POINTERS FOR THE FINAL EXAMINATION

LABOR STANDARDS

GENERAL PRINCIPLES

1. What do you understand by Labor Standards law?

“Labor standards law” is that part of labor law which prescribes the minimum terms and conditions of
employment which the employer is required to grant to its employees. On the other hand, the term “Labor
relations law” is that part of labor law (Book V of the Labor Code) which deals with unionism, collective
bargaining, grievance machinery, voluntary arbitration, strike, picketing and lockout.

Labor relations and labor standards laws are not mutually exclusive. They are complementary to, and closely
interlinked with, each other. For instance, the laws on collective bargaining, strikes and lockouts which are
covered by labor relations law necessarily relate to the laws on working conditions found in Book III.

2. What are the Labor Standards provisions of the Labor Code?

The Labor Standards provisions of the Labor Code relate to the minimum requirements prescribed by the
existing laws, rules, and regulations relating to wages, hours of work, cot-of-living allowance and other
monetary and welfare benefits, including occupational, safety and health standards. The coverage under the
Code is from Articles 1 to 217.

3. Distinguish Constitutional due process from Statutory due process.

Statutory due process per Agabon doctrine refers to the due process provision in the Labor Code (Article
277[b]).

Article. 277. Miscellaneous provisions. –

(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
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).

Constitutional due process refers to the provision under Article III, Section 1 of the Constitution. It cannot be
invoked against a private party like the employer. It can only be asserted against the state or government.
Hence, the employee being investigated cannot invoke constitutional due process but only statutory and
contractual due process.
The rule since Agabon is that compliance with the statutorily-prescribed procedural due process under Article
292(b) [277(b)] of the Labor Code would suffice. It is not important in determining the validity of the
termination whether there is an existing company policy which also enunciates the procedural due process in
termination cases. However, under the latest doctrinal en banc ruling in the 2013 case of Abbott
Laboratories, Philippines v. Pearlie Ann F. Alcaraz, it is now required that in addition to compliance with the
statutory due process, the employer should still comply with the due process procedure prescribed in its own
company rules now called CONTRACTUAL DUE PROCESS. The employer’s failure to observe its own
company-prescribed due process, IN ADDITION TO STATUTORY DUE PROCESS, will make it liable to pay
an indemnity in the form of nominal damages, the amount of which is similar to the P30,000.00 awarded
under the Agabon doctrine.

4. Is violation of notice requirement a denial of constitutional due process?

ANSWER: No. It is not the due process provide in the Constitution that is required in termination of
employment but statutory due process. Constitutional due process protects the individual from the
government and assures him of his rights in criminal, civil or administrative proceedings, while statutory due
process protects employees from being unjustly terminated without just cause after notice and hearing. Put
differently, the Bill of Rights is not meant to be invoked against acts of private individuals like employers.
Private actions, no matter how egregious, cannot violate the constitutional guarantee.

5. CASES involving EMPLOYER-EMPLOYEE RELATIONSHIP

• Singer Sewing Machine vs. NLRC, 193 SCRA 271

Facts:

Singer Machine Collectors Union-Baguio filed a petition for direct certification as the sole and exclusive
bargaining agent of all collectors of Singer Sewing Machine. The company opposed the petition mainly
because the union members are not employees but independent contractors as evidenced by the collection
agency agreement which they signed.

Med-Arbiter ruled that there exists an employee-employer relationship and granted the certification election
which was affirmed by Sec. Drilon. The company files the present petition on the determination of the
relationship. The union insists that the provisions of the Collection Agreement belie the company’s position
that the union members are independent contractors.

Ruling:

The present case calls for the application of the control test, which if not satisfied, would lead to the
conclusion that no employee-employer relationship exists. If the union members are not employees, no right
to organize for the purpose of bargaining or as a bargaining agent cannot be recognized. The following
elements are generally considered in the determination of the relationship: the selection and engagement of
the employee, payment of wages, power of dismissal and the power to control the employee’s conduct which
is the most important element. The nature of the relationship between a company and its collecting agents
depends on the circumstances of each particular relationship. Not all collecting agents are employees and
neither are all collecting agents independent contractors. The agreement confirms the status of the collecting
agents as independent contractor. The requirement that collection agents utilize only receipt forms and report
forms issued by the company and that reports shall be submitted at least once a week is not necessarily an
indication of control over the means by which the job collection is to be performed. Even if report
requirements are to be called control measures, any control is only with respect to the end result of the
collection since the requirements regulate the things to be done after the performance of the collection job or
the rendition of service.

The plain language of the agreement reveals that the designation as collection agent does not create an
employment relationship and that the applicant is to be considered at all times as an independent contractor.
The court finds that since private respondents are not employees of the company, they are not entitled to the
constitutional right to form or join a labor organization for the purposes of collective bargaining. There is no
constitutional and legal basis for their union to be granted their petition for direct certification.

