LABOR LAWS AND

LEGISLATIONS
ETEEAP
COURSE CODE: LAW 3043
SUBJECT: LABOR LAWS AND LEGISLATIONS
PROFESSOR: MR. PONON, JOVIT
SY: 1st Sem 2018 - 2019

SUBMITTED BY:

Kristine Jane M. Manalastas | BSBA Major in Human Resource Management

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1. What is labor law?

Answer: Body of rulings pertaining to working people and their organizations, including trade
unions and employee unions, enforced by government agencies. There are two categories of labor
laws; collective and individual. Collective labor law involves relationships between the union, the
employer and the employee. Individual labor law involves concerns for employees' rights in the
workplace. Labor laws first became standard during the Industrial Revolution. Also called
employment law.

2. Why do you have to study labor laws? Why is it important?

Answer:
2.1 For human rights
It is everyone’s prerogative to know our rights especially in the workplace as an employee and as
an individual of the organization. Knowing the labor law helps us to justify our right to fair
compensation, privacy, freedom from discrimination, which are just some of the basic rights in a
workplace.

2.2 For career

Personally, I am currently an HR practitioner, not that I must learn about the labor law for my own,
yet also for the organization and our team that I work with. A good HR manager is someone who
knows all the ins and outs of the Philippine labor law. As this will help the company I work to comply
with the labor relations, and to be in a harmonious relationship with our employees.

2.3 For protection

Employment laws are designed to equalize the traditional “master-servant” relationship so that
neither side takes advantage of the other. For example, it wasn’t always so that employees were
fairly compensated for their hours of work, especially if they exceeded 40 hours. The labor law
dictates that most employees who work more than 40 hours in an average workweek are
compensated at time-and-a-half. Employers also must keep a record of employee hours and have
a system in place for tracking their hours

2.4 For economic stability

Labor laws ensure that work is performed to a satisfactory degree and that those who do the work
are fairly compensated to spend and invest as desired. When this is achieved, companies can
make contributions to the economy and help stimulate more growth.

3. What is pre-employment?
Answer:
 Pre-employment is anything that occurs or undertaken prior to or in preparation for employment.
Some of the examples of a pre-employment preparations are as follows:
- Interview
- Tests / exams
- Background screening
- Background checking
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4. What is labor contracting? Is Labor contracting legal and valid? When is it illegal?
Answer: Labor-only contracting is when “a contractor or subcontractor merely recruits, supplies or
places workers to perform a job, work or service for a principal.”

To understand this, imagine the owner (also called “principal”) of a residential lot entering into an
agreement with and obligating a contractor (who has sufficient capital or investment) to build his dream
house. The agreement required the owner to pay the contractor P5 million in tranches: P1 million upon
the signing of the contract and the balance upon the accomplishment of certain specified construction
milestones.

In turn, the contractor is obliged to supply all the necessary cement, gravel, sand, wood and other
construction materials, plus the labor force, equipment and tools to finish the house.

According to Department Order No. 174 (Series 2017) of the Department of Labor and Employment
(DOLE), labor-only contracting happens when the contractor or subcontractor does not have:
(1) “substantial capital [minimum of P5 million],
(2) … investments in the form of tools, equipment, machineries, supervision, work premises, among
others,
(3) … the employees recruited or placed are performing activities which are directly related to the main
business of the principal.” It happens also when “the contractor … does not exercise … control over
the performance of the work of the employee.”

Under this scheme, the carpenters and other workers hired by the contractor are his employees, not
of the owner. He is required to pay them at least the minimum wage, overtime and other benefits
imposed by law. The owner will not be liable for such benefits unless the contractor underpays their
salaries, in which case he would be solidarily liable.

5. What is a home worker?

Answer: Homeworkers or home workers are defined by the International Labor Organization as people
working from their homes or from other premises of their choosing other than the workplace, for
payment, which results of a product or service specified by the employer. There are an estimated 300
million homeworkers in the world, though because these workers generally function in the informal
economy, and are seldom registered and often not contracted, exact numbers are difficult to come by.
Recently, the phenomenon of homework has grown with increased communication technology, as well
as changes in supply chains, particularly the development of Just In Time inventory systems.
Homeworkers are often employed in piece work.

6. What are the conditions of a home worker?

Answer: Employment of Homeworkers

SECTION 1. General statement on coverage. — This Rule shall apply to any homeworker who
performs in or about his home any processing of goods or materials, in whole or in part, which have
been furnished directly or indirectly by an employer and thereafter to be returned to the latter.
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SECTION 2. Definitions. — As used in this Rule, the following terms shall have the meanings indicated
hereunder:

(a) "Home" means any room, house, apartment, or other premises used regularly, in whole or in part,
as a dwelling place, except those situated within the premises or compound of an employer, contractor,
and the work performed therein is under the active or personal supervision by, or for, the latter.

(b) "Employer" means any natural or artificial person who, for his own account or benefit, or on behalf
of any person residing outside the Philippines, directly or indirectly, or through any employee, agent,
contractor, sub-contractor; or any other person:

(1) Delivers or causes to be delivered any goods or articles to be processed in or about a home and
thereafter to be returned or to be disposed of or distributed in accordance with his direction; or

(2) Sells any goods or articles for the purpose of having such goods or articles processed in or about
a home and then repurchases them himself or through another after such processing.

(c) "Contractor" or "sub-contractor" means any person who, for the account or benefit of an employer,
delivers or caused to be delivered to a homeworker goods or articles to be processed in or about his
home and thereafter to be returned, disposed of or distributed in accordance with the direction of the
employer.

(d) "Processing" means manufacturing, fabricating, finishing, repairing, altering, packing, wrapping or
handling any material.

SECTION 3. Payment for work. — (a) Immediately upon receipt of the finished goods or articles, the
employer shall pay the homeworker or the contractor or sub-contractor, as the case may be, for the
work performed; Provided, However, that where payment is made to a contractor or sub-contractor,
the homeworker shall be paid within the week after the contractor or sub-contractor has collected the
goods or articles from the homeworkers.

(b) The Secretary of Labor and Employment shall from time to time establish the standard minimum
piece or output rate in appropriate orders for the particular work or processing to be performed by the
homeworkers.

SECTION 4. Deductions. — No employee, contractor, or sub-contractor shall make any deduction

from the homeworker's earnings for the value of materials which have been lost, destroyed, soiled or
otherwise damaged unless the following conditions are met:

(a) The homeworker concerned is clearly shown to be responsible for the loss or damage;

(b) The employee is given reasonable opportunity to show cause why deductions should not be made;
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(c) The amount of such deduction is fair and reasonable and shall not exceed the actual loss or
damages; and

(d) The deduction is made at such rate that the amount deducted does not exceed 20% of the
homeworker's earnings in a week.

SECTION 5. Conditions for payment of work. — (a) The employer may require the homeworker to re-
do work which has been improperly executed without having to pay the stipulated rate more than once.

(b) An employer, contractor, or sub-contractor 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 6. Disagreement between homeworkers and employer. — In cases of disagreement

between the homeworker and the employer, contractor or sub-contractor on matters falling under
Section 4 (a), 5 and 6 of this Rule, either party may refer the case to the Regional Office having
jurisdiction over the homeworker. The Regional Office shall decide the case within ten (10) working
days from receipt of the case. Its decision shall be final and unappealable.

SECTION 7. Liability of employer and contractor. — Whenever an employer shall contract with another
for the performance of the employer's work, it shall be the duty of such employer to provide in such
contract that the employees or homeworkers of the contractor and the latter's sub-contractor shall be
paid in accordance with the provisions of this Rule. In the event that such contractor or sub-contractor
fails to pay the wages or earnings of his employees or homeworkers as specified in this Rule, such
employer shall be jointly and severally liable with the contractor or sub-contractor to the workers of the
latter, to the extent that such work is performed under such contract, in the same manner as if the
employees or homeworkers were directly engaged by the employer.

7. Is wage agreement valid?

Answer: Wages and other working conditions are determined in a contract of employment between
the employer and the employee. The wage levels and combinations thereof, etc. are subject to the
provisions of the contract of employment. It is permitted to negotiate a fixed monthly salary of an
employee in a contract of employment, which sets out the total wages of the employee in respect of
their work for the employer. Moreover, wage agreement shall be at least the minimum wage order per
region and/or section declared by the government to deem it valid and acceptable.

8. What are the other benefits of a worker? Enumerate and give all other benefits and explain.
Answer:
a. MINIMUM WAGE
The Wage Rationalization Act, Republic Act No. 6727, sets the minimum wage rates applicable
per region, province and industry sector. The industry sectors are: non-agricultural, agriculture
(plantation and non-plantation), cottage and handicraft, retail and service sectors. Minimum wage
may vary depending on the number of employees and gross-sales of an enterprise and its industry
sector.
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As of August 2018 the minimum wage of non-agricultural workers in Metro Manila is PHP 512 and
PHP 475 for agricultural workers. Outside of Metro Manila, the minimum daily wage varies from
PHP 280 to PHP 372 for non-agricultural workers, depending on the region.

b. OVERTIME

Minimum wage is based on a work week of 40 hours or 8 hours per day. The daily 60-minute
mandatory lunch break is not included in the 8 hour work day and is not compensated.

Overtime pay rates vary depending on when the overtime work takes place: regular work day, holiday,
rest day, or night (between the hours of 10pm to 6am).

Overtime Rates:
 Regular work day: plus 25% of the hourly pay rate.
 Rest day, regular/special holiday: plus 30% of the hourly rate on said day.

c. PREMIUM PAY
Premium pay is given on non-working days (rest days/special holidays)

There are 3 special holidays:

 Ninoy Aquino Day
 All Saints Day
 Last Day of the Year
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Premium Pay Rates:

 On a rest day or special holiday, an employee is entitled to an additional 30% of his daily
basic rate, or a total of 130%.
 On a rest day which is also a special holiday, an employee is entitled to an additional 50%
of his daily basic rate, or a total of 150%.
 On a regular holiday which is also an employee’s rest day, an employee is entitled to an
additional 30% of the regular holiday rate of 200%, or a total of 260%. Note that it is only
applicable to employees covered by the holiday-pay rule.
 The “no work, no pay” principle applies during special non-working days and such other
special days as may be proclaimed by the President of the Philippines. Workers who are
not required or permitted to work on these days are, therefore, not entitled to any
compensation. This, however, is without prejudice to any voluntary practice or CBA
providing for payment of wages and benefits for declared special days even if unworked.

d. HOLIDAY PAY

The Labor Code requires the payment of an employee’s daily basic wage for all non working
regular holidays.

There are 12 regular and 3 special non working holidays (see above) in the Philippines.

12 regular holidays are (Republic Act No. 9849):

 New Year’s day

 Maundy Thursday
 Good Friday
 Araw ng Kagitingan
 Labor Day
 Independence Day
 National Heroes’ Day
 Eid’l Fit’r
 Eid’l Adha
 Bonifacio Day
 Christmas Day
 Rizal Day

e. NIGHT SHIFT DIFFERENTIAL

For work done between the hours of 10pm to 6am, employees are entitled to Night Shift Differential
(NSD), which represents an additional 10% to the regular wage for each hour of work performed.
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f. SERVICE CHARGES
Employees of employers collecting service charges are entitled to an equal share in the 85% of
the total of such charges, except managerial employees. The remaining 15% of the charges may
be retained by the management to answer for losses and breakages and for distribution to
managerial employees, at the discretion of the management in the latter case. Service charges
are collected by most hotels and some restaurants, night clubs, cocktail lounges, among others.

Exceptions to Coverage of Benefits granted under the provisions on Overtime, Premium, Holiday,
Night Shift Differential Pays and Service Charges

These mentioned benefits apply to all employees except:

1. Government employees.
2. Workers of retail and service establishments regularly employing less than 10 workers.
3. Managerial employees and officers or members of a managerial staff.
4. Househelpers and persons in the personal service of another.
5. Workers who are paid by results/output.
6. Field personnel if they regularly perform their duties away from the office or place of business.

g. SERVICE INCENTIVE LEAVE

Every employee who has rendered at least one (1) year of service is entitled to a Service Incentive
Leave (SIL) of five (5) days with pay. SIL may be used for sick and vacation leave purposes. The
unused SIL at the end of the year can be converted into cash using the salary rate at the date of
conversion. It is the employer’s prerogative to grant additional vacation leave.

Meaning of “one year of service”

The phrase “one year of service” of the employee means service within 12 months, whether
continuous or broken, reckoned from the date the employee started working. The period includes
authorized absences unworked weekly rest days, and paid regular holidays. Where by individual
or collective agreement, practice or policy, the period of working days is less than 12 months, said
period shall be considered as one year for the purpose of determining entitlement to the service
incentive leave.

h. PARENTAL LEAVES
The Labor Code of the Philippines covers three different types of parental leaves: maternity leave,
paternity leave and solo-parent leave.

A. Maternity Leave
Whether married or not, each pregnant employee is entitled to a maternity leave benefit of 60 days
for a normal delivery or miscarriage, or 78 days for a caesarean delivery, for up to four pregnancies.

For the duration of the maternity leave, the employee receives a fraction of his regular monthly
salary from the company which is in turn reimbursed by the SSS. It is common for companies to
give the whole regular pay and shoulder what is not covered by the SSS.
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To benefit from a maternity leave, it is required for the employee to be registered with the SSS and
be employed at the time of the expected delivery. Furthermore, the SSS must be notified by the
employer and at least three monthly contributions must have been made to the SSS for that
employee within the past year.

The maternity leave benefit being given instead of a regular wage, it can not be included in an
employee’s 13th month wage.

B. Paternity Leave
All married male employees are entitled to a 7 day paternity leave for the delivery or miscarriage
of his legitimate spouse with whom he must live, for up to four pregnancies. The paternity leave is
at the cost of the employer and is not reimbursed by the SSS.

C. Solo-Parent Leave
In addition to parental leaves at the time of a child’s birth, the Filipino labour code drew a special
leave for solo-parent employees as described in the Solo Parents Welfare, Republic Act No. 8972.
The employee must have been working for at least a year to be entitled to a solo-parent leave,
which allows him to 7 working days of leave in a year.

i. OTHER LEAVES

A. Gynecological Leave
A woman employee having rendered continuous aggregate employment service of at least six (6)
months for the last twelve (12) months shall be entitled to a special leave benefit of two (2) months
with full pay based on her gross monthly compensation following surgery caused by gynecological
disorders.

B. Leave For Women And Their Children Who Are Victims Of Violence
Victims 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.

Any employer who shall prejudice the right of the person under this section shall be penalized in
accordance with the provisions of the Labor Code and Civil Service Rules and Regulations.
Likewise, an employer who shall prejudice any person for assisting a co-employee who is a victim
under this Act shall likewise be liable for discrimination.
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j. 13th MONTH PAY

Each year, a 13th month pay is given to all rank-and-file employees. By law, this benefit must be
paid before December 24th and is mandatory. Employees who have resigned or have been
severed from the company before the payment of the 13th month pay are still entitled to it in
proportion to the length of time they worked for during that year.

The 13th month pay must be at least 1/12th of the total basic salary of each employee earned
during that calendar year.

k. SEPARATION PAY
Following the labor code of the Philippines, articles 283 and 284 state that an employee can claim
separation pay if his contract is ended under authorized causes. According to article 282 an
employee terminated for just cause (neglect of duties, fraud, crime…) is generally not entitled to
separation pay.

A separation pay of ½ month pay for every year of service can be claimed under the following
authorized causes:
 Retrenchment of person for loss prevention.
 Cessation of operation of a branch not due to serious losses or financial difficulties.
 If the employee has contracted a disease not curable within 6 months and that his
presence at work can be harmful to himself or his co-workers.

A separation pay of 1 month pay for every year of service can be claimed under the following
authorized causes:
 Labor-saving devices installed by the employer.
 Redundancy of the employee’s services for the company.
 Impossibility to reinstate the employee to his former position or to an equivalent position,
for reasons outside of the employer’s power.

The employer has the right to terminate the contract of an employee following any of the above
authorized causes through a written notice to both the employee and the Department of Labor and
Employment of the Philippines at least one month before the contract cessation date.

l. RETIREMENT PAY
All employees from the private-sector may retire from age 60 up to age 65, at which retirement
becomes compulsory, and must have served the establishment for at least 5 years.

Retirement pay must at least be equivalent to half of a month’s salary for each year of service and
a fraction of at least 6 months is therefore considered as one whole year.

One “half month salary” must include the following: a) 15 days salary based on the last salary pay,
b) the pay equivalent of a five days of incentive leave, c) 1/12 of the 13th month pay. Therefore,
one ½ month salary is equivalent to 22.5 days.
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Minimum Retirement pay = Latest daily pay rate x 22.5 days per month x number of years of
service

Depending on the agreements between the employer and employee other benefits can be included
in the retirement pay such as a Collective Bargaining Agreement (CBA).

m. GROSS BENEFITS & DE MINIMIS BENEFITS

To reward employee performance and to set incentives it is common for employers to give
compensations in cash or in kind to employees. According to the Philippine regulations, these
benefits are exempt of taxes under certain conditions.
Following the tax code, benefits received are excluded from the computation of gross income as
long as it remains below P90,000. “Gross benefits” include: the 13th month pay, Christmas
bonuses, productivity and incentive bonuses, and other benefits of the same nature in cash or in
kind.

In addition to that, compensations of small value, called De Minimis Benefits, are also excluded
from the computation of gross income. De Minimis Benefits have the purpose to promote the well-
being and efficiency of employees and are limited to facilities or privileges of relatively small size.

De Minimis Benefits include:

 Monetized unused vacation leave credits of private employees not exceeding 10 days
during the year;
 Medical cash allowance to dependents of employees, not exceeding P1,500 per employee
per semester or P250 per month;
 Rice subsidy of P2,000 or one 50-kg sack of rice per month worth not more than P2,000;
 Uniforms and clothing allowance not exceeding P6,000 per annum;
 Actual medical assistance not exceeding P10,000 per annum;
 Laundry allowance not exceeding P300 per month;
 Employees’ achievement awards, which must be in the form of tangible personal property
other than cash or gift certificates, with an annual monetary value not exceeding P10,000
received by the employee under an established written plan which does not discriminate in
favor of highly paid employees;
 Gifts given during Christmas and major anniversary celebrations not exceeding P5,000 per
employee per annum;
 Daily meal allowance for overtime work and night/graveyard shift not exceeding 25% of the
basic minimum wage; and
 Benefits received by an employee by virtue of a Collective Bargaining Agreement (CBA)
and productivity incentive schemes, provided the total annual monetary value received
from both CBA and productivity incentive schemes combined do not exceed P10,000 per
employee per taxable year.
 Meal allowance is non-taxable only for overtime or graveyard shift. Maximum PHP 120.00
per day based on PHP481.00 (Metro Manila minimum wage – Wage Order No. NCR-19).
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 Benefits received by an employee by virtue of a collective bargaining agreement (CBA) and

productivity incentive schemes provided that the total annual monetary value received from
both CBA and productivity incentive schemes combined, do not exceed ten thousand
pesos (Php 10,000.00) per employee per taxable year.
 Minimum Wage Earners are exempt paying from income tax. (RR 10-2008, RA 95054)

SOCIAL SECURITY SYSTEM

By law, private sector employees must be covered under the Social Security System (SSS). Based
on each employee’s gross monthly pay, both the employer and employee remit monthly
contributions to the SSS. In turn, the SSS benefits cover maternity, retirement, sickness, disability,
death and pension benefits. SSS

PHILHEALTH
For all employees covered by the SSS medical coverage is mandatory and automatic. Both the
employer and employee contribute equal monthly amounts to the PhilHealth Insurance
Corporation. PhilHealth

HOME DEVELOPMENT MUTUAL FUND

The Home Development Mutual Fund (HDMF), also known as the Pag-IBIG Fund, is mandatory
to all employees who are compulsorily covered by the Government Service Insurance System
(GSIS, for Filipino Government employees) or the SSS. Through the Republic Act No. 9679, the
HDMF answers two important needs for Filipino workers by establishing a national savings
program and an affordable house financing system. HDMF members benefit of 1. savings, 2. short
term loans and 3. access to low cost housing programs. Both the employee and the employer
contribute to the fund.

For a monthly compensation of PHP 1,500 and less the employee contributes 1% and above PHP
1500 monthly compensation it is 2%. The employer’s contribution always remains at 2%.
Contributions are deducted from gross income before computation of the income tax. Note that the
maximum employee contribution is set at PHP 5,000. Hence the minimum contribution for
employees and employers is now set at PHP 100.

Other more common benefits that are not mandated but are given by a lot of companies are:
holiday bonus, mid-year bonus, and paid holiday and vacation leaves

9. If these benefits are not given, does the employer violate the Labor Laws?
Answer: Most of the benefits mentioned above when not adhered to is undoubtedly a violation of the
Labor laws, except for the bonus and some of the De minimis benefits.

10. Enumerate and explain the functions of the National Labor Relations Commission, NLRC?
Answer: NLRC provides full protection to labor, local and oversees, organized and unorganized, and
helps promote full employment and equality of employment opportunities for all.
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It guarantees 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 entitle workers from security of tenure, humane conditions of work, and a living wage.

They participate in policy and decision-making processes affecting their rights and benefits as may be
provided by law.

NLRC promotes 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.

They 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 on investments, and
to expansion and growth.

11. Can an employee file a case at the Department of Labor, DOLE, and at the same time at the
NLRC?

Answer: The National Labor Relations Commission exercises two (2) kinds of jurisdiction: (1) Original
jurisdiction; and (2) Exclusive appellate jurisdiction.

1. Original jurisdiction:

Injunction in ordinary labor disputes to enjoin or restrain any actual or threatened commission of any
or all prohibited or unlawful acts or to require the performance of a particular act in any labor dispute
which, if not restrained or performed forthwith, may cause grave or irreparable damage to any party;
Injunction in strikes or lockouts under Article 264 of the Labor Code; and
Certified labor disputes causing or likely to cause a strike or lockout in an industry indispensable to
the national interest, certified to it by the Secretary of Labor and Employment for compulsory
arbitration.

2. Exclusive appellate jurisdiction:

All cases decided by the Labor Arbiters including contempt cases; and Cases decided by the DOLE
Regional Directors or his duly authorized Hearing Officers (under Article 129) involving recovery of
wages, simple money claims and other benefits not exceeding P5,000 and not accompanied by claim
for reinstatement.

Jurisdiction over termination disputes belongs to Labor Arbiters and not with the grievance machinery
or Voluntary Arbitrator. Under Article 262, the Voluntary Arbitrator may assume jurisdiction only when
agreed upon by the parties. Policy Instructions No. 56 issued by DOLE Secretary Confesor clarifying
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the jurisdiction of Labor Arbiters and Voluntary Arbitrations does not apply. It reiterated the ruling that
dismissal is not a grievable issue.

The DOLE Secretary may assume jurisdiction over a labor dispute, or certify it to the NLRC for
compulsory arbitration, if, in his opinion, it may cause or likely to cause a strike or lockout in an industry
indispensable to the national interest. The President may also exercise the power to assume
jurisdiction over a labor dispute.

12. What are the powers of NLRC? Please give the details in forming a labor organization?
Answer:
1. 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;
(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 (now 279) 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 (now 233) 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

2. Issuance of Summons
3. Serving of summons
4. Decide on prohibited pleadings and motions
5. Address motion to dismiss
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6. Approval of mandatory conciliation and mediation conference

7. Consider other procedures on any failure of settlement
8. Terminate the mandatory conciliation and mediation conference and direct the complainant or
petitioner to file a verified position paper and submit evidence in support of his/her causes of
action and thereupon render his/her decision on the basis of the evidence on record.
9. Amendment of complaint/petition
10. Labor Arbiter direct the parties to submit simultaneously their verified position papers with
supporting documents and affidavits, if any, on a date set by him/her within ten (10) calendar
days from the date of termination of the mandatory conciliation and mediation conference.
11. Determination of necessity of hearing or clarificatory conference
12. The Labor Arbiter shall take full control and personally conduct the hearing or clarificatory
conference and may ask questions for the purpose of clarifying points of law or facts involved
in the case.
13. The Labor Arbiter may allow the presentation of testimonial evidence with right of cross-
examination by the opposing party and shall limit the presentation of evidence to matters
relevant to the issue before him/her and necessary for a just and speedy disposition of the
case. (b) The Labor Arbiter shall make a written summary of the proceedings, including the
substance of the evidence presented, in consultation with the parties. The written summary
shall be signed by the parties and shall form part of the records
14. No postponement or continuance shall be allowed by the Labor Arbiter, except upon
meritorious grounds and subject to the requirement of expeditious disposition of cases. The
hearing or clarificatory conference shall be terminated within thirty (30) calendar days from the
date of the initial clarificatory conference.
15. A Labor Arbiter may voluntarily inhibit himself/herself from the resolution of a case
and shall so state in writing the legal justifications therefor. Upon motion of a party, either on
the ground of relationship within the fourth civil degree of consanguinity or affinity with the
adverse party or counsel, or on question of partiality or other justifiable grounds, the Labor
Arbiter may inhibit himself/herself from further hearing and deciding the case. Such motion
shall be resolved within five (5) days from the filing thereof. An order denying or granting a
motion for inhibition is unappealable.
16. The Labor Arbiter shall render his/her decision within thirty (30) calendar days, without
extension, after the submission of the case by the parties for decision, even in the absence of
stenographic notes: Provided, however, that cases involving overseas Filipino workers shall
be decided within ninety (90) calendar days after the filing of the complaint.
17. Finality of the Decision or Order of the Labor Arbiter. – If no appeal is filed with the Regional
Arbitration Branch of origin within the time provided under Article 223 (now 229) of the Labor
Code, as amended, and Section 1, Rule VI of these Rules, the decision or order of the Labor
Arbiter shall become final and executory after ten (10) calendar days from receipt thereof by
the counsel or authorized representative or the parties if not assisted by counsel or
representative.
18. – 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.

13. What are Labor Organizations?

16 | L a b o r Law s and Legislations

Answer: 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.

Trade or Labor unions in the Philippines are organizations sanctioned by Labor Code of the Philippines
as an acknowledgment of Filipino workers’ freedom to self-organize.

14. What are the rights and obligations of members in a labor organization?
Answer:
(a) To act as the representative of its members for the purpose of collective bargaining, pursuant
to section three of this Act;

(b) To be certified as the exclusive representative of the employees in a collective bargaining unit,
as provided in section twelve (a);

(c) To own property, real or personal, for the use and benefit of such labor organization and of its
members; and

(d) To bring and defend actions in its registered name relating to such property.

No suit, action or other proceeding shall be maintainable in any court against a labor organization or
any officer or member thereof for any act done by or on behalf of such organization in furtherance of
an industrial dispute to which it is a party, on the ground only that such act induces some other person
to break a contract of employment or that it is in restraint of trade or interferes with the trade, business
or employment of some other person or with the right of some other person to dispose of his capital
or labor.

Trade unions aim to promote enlightenment among Filipino workers concerning their wages, hour of
work, and other legal rights. They aim to raise awareness on their obligations as union members and
employees as well. Moreover, they serve as legitimate entities that negotiate with employers in policy-
making with regard to terms and conditions of employment. These negotiations formally take place in
the process of Collective Bargaining Agreement.

15. Is the creation of a labor organization a right or a privilege?

Answer: Trade unions are granted with a right to go on a strike a temporary stoppage of work by the
employees when there is a labor dispute. Labor disputes are defined as situation when there are
controversies surrounding negotiations and arranging of the terms and condition of employment. They
also tend to held protests necessary to call out the government or the organization with their demands
and complaints.

16. What are the rights of a legitimate labor organization?

Answer:
 Rights of legitimate labor organizations. A legitimate labor organization shall have the right:
 To act as the representative of its members for the purpose of collective bargaining;
17 | L a b o r Law s and Legislations

 To be certified as the exclusive representative of all the employees in an appropriate bargaining

unit for purposes of collective bargaining;
 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;
 To own property, real or personal, for the use and benefit of the labor organization and its
members;
 To sue and be sued in its registered name; and
 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 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)

17. What are unfair labor practices?

Answer:
(a) It shall be unfair labor practice for an employer:

(1) To interfere with, restrain or coerce employees in the exercise of their rights guaranteed in
section three;

(2) To require as a condition of employment that a person or an employee shall not join a labor
organization or shall withdraw from one to which he belongs;

(3) To initiate, dominate, assist in or interfere with the formation or administration of any labor
organization or to contribute financial or other support to it;

(4) To discriminate in regard to hire or tenure of employment of any term or condition of

employment to encourage or discourage membership in any labor organization: Provided, That
nothing in this Act or in any other Act or statute of the Republic of the Philippines shall preclude an
employer from making an agreement with a labor organization to require as a condition of employment
membership therein, if such labor organization is the representative of the employees as provided in
section twelve;

(5) To dismiss, discharge, or otherwise prejudice or discriminate against an employee for having
filed charges or for having given or being about to give testimony under this Act;
18 | L a b o r Law s and Legislations

(6) To refuse to bargain collectively with the representatives of his employees subject to the
provisions of section thirteen and fourteen.

(b) It shall be unfair labor practice for organization or its agents:

(1) To restrain or coerce employees in the exercise of their rights under section three, provided
that this paragraph shall not impair the right of a labor organization to prescribe its own rules with
respect to the acquisition or retention of membership therein;

(2) To cause or attempt to cause an employer to discriminate against an employee in violation of

subsection (a) (4) or to discriminate against an employee with respect to whom membership in such
organization has been denied or terminated on some ground other than the usual terms and conditions
under which membership or continuation of membership is made available to other members.

(3) To refuse to bargain collectively with the employer, provided it is the representative of the
employees subject to the provisions of sections thirteen and fourteen.

(4) To cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any
money or other thing of value, in the nature of an exaction, for services which are not performed or not
to be performed.

18. If there is an unfair labor practices present, what can an employee do?
Answer: Whenever it is charged by an offended party or his representative that any person has
engaged or is engaging in any such unfair labor practice, the Court or any agency or agent designated
by the Court must investigate such charge and shall have the power to issue and cause to be served
upon such person a complaint stating the charges in that respect and containing a notice of hearing
before the Court or a member thereof, or before a designated Hearing Examiner at the time and place
fixed therein not less than five nor more than ten days after serving the said complaint. The person
complained of shall have the right to file an answer to the complaint and to appear in person or
otherwise (but if the Court shall so request, the appearance shall be personal) and give testimony at
the place and time fixed in the complaint. In the discretion of the Court, a member thereof or a Hearing
Examiner, any other person may be allowed to be intervene in the said proceeding and to present
testimony. In such proceeding, the rules of evidence prevailing in courts of law or equity shall not be
controlling and it is the spirit and intention of this Act that the Court and its members and Hearing
Examiners 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. In rendering its decisions, the Court
shall not be bound solely by the evidence presented during the hearing but may avail itself of all other
means such as (but not limited to) ocular inspections and questioning of well-informed persons which
results must be made a part of the record. In the proceeding before the Court or a Hearing Examiner
thereof, the parties shall not be required to be represented by legal counsel and it shall be the duty
and obligation of the Court or Hearing Examiner to examine and cross-examine witnesses on behalf
of the parties and to assist in the orderly presentation of the evidence.
19 | L a b o r Law s and Legislations

19. Is strike legal?

Answer: A strike is legal – and therefore protected by the NLRA – if the employees are striking for
economic reasons or to protest an unfair labor practice by the employer. In the first scenario, strikers
are trying to get some economic concession from the employer, like higher wages, increased benefits,
or better working conditions. In the second, workers strike because the employer has engaged in some
practice that violates the NLRA, like refusing to bargain with the union or discriminating against union
members.

20. When does it becomes illegal?

Answer: Even strikes with a legal purpose are not protected by the NLRA If the union’s contract with
the employer (the collective bargaining agreement) includes a no-strike clause. With a few limited
exceptions (for example, if employees are refusing to work because of unusually dangerous working
conditions), a strike that violates a no-strike provision is illegal.

A strike can also become unlawful if strikers engage in serious misconduct, such as violence or threats,
physically preventing other from entering or leaving the workplace, or sit-down strikes, in which
employees refuse to leave the workplace and refuse to work. These strikes are not protected by the
NLRA.

21. What is the process if one will make a strike?

Answer: The exercise of the rights to strike or lockout shall be subject to the following requirements:

(a) A strike or lockout notice shall be filed with the labor department at least 15 days if the issues
raised are unfair labor practice or at least 30 days if the issue involved bargaining deadlock.

(b) The strike or lockout shall be supported by a majority vote of the members of the union or of the
members of the board of directors of corporations or associations or partnership, obtained by secret
ballot in a meeting called for the purpose; and

(c) Strike lockout vote shall be reported to the labor department at least 7 days before the intended
strike or lockout.

1. Filing of a notice of an intent to strike with the Bureau of Labor Relations or the National Conciliation
and Mediation Board (NCMB)

2. Taking the vote of the workers or Board of Directors to undertake the action;

3. Reporting the results of the strike votes;

4. Observing the cooling-off period - (15) fifteen days for unfair labor practice strike or lockouts, and
thirty (30) days for economic strikes and lockouts; and

5. Observing the seven (7) - day strike ban period.

20 | L a b o r Law s and Legislations

22. What is collective bargaining agreement?

Answer: A collective bargaining is a process where both parties, labor and management, agree to fix
and administer terms and conditions of employment which must not be below the minimum standards
fixed by law, and sets a mechanism for resolving the parties’ grievances.

23. How is it formed?

Answer: CBA is a contract executed upon incorporating the agreements reached after negotiations
with the employer and the exclusive bargaining representative of the employees with respect to wages,
hours or work and all other terms and conditions of employment. As such, a CBA includes economic
provisions and non-economic provisions. Economic provisions include monetary value of wage
increases, loan benefits, bonuses, allowances, retirement plan, and other fringe benefits. On the other
hand, non-economic clauses include union security clauses, grievance procedures, labor-
management cooperation schemes, and other provisions without monetary value.

24. What is a lock out?

Answer: A lock out is an action by an employer to temporarily refuse to furnish work because of a
dispute with the workers over wages, hours of work and other terms and conditions of employment or
the representative status of a union for the purpose of collective bargaining.

25. What is the function of a grievance machinery?

Answer: Grievance machinery is a committee within the agency created primarily for the early
appreciation of complaint/grievance filed by a dissatisfied employee

An orderly process established in the CBA whereby the employer, the employee and the union,
present to each other a complaint or dissatisfaction, in the hope of getting it settled quickly.

Designed to give employees every opportunity to be heard

Aims to eliminate or reduce dissatisfaction, misunderstanding, or complaint, which can affect the
employee's morale and reduce efficiency

Functions for Establishing Grievance Machinery:

 Provides for peaceful resolution of disputes;

 Provides a systematic way to resolve problems through fact finding
 Provides a method of interpreting the contract
 Protects the integrity of the contractual agreement
 Improves the efficiency of the organization
 Can improve labor-management relations
 Identifies problems in plant operations or the contract itself
 Keeps the lines of communication between the parties open during the life of the contract
 It gives employees an opportunity to voice their concern.
21 | L a b o r Law s and Legislations

 Provides the individual union member with the ability to appeal a decision and ultimately allows
the member to resolve the problem through exhausting his/her rights under the grievance
procedure, or possibly by overturning the decision of management through arbitration.

26. What are the requisites if an employee would retire?

Answer: An employee upon reaching the age of sixty (60) years (optional) or more, but not beyond
sixty-five (65) years (mandatory) which is 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 (1) whole year.

27. What are the benefits if an employee retires?

Answer: 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.

"Retail, service and agricultural establishments or operations employing not more than (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."

28. If an employee does not want to retire, can he be forced to retire?

Answer: The newly-enacted Anti-Age Discrimination Law or Republic Act 10911 will not only prohibit
discriminating employees according to age when hiring or promoting, but will also prohibit them from
laying off employees when they reach the retirement age of 60. With this law, you cannot force the
employee to retire. They can avail of the retirement if it is voluntary.