten (10) calendar days from receipt of such notice;
(b) Should differences arise on the basis of such notice and reply, either party may
request for a conference which shall begin not later than ten (10) calendar days
from the date of request.

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(c) If the dispute is not settled, the Board shall intervene upon request of either or
both parties or at its own initiative and immediately call the parties to conciliation
meetings. The Board shall have the power to issue subpoenas requiring the
attendance of the parties to such meetings. It shall be the duty of the parties to
participate fully and promptly in the conciliation meetings the Board may call;
(d) During the conciliation proceedings in the Board, the parties are prohibited from
doing any act which may disrupt or impede the early settlement of the disputes;
and
(e) The Board shall exert all efforts to settle disputes amicably and encourage the
parties to submit their case to a voluntary arbitrator. (As amended by Section 20,
Republic Act No. 6715, March 21, 1989).

[RULE 17]
Section 1. Where to file. - Within thirty (30) days from execution of a collective
bargaining agreement, the parties thereto shall submit two (2) duly signed copies of the
agreement to the Regional Office which issued the certificate of registration/certificate of
creation of chartered local of the labor union-party to the agreement. Where the
certificate of creation of the concerned chartered local was issued by the Bureau, the
agreement shall be filed with the Regional Office which has jurisdiction over the place
where it principally operates.
Multi-employer collective bargaining agreements shall be filed with the Bureau.

Article 251. Duty to bargain collectively in the absence of collective bargaining


agreements. In the absence of an agreement or other voluntary arrangement providing
for a more expeditious manner of collective bargaining, it shall be the duty of employer
and the representatives of the employees to bargain collectively in accordance with the
provisions of this Code.

Article 252. Meaning of duty to bargain collectively. The duty to bargain collectively
means the performance of a mutual obligation to meet and convene promptly and
expeditiously in good faith for the purpose of negotiating an agreement with respect to
wages, hours of work and all other terms and conditions of employment including
proposals for adjusting any grievances or questions arising under such agreement and
executing a contract incorporating such agreements if requested by either party but such
duty does not compel any party to agree to a proposal or to make any concession.

Article 253. Duty to bargain collectively when there exists a collective bargaining
agreement. When there is a collective bargaining agreement, the duty to bargain
collectively shall also mean that neither party shall terminate nor modify such agreement
during its lifetime. However, either party can serve a written notice to terminate or modify
the agreement at least sixty (60) days prior to its expiration date. It shall be the duty of
both parties to keep the status quo and to continue in full force and effect the terms and
conditions of the existing agreement during the 60-day period and/or until a new
agreement is reached by the parties.

Article 253-A. Terms of a collective bargaining agreement. Any Collective


Bargaining Agreement that the parties may enter into shall, insofar as the representation
aspect is concerned, be for a term of five (5) years. No petition questioning the majority
status of the incumbent bargaining agent shall be entertained and no certification election
shall be conducted by the Department of Labor and Employment outside of the sixty-day
period immediately before the date of expiry of such five-year term of the Collective
Bargaining Agreement. All other provisions of the Collective Bargaining Agreement shall
be renegotiated not later than three (3) years after its execution. Any agreement on such
other provisions of the Collective Bargaining Agreement entered into within six (6) months
from the date of expiry of the term of such other provisions as fixed in such Collective
Bargaining Agreement, shall retroact to the day immediately following such date. If any
such agreement is entered into beyond six months, the parties shall agree on the duration

119
of retroactivity thereof. In case of a deadlock in the renegotiation of the Collective
Bargaining Agreement, the parties may exercise their rights under this Code. (As
amended by Section 21, Republic Act No. 6715, March 21, 1989).

Article 254. Injunction prohibited. No temporary or permanent injunction or restraining


order in any case involving or growing out of labor disputes shall be issued by any court or
other entity, except as otherwise provided in Articles 218 and 264 of this Code. (As
amended by Batas Pambansa Bilang 227, June 1, 1982).

Article 255. Exclusive bargaining representation and workers participation in policy


and decision-making. The labor organization designated or selected by the majority of
the employees in an appropriate collective bargaining unit shall be the exclusive
representative of the employees in such unit for the purpose of collective bargaining.
However, an individual employee or group of employees shall have the right at any time to
present grievances to their employer.
Any provision of law to the contrary notwithstanding, workers shall have the right,
subject to such rules and regulations as the Secretary of Labor and Employment may
promulgate, to participate in policy and decision-making processes of the establishment
where they are employed insofar as said processes will directly affect their rights, benefits
and welfare. For this purpose, workers and employers may form labor-management
councils: Provided, That the representatives of the workers in such labor-management
councils shall be elected by at least the majority of all employees in said
establishment. (As amended by Section 22, Republic Act No. 6715, March 21, 1989).

(d) "Bargaining Unit" refers to a group of employees sharing mutual interests within a
given employer unit, comprised of all or less than all of the entire body of employees in
the employer unit or any specific occupational or geographical grouping within such
employer unit.

[RULE 21]

Section 2. Selection of representatives. - In organized establishments, the workers'


representatives to the council shall be nominated by the exclusive bargaining
representative. In establishments where no legitimate labor organization exists, the
workers representative shall be elected directly by the employees at large.

Article 256. Representation Issue in Organized Establishments. - In organized


establishments, when a verified petition questioning the majority status of the incumbent
bargaining agent is filed by any legitimate labor organization including a national union or
federation which has already issued a charter certificate to its local chapter participating in
the certification election or a local chapter which has been issued a charter certificate by
the national union or federation before the Department of Labor and Employment within
the sixty (60)-day period before the expiration of the collective bargaining agreement, the
Med-Arbiter shall automatically order an election by secret ballot when the verified petition
is supported by the written consent of at least twenty-five percent (25%) of all the
employees in the bargaining unit to ascertain the will of the employees in the appropriate
bargaining unit. To have a valid election, at least a majority of all eligible voters in the unit
must have cast their votes. The labor union receiving the majority of the valid votes cast
shall be certified as the exclusive bargaining agent of all the workers in the unit. When an
election which provides for three or more choices results in no choice receiving a majority
of the valid votes cast, a run-off election shall be conducted between the labor unions
receiving the two highest number of votes: Provided, That the total number of votes for all
contending unions is at least fifty percent (50%) of the number of votes cast. In cases
where the petition was filed by a national union or federation, it shall not be required to
disclose the names of the local chapters officers and members.
At the expiration of the freedom period, the employer shall continue to recognize
the majority status of the incumbent bargaining agent where no petition for certification

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election is filed. (As amended by Section 23, Republic Act No. 6715, March 21, 1989 and
Section 10, Republic Act No. 9481 which lapsed into law on May 25, 2007 and became
effective on June 14, 2007).

(ll) "Organized Establishment" refers to an enterprise where there exists a recognized or


certified sole and exclusive bargaining agent.

Section 2. Determination of representation status; modes. - The determination of an


exclusive bargaining agent shall be through voluntary recognition in cases where there is
only one legitimate labor organization operating within the bargaining unit, or through
certification, run-off or consent election as provided in these Rules.

BOOK 5 - RULE 7
VOLUNTARY RECOGNITION

Section 1. When and where to file. - In unorganized establishments with only one
legitimate labor organization, the employer may voluntarily recognize the representation
status of such a union. Within thirty (30) days from such recognition, the employer and
union shall submit a notice of voluntary recognition with the Regional Office which
issued the recognized labor union's certificate of registration or certificate of creation of
a chartered local.

Section 2. Requirements for voluntary recognition. - The notice of voluntary


recognition shall be accompanied by the original copy and two (2) duplicate copies of
the following documents:
(a) a joint statement under oath of voluntary recognition attesting to the fact of
voluntary recognition;
(b) certificate of posting of the ,joint statement of voluntary recognition for fifteen
(15) consecutive days in at least two (2) conspicuous places in the establishment or
bargaining unit where the union seeks to operate;
(c) the approximate number of employees in the bargaining unit, accompanied by
the names of those who support the voluntary recognition comprising at least a majority
of the members of the bargaining unit; and
(d) a statement that the labor union is the only legitimate labor organization
operating within the bargaining unit.
All accompanying documents of the notice for voluntary recognition shall be
certified under oath by the employer representative and president of the recognized
labor union.

Section 3. Action on the Notice. - Where the notice of voluntary recognition is


sufficient in form, number and substance and where there is no other registered labor
union operating within the bargaining unit concerned, the Regional Office, through the
Labor Relations Division shall, within ten (10) days from receipt of the notice, record the
fact of voluntary recognition in its roster of legitimate labor unions and notify the labor
union concerned.
Where the notice of voluntary recognition is insufficient in form, number and
substance, the Regional Office shall, within the same period, notify the labor union of its
findings and advise it to comply with the necessary requirements. Where neither the
employer nor the labor union failed to complete the requirements for voluntary
recognition under Section 2 of this Rule within thirty (30) days from receipt of the
advisory, the Regional Office shall return the notice for voluntary recognition together
with all its accompanying documents without prejudice to its re-submission.

Section 4. Effect of recording of fact of voluntary recognition. - From the time of


recording of voluntary recognition, the recognized labor union shall enjoy the rights,
privileges and obligations of an existing bargaining agent of all the employees in the
bargaining unit.
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Entry of voluntary recognition shall bar the filing of a petition for certification
election by any labor organization for a period of one (1) year from the date of entry of
voluntary recognition. Upon expiration of this one-year period, any legitimate labor
organization may file a petition for certification election in the same bargaining unit
represented by the voluntarily recognized union, unless a collective bargaining
agreement between the employer and voluntarily recognized labor union was executed
and registered with the Regional Office in accordance with Rule XVII of these Rul es.

Section 2. Where to file. - A petition for certification election shall be filed with the
Regional Office which issued the petitioning union's certificate of registration/certificate
of creation of chartered local.
The petition shall be heard and resolved by the Med-Arbiter.
Where two or more petitions involving the same bargaining unit are filed in one
Regional Office, the same shall be automatically consolidated with the Med-Arbiter who
first acquired jurisdiction. Where the petitions are filed in different Regional Offices, the
Regional Office in which the petition was first filed shall exclude all others; in which
case, the latter shall indorse the petition to the former for consolidation.

[RULE 8]
Section 3. When to file. - A petition for certification election may be filed anytime,
except:
(a) when a fact of voluntary recognition has been entered or a valid certification,
consent or run-off election has been conducted within the bargaining unit within one (1)
year prior to the filing of the petition for certification election. Where an appeal has been
filed from the order of the Med-Arbiter certifying the results of the election, the running
of the one year period shall be suspended until the decision on the appeal has become
final and executory;
(b) when the duly certified union has commenced and sustained negotiations in
good faith with the employer in accordance with Article 250 of' the Labor Code within
the one year period referred to in the immediately preceding paragraph;
c) when a bargaining deadlock to which an incumbent or certified bargaining agent is
a party had been submitted to conciliation or arbitration or had become the subject
old valid notice of strike or lockout;
d) when a collective bargaining agreement between the employer and a duly
recognized or certified bargaining agent has been registered in accordance with Article
231 of the Labor Code. Where such collective bargaining agreement is registered. the
petition may be tiled only within sixty (60) days prior to its expiry.

Section 25. Effects of early agreements. - The representation case shall not be
adversely affected by a collective bargaining agreement registered before or during the
last sixty (60) days of a subsisting agreement or during the pendency of the
representation case. (renumbered pursuant to D.O. 40-F-03, 30 October 2008)

Section 14. Denial of the petition; Grounds. - The Mediator-Arbiter may dismiss the
petition on any of the following grounds:
(a) the petitioning union or national union/federation is not listed in the
Department's registry of legitimate labor unions or that its registration certificate has
been cancelled with finality in accordance with Rule XIV of these Rules:
(b) failure of a local/chapter or national union/federation to submit a duly issued
charter certificate upon filing of the petition for certification election;
(c) filing the petition before or after the freedom period of a duly registered
collective bargaining agreement; provided that the sixty-day period based on the original
collective bargaining agreement shall not be affected by any amendment, extension or
renewal of the collective bargaining agreement;
(d) filing of a petition within one (1) year from the date of recording of the voluntary
recognition, or within the same period from a valid certification, consent or run-off
election where no appeal on the results of the certification, consent or run-off election is

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pending;
(e) where a duly certified union has commenced and sustained negotiations with
the employer in accordance with Article 250 of the Labor Code within the one-year
period referred to in Section 14.d of this Rule, or where there exists a bargaining
deadlock which has been submitted to conciliation or arbitration or has become the
subject of a valid notice of strike or lockout where an incumbent or certified bargaining
agent is a p a n ;
(f) in an organized establishment. the failure to submit the twenty-five percent
(25%) signature requirement to support the filing of the petition for certification election;
(g) non-appearance of the petitioner for two (2) consecutive scheduled
conferences before the Mediator-Arbiter despite due notice; and
(h) absence of employer-employee relationship between all the members of the
petitioning union and the establishment where the proposed bargaining unit is sought to
be represented. (as amended by D.O. 40-F-03.30 October 2008)

Section 15. Prohibited ground for the denial/suspension of the petition. - The
inclusion as union members of employees outside the bargaining unit shall not be a
ground for the cancellation of the registration of the union. Said employees are
automatically deemed removed from the list of membership of said unions. (as
amended by D.O. 40-F-03, 30 October 2008)

Section 10. Consent Election; Agreement. - The contending unions may agree to the
holding of an election, in which case it shall be called a consent election. The Mediator-
Arbiter shall forthwith call for the consent election, reflecting the parties' agreement and
the call in the minutes of the conference.
The Mediator-Arbiter shall, immediately forward the records of the petition to
the Regional Director or his/her authorized representative for the determination of the
Election Officer who shall be chosen by raffle in the presence of representatives of the
contending unions if they so desire.
The first pre-election conference shall be scheduled within ten (10) days from
the date of the consent election agreement. Subsequent conferences may he called to
expedite and facilitate the holding of the consent election.
To afford an individual employee-voter an informed choice where a
local/chapter is the petitioning union, the local/chapter shall secure its certificate of
creation at least five working days before the date of the consent election. (as amended
by D.O. 40-F-03, 30 October 2008)

Section 24. Effects of consent election. - Where a petition for certification election
had been filed, and upon the intercession of the Med-Arbiter, the parties agree to hold a
consent election, the results thereof shall constitute a bar to the holding of a certification
election for one ( 1 ) year from the holding of such consent election. Where an appeal
has been filed from the results of the consent election, the running of the one -year
period shall be suspended until the decision on appeal has become final and execut ory.
Where no petition for certification election was filed but the parties themselves agreed to
hold a consent election with the intercession of the Regional Office, the results thereof
shall constitute a bar to another petition for certification election. (renumbered
pursuant to D.O. 40-F-03. 30 October 20118)

RULE X
RUN-OFF ELECTIONS

Section 1. When proper. - When an election which provides for three (3) or more
choices results in none of the contending unions receiving a majority of the valid votes
cast, and there are no objections or challenges which if sustained can materially alter the
results, the Election Officer shall motu propio conduct a run-off election within ten (10)
days from the close of the election proceedings between the labor unions receiving the

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two highest number of votes; provided, that the total number of votes for all contending
unions is at least fifty (50%) percent of the number of votes cast.
"No Union" shall not be a choice in the run-off election. Notice of run-off elections
shall be posted by the Election Officer at least five (5) days before the actual date of run-
off election.

Section 2. Qualification of voters. - The same voters' list used in the certification
election shall be used in the run-off election. The ballots in the run-off election shall
provide as choices the unions receiving the highest and second highest number of the
votes cast. The labor union receiving the greater number of valid votes cast shall be
certified as the winner, subject to Section 20, Rule IX.

Section 5. Qualification of voters; inclusion-exclusion. - All employees who are


members of the appropriate bargaining unit sought to be represented by the petitioner at
the time of the issuance of the order granting the conduct of a certification election shall
be eligible to vote. An employee who has been dismissed from work but has contested the
legality of the dismissal in a forum of appropriate jurisdiction at the time of the issuance of
the order for the conduct of a certification election shall be considered a qualified voter,
unless his/her dismissal was declared valid in a final judgment at the time of the conduct
of the certification election.
In case of disagreement over the voters' list or over the eligibility of voters, all
contested voters shall be allowed to vote. But their votes shall be segregated and sealed
in individual envelopes in accordance with Sections 10 and 11 of this Rule.

Section 10. Procedure in the challenge of votes. - The ballot of the voter who has been
properly challenged during the pre-election conferences, shall be placed in an envelope
which shall be sealed by the Election Officer in the presence of the voter and the
representatives of the contending unions. The Election Officer shall indicate on the
envelope the voter's name, the union challenging the voter, and the ground for the
challenge. The sealed envelope shall then be signed by the Election Officer and the
representatives of the contending unions. The Election Officer shall note all challenges in
the minutes of the election proceedings and shall have custody of all envelopes containing
the challenged votes. The envelopes shall be opened and the question of eligibility shall
be passed upon by the Mediator-Arbiter only if the number of segregated votes will
materially alter the results of the election. (renumbered and amended by D.O. 40-F-03,
30 October 2008)

Section 16. Failure of election. - Where the number of votes cast in a certification or
consent election is less than the majority of the number of eligible voters and there are no
material challenged votes, the Election Officer shall declare a failure of election in the
minutes of the election proceedings. (renumbered pursuant to U.O. 40-F-03, 30
October 2008)

Section 17. Effect of failure of election. - A failure of election shall not bar the tiling of a
motion for the immediate holding of another certification or consent election within six (6)
months from date of declaration of failure of election. (renumbered pursuant to D.O. 40-
F-03, 30 October 2008)

(ii) "Med-Arbiter" refers to an officer in the Regional Office or in the Bureau authorized
to hear and decide representation cases, inter/intra-union disputes and other
related labor relations disputes, except cancellation of union registration cases.

Article 257. Petitions in Unorganized Establishments. - In any establishment where


there is no certified bargaining agent, a certification election shall automatically be
conducted by the Med-Arbiter upon the filing of a petition by any legitimate labor
organization, including a national union or federation which has already issued a charter
certificate to its local/chapter participating in the certification election or a local/chapter

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which has been issued a charter certificate by the national union or federation. In cases
where the petition was filed by a national union or federation, it shall not be required to
disclose the names of the local chapters officers and members. (As amended by Section
24, Republic Act No. 6715, March 21, 1989 and Section 11, Republic Act No. 9481 which
lapsed into law on May 25, 2007 and became effective on June 14, 2007).

Article 258. When an employer may file petition. When requested to bargain
collectively, an employer may petition the Bureau for an election. If there is no existing
certified collective bargaining agreement in the unit, the Bureau shall, after hearing, order
a certification election.
All certification cases shall be decided within twenty (20) working days.
The Bureau shall conduct a certification election within twenty (20) days in
accordance with the rules and regulations prescribed by the Secretary of Labor.

Article 258-A. Employer as Bystander. - In all cases, whether the petition for
certification election is filed by an employer or a legitimate labor organization, the
employer shall not be considered a party thereto with a concomitant right to oppose a
petition for certification election. The employers participation in such proceedings shall be
limited to:
(1) being notified or informed of petitions of such nature; and
(2) submitting the list of employees during the pre-election conference should the
Med-Arbiter act favorably on the petition. (As amended by Section 12, Republic Act
No. 9481 which lapsed into law on May 25, 2007 and became effective on June 14,
2007).

Article 259. Appeal from certification election orders. Any party to an election may
appeal the order or results of the election as determined by the Med-Arbiter directly to the
Secretary of Labor and Employment on the ground that the rules and regulations or parts
thereof established by the Secretary of Labor and Employment for the conduct of the
election have been violated. Such appeal shall be decided within fifteen (15) calendar
days. (As amended by Section 25, Republic Act No. 6715, March 21, 1989).

Section 18. Appeal. - The order granting the conduct of a certification election in an
unorganized establishment shall not be subject to appeal. Any issue arising therefrom
may be raised by means of protest on the conduct and results of the certification
election.
The order granting the conduct of a certification election in an organized
establishment and the decision dismissing or denying the petition, whether in an
organized or unorganized establishment, may be appealed to the Office of the
Secretary within ten (10) days from receipt thereof
The appeal shall be verified under oath and shall consist of a memorandum of
appeal, specifically stating the grounds relied upon by the appellant with the supporting
arguments and evidence. (renumbered pursuant to D.O. 40-F-03, 30 October 2008)

Section 19. Where to file appeal. - The memorandum of appeal shall be filed in the
Regional Office where the petition originated, copy furnished the contending unions
and the employer, as the case may be. Within twenty-four (24) hours from receipt of the
appeal, the Regional Director shall cause the transmittal thereof together with the entire
records of the case to the Office of the Secretary. (renumbered pursuant to D.O. 40-
F-03.30 October 2008)

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Title VII-A
GRIEVANCE MACHINERY
AND VOLUNTARY ARBITRATION

(u) "Grievance" refers to any question by either the employer or the union regarding the
interpretation or implementation of any provision of the collective bargaining
agreement or interpretation or enforcement of company personnel policies.

Article. 260. Grievance machinery and voluntary arbitration. - The parties to a


Collective Bargaining Agreement shall include therein provisions that will ensure the
mutual observance of its terms and conditions. They shall establish a machinery for the
adjustment and resolution of grievances arising from the interpretation or implementation
of their Collective Bargaining Agreement and those arising from the interpretation or
enforcement of company personnel policies.
All grievances submitted to the grievance machinery which are not settled within
seven (7) calendar days from the date of its submission shall automatically be referred to
voluntary arbitration prescribed in the Collective Bargaining Agreement.
For this purpose, parties to a Collective Bargaining Agreement shall name and
designate in advance a Voluntary Arbitrator or panel of Voluntary Arbitrators, or include in
the agreement a procedure for the selection of such Voluntary Arbitrator or panel of
Voluntary Arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly
accredited by the Board. In case the parties fail to select a Voluntary Arbitrator or panel of
Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of
Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed
upon in the Collective Bargaining Agreement, which shall act with the same force and
effect as if the Arbitrator or panel of Arbitrators has been selected by the parties as
described above.

Section 2. Procedure in handling grievances. - In the absence of a specific provision in


the collective bargaining agreement or existing company practice prescribing for the
procedures in handling grievance, the following shall apply:
(a) An employee shall present this grievance or complaint orally or in writing to
the shop steward. Upon receipt thereof, the shop steward shall verify the facts
and determine whether or not the grievance is valid.
(b) If the grievance is valid, the shop steward shall immediately bring the
complaint to the employee's immediate supervisor. The shop steward, the
employee and his immediate supervisor shall exert efforts to settle the
grievance at their level.
(c) If no settlement is reached, the grievance shall be referred to the grievance
committee which shall have ten (10) days to decide the case.
Where the issue involves or arises from the interpretation or implementation of a
provision in the collective bargaining agreement, or from any order, memorandum, circular
or assignment issued by the appropriate authority in the establishment, and such issue
cannot be resolved at the level of the shop steward or the supervisor, the same may be
referred immediately to the grievance committee.

Article. 261. Jurisdiction of Voluntary Arbitrators or panel of Voluntary Arbitrators. -


The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have original and exclusive
jurisdiction to hear and decide all unresolved grievances arising from the interpretation or
implementation of the Collective Bargaining Agreement and those arising from the
interpretation or enforcement of company personnel policies referred to in the immediately
preceding article. Accordingly, violations of a Collective Bargaining Agreement, except
those which are gross in character, shall no longer be treated as unfair labor practice and
shall be resolved as grievances under the Collective Bargaining Agreement. For purposes
of this article, gross violations of Collective Bargaining Agreement shall mean flagrant
and/or malicious refusal to comply with the economic provisions of such agreement.

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The Commission, its Regional Offices and the Regional Directors of the
Department of Labor and Employment shall not entertain disputes, grievances or matters
under the exclusive and original jurisdiction of the Voluntary Arbitrator or panel of
Voluntary Arbitrators and shall immediately dispose and refer the same to the Grievance
Machinery or Voluntary Arbitration provided in the Collective Bargaining Agreement.

RULE 43: APPEALS FROM THE COURT OF TAX APPEALS AND QUASI-JUDICIAL
AGENCIES TO THE COURT OF APPEALS

SECTION 1. Scope.This Rule shall apply to appeals from judgments or final orders of
the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or
authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions.
Among these agencies are the Civil Service Commission, Central Board of Assessment
Appeals, Securities and Exchange Commission, Office of the President, Land Registration
Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents,
Trademarks and Technology Transfer, National Electrification Administration, Energy
Regulatory Board, National Telecommunications Commission, Department of Agrarian
Reform under Republic Act No. 6657, Government Service Insurance System, Employees
Compensation Commission, Agricultural Inventions Board, Insurance Commission,
Philippine Atomic Energy Commission, Board of Investments, Construction Industry
Arbitration Commission, and voluntary arbitrators authorized by law

SEC. 2. Cases not covered.This Rule shall not apply to judgments or final orders issued
under the Labor Code of the Philippines.

Article. 262. Jurisdiction over other labor disputes. - The Voluntary Arbitrator or panel
of Voluntary Arbitrators, upon agreement of the parties, shall also hear and decide all
other labor disputes including unfair labor practices and bargaining deadlocks.

Article. 262-A. Procedures. - The Voluntary Arbitrator or panel of Voluntary Arbitrators


shall have the power to hold hearings, receive evidences and take whatever action is
necessary to resolve the issue or issues subject of the dispute, including efforts to effect a
voluntary settlement between parties.
All parties to the dispute shall be entitled to attend the arbitration proceedings.
The attendance of any third party or the exclusion of any witness from the proceedings
shall be determined by the Voluntary Arbitrator or panel of Voluntary Arbitrators. Hearing
may be adjourned for cause or upon agreement by the parties.
Unless the parties agree otherwise, it shall be mandatory for the Voluntary
Arbitrator or panel of Voluntary Arbitrators to render an award or decision within twenty
(20) calendar days from the date of submission of the dispute to voluntary arbitration.
The award or decision of the Voluntary Arbitrator or panel of Voluntary Arbitrators
shall contain the facts and the law on which it is based. It shall be final and executory after
ten (10) calendar days from receipt of the copy of the award or decision by the parties.
Upon motion of any interested party, the Voluntary Arbitrator or panel of
Voluntary Arbitrators or the Labor Arbiter in the region where the movant resides, in case
of the absence or incapacity of the Voluntary Arbitrator or panel of Voluntary Arbitrators,
for any reason, may issue a writ of execution requiring either the sheriff of the Commission
or regular courts or any public official whom the parties may designate in the submission
agreement to execute the final decision, order or award.

Article. 262-B. Cost of voluntary arbitration and Voluntary Arbitrators fee. - The
parties to a Collective Bargaining Agreement shall provide therein a proportionate sharing
scheme on the cost of voluntary arbitration including the Voluntary Arbitrators fee. The
fixing of fee of Voluntary Arbitrators, whether shouldered wholly by the parties or
subsidized by the Special Voluntary Arbitration Fund, shall take into account the following
factors:
(a) Nature of the case;

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(b) Time consumed in hearing the case;
(c) Professional standing of the Voluntary Arbitrator;
(d) Capacity to pay of the parties; and
(e) Fees provided for in the Revised Rules of Court.

Title VIII
STRIKES AND LOCKOUTS
AND FOREIGN INVOLVEMENT
IN TRADE UNION ACTIVITIES

Chapter I
STRIKES AND LOCKOUTS

Section 6. Who may declare a strike or lockout. - Any certified or duly recognized
bargaining representative may declare a strike in cases of bargaining deadlocks and
unfair labor practices. The employer may declare a lockout in the same cases. In the
absence of a certified or duly recognized bargaining representative, any legitimate labor
organization in the establishment may declare a strike but only on grounds of unfair labor
practices.

Article. 263. Strikes, picketing and lockouts.


(a) It is the policy of the State to encourage free trade unionism and free collective
bargaining.
(b) Workers shall have the right to engage in concerted activities for purposes of collective
bargaining or for their mutual benefit and protection. The right of
legitimate labor organizations to strike and picket and of employers to lockout,
consistent with the national interest, shall continue to be recognized and respected.
However, no labor union may strike and no employer may declare a lockout on
grounds involving inter-union and intra-union disputes.

Section 5. Grounds for strike or lockout. - A strike or lockout may be declared in cases
of bargaining deadlocks and unfair labor practices. Violations of collective bargaining
agreements, except flagrant and/or malicious refusal to comply with its economic
provisions, shall not be considered unfair labor practice and shall not be strikeable. No
strike or lockout may be declared on grounds involving inter-union and intra-union
disputes or without first having filed a notice or lockout or without the necessary strike or
lockout vote having been obtained and repotted to the Board. Neither will a strike be
declared after assumption of jurisdiction by the Secretary or after certification or
submission of the dispute to compulsory or voluntary arbitration or during the pendency of
cases involving the same grounds for the strike or lockout. (as amended D.O. 40-A)

(c) In case of bargaining deadlocks, the duly certified or recognized bargaining agent may
file a notice of strike or the employer may file a notice of lockout with the Ministry at
least 30 day before the intended date thereof. In cases of unfair labor practice, the
period of notice shall be 15 days and in the absence of a duly certified or recognized
bargaining agent, the notice of strike may be filed by any legitimate labor organization
in behalf of its members. However, in case of dismissal from employment of union
officers duly elected in accordance with the union constitution and by-laws, which
may constitute union busting, where the existence of the union is threatened, the 15-
day cooling-off period shall not apply and the union may take action immediately. (As
amended by Executive Order No. 111, December 24, 1986).

Section 7. Notice of strike or lockout. - In bargaining deadlocks, a notice of strike or


lockout shall be filed with the regional branch of the Board at least thirty (30) days before
the intended date thereof, a copy of said notice having been served on the other party
concerned. In cases of unfair labor practice, the period of notice shall be fifteen (15) days.
However, in case of unfair labor practice involving the dismissal from employment of any
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union officer duly elected in accordance with the union constitution and by-laws which may
constitute union-busting where the existence of the union is threatened, the fifteen-day
cooling-off period shall not apply and the union may take action immediately after the
strike vote is conducted and the results thereof submitted to the appropriate regional
branch of the Board.

(d) The notice must be in accordance with such implementing rules and regulations as the
Minister of Labor and Employment may promulgate.
(e) During the cooling-off period, it shall be the duty of the Ministry to exert all efforts at
mediation and conciliation to effect a voluntary settlement. Should the dispute remain
unsettled until the lapse of the requisite number of days from the mandatory filing of
the notice, the labor union may strike or the employer may declare a lockout.

Section 9. Action on Notice. - Upon receipt of the notice, the regional branch of the
Board shall exert all efforts at mediation and conciliation to enable the parries to settle the
dispute amicably. The regional branch of the Board may, upon agreement of the parties,
treat a notice as a preventive mediation case. It shall also encourage the parties to submit
the dispute to voluntary arbitration.
During the proceedings, the parties shall not do any act which may disrupt or
impede the early settlement of the dispute. They are obliged, as part of their duty to
bargain collectively in good faith and to participate fully and promptly in the conciliation
meetings called by the regional branch of the Board.
A notice, upon agreement of the parties, may be referred to alternative modes of
dispute resolution, including voluntary arbitration.

(f) A decision to declare a strike must be approved by a majority of the total union
membership in the bargaining unit concerned, obtained by secret ballot in meetings or
referenda called for that purpose. A decision to declare a lockout must be approved
by a majority of the board of directors of the corporation or association or of the
partners in a partnership, obtained by secret ballot in a meeting called for that
purpose. The decision shall be valid for the duration of the dispute based on
substantially the same grounds considered when the strike or lockout vote was taken.
The Ministry may, at its own initiative or upon the request of any affected party,
supervise the conduct of the secret balloting. In every case, the union or the employer
shall furnish the Ministry the results of the voting at least seven days before the
intended strike or lockout, subject to the cooling-off period herein provided. (As
amended by Batas Pambansa Bilang 130, August 21, 1981 and further amended by
Executive Order No. 111, December 24, 1986).

Section 10. Strike or lockout vote. - A decision to declare a strike must be approved by
a majority of the total union membership in the bargaining unit concerned obtained by
secret ballot in meetings or referenda called for the purpose. A decision to declare a
lockout must be approved by a majority of the Board of Directors of the employer,
corporation or association or the partners in a partnership obtained by a secret ballot in a
g
meetin called for the purpose.

The regional branch of the Board may, at its own initiative or upon request of any
affected party, supervise the conduct of the secret balloting. In every case, the union or
the employer shall furnish the regional branch of the Board and the notice of meetings
referred to in the preceding paragraph at least twenty-four (24) hours before such
meetings as well as the results of the voting at least seven (7) clays before the intended
strike or lockout, subject to the cooling-off period provided in this Rule.

(g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or
lockout in an industry indispensable to the national interest, the Secretary
of Labor and Employment may assume jurisdiction over the dispute and decide it or
certify the same to the Commission for compulsory arbitration. Such assumption or
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certification shall have the effect of automatically enjoining the intended or impending
strike or lockout as specified in the assumption or certification order. If one has
already taken place at the time of assumption or certification, all striking or locked out
employees shall immediately return-to-work and the employer shall immediately
resume operations and readmit all workers under the same terms and conditions
prevailing before the strike or lockout. The Secretary of Labor and Employment or the
Commission may seek the assistance of law enforcement agencies to ensure
compliance with this provision as well as with such orders as he may issue to enforce
the same.
In line with the national concern for and the highest respect accorded to the right
of patients to life and health, strikes and lockouts in hospitals, clinics and similar
medical institutions shall, to every extent possible, be avoided, and all serious efforts,
not only by labor and management but government as well, be exhausted to
substantially minimize, if not prevent, their adverse effects on such life and health,
through the exercise, however legitimate, by labor of its right to strike and by
management to lockout. In labor disputes adversely affecting the continued operation
of such hospitals, clinics or medical institutions, it shall be the duty of the striking
union or locking-out employer to provide and maintain an effective skeletal workforce
of medical and other health personnel, whose movement and services shall be
unhampered and unrestricted, as are necessary to insure the proper and adequate
protection of the life and health of its patients, most especially emergency cases, for
the duration of the strike or lockout. In such cases, therefore, the Secretary
of Labor and Employment may immediately assume, within twenty four (24) hours
from knowledge of the occurrence of such a strike or lockout, jurisdiction over the
same or certify it to the Commission for compulsory arbitration. For this purpose, the
contending parties are strictly enjoined to comply with such orders, prohibitions and/or
injunctions as are issued by the Secretary of Labor and Employment or the
Commission, under pain of immediate disciplinary action, including dismissal or loss
of employment status or payment by the locking-out employer of backwages,
damages and other affirmative relief, even criminal prosecution against either or both
of them.
The foregoing notwithstanding, the President of the Philippines shall not be
precluded from determining the industries that, in his opinion, are indispensable to the
national interest, and from intervening at any time and assuming jurisdiction over any
such labor dispute in order to settle or terminate the same.

Section 15. Assumption by the Secretary of Labor and Employment. when a labor
dispute causes or likely to cause a strike or lockout in an industry indispensable to the
national interest, the Secretary of Labor and employment may assume jurisdiction over
the dispute and decide it or certify the same to the NLRC for compulsory arbitration,
provided, that any of the following conditions is present:
1. Both parties have requested the Secretary of labor and Employment to assume
jurisdiction over the labor dispute; or
2. After a conference called by the office of the Secretary of Labor and Employment
on the propriety of its issuance, motu proprio or upon a request or petition by either parties
to the labor dispute
Such assumption shall have the effect of automatically enjoining an impending
strike or lockout. If a strike/lockout has already taken place, all striking or locked out
employees and other employees subject of the notice of strike shall immediately return to
work and the employer shall immediately resume operations and readmit all employees
under the same terms and conditions prevailing before the strike or lockout.
Notwithstanding the foregoing, parties to the case may agree at any time to
submit the dispute to the Secretary of Labor and Employment or his duly authorized
representative as voluntary arbitrator or to a duly accredited voluntary arbitrator or to a
panel of voluntary arbitrators. (As amended by D0 40-G s2010)

130
Section 16. Requirement for Minimum Operational Service. In labor disputes
adversely affecting continued operation of hospitals, clinics or medical institutions, it shall
be the duty of the striking union or locking0out employer to provide and maintain an
effective skeletal workforce of medical and other health personnel, whose movement and
services shall be unhampered and unrestricted, as are necessary to ensure the proper
and adequate protection of the life and health of its patients, most especially emergency
cases, for the duration of the strike or lockout. (As amended by D0 40-G s2010)

Section 17. Decision on the Assumed Labor Dispute; Finality. The decision of the
Secretary of Labor and Employment, the NLRC, or Voluntary Arbitrator or panel of
Voluntary Arbitrators shall be rendered within thirty (30) calendar days from submission of
the case for resolution and shall be final and executor ten (10) calendar days after receipt
thereof by the parties. (As amended by D0 40-G s2010)

Section 18. Prohibitions on Law Enforcement Agencies or Public


Officials/Employees, Armed Persons, Private Security Guards and Similar
Personnel in the Private Security Agency; Exception. No public official or employee,
including officers and personnel of the Armed Forces of the Philippines or the Philippine
National Police, or armed person, private security guards and similar personnel in the
private security agency shall bring in, introduce or escort in any manner, any individual
who seeks to replace strikers in entering or leaving the premises of a strike area, or work
in place of the strikers.
The police force shall keep out of the picket lines unless actual violence or other
criminal acts occur therein.
But any public officer, the Secretary of Labor and employment or the NLRC may
seek the assistance of law enforcement agencies to maintain peace and order, protect life
and property, and/or enforce the law and legal order pursuant to the provisions of the joint
DOLE-DILG-PEZA guidelines in the conduct of PNP personnel, Economic Zone Police
and security guards, company security guards and similar personnel during labor
disputes. (As amended by D0 40-G s2010)

(h) Before or at any stage of the compulsory arbitration process, the parties may opt to
submit their dispute to voluntary arbitration.
(i) The Secretary of Labor and Employment, the Commission or the voluntary arbitrator
shall decide or resolve the dispute, as the case may be. The decision of the
President, the Secretary of Labor and Employment, the Commission or the voluntary
arbitrator shall be final and executory ten (10) calendar days after receipt thereof by
the parties. (As amended by Section 27, Republic Act No. 6715, March 21, 1989).

Section 14. Injunctions. - No court or entity shall enjoin any picketing, strike or lockout,
4
except as provided in Articles 218 and 263 of the Labor Code.

4
Art. 218. Powers of the Commission. The Commission shall have the power and authority:

XXX
(e) To enjoin or restrain any actual or threatened commission of any or all prohibited or unlawful acts or to require
the performance of a particular act in any labor dispute which, if not restrained or performed forthwith, may cause
grave or irreparable damage to any party or render ineffectual any decision in favor of such party: Provided, That no
temporary or permanent injunction in any case involving or growing out of a labor dispute as defined in this Code
shall be issued except after hearing the testimony of witnesses, with opportunity for cross-examination, in support of
the allegations of a complaint made under oath, and testimony in opposition thereto, if offered, and only after a
finding of fact by the Commission, to the effect:
1. That prohibited or unlawful acts have been threatened and will be committed and will be continued
unless restrained, but no injunction or temporary restraining order shall be issued on account of any
threat, prohibited or unlawful act, except against the person or persons, association or organization
making the threat or committing the prohibited or unlawful act or actually authorizing or ratifying the
same after actual knowledge thereof;
2. That substantial and irreparable injury to complainants property will follow;
3. That as to each item of relief to be granted, greater injury will be inflicted upon complainant by the denial
of relief than will be inflicted upon defendants by the granting of relief;
4. That complainant has no adequate remedy at law; and
5. That the public officers charged with the duty to protect complainants property are unable or unwilling to
furnish adequate protection.
XXX
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The Commission shall have the power to issue temporary restraining orders in
such cases but only after due notice and hearing and in accordance with its rules. The
reception of evidence for the application of a writ of injunction may be delegated by the
Commission to any Labor Arbiter who shall submit his recommendations to the
Commission for its consideration and resolution.
Any ex parte restraining order issued by the Commission, or its chairman or
Vice-Chairman where the Commission is not in session and as prescribed by its rules,
shall be valid for a period not exceeding twenty (20) days.

Article. 264. Prohibited activities.


(a) No labor organization or employer shall declare a strike or lockout without first having
bargained collectively in accordance with Title VII of this Book or without first having
filed the notice required in the preceding Article or without the necessary strike or
lockout vote first having been obtained and reported to the Ministry.
No strike or lockout shall be declared after assumption of jurisdiction by the
President or the Minister or after certification or submission of the dispute to
compulsory or voluntary arbitration or during the pendency of cases involving the
same grounds for the strike or lockout.
Any worker whose employment has been terminated as a consequence of any
unlawful lockout shall be entitled to reinstatement with full backwages. Any union
officer who knowingly participates in an illegal strike and any worker or union officer
who knowingly participates in the commission of illegal acts during a strike may be
declared to have lost his employment status: Provided, That mere participation of a
worker in a lawful strike shall not constitute sufficient ground for termination of his
employment, even if a replacement had been hired by the employer during such
lawful strike.
(b) No person shall obstruct, impede, or interfere with, by force, violence, coercion, threats
or intimidation, any peaceful picketing by employees during any labor controversy or
in the exercise of the right to self-organization or collective bargaining, or shall aid or
abet such obstruction or interference.
(c) No employer shall use or employ any strike-breaker, nor shall any person be employed
as a strike-breaker.
(d) No public official or employee, including officers and personnel of the New Armed
Forces of the Philippines or the Integrated National Police, or armed person, shall
bring in, introduce or escort in any manner, any individual who seeks to replace
strikers in entering or leaving the premises of a strike area, or work in place of the
strikers. The police force shall keep out of the picket lines unless actual violence or
other criminal acts occur therein: Provided, That nothing herein shall be interpreted to
prevent any public officer from taking any measure necessary to maintain peace and
order, protect life and property, and/or enforce the law and legal order. (As amended
by Executive Order No. 111, December 24, 1986).
(e) No person engaged in picketing shall commit any act of violence, coercion or
intimidation or obstruct the free ingress to or egress from the employers premises for
lawful purposes, or obstruct public thoroughfares. (As amended by
Batas Pambansa Bilang227, June 1, 1982).

Section 13. Peaceful picketing. - Workers shall have the right to peaceful picketing. No
person engaged in picketing shall commit any act of violence, coercion or intimidation
or obstruct the free ingress to or egress front the employer's premises for lawful
purposes, or obstruct public thoroughfares.

No person shall obstruct, impede or interfere with, by force, violence, coercion,


threats or intimidation, any peaceful picketing by workers during any labor controversy or
in the exercise of the right to self-organization or collective bargaining or shall aid or abet
such obstruction or interference. No employer shall use or employ any person to commit
such acts nor shall any person be employed for such purpose.

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Article. 265. Improved offer balloting. - In an effort to settle a strike, the Department
of Labor and Employment shall conduct a referendum by secret ballot on the improved
offer of the employer on or before the 30th day of the strike. When at least a majority of
the union members vote to accept the improved offer the striking workers shall
immediately return to work and the employer shall thereupon readmit them upon the
signing of the agreement.
In case of a lockout, the Department of Labor and Employment shall also
conduct a referendum by secret balloting on the reduced offer of the union on or before
the 30th day of the lockout. When at least a majority of the board of directors or trustees
or the partners holding the controlling interest in the case of a partnership vote to accept
the reduced offer, the workers shall immediately return to work and the employer shall
thereupon readmit them upon the signing of the agreement. (Incorporated by Section 28,
Republic Act No. 6715, March 21, 1989).

Article. 266. Requirement for arrest and detention. - Except on grounds of national
security and public peace or in case of commission of a crime, no union members or union
organizers may be arrested or detained for union activities without previous consultations
with the Secretary of Labor.

Chapter II
ASSISTANCE TO
LABOR ORGANIZATIONS

Article. 267. Assistance by the Department of Labor. - The Department of Labor, at the
initiative of the Secretary of Labor, shall extend special assistance to the organization, for
purposes of collective bargaining, of the most underprivileged workers who, for reasons of
occupation, organizational structure or insufficient incomes, are not normally covered by
major labor organizations or federations.

Article. 268. Assistance by the Institute of Labor and Manpower Studies. - The
Institute of Labor and Manpower Studies shall render technical and other forms of
assistance to labor organizations and employer organizations in the field of labor
education, especially pertaining to collective bargaining, arbitration, labor standards and
the Labor Code of the Philippines in general.

Chapter III
FOREIGN ACTIVITIES

Article. 269. Prohibition against aliens; exceptions. - All aliens, natural or juridical, as
well as foreign organizations are strictly prohibited from engaging directly or indirectly in all
forms of trade union activities without prejudice to normal contacts between
Philippine labor unions and recognized international labor centers: Provided, however,
That aliens working in the country with valid permits issued by the Department of Labor
and Employment, may exercise the right to self-organization and join or
assist labor organizations of their own choosing for purposes of collective bargaining:
Provided, further, That said aliens are nationals of a country which grants the same or
similar rights to Filipino workers. (As amended by Section 29, Republic Act No. 6715,
March 21, 1989).

Article. 270. Regulation of foreign assistance.


(a) No foreign individual, organization or entity may give any donations, grants or other
forms of assistance, in cash or in kind, directly or indirectly, to any labor organization,
group of workers or any auxiliary thereof, such as cooperatives, credit unions and
institutions engaged in research, education or communication, in relation to trade
union activities, without prior permission by the Secretary of Labor.
"Trade union activities" shall mean:
(1) organization, formation and administration of labor organization;
(2) negotiation and administration of collective bargaining agreements;
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(3) all forms of concerted union action;
(4) organizing, managing, or assisting union conventions, meetings, rallies,
referenda, teach-ins, seminars, conferences and institutes;
(5) any form of participation or involvement in representation proceedings,
representation elections, consent elections, union elections; and
(6) other activities or actions analogous to the foregoing.
(b) This prohibition shall equally apply to foreign donations, grants or other forms of
assistance, in cash or in kind, given directly or indirectly to any employer or
employers organization to support any activity or activities affecting trade unions.
(c) The Secretary of Labor shall promulgate rules and regulations to regulate and control
the giving and receiving of such donations, grants, or other forms of assistance,
including the mandatory reporting of the amounts of the donations or grants, the
specific recipients thereof, the projects or activities proposed to be supported, and
their duration.

Article. 271. Applicability to farm tenants and rural workers. - The provisions of this
Title pertaining to foreign organizations and activities shall be deemed applicable likewise
to all organizations of farm tenants, rural workers, and the like: Provided, That in
appropriate cases, the Secretary of Agrarian Reform shall exercise the powers and
responsibilities vested by this Title in the Secretary of Labor.

Chapter IV
PENALTIES FOR VIOLATION

Article. 272. Penalties.


(a) Any person violating any of the provisions of Article 264 of this Code shall be punished
by a fine of not less than one thousand pesos (P1,000.00) nor more than ten
thousand pesos (P10,000.00) and/or imprisonment for not less than three months nor
more than three (3) years, or both such fine and imprisonment, at the discretion of the
court. Prosecution under this provision shall preclude prosecution for the same act
under the Revised Penal Code, and vice versa.
(b) Upon the recommendation of the Minister of Labor and Employment and the Minister
of National Defense, foreigners who violate the provisions of this Title shall be subject
to immediate and summary deportation by the Commission on Immigration and
Deportation and shall be permanently barred from re-entering the country without the
special permission of the President of the Philippines. (As amended by Section 16,
Batas Pambansa Bilang 130 and Section 7, Batas Pambansa Bilang 227).

Section 19. Criminal prosecution. - The regular courts shall have jurisdiction over any
criminal action under Article 272 of the Labor Code, as amended, but subject to the
required clearance from the DOLE on cases arising out of or related to a labor dispute
pursuant to the Ministry of Justice (Now Department of Justice) Circular No. 15, series of
1982, and circular No. 9, series of 1986. (As renumbered and amended by D0 40-G-03
s2010)

Title IX
SPECIAL PROVISIONS

Article. 273. Study of labor-management relations. - The Secretary of Labor shall have
the power and it shall be his duty to inquire into:
(a) the existing relations between employers and employees in the Philippines;
(b) the growth of associations of employees and the effect of such associations upon
employer-employee relations;
(c) the extent and results of the methods of collective bargaining in the determination
of terms and conditions of employment;
(d) the methods which have been tried by employers and associations of employees
for maintaining mutually satisfactory relations;

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(e) desirable industrial practices which have been developed through collective
bargaining and other voluntary arrangements;
(f) the possible ways of increasing the usefulness and efficiency of collective
bargaining for settling differences;
(g) the possibilities for the adoption of practical and effective methods of labor-
management cooperation;
(h) any other aspects of employer-employee relations concerning the promotion of
harmony and understanding between the parties; and
(i) the relevance of labor laws and labor relations to national development.
The Secretary of Labor shall also inquire into the causes of industrial unrest and
take all the necessary steps within his power as may be prescribed by law to alleviate the
same, and shall from time to time recommend the enactment of such remedial legislation
as in his judgment may be desirable for the maintenance and promotion of industrial
peace.

Article. 274. Visitorial power. - The Secretary of Labor and Employment or his duly
authorized representative is hereby empowered to inquire into the financial activities of
legitimate labor organizations upon the filing of a complaint under oath and duly supported
by the written consent of at least twenty percent (20%) of the total membership of
the labor organization concerned and to examine their books of accounts and other
records to determine compliance or non-compliance with the law and to prosecute any
violations of the law and the union constitution and by-laws: Provided, That such inquiry or
examination shall not be conducted during the sixty (60)-day freedom period nor within the
thirty (30) days immediately preceding the date of election of union officials. (As amended
by Section 31, Republic Act No. 6715, March 21, 1989).

Article. 275. Tripartism and tripartite conferences.


(a) Tripartism in labor relations is hereby declared a State policy. Towards this end,
workers and employers shall, as far as practicable, be represented in decision and
policy-making bodies of the government.
(b) The Secretary of Labor and Employment or his duly authorized representatives may,
from time to time, call a national, regional, or industrial tripartite conference of
representatives of government, workers and employers for the consideration and
adoption of voluntary codes of principles designed to promote industrial peace based
on social justice or to align labor movement relations with established priorities in
economic and social development. In calling such conference, the Secretary
of Labor and Employment may consult with accredited representatives of workers and
employers. (As amended by Section 32, Republic Act No. 6715, March 21, 1989).

Article. 276. Government employees. - The terms and conditions of employment of all
government employees, including employees of government-owned and controlled
corporations, shall be governed by the Civil Service Law, rules and regulations. Their
salaries shall be standardized by the National Assembly as provided for in the New
Constitution. However, there shall be no reduction of existing wages, benefits and other
terms and conditions of employment being enjoyed by them at the time of the adoption of
this Code.

Article. 277. Miscellaneous provisions.


(a) All unions are authorized to collect reasonable membership fees, union dues,
assessments and fines and other contributions for labor education and research,
mutual death and hospitalization benefits, welfare fund, strike fund and credit and
cooperative undertakings. (As amended by Section 33, Republic Act No. 6715, March
21, 1989).
(b) Subject to the constitutional right of workers to security of tenure and their right to be
protected against dismissal except for a just and authorized cause and without
prejudice to the requirement of notice under Article 283 of this Code, the employer
shall furnish the worker whose employment is sought to be terminated a written notice
containing a statement of the causes for termination and shall afford the latter ample
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opportunity to be heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules and regulations
promulgated pursuant to guidelines set by the Department of Labor and Employment.
Any decision taken by the employer shall be without prejudice to the right of the
worker to contest the validity or legality of his dismissal by filing a complaint with the
regional branch of the National Labor Relations Commission. The burden of proving
that the termination was for a valid or authorized cause shall rest on the employer.
The Secretary of the Department of Labor and Employment may suspend the effects
of the termination pending resolution of the dispute in the event of a prima facie
finding by the appropriate official of the Department of Labor and Employment before
whom such dispute is pending that the termination may cause a serious labor dispute
or is in implementation of a mass lay-off. (As amended by Section 33, Republic Act
No. 6715, March 21, 1989).
(c) Any employee, whether employed for a definite period or not, shall, beginning on his
first day of service, be considered as an employee for purposes of membership in
any labor union. (As amended by Section 33, Republic Act No. 6715).
(d) No docket fee shall be assessed in labor standards disputes. In all other disputes,
docket fees may be assessed against the filing party, provided that in bargaining
deadlock, such fees shall be shared equally by the negotiating parties.
(e) The Minister of Labor and Employment and the Minister of the Budget shall cause to
be created or reclassified in accordance with law such positions as may be necessary
to carry out the objectives of this Code and cause the upgrading of the salaries of the
personnel involved in the Labor Relations System of the Ministry. Funds needed for
this purpose shall be provided out of the Special Activities Fund appropriated by
Batas Pambansa Blg. 80 and from annual appropriations thereafter. (Incorporated by
Batas Pambansa Bilang 130, August 21, 1981).
(f) A special Voluntary Arbitration Fund is hereby established in the Board to subsidize the
cost of voluntary arbitration in cases involving the interpretation and implementation
of the Collective Bargaining Agreement, including the Arbitrators fees, and for such
other related purposes to promote and develop voluntary arbitration. The Board shall
administer the Special Voluntary Arbitration Fund in accordance with the guidelines it
may adopt upon the recommendation of the Council, which guidelines shall be
subject to the approval of the Secretary of Labor and Employment. Continuing funds
needed for this purpose in the initial yearly amount of fifteen million pesos
(P15,000,000.00) shall be provided in the 1989 annual general appropriations acts.
The amount of subsidy in appropriate cases shall be determined by the Board in
accordance with established guidelines issued by it upon the recommendation of the
Council.
The Fund shall also be utilized for the operation of the Council, the training and
education of Voluntary Arbitrators, and the Voluntary Arbitration Program. (As
amended by Section 33, Republic Act No. 6715, March 21, 1989).
(g) The Ministry shall help promote and gradually develop, with the agreement
of labor organizations and employers, labor-management cooperation programs at
appropriate levels of the enterprise based on the shared responsibility and mutual
respect in order to ensure industrial peace and improvement in productivity, working
conditions and the quality of working life. (Incorporated by
Batas Pambansa Bilang 130, August 21, 1981).
(h) In establishments where no legitimate labor organization exists, labor-management
committees may be formed voluntarily by workers and employers for the purpose of
promoting industrial peace. The Department of Labor and Employment
shall endeavor to enlighten and educate the workers and employers on their rights
and responsibilities through labor education with emphasis on the policy thrusts of
this Code. (As amended by Section 33, Republic Act No. 6715, March 21, 1989).
(i) To ensure speedy labor justice, the periods provided in this Code within which
decisions or resolutions of labor relations cases or matters should be rendered shall
be mandatory. For this purpose, a case or matter shall be deemed submitted for
decision or resolution upon the filing of the last pleading or memorandum required by

136
the rules of the Commission or by the Commission itself, or the Labor Arbiter, or the
Director of the Bureau of Labor Relations or Med-Arbiter, or the Regional Director.
Upon expiration of the corresponding period, a certification stating why a decision
or resolution has not been rendered within the said period shall be issued forthwith by the
Chairman of the Commission, the Executive Labor Arbiter, or the Director of the Bureau
of Labor Relations or Med-Arbiter, or the Regional Director, as the case may be, and a
copy thereof served upon the parties.
Despite the expiration of the applicable mandatory period, the aforesaid officials
shall, without prejudice to any liability which may have been incurred as a consequence
thereof, see to it that the case or matter shall be decided or resolved without any further
delay. (Incorporated by Section 33, Republic Act No. 6715, March 21, 1989).

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BOOK SIX
POST EMPLOYMENT

Title I
TERMINATION OF EMPLOYMENT

ART. 278. Coverage. - The provisions of this Title shall apply to all establishments or
undertakings, whether for profit or not.

ART. 279. Security of tenure. - In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by this
Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent computed from the time
his compensation was withheld from him up to the time of his actual reinstatement. (As
amended by Section 34, Republic Act No. 6715, March 21, 1989).

Section 2. Security of Tenure.


(a) In cases of regular employment, the employer shall not terminate the services
of an employee except for just or authorized causes as provided by law, subject to the
requirements of due process.
(b) The foregoing shall also apply in cases of probationary employment;
Provided, however, that in such cases, termination of employment due to failure of the
employee to qualify in accordance with the standards of the employer made known to the
former at the time of engagement may also be a ground for termination of employment.
(c) In cases of employment covered by contracting or subcontracting
arrangements, no employee shall be dismissed prior to the expiration of the contract
between the principal and contractor or subcontractor as defined in Rule III-A, Book III of
these Rules, unless the dismissal is for just or authorized cause, or is brought about by
the completion of the phase of the contract for which the employee was engaged but, in
any case, subject to the requirements of due process or prior notice.
(d) In all cases of termination of employment, the following standards of due process shall
be substantially observed:
For termination of employment based on just causes as defined in Article 282 of
the Labor Code:
(i) A written notice served on the employee specifying the ground or grounds for
termination, and giving said employee reasonable opportunity within which to explain his
side.
(ii) A hearing or conference during which the employee is concerned, with the
assistance of counsel, if he so desires, is given opportunity to respond to the charge,
present his evidence, or rebut the evidence presented against him.
(iii) A written notice of termination served on the employee, indicating that upon due
consideration of all circumstances, grounds have been established to justify his
termination.
For termination of employment as defined in Article 283 of the Labor Code, the
requirement of due process shall be deemed complied with upon service of a written
notice to the employee and the appropriate Regional Office of the DOLE at least 30 days
before effectivity of the termination, specifying the ground or grounds for termination.
If the termination is brought about by the completion of a contract or phase
thereof, or by failure of the employee to meet the standards of the employer in the case of
probationary employment, it shall be sufficient that a written notice is served the employee
within a reasonable time from the effective date of termination. (As amended by DO-10,
s1997)

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ART. 280. Regular and casual employment. - The provisions of written agreement to
the contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be performed is seasonal in
nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee
with respect to the activity in which he is employed and his employment shall continue
while such activity exists.

Section 5. (a) Regular employment. The provisions of written agreements to the


contrary notwithstanding and regardless of the oral agreements of the parties,
employment shall be deemed regular for purposes of Book VI of the Labor Code where
employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment
has been fixed for a specific project or undertaking, the completion or termination of which
has been determined at the time of the engagement of the employee or where the job,
work or service to be performed is seasonal in nature and the employment is for the
duration of the season.
(b) Casual employment. There is casual employment where an employee is
engaged to perform a job, work or service which is merely incidental to the business of the
employer, and such job, work or service is for a definite period made known to the
employee at the time of engagement: Provided, that any employee who has rendered at
least one year of service, whether such service is continuous or not, shall be considered a
regular employee with respect to the activity in which he is employed and his employment
shall continue while such activity exists.
Notwithstanding the foregoing distinctions, every employee shall be entitled to
the rights and privileges, and shall be subject to the duties and obligations, as may be
granted by law to regular employees during the period of their actual employment. (As
amended by DO-10, s1997)

ART. 281. Probationary employment. - Probationary employment shall not exceed six
(6) months from the date the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The services of an employee who
has been engaged on a probationary basis may be terminated for a just cause or when he
fails to qualify as a regular employee in accordance with reasonable standards made
known by the employer to the employee at the time of his engagement. An employee who
is allowed to work after a probationary period shall be considered a regular employee.

Section 6. Probationary employment. There is probationary employment where the


employee, upon his engagement, is made to undergo a trial period during which the
employer determines his fitness to qualify for regular employment based on reasonable
standards made known to him at the time of engagement.
Probationary employment shall be governed by the following rules:
(a) Where the work for which the employee has been engaged is learnable or
apprenticeable in accordance with the standards prescribed by the Department of
Labor and Employment, the period of probationary employment shall be limited to the
authorized learnership or apprenticeship period, which is applicable.
(b) Where the work is neither learnable nor apprenticeable, the period of probationary
employment shall not exceed six months reckoned from the date the employee
actually started working.

139
(c) The services of an employee who has been engaged on probationary basis may be
terminated only for a just or authorized cause, when he fails to qualify as a regular
employee in accordance with reasonable standards prescribed by the employer.
(d) In all cases of probationary employment, the employer shall make known to the
employee the standards under which he will qualify as a regular employee at the time of
his engagement. Where no standards are made known to the employee at that time, he
shall be deemed a regular employee. (As amended by DO-10, s1997)

ART. 282. Termination by employer. - An employer may terminate an employment for


any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of
his employer or representative in connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his
employer or duly authorized representative;
(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representatives; and
(e) Other causes analogous to the foregoing.

Section 7. Termination of employment by employer. The just causes for terminating


the services of an employee shall be those provided in Article 282 of the Code. The
separation from work of an employee for a just cause does not entitle him to the
termination pay provided in the Code, without prejudice, however, to whatever rights,
benefits and privileges he may have under the applicable individual or collective
bargaining agreement with the employer or voluntary employer policy or practice.

NOTE: Other just causes


1. Abandonment of employment Elements:
The Court held that for abandonment to exist, it is essential:
(a) that the employee must have failed to report for work or must have been
absent without valid or justifiable reason; and
(b) that there must have been a clear intention to sever the employer-employee
relationship manifested by some overt acts. (E.G. & I. Construction
Corporation and Edsel Galeos v. Ananias P. Sato, et al., 2011)

2. Termination of employment pursuant to a union security clause


Elements:
In terminating the employment of an employee by enforcing the union security clause, the
employer needs only to determine and prove that:
(1) the union security clause is applicable;
(2) the union is requesting for the enforcement of the union security provision in
the CBA; and
(3) there is sufficient evidence to support the unions decision to expel the
employee from the union. (Alabang Country Club vs NLRC, 2008)

ART. 283. Closure of establishment and reduction of personnel.- The employer may
also terminate the employment of any employee due to the installation of labor-saving
devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the workers and
the Ministry of Labor and Employment at least one (1) month before the intended date
thereof. In case of termination due to the installation of labor-saving devices or
redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to
at least his one (1) month pay or to at least one (1) month pay for every year of service,
whichever is higher. In case of retrenchment to prevent losses and in cases of closures or

140
cessation of operations of establishment or undertaking not due to serious business
losses or financial reverses, the separation pay shall be equivalent to one (1) month pay
or at least one-half (1/2) month pay for every year of service, whichever is higher. A
fraction of at least six (6) months shall be considered one (1) whole year.

SECTION 12. Suspension of relationship. The employer-employee relationship shall


be deemed suspended in case of suspension of operation of the business or undertaking
of the employer for a period not exceeding six (6) months, unless the suspension is for the
purpose of defeating the rights of the employees under the Code, and in case of
mandatory fulfillment by the employee of a military or civic duty. The payment of wages of
the employee as well as the grant of other benefits and privileges while he is on a military
or civic duty shall be subject to special laws and decrees and to the applicable individual
or collective bargaining agreement and voluntary employer practice or policy.

ART. 284. Disease as ground for termination. - An employer may terminate the
services of an employee who has been found to be suffering from any disease and whose
continued employment is prohibited by law or is prejudicial to his health as well as to the
health of his co-employees: Provided, That he is paid separation pay equivalent to at least
one (1) month salary or to one-half (1/2) month salary for every year of service, whichever
is greater, a fraction of at least six (6) months being considered as one (1) whole year.

Section 8. Disease as a ground for dismissal. Where the employee suffers from a
disease and his continued employment is prohibited by law or prejudicial to his health or
the health of his co-employees, the employer shall not terminate his employment unless
there is a certification by a competent public health authority that the disease is of such a
nature or at such a stage that it cannot be cured within a period of six (6) months even
with proper medical treatment. If the disease or ailments can be cured within the period,
the employer shall not terminate the employee but shall ask the employee to take a leave.
The employer shall reinstate such employee to his former position immediately upon the
restoration of his normal health.

ART. 285. Termination by employee.


(a) An employee may terminate without just cause the employee-employer
relationship by serving a written notice on the employer at least one (1) month in
advance. The employer upon whom no such notice was served may hold the
employee liable for damages.
(b) An employee may put an end to the relationship without serving any notice on the
employer for any of the following just causes:
1. Serious insult by the employer or his representative on the honor and person
of the employee;
2. Inhuman and unbearable treatment accorded the employee by the employer or
his representative;
3. Commission of a crime or offense by the employer or his representative
against the person of the employee or any of the immediate members of his
family; and
4. Other causes analogous to any of the foregoing.

NOTE: Requisites of valid Quitclaims


In certain cases, however, the Court has given effect to quitclaims executed by employees
if the employer is able to prove the following requisites, to wit:
(1) the employee executes a deed of quitclaim voluntarily;
(2) there is no fraud or deceit on the part of any of the parties;
(3) the consideration of the quitclaim is credible and reasonable; and
(4) the contract is not contrary to law, public order, public policy, morals or good
customs, or prejudicial to a third person with a right recognized by law.
(Ponente: Villarama; GMC v. Ativo, 2010)

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ART. 286. When employment not deemed terminated. The bona-fide suspension of
the operation of a business or undertaking for a period not exceeding six (6) months, or
the fulfillment by the employee of a military or civic duty shall not terminate employment.
In all such cases, the employer shall reinstate the employee to his former position without
loss of seniority rights if he indicates his desire to resume his work not later than one (1)
month from the resumption of operations of his employer or from his relief from the military
or civic duty.

SECTION 9. Termination pay.


(a) An employee shall be entitled to termination pay equivalent to at least one
month's salary for every year of service a fraction of at least six (6) months being
considered as one whole year, in case of termination of his employment due to the
installation of labor-saving devices or redundancy.
(b) Where the termination of employment is due to retrenchment to prevent
losses and in case of closure or cessation of operations of establishment or undertaking
not due to serious business losses or financial reverses, or where the employment is
prohibited by law or is prejudicial to his health or to the health of his co-employees, the
employee shall be entitled to termination pay equivalent to at least one-half month's pay
for every year of service, a fraction of at least six months being considered as one whole
year.
(c) The termination pay provided in the Section shall in no case be less than the
employee's one month pay.

SECTION 10. Basis of termination pay. The computation of the termination pay of an
employee as provided herein shall be based on his latest salary rate, unless the same
was reduced by the employer to defeat the intention of the Code, in which case the basis
of computation shall be the rate before its deduction.

Section 3. Reinstatement. An employee who is unjustly dismissed from work shall be


entitled to reinstatement without loss of seniority rights and to backwages.

Section 4. Reinstatement to former position. (a) An employee who is separated from


work without just cause shall be reinstated to his former position, unless such position no
longer exists at the time of his reinstatement, in which case he shall be given a
substantially equivalent position in the same establishment without loss of seniority rights.
(b) In case the establishment where the employee is to be reinstated has closed or
ceased operations or where his former position no longer exists at the time the
reinstatement for reasons not attributable to the fault of the employer, the employee shall
be entitled to separation pay equivalent at least one month salary or to one month salary
for every year of service, whichever is higher, a fraction of at least six months being
considered as one whole year.

Title II
RETIREMENT FROM THE SERVICE

[Labor Advisory on Retirement Pay Law]


A. COVERAGE
RA 7641 or the Retirement Pay Law shall apply to all employees in the private sector,
regardless of their position, designation or status and irrespective of the method by which
their wages are paid. They shall include part-time employees, employees of service and
other job contractors and domestic helpers or persons in the personal service of another.
The law does not cover employees of retail, service and agricultural
establishments or operations employing not more than ten (10) employees or workers and
employees of the National Government and its political subdivisions, including

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Government-owned and/or controlled corporations, if they are covered by the Civil Service
law and its regulations.

ART. 287. Retirement. Any employee may be retired upon reaching the retirement age
established in the collective bargaining agreement or other applicable employment
contract.
In case of retirement, the employee shall be entitled to receive such retirement
benefits as he may have earned under existing laws and any collective bargaining
agreement and other agreements: Provided, however, That an employee's retirement
benefits under any collective bargaining and other agreements shall not be less than
those provided herein.
In the absence of a retirement plan or agreement providing for retirement
benefits of employees in the establishment, an employee upon reaching the age of sixty
(60) years or more, but not beyond sixty-five (65) years which is hereby declared the
compulsory retirement age, who has served at least five (5) years in the said
establishment, may retire and shall be entitled to retirement pay equivalent to at least one-
half (1/2) month salary for every year of service, a fraction of at least six (6) months being
considered as one whole year.
Unless the parties provide for broader inclusions, the term one-half (1/2) month
salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the
cash equivalent of not more than five (5) days of service incentive leaves.
An underground mining employee upon reaching the age of fifty (50) years or
more, but not beyond sixty (60) years which is hereby declared the compulsory retirement
age for underground mine workers, who has served at least five (5) years as underground
mine worker, may retire and shall be entitled to all the retirement benefits provided for in
this Article.(added by RA 8558)
Retail, service and agricultural establishments or operations employing not more
than ten (10) employees or workers are exempted from the coverage of this provision.
Violation of this provision is hereby declared unlawful and subject to the penal
provisions provided under Article 288 of this Code.
Nothing in this Article shall deprive any employee of benefits to which he may be
entitled under existing laws or company policies or practices. (Amended by RA 7641 and
further amended by RA 8558)

[IRR: BOOK 6 RULE 2]


SECTION 5. Retirement Benefits.
5.1 In the absence of an applicable agreement or retirement plan, an employee who
retires pursuant to the Act shall be entitled to retirement pay equivalent to at least one-half
() month salary for every year of service, a fraction of at least six (6) months being
considered as one whole year.

5.2 Components of One-half () Month Salary. For the purpose of determining the
minimum retirement pay due an employee under this Rule, the term one-half month
salary shall include all of the following:
(a) Fifteen (15) days salary of the employee based on his latest salary rate. As
used herein, the term salary includes all remunerations paid by an employer
to his employees for services rendered during normal working days and
hours, whether such payments are fixed or ascertained on a time, task, piece
of commission basis, or other method of calculating the same, and includes
the fair and reasonable value, as determined by the Secretary of Labor and
Employment, of food, lodging or other facilities customarily furnished by the
employer to his employees. The term does not include cost of living
allowances, profit-sharing payments and other monetary benefits which are
not considered as part of or integrated into the regular salary of the
employees.
(b) The cash equivalent of not more than five (5) days of service incentive leave;
(c) One-twelfth of the 13th month pay due the employee.

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(d) All other benefits that the employer and employee may agree upon that
should be included in the computation of the employees retirement pay.

5.3 One-half month salary of employees who are paid by results. For covered
workers who are paid by results and do not have a fixed monthly rate, the basis for
determination of the salary for fifteen days shall be their average daily salary (ADS),
subject to the provisions of Rule VII-A, Book III of the Rules Implementing the Labor Code
on the payment of wages of workers who are paid by results. The ADS is the average
salary for the last twelve (12) months reckoned from the date of their retirement, divided
by the number of actual working days in that particular period.

Retirement under CBA/contract.


3.1 Any employee may retire or be retired by his employer upon reaching the
retirement age established in the collective bargaining agreement or other applicable
employment contract or retirement plan subject to the provisions of Section 5 hereof on
the payment of retirement benefits.
3.2 In case of retirement under this Section, the employee shall be entitled to
receive such retirement benefits as he may have earned under existing laws and any
collective bargaining agreement and other agreements; provided, however, that an
employees retirement benefits under any collective bargaining and other agreements
shall not be less than those provided under this Rule, and provided further that if such
benefits are less, the employer shall pay the difference between the amount due the
employee under this Rule and that provided under the collective or individual agreement
or retirement plan.
3.3 Where both the employer and the employee contribute to a retirement fund in
accordance with an individual or collective agreement or other applicable employment
contract, the employers total contribution thereto shall not be less than the total retirement
benefits to which the employee would have been entitled had there been no such
retirement fund. In case the employers contribution is less than the retirement benefits
provided under this Rule, the employer shall pay the deficiency.

Optional; Compulsory Retirement.


4.1 Optional Retirement. In the absence of a retirement plan or other
applicable agreement providing for retirement benefits of employees in an establishment,
an employee may retire upon reaching the age of sixty (60) years or more if he has served
for at least five (5) years in said establishment.
4.2 Compulsory Retirement. Where there is no such plan or agreement
referred to in the immediately preceding sub-section, an employee shall be retired upon
reaching the age of sixty-five (65) years.
4.3 Upon retirement of an employee, whether optional or compulsory, his
services may be continued or extended on a case to case basis upon agreement of the
employer and employee.
4.4 Service Requirement. The minimum length of service in an establishment
or with an employer of at least five (5) years required for entitlement to retirement pay
shall include authorized absences and vacations, regular holidays and mandatory
fulfillment of a military or civic duty.

[RA 8282: SSS Act]


SEC. 12-B. Retirement Benefits.
(a) A member who has paid at least one hundred twenty (120) monthly
contributions prior to the semester of retirement and who: (1) has reached the age of sixty
(60) years and is already separated from employment or has ceased to be self-employed;
or (2) has reached the age of sixty-five (65) years, shall be entitled for as long as he lives
to the monthly pension: Provided, That he shall have the option to receive his first
eighteen (18) monthly pensions in lump sum discounted at a preferential rate of interest to
be determined by the SSS.

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(b) A covered member who is sixty (60) years old at retirement and who does not
qualify for pension benefits under paragraph (a) above, shall be entitled to a lump sum
benefit equal to the total contributions paid by him and on his behalf: Provided, That he is
separated from employment and is not continuing payment of contributions to the SSS on
his own.
(c) The monthly pension shall be suspended upon the reemployment or
resumption of self-employment of a retired member who is less than sixty-five (65) years
old. He shall again be subject to Section Eighteen and his employer to Section Nineteen
of this Act.
(d) Upon the death of the retired member, his primary beneficiaries as of the date
of his retirement shall be entitled to receive the monthly pension: Provided, That if he has
no primary beneficiaries and he dies within sixty (60) months from the start of his monthly
pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to
the total monthly pensions corresponding to the balance of the five-year guaranteed
period, excluding the dependents pension.
(e) The monthly pension of a member who retires after reaching age sixty (60)
shall be the higher of either: (1) the monthly pension computed at the earliest time he
could have retired had he been separated from employment or ceased to be self-
employed plus all adjustments thereto; or (2) the monthly pension computed at the time
when he actually retires.

[RA 8291: GSIS Act]


"RETIREMENT BENEFITS

SEC. 13. Retirement Benefits.


(a) Retirement benefits shall be:
(1) the lump sum payment as defined in this Act payable at the time of
retirement plus an old-age pension benefit equal to the basic monthly
pension payable monthly for life, starting upon expiration of the five-
year (5) guaranteed period covered by the lump sum; or
(2) cash payment equivalent to eighteen (18) months of his basic
monthly pension plus monthly pension for life payable immediately
with no five-year (5) guarantee.
(b) Unless the service is extended by appropriate authorities, retirement shall be
compulsory for an employee of sixty-five (65) years of age with at least fifteen
(15) years of service: Provided, That if he has less than fifteen (15) years of
service, he may be allowed to continue in the service in accordance with
existing civil service rules and regulations.

SEC. 13-A. Conditions for Entitlement. - A member who retires from the service shall be
entitled to the retirement benefits enumerated in paragraph (a) of Section 13
hereof: Provided, That:
(1) he has rendered at least fifteen years of service;
(2) he is at least sixty (60) years of age at the time of retirement; and
(3) he is not receiving a monthly pension benefit from permanent total disability.

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BOOK SEVEN
TRANSITORY AND FINAL PROVISIONS

Title I
PENAL PROVISIONS AND LIABILITIES

ART. 288. Penalties. - Except as otherwise provided in this Code, or unless the acts
complained of hinge on a question of interpretation or implementation of ambiguous
provisions of an existing collective bargaining agreement, any violation of the provisions of
this Code declared to be unlawful or penal in nature shall be punished with a fine of not
less than One Thousand Pesos (P1,000.00) nor more than Ten Thousand Pesos
(P10,000.00) or imprisonment of not less than three months nor more than three years, or
both such fine and imprisonment at the discretion of the court.
In addition to such penalty, any alien found guilty shall be summarily deported
upon completion of service of sentence.
Any provision of law to the contrary notwithstanding, any criminal offense
punished in this Code, shall be under the concurrent jurisdiction of the Municipal or City
Courts and the Courts of First Instance. (As amended by Section 3,
Batas Pambansa Bilang 70).

ART. 289. Who are liable when committed by other than natural person. - If the
offense is committed by a corporation, trust, firm, partnership, association or any other
entity, the penalty shall be imposed upon the guilty officer or officers of such corporation,
trust, firm, partnership, association or entity.

Title II
PRESCRIPTION OF OFFENSES AND CLAIMS

ART. 290. Offenses. - Offenses penalized under this Code and the rules and regulations
issued pursuant thereto shall prescribe in three (3) years.
All unfair labor practice arising from Book V shall be filed with the appropriate
agency within one (1) year from accrual of such unfair labor practice; otherwise, they shall
be forever barred.

ART. 291. Money claims. - All money claims arising from employer-employee relations
accruing during the effectivity of this Code shall be filed within three (3) years from the
time the cause of action accrued; otherwise they shall be forever barred.
All money claims accruing prior to the effectivity of this Code shall be filed with
the appropriate entities established under this Code within one (1) year from the date
of effectivity, and shall be processed or determined in accordance with the implementing
rules and regulations of the Code; otherwise, they shall be forever barred.
Workmens compensation claims accruing prior to the effectivity of this Code and
during the period from November 1, 1974 up to December 31, 1974, shall be filed with the
appropriate regional offices of the Department of Labor not later than March 31, 1975;
otherwise, they shall forever be barred. The claims shall be processed and adjudicated in
accordance with the law and rules at the time their causes of action accrued.

ART. 292. Institution of money claims. - Money claims specified in the immediately
preceding Article shall be filed before the appropriate entity independently of the criminal
action that may be instituted in the proper courts.
Pending the final determination of the merits of money claims filed with the
appropriate entity, no civil action arising from the same cause of action shall be filed with
any court. This provision shall not apply to employees compensation case which shall be
processed and determined strictly in accordance with the pertinent provisions of this
Code.

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Title III
TRANSITORY AND FINAL PROVISIONS

ART. 293. Application of law enacted prior to this Code. - All actions or claims
accruing prior to the effectivity of this Code shall be determined in accordance with the
laws in force at the time of their accrual.

ART. 294. Secretary of Labor to initiate integration of maternity leave benefits. -


Within six (6) months after this Code takes effect, the Secretary of Labor shall initiate such
measures as may be necessary for the integration of maternity leave benefits into the
Social Security System, in the case of private employment, and the Government Service
Insurance System, in the case of public employment.

ART. 295. Funding of the Overseas Employment Development Board and the
National Seamens Board - The Overseas Employment Development Board and the
National Seamen Board referred to in Articles 17 and 20, respectively, of this Code shall
initially be funded out of the unprogrammed fund of the Department of Labor and the
National Manpower and Youth Council.

ART. 296. Termination of the workmens compensation program. - The Bureau of


Workmens Compensation, Workmens Compensation Commission, and Workmens
Compensation Units in the regional offices of the Department of Labor shall continue to
exercise the functions and the respective jurisdictions over workmens compensation
cases vested upon them by Act No. 3428, as amended, otherwise known as the
Workmens Compensation Act until March 31, 1976. Likewise, the term of office of
incumbent members of the Workmens Compensation Commission, including its
Chairman and any commissioner deemed retired as of December 31, 1975, as well as the
present employees and officials of the Bureau of Workmens Compensation, Workmens
Compensation Commission and the Workmens Compensation Units shall continue up to
that date. Thereafter, said offices shall be considered abolished and all officials and
personnel thereof shall be transferred to and mandatorily absorbed by the Department
of Labor, subject to Presidential Decree No. 6, Letters of Instructions Nos. 14 and 14-A
and the Civil Service Law and rules.
Such amount as may be necessary to cover the operational expenses of the
Bureau of Workmens Compensation and the Workmens Compensation Units, including
the salaries of incumbent personnel for the period up to March 31, 1976 shall be
appropriated from the unprogrammed funds of the Department of Labor.

ART. 297. Continuation of insurance policies and indemnity bonds. - All workmens
compensation insurance policies and indemnity bonds for self-insured employers existing
upon the effectivity of this Code shall remain in force and effect until the expiration dates
of such policies or the lapse of the period of such bonds, as the case may be, but in no
case beyond December 31, 1974. Claims may be filed against the insurance carriers
and/or self-insured employers for causes of action which accrued during the existence of
said policies or authority to self-insure.

ART. 298. Abolition of the Court of Industrial Relations and the


National Labor Relations Commission. - The Court of Industrial Relations and the
National Labor Relations Commission established under Presidential Decree No. 21 are
hereby abolished. All unexpended funds, properties, equipment and records of the Court
of Industrial Relations, and such of its personnel as may be necessary, are hereby
transferred to the Commission and to its regional branches. All unexpended funds,
properties and equipment of the National Labor Relations Commission established under
Presidential Decree No. 21 are transferred to the Bureau of Labor Relations. Personnel
not absorbed by or transferred to the Commission shall enjoy benefits granted under
existing laws.

147
ART. 299. Disposition of pending cases. - All cases pending before the Court of
Industrial Relations and the National Labor Relations Commission established under
Presidential Decree No. 21 on the date of effectivity of this Code shall be transferred to
and processed by the corresponding labor relations divisions or the
National Labor Relations Commission created under this Code having cognizance of the
same in accordance with the procedure laid down herein and its implementing rules and
regulations. Cases on labor relations on appeal with the Secretary of Labor or the Office of
the President of the Philippines as of the date of effectivity of this Code shall remain under
their respective jurisdictions and shall be decided in accordance with the rules and
regulations in force at the time of appeal.
All workmens compensation cases pending before the Workmens
Compensation Units in the regional offices of the Department of Labor and those pending
before the Workmens Compensation Commission as of March 31, 1975, shall be
processed and adjudicated in accordance with the law, rules and procedure existing prior
to the effectivity of the Employees Compensation and State Insurance Fund.

ART. 300. Personnel whose services are terminated. - Personnel of agencies or any of
their subordinate units whose services are terminated as a result of the implementation of
this Code shall enjoy the rights and protection provided in Sections 5 and 6 of Republic
Act numbered fifty-four hundred and thirty five and such other pertinent laws, rules and
regulations. In any case, no lay-off shall be effected until funds to cover the gratuity and/or
retirement benefits of those laid off are duly certified as available.

ART. 301. Separability provisions. - If any provision or part of this Code, or the
application thereof to any person or circumstance, is held invalid, the remainder of this
code, or the application of such provision or part to other persons or circumstances, shall
not be affected thereby.

ART. 302. Repealing clause. - All labor laws not adopted as part of this Code either
directly or by reference are hereby repealed. All provisions of existing laws, orders,
decrees, rules and regulations inconsistent herewith are likewise repealed.
Done in the City of Manila, this 1st day of May in the year of our Lord, nineteen hundred
and seventy four.

(Sgd.) FERDINAND E. MARCOS


President, Republic of the Philippines

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