• Manila Golf Club vs. IAC, 237 SCRA 207

Facts:

This is originally filed with the Social Security Commission (SSC) via petition of 17 persons who styled
themselves as “ Caddies of Manila Golf and Country Club-PTCCEA” for the coverage and availment of
benefits of the Social Security Act as amended, PTCCEA (Philippine Technical, Clerical, Commercial
Employees Association) a labor organization where which they claim for membership. The same time two
other proceedings were filed and pending. These are certification election case filed by PTCCEA on behalf of
the same caddies of Manila Golf and Country club which was in favor of the caddies and compulsory
arbitration case involving PTCCEA and Manila Golf and Country Club which was dismissed and ruled that
there was no employer-employee relationship between the caddies and the club.
The question involved in the case is whether or not rendering caddying services for members of golf clubs
and their guests in said clubs’ courses or premises are the employees of such clubs and therefore within the
compulsory coverage of the Social Security System (SSS).

Ruling:

The Court does not agree that the facts logically point to the employer-employee relationship. In the very
nature of things, caddies must submit to some supervision of their conduct while enjoying the privilege of
pursuing their occupation within the premises and grounds of whatever club they do work in. They work for
the club to which they attach themselves on sufferance but, on the other hand, also without having to
observe any working hours, free to leave anytime they please, to stay away for as long they like.

These considerations clash frontally with the concept of employment.

It can happen that a caddy who has rendered services to a player on one day may still find sufficient time to
work elsewhere. Under such circumstances, the caddy may leave the premises and to go to such other
place of work that he wishes. These are things beyond the control of the petitioner. The caddy (LLamar) is
not an employee of petitioner Manila Golf and Country Club and the petitioner is under no obligation to report
him for compulsory coverage of SSS.

• Encyclopedia Britanica vs. NLRC, 264 SCRA 4 [1996]

Facts:

Limjoco was a Sales Divison of Encyclopaedia Britannica and was in charge of selling the products through
some sales representatives. As compensation, he would receive commissions from the products sold by his
agents. He was also allowed to use the petitioner’s name, goodwill and logo. It was agreed that office
expenses would be deducted from Limjoco’s commissions. In 1974, Limjoco resigned to pursue his private
business and filed a complaint against petitioner for alleged non-payment of separation pay and other
benefits and also illegal deduction from sales commissions. Petitioner alleged that Limjoco was not an
employee of the company but an independent dealer authorized to promote and sell its products and in
return, received commissions therein. Petitioner also claims that it had no control and supervision over the
complainant as to the manners and means he conducted his business operations. Limjoco maintained
otherwise. He alleged he was hired by the petitioner and was assigned in the sales department.

The Labor Arbiter ruled that Limjoco was an employee of the company. NLRC also affirmed the decision and
opined that there was no evidence supporting allegation that Limjoco was an independent contractor or
dealer. On appeal, petitioner assails that there was no employee-employer relationship.

Ruling:

There was no employee-employer relationship. In determining the relationship, the following elements must
be present: selection and engagement of the employee, payment of wages, power of dismissal and power to
control the employee’s conduct. The power of control is commonly regarded as the most crucial and
determinative indicator of the presence or absence of an employee-employer relationship. Under the control
test, an employee-employer relationship exists where the person for whom the services are performed
reserves a right to control not only the end to be achieved, but also the manner and means to be employed
in reaching that end. The issuance of guidelines by the petitioner was merely guidelines on company policies
which sales managers follow and impose on their respective agents. Limjoco was not an employee of the
company since he had the free rein in the means and methods for conducting the marketing operations. He
was merely an agent or an independent dealer of the petitioner. He was free to conduct his work and he was
free to engage in other means of livelihood.

In ascertaining the employee-employer relationship, the factual circumstances must be considered. The
element of control is absent where a person who works for another does so more or less at his own pleasure
and is not subject to definite hours or conditions of work, and in turn is compensated in according to the
result of his efforts and not the amount thereof. Hence, there was no employee-employer relationship.
• Carungcong vs. Sunlife, 283 SCRA 319

Facts:

Susan Carungcong began her career in the insurance industry in 1974 as an agent of Sun Life Assurance
Company of Canada. She signed an Agent Agreement with Sun Life. In virtue of which she was designated
the latter’s agent to solicit applications for its insurance and annuity policies. This contract was superseded
some five years later when she signed two (2) new agreements. The first, denominated Career Agent’s or
Unit Manager’s Agreement, dealt with such matters as the agent’s commissions, his obligations, limitations
on his authority, and termination of the agreement by death, or by written notice with or without cause. The
second was titled, Manager’s Supplementary Agreement. It explicitly described as a “further agreement”.
Carungcong and Sun Life executed another Agreement named New Business Manager with the function
generally to manage a New Business Office established. This latest Agreement stressed that the New
Business Manager in performance of his duties defined herein, shall be considered an independent
contractor and not an employee of Sun Life, and that under no circumstance shall the New Business
Manager and/or his employees be considered employees of Sun Life.

Ms. Eleizer Sibayan, Manager of Sun Life’s Internal Audit Department, commenced an inquiry into the
special fund availments of Carungcong and other New Business Managers. Respondent Lance Kemp, had
been receiving reports of anomalies in relation thereto from unit managers and agents. Thereafter, on
January 1990, Carungcong was confronted with and asked to explain the discrepancies set out in Sibayan’s
report. She was given a letter signed by Metron V. Deveza, CLU, Director, Marketing, which advised of the
termination of her relationship with Sun Life. Carungcong promptly instituted proceedings for vindication in
the Arbitration Branch of the National Labor Relations Commissions on January 16, 1990. There she
succeeded in obtaining a favorable judgment. Labor Arbiter found that there existed an employer-employee
relationship between her and Sun Life. On appeal, the National Labor Relations Commission reversed the
Arbiter’s judgment. It affirmed that no employment relationship existed between Carungcong and Sun Life.
She contented that she was an employee subject to control and supervision by Sun Life.

Ruling:

Noteworthy is that this last agreement which emphasized, like the “Career Agent’s or Unit Manager’s
Agreement” first signed by her, that in performance of her duties defined herein. Carungcong would be
considered an independent contractor and not an employee of Sun Life, and that under no circumstance
shall the New Business Manager and/or his employees be considered employees of Sun Life. Carungcong is
an independent contractor. It was indicated in the very face of the contract. The rules and regulations of the
company is not sufficient to establish an employer-employee relationship. It does not necessarily create any
employer-employee relationship where the employers’ controls have to interfere in the methods and means
by which employee would like employ to arrive at the desired results.

Carungcong admitted that she was free to work as she pleases, at the place and time she felt convenient for
her to do so. She was not paid to a fixed salary and was mainly paid by commissions depending on the
volume of her performance. She was not an employee of Sun Life Co.

• Ramos vs CA, 380 SCRA 467

Facts:

Petitioner Erlinda Ramos was advised to undergo an operation for the removal of her stone in the gall
bladder. She was referred to Dr. Hosaka, a surgeon, who agreed to do the operation. The operation was
scheduled on June 17, 1985 in the De los Santos Medical Center. Erlinda was admitted to the medical center
the day before the operation. On the following day, she was ready for operation as early as 7:30 am. Around
9:30, Dr. Hosaka has not yet arrived. By 10 am, Rogelio wanted to pull out his wife from the operating room.
Dr. Hosaka finally arrived at 12:10 pm more than 3 hours of the scheduled operation. Dr. Guiterres tried to
intubate Erlinda. The nail beds of Erlinda were bluish discoloration in her left hand. At 3 pm, Erlinda was
being wheeled to the Intensive care Unit and stayed there for a month. Since the ill-fated operation, Erlinda
remained in comatose condition until she died. The family of Ramos sued them for damages.

One of the issues involved was that there was an employee-employer relationship that existed between the
medical center and Drs. Hosaka and Guiterrez.

Ruling:

Private Hospitals hire, fire and exercise real control over their attending and visiting consultant staff. While
consultants are not technically employees, the control exercised, the hiring and the right to terminate
consultants fulfill the hallmarks of an employer-employee relationship with the exception of payment of
wages. The control test is determining. In applying the four fold test, DLSMC cannot be considered an
employer of the respondent doctors. It has been consistently held that in determining whether an employer-
employee relationship exists between the parties, the following elements must be present: (1) selection and
engagement of services; (2) payment of wages; (3) the power to hire and fire; and (4) the power to control
not only the end to be achieved, but the means to be used in reaching such an end. The hospital does not
hire consultants but it accredits and grants him the privilege of maintaining a clinic and/or admitting patients.
It is the patient who pays the consultants. The hospital cannot dismiss the consultant but he may lose his
privileges granted by the hospital. The hospital’s obligation is limited to providing the patient with the
preferred room accommodation and other things that will ensure that the doctor’s orders are carried out. The
court finds that there is no employer-employee relationship between the doctors and the hospital.

• Sonza vs. ABS-CBN, G.R. No. 138051, June 10, 2004

Facts:

In May 1994, ABS-CBN signed an agreement with the Mel and Jay Management and Development
Corporation (MJMDC). ABS-CBN was represented by its corporate officers while MJMDC was represented
by Sonza, as President and general manager, and Tiangco as its EVP and treasurer. Referred to in the
agreement as agent, MJMDC agreed to provide Sonza’s services exclusively to ABS-CBN as talent for radio
and television. ABS-CBN agreed to pay Sonza a monthly talent fee of P310, 000 for the first year and P317,
000 for the second and third year. On April 1996, Sonza wrote a letter to ABS-CBN where he irrevocably
resigned in view of the recent events concerning his program and career. After the said letter, Sonza filed
with the Department of Labor and Employment a complaint alleging that ABS-CBN did not pay his salaries,
separation pay, service incentive pay,13th month pay, signing bonus, travel allowance and amounts under the
Employees Stock Option Plan (ESOP). ABS-CBN contended that no employee-employer relationship existed
between the parties. However, ABS-CBN continued to remit Sonza’s monthly talent fees but opened another
account for the same purpose.

The Labor Arbiter dismissed the complaint and found that there is no employee-employer relationship. NLRC
affirmed the decision of the Labor Arbiter. CA also affirmed the decision of NLRC.

Ruling:

Case law has consistently held that the elements of an employee-employer relationship are selection and
engagement of the employee, the payment of wages, the power of dismissal and the employer’s power to
control the employee on the means and methods by which the work is accomplished. The last element, the
so-called "control test", is the most important element. Sonza’s services to co-host its television and radio
programs are because of his peculiar talents, skills and celebrity status. Independent contractors often
present themselves to possess unique skills, expertise or talent to distinguish them from ordinary employees.
The specific selection and hiring of SONZA, because of his unique skills, talent and celebrity status not
possessed by ordinary employees, is a circumstance indicative, but not conclusive, of an independent
contractual relationship. All the talent fees and benefits paid to SONZA were the result of negotiations that
led to the Agreement. For violation of any provision of the Agreement, either party may terminate their
relationship. Applying the control test to the present case, we find that SONZA is not an employee but an
independent contractor.

The control test is the most important test our courts apply in distinguishing an employee from an
independent contractor. This test is based on the extent of control the hirer exercises over a worker. The
greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee.
The converse holds true as well – the less control the hirer exercises, the more likely the worker is
considered an independent contractor. To perform his work, SONZA only needed his skills and talent. How
SONZA delivered his lines, appeared on television, and sounded on radio were outside ABS-CBN’s control.
ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely reserved the right to modify the
program format and airtime schedule "for more effective programming." ABS-CBN’s sole concern was the
quality of the shows and their standing in the ratings. Clearly, ABS-CBN did not exercise control over the
means and methods of performance of Sonza’s work. A radio broadcast specialist who works under minimal
supervision is an independent contractor. Sonza’s work as television and radio program host required special
skills and talent, which SONZA admittedly possesses. ABS-CBN claims that there exists a prevailing practice
in the broadcast and entertainment industries to treat talents like Sonza as independent contractors. The
right of labor to security of tenure as guaranteed in the Constitution arises only if there is an employer-
employee relationship under labor laws. Individuals with special skills, expertise or talent enjoy the freedom
to offer their services as independent contractors. The right to life and livelihood guarantees this freedom to
contract as independent contractors. The right of labor to security of tenure cannot operate to deprive an
individual, possessed with special skills, expertise and talent, of his right to contract as an independent
contractor.

• Lazaro vs. Social Security Commission, 435 SCRA 472 [2004]

Facts:

Respondent Rosalina M. Laudato filed a petition before the SSC for social security coverage and remittance
of unpaid monthly social security contributions against her three (3) employers. Among the respondents was
herein petitioner Angelito L. Lazaro, proprietor of Royal Star Marketing (“Royal Star”), which is engaged in
the business of selling home appliances. Lazaro denied that Laudato was an employee but instead claimed
that she was an agent of the company. Lazaro also maintained that she was not mandated to work of definite
work hours and thus not deemed to be a regular employee of Royal Star Marketing, the company of Lazaro.

SSC promulgated a decision rendering that Laudato is a regular employee of Royal Star Marketing and
entitled to social security contributions. Lazaro filed a petition for review before the CA where CA ruled that
Laudato was an employee of Royal Star Marketing. This petition before the Court assails same arguments
raised by Lazaro in SSC. She raised that Laudato was not an employee of Royal Star Marketing since Royal
Star had no control over the activities of Laudato. For the purpose of determining whether the respondent is
entitled to social security contributions, it must be shown that Laudato was a regular employee of Royal Star
Marketing.

Ruling:

It is an accepted doctrine that for the purposes of coverage under the Social Security Act, the determination
of employer-employee relationship warrants the application of the “control test,” that is, whether the employer
controls or has reserved the right to control the employee, not only as to the result of the work done, but also
as to the means and methods by which the same is accomplished. The SSC, applying the control test found
that Laudato was an employee of Royal Star. The Court agrees with the findings of the SSC and the CA. The
fact that Laudato was paid by way of commission does not preclude the establishment of an employer-
employee relationship.

In the case of Grepalife v. Judico, the Court upheld the existence of an employer-employee relationship
between the insurance company and its agents, despite the fact that the compensation that the agents on
commission received was not paid by the company but by the investor or the person insured. The relevant
factor remains, as stated earlier, whether the "employer" controls or has reserved the right to control the
"employee" not only as to the result of the work to be done but also as to the means and methods by which
the same is to be accomplished. Neither does it follow that a person who does not observe normal hours of
work cannot be deemed an employee.

In the case of Cosmopolitan Funeral Homes, Inc. v. Maalat, the employer similarly denied the existence of an
employer-employee relationship, as the claimant according to it, was a “supervisor on commission basis”
who did not observe normal hours of work. This Court declared that there was an employer-employee
relationship, noting that “[the] supervisor, although compensated on commission basis, [is] exempt from the
observance of normal hours of work for his compensation is measured by the number of sales he makes.”

• Phil. Global Communications v. De Vera, 459 SCRA 260 [2005]

Facts:

Philippine Global Communications inc. is a corporation engaged in the business of communication services
and allied activities while Ricardo de Vera is a physician by profession whom petitioner enlisted to attend to
the medical needs of its employees. The controversy rose when petitioner terminated his engagement.

In 1981, Dr. de Vera offered his services to petitioner. The parties agreed and formalized the respondent’s
proposal in a document denominated as retainership contract which will be for a period of one year, subject
to renewal and clearly stated that respondent will cover the retainership the company previously with Dr.
Eulau. The agreement went until 1994, in the years 1995-1996, it was renewed verbally. The turning point of
the parties’ relationship was when petitioner, thru a letter bearing the subject TERMINATION –
RETAINERSHIP CONTRACT, informed Dr. de Vera of its decision to discontinue the latter’s retainer contract
because the management has decided that it would be more practical to provide medical services to its
employees through accredited hospitals near the company premises.

On January 1997, de Vera fileda complaint for illegal dismissal before the NLRC, alleging that he had been
actually employed by the company as its company physician since 1991. The commission rendered decision
in favor of Philcom and dismissed the complaint saying that de Vera was an independent contractor. On
appeal to NLRC, it reversed the decision of the Labor Arbiter stating that de Vera is a regular employee and
directed the company to reinstate him. Philcom appealed to the CA where it rendered decision deleting the
award but reinstating de Vera. Philcom filed this petition involving the difference of a job contracting
agreements from employee-employer relationship.

Issue:
Whether or not there is an employer-employee relationship between the parties.

SC Ruling:

The elements of an employer-employee relationship is wanting in this case. The record are replete with
evidence showing that respondent had to bill petitioner for his monthly professional fees. It simply runs
against the grain of common experience to imagine that an ordinary employee has yet to bill his employer to
receive his salary.

The power to terminate the parties’ relationship was mutually vested on both. Either may terminate the
arrangement at will, with or without cause.

Remarkably absent is the element of control whereby the employer has reserved the right to control the
employee not only as to the result of the work done but also as to the means and methods by which the
same is to be accomplished.

Petitioner had no control over the means and methods by which respondent went about performing his work
at the company premises. In fine, the parties themselves practically agreed on every terms and conditions of
the engagement, which thereby negates the element of control in their relationship.

• ABS-CBN vs. Nazareno, G.R. No. 164156, Sept. 26, 2006

Facts:

Petitioner ABS-CBN Broadcasting Corporation (ABS-CBN) is engaged in the broadcasting business and
owns a network of television and radio stations, whose operations revolve around the broadcast,
transmission, and relay of telecommunication signals. It sells and deals in or otherwise utilizes the airtime it
generates from its radio and television operations. It has a franchise as a broadcasting company, and was
likewise issued a license and authority to operate by the National Telecommunications Commission.
Petitioner employed respondents Nazareno, Gerzon, Deiparine, and Lerasan as production assistants (PAs)
on different dates. They were assigned at the news and public affairs, for various radio programs in the Cebu
Broadcasting Station. On December 19, 1996, petitioner and the ABS-CBN Rank-and-File Employees
executed a Collective Bargaining Agreement (CBA) to be effective during the period from December 11,
1996 to December 11, 1999. However, since petitioner refused to recognize PAs as part of the bargaining
unit, respondents were not included to the CBA. On October 12, 2000, respondents filed a Complaint for
Recognition of Regular Employment Status, Underpayment of Overtime Pay, Holiday Pay, Premium Pay,
Service Incentive Pay, Sick Leave Pay, and 13th Month Pay with Damages against the petitioner before the
NLRC.

The Labor Arbiter rendered judgment in favor of the respondents, and declared that they were regular
employees of petitioner as such, they were awarded monetary benefits. NLRC affirmed the decision of the
Labor Arbiter. Petitioner filed a motion for reconsideration but CA dismissed it. The issue involved is whether
the respondents were considered regular employees of ABS-CBN.

Ruling:

The respondents are regular employees of ABS-CBN. It was held that where a person has rendered at least
one year of service, regardless of the nature of the activity performed, or where the work is continuous or
intermittent, the employment is considered regular as long as the activity exists, the reason being that a
customary appointment is not indispensable before one may be formally declared as having attained regular
status. In Universal Robina Corporation v. Catapang, the Court states that the primary standard, therefore, of
determining regular employment is the reasonable connection between the particular activity performed by
the employee in relation to the usual trade or business of the employer. The test is whether the former is
usually necessary or desirable in the usual business or trade of the employer. The connection can be
determined by considering the nature of work performed and its relation to the scheme of the particular
business or trade in its entirety. Also, if the employee has been performing the job for at least a year, even if
the performance is not continuous and merely intermittent, the law deems repeated and continuing need for
its performance as sufficient evidence of the necessity if not indispensability of that activity to the business.
Hence, the employment is considered regular, but only with respect to such activity and while such activity
exists.

Additionally, respondents cannot be considered as project or program employees because no evidence was
presented to show that the duration and scope of the project were determined or specified at the time of their
engagement. In the case at bar, however, the employer-employee relationship between petitioner and
respondents has been proven. In the selection and engagement of respondents, no peculiar or unique skill,
talent or celebrity status was required from them because they were merely hired through petitioner’s
personnel department just like any ordinary employee. Respondents did not have the power to bargain for
huge talent fees, a circumstance negating independent contractual relationship. Respondents are highly
dependent on the petitioner for continued work. The degree of control and supervision exercised by
petitioner over respondents through its supervisors negates the allegation that respondents are independent
contractors.

The presumption is that when the work done is an integral part of the regular business of the employer and
when the worker, relative to the employer, does not furnish an independent business or professional service,
such work is a regular employment of such employee and not an independent contractor. As regular
employees, respondents are entitled to the benefits granted to all other regular employees of petitioner
under the CBA . Besides, only talent-artists were excluded from the CBA and not production assistants who
are regular employees of the respondents. Moreover, under Article 1702 of the New Civil Code: “In case of
doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living of
the laborer.”

• Francisco vs. NLRC, 500 SCRA 690 [2006]

Facts:

Petitoner was hired by Kasei Corporation during the incorporation stage. She was designated as accountant
and corporate secretary and was assigned to handle all the accounting needs of the company. She was also
designated as Liason Officer to the City of Manila to secure permits for the operation of the company.In
1996, Petitioner was designated as Acting Manager. She was assigned to handle recruitment of all
employees and perform management administration functions. In 2001, she was replaced by Liza Fuentes
as Manager. Kasei Corporation reduced her salary to P2,500 per month which was until September. She
asked for her salary but was informed that she was no longer connected to the company. She did not
anymore report to work since she was not paid for her salary. She filed an action for constructive dismissal
with the Labor Arbiter. The Labor Arbiter found that the petitioner was illegally dismissed. NLRC affirmed the
decision while CA reversed it.

The following issue is to be discussed, whether there was an employer-employee relationship.

Ruling:

The court held that in this jurisdiction, there has been no uniform test to determine the existence of an
employer-employee relation. Generally, courts have relied on the so-called right of control test where the
person for whom the services are performed reserves a right to control not only the end to be achieved but
also the means to be used in reaching such end. In addition to the standard of right-of-control, the existing
economic conditions prevailing between the parties, like the inclusion of the employee in the payrolls, can
help in determining the existence of an employer-employee relationship. The better approach would
therefore be to adopt a two-tiered test involving: (1) the putative employer’s power to control the employee
with respect to the means and methods by which the work is to be accomplished; and (2) the underlying
economic realities of the activity or relationship. In Sevilla v. Court of Appeals, the court observed the need to
consider the existing economic conditions prevailing between the parties, in addition to the standard of right-
of-control like the inclusion of the employee in the payrolls, to give a clearer picture in determining the
existence of an employer-employee relationship based on an analysis of the totality of economic
circumstances of the worker.

Thus, the determination of the relationship between employer and employee depends upon the
circumstances of the whole economic activity, such as: (1) the extent to which the services performed are an
integral part of the employer’s business; (2) the extent of the worker’s investment in equipment and facilities;
(3) the nature and degree of control exercised by the employer; (4) the worker’s opportunity for profit and
loss; (5) the amount of initiative, skill, judgment or foresight required for the success of the claimed
independent enterprise; (6) the permanency and duration of the relationship between the worker and the
employer; and (7) the degree of dependency of the worker upon the employer for his continued employment
in that line of business. The proper standard of economic dependence is whether the worker is dependent on
the alleged employer for his continued employment in that line of business.

By applying the control test, there is no doubt that petitioner is an employee of Kasei Corporation because
she was under the direct control and supervision of Seiji Kamura, the corporation’s Technical Consultant. It is
therefore apparent that petitioner is economically dependent on Respondent Corporation for her continued
employment in the latter’s line of business. There can be no other conclusion that petitioner is an employee
of respondent Kasei Corporation. She was selected and engaged by the company for compensation, and is
economically dependent upon respondent for her continued employment in that line of business. Her main
job function involved accounting and tax services rendered to Respondent Corporation on a regular basis
over an indefinite period of engagement. Respondent Corporation hired and engaged petitioner for
compensation, with the power to dismiss her for cause. More importantly, Respondent Corporation had the
power to control petitioner with the means and methods by which the work is to be accomplished.
• Nogales et. al., vs. Capitol Medical Center et al., G.R. No. 142625, December 19, 2006

Facts:
Pregnant with her fourth child, Corazon Nogales, who was then 37 years old, was under the exclusive
prenatal care of Dr. Oscar Estrada. While Corazon was on her last trimester of pregnancy, Dr. Estrada noted
an increase in her blood pressure and development of leg edema indicating preeclampsia, which is a
dangerous complication of pregnancy. Around midnight of 25 May 1976, Corazon started to experience mild
labor pains prompting Corazon and Rogelio Nogales ("Spouses Nogales") to see Dr. Estrada at his home.
After examining Corazon, Dr. Estrada advised her immediate admission to the Capitol Medical Center
("CMC"). Due to the inclement weather then, Dr. Espinola, who was fetched from his residence by an
ambulance, arrived at the CMC about an hour later or at 9:00 a.m. He examined the patient and ordered
some resuscitative measures to be administered. Despite Dr. Espinola's efforts, Corazon died at 9:15 a.m.
The cause of death was "hemorrhage, post partum." Issue in this case is whether CMC is vicariously liable
for the negligence of Dr. Estrada.

Ruling:

The resolution of this issue rests, on the other hand, on the ascertainment of the relationship between Dr.
Estrada and CMC. The Court also believes that a determination of the extent of liability of the other
respondents is inevitable to finally and completely dispose of the present controversy. After a thorough
examination of the voluminous records of this case, the Court finds no single evidence pointing to CMC's
exercise of control over Dr. Estrada's treatment and management of Corazon's condition. It is undisputed
that throughout Corazon's pregnancy, she was under the exclusive prenatal care of Dr. Estrada. At the time
of Corazon's admission at CMC and during her delivery, it was Dr. Estrada, assisted by Dr. Villaflor, who
attended to Corazon. There was no showing that CMC had a part in diagnosing Corazon's condition. While
Dr. Estrada enjoyed staff privileges at CMC, such fact alone did not make him an employee of CMC. CMC
merely allowed Dr. Estrada to use its facilities when Corazon was about to give birth, which CMC considered
an emergency. Considering these circumstances, Dr. Estrada is not an employee of CMC, but an
independent contractor. The question now is whether CMC is automatically exempt from liability considering
that Dr. Estrada is an independent contractor-physician. In general, a hospital is not liable for the negligence
of an independent contractor-physician. There is, however, an exception to this principle. The hospital may
be liable if the physician is the "ostensible" agent of the hospital. This exception is also known as the
"doctrine of apparent authority."In the instant case, CMC impliedly held out Dr. Estrada as a member of its
medical staff. Through CMC's acts, CMC clothed Dr. Estrada with apparent authority thereby leading the
Spouses Nogales to believe that Dr. Estrada was an employee or agent of CMC. CMC cannot now repudiate
such authority. In the present case, there is no evidence of Nurse Dumlao's alleged failure to follow Dr.
Estrada's specific instructions. Even assuming Nurse Dumlao defied Dr. Estrada's order, there is no showing
that side-drip administration of hemacel proximately caused Corazon's death. No evidence linking Corazon's
death and the alleged wrongful hemacel administration was introduced. Therefore, there is no basis to hold
Nurse Dumlao liable for negligence. The Court finds respondent CMC vicariously liable for the negligence of
Dr. Oscar Estrada.

• Coca-Cola Bottlers Phils., vs. Dr. Climaco, G.R. No. 146881, February 15, 2007

Facts:

Dr. Dean N. Climaco is a medical doctor who was hired by Coca-Cola Bottlers Phils., Inc. by virtue of a
Retainer Agreement. The Retainer Agreement, which began on January 1, 1988, was renewed annually. The
last one expired on December 31, 1993. Despite the non-renewal of the Retainer Agreement, respondent
continued to perform his functions as company doctor to Coca-Cola until he received a letter dated March 9,
1995 from the company concluding their retainership agreement effective 30 days from receipt thereof. Dr.
Climaco inquired from the management of the company whether it was agreeable to recognizing him as a
regular employee. The management refused to do so. On February 24, 1994, respondent filed a Complaint
before the NLRC, Bacolod City, seeking recognition as a regular employee of the company and prayed for
the payment of all benefits of a regular employee. While the complaint was pending before the Labor Arbiter,
respondent received a letter dated March 9, 1995 from Petitioner Company concluding their retainership
agreement effective thirty (30) days from receipt thereof.
Issue:

Whether or not there exists an employer-employee relationship.

Ruling:

The Court, in determining the existence of an employer-employee relationship, has invariably adhered to the
four-fold test: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of
dismissal; and (4) the power to control the employee’s conduct, or the so-called "control test," considered to
be the most important element. No employer-employee relationship exists between the parties. The…
company lacked the power of control over the performance by respondent of his duties. The…
Comprehensive Medical Plan, which contains the respondent’s objectives, duties and obligations, does not
tell respondent "how to conduct his physical examination, how to immunize, or how to diagnose and treat his
patients, employees of [petitioner] company, in each case."
Neri v. National Labor Relations Commission

“…It is admitted that FEBTC issued a job description which detailed her functions as a radio/telex operator.
However, a cursory reading of the job description shows that what was sought to be controlled by FEBTC
was actually the end result of the task, e.g., that the daily incoming and outgoing telegraphic transfer of funds
received and relayed by her, respectively, tallies with that of the register. The guidelines were laid down
merely to ensure that the desired end result was achieved. It did not, however, tell Neri how the radio/telex
machine should be operated.”

Through the Comprehensive Medical Plan, provided guidelines merely to ensure that the end result was
achieved, but did not control the means and methods by which respondent performed his assigned tasks.
Likewise, the allegation of complainant that since he is on call at anytime of the day and night makes him a
regular employee is off-tangent. Complainant does not dispute the fact that outside of the two (2) hours that
he is required to be at respondent company’s premises, he is not at all further required to just sit around in
the premises and wait for an emergency to occur so as to enable him from using such hours for his own
benefit and advantage. In fact, complainant maintains his own private clinic attending to his private practice
in the city, where he services his patients, bills them accordingly -- and if it is an employee of respondent
company who is attended to by him for special treatment that needs hospitalization or operation, this is
subject to a special billing. More often than not, an employee is required to stay in the employer’s workplace
or proximately close thereto that he cannot utilize his time effectively and gainfully for his own purpose. Such
is not the prevailing situation here. The Retainership Agreement granted to both parties the power to
terminate their relationship upon giving a 30-day notice. Hence, Petitioner Company did not wield the sole
power of dismissal or termination. Considering that there is no employer-employee relationship between the
parties, the termination of the Retainership Agreement, which is in accordance with the provisions of the
Agreement, does not constitute illegal dismissal of respondent. Consequently, there is no basis for the moral
and exemplary damages granted by the Court of Appeals to respondent due to his alleged illegal dismissal.

• Consolidated Broadcasting System vs. Oberio, G.R. No. 168424, June 8, 2007

Facts:

Respondents alleged that they were employed as drama talents by DYWB-Bombo Radyo, a radio station
owned and operated by petitioner Consolidated Broadcasting System, Inc. They reported for work daily for
six days in a week and were required to record their drama production in advance. Some of them were
employed by petitioner since 1974, while the latest one was hired in 1997. Their drama programs were aired
not only in Bacolod City but also in the sister stations of DYWB in the Visayas and Mindanao areas.
Sometime in August 1998, petitioner reduced the number of its drama productions from 14 to 11, but was
opposed by respondents. After the negotiations failed, the latter sought the intervention of the Department of
Labor and Employment (DOLE), which on November 12, 1998, conducted through its Regional Office, an
inspection of DWYB station. The results thereof revealed that petitioner is guilty of violation of labor standard
laws. Petitioner contended that respondents are not its employees and refused to submit the payroll and
daily time records despite the subpoena duces tecum issued by the DOLE Regional Director. Petitioner
further argued that the case should be referred to the NLRC because the Regional Director has no
jurisdiction over the determination of the existence of employer-employee relationship which involves
evidentiary matters that are not verifiable in the normal course of inspection. Vexed by the respondents'
complaint, petitioner allegedly pressured and intimidated respondents. Respondents Oberio and Delta were
suspended for minor lapses and the payment of their salaries were purportedly delayed. Eventually, on
February 3, 1999, pending the outcome of the inspection case with the Regional Director, respondents were
barred by petitioner from reporting for work; thus, the former claimed constructive dismissal.

Issues:
1. Whether respondents were employees of petitioner.
2. Whether respondents’ dismissal was illegal.

Ruling:

1. Yes, respondents’ employment with petitioner passed the "four-fold test" on employer-employee relations,
namely: (1) the selection and engagement of the employee, or the power to hire; (2) the payment of wages;
(3) the power to dismiss; and (4) the power to control the employee. Petitioner failed to controvert with
substantial evidence the allegation of respondents that they were hired by the former on various dates from
1974 to 1997. If petitioner did not hire respondents and if it was the director alone who chose the talents,
petitioner could have easily shown, being in possession of the records, a contract to such effect. However,
petitioner merely relied on its contention that respondents were piece rate contractors who were paid by
results.Note that under Policy Instruction No. 40, petitioner is obliged to execute the necessary contract
specifying the nature of the work to be performed, rates of pay, and the programs in which they will work.
Moreover, project or contractual employees are required to be apprised of the project they will undertake
under a written contract. This was not complied with by the petitioner, justifying the reasonable conclusion
that no such contracts exist and that respondents were in fact regular employees. Moreover, the
engagement of respondents for a period ranging from 2 to 25 years and the fact that their drama programs
were aired not only in Bacolod City but also in the sister stations of DYWB in the Visayas and Mindanao
areas, undoubtedly show that their work is necessary and indispensable to the usual business or trade of
petitioner. The test to determine whether employment is regular or not is the reasonable connection between
the particular activity performed by the employee in relation to the usual business or trade of the employer.

2. Finally, we find that respondents were illegally dismissed. In labor cases, the employer has the burden of
proving that the dismissal was for a just cause; failure to show this would necessarily mean that the dismissal
was unjustified and, therefore, illegal. In this case, petitioner merely contended that it was respondents who
ceased to report to work, and never presented any substantial evidence to support said allegation.
Furthermore, if doubts exist between the evidence presented by the employer and the employee, the scales
of justice must be tilted in favor of the latter -the employer must affirmatively show rationally adequate
evidence that the dismissal was for a justifiable cause. It is a time-honored rule that in controversies between
a laborer and his master, doubts reasonably arising from the evidence should be resolved in the former's
favor. The policy is to extend the doctrine to a greater number of employees who can avail of the benefits
under the law, which is in consonance with the avowed policy of the State to give maximum aid and
protection of labor.

• Dumpit-Morillo vs. CA, G.R. No. 164652, June 8, 2007, citing 2004 Sonza

Facts:

Associated Broadcasting Company (ABC) hired Thelma Dumpit-Murillo under a talent contract as a
newscaster and co-anchor for Balitang-Balita, an early evening news program. The contract was for a period
of three months. After four years of repeated renewals, petitioner’s talent contract expired. Two weeks after
the expiration of the last contract, petitioner sent a letter to Mr. Jose Javier, Vice President for News and
Public Affairs of ABC, informing the latter that she was still interested in renewing her contract subject to a
salary increase. Thereafter, petitioner stopped reporting for work. She sent a demand letter to ABC,
demanding reinstatement, payment of unpaid wages and full backwages, payment of 13th month pay,
vacation/sick/service incentive leaves and other monetary benefits due to a regular employee. ABC replied
that a check covering petitioner’s talent fees had been processed and prepared, but that the other claims of
petitioner had no basis in fact or in law. The Labor Arbiter dismissed the complaint for illegal constructive
dismissal. NLRC reversed.

Issue:

Whether or not Murillo is an employee of Associated Broadcasting Company.

Ruling:

Thelma Dumpit-Murillo was a regular employee under contemplation of law. The practice of having fixed-
term contracts in the industry does not automatically make all talent contracts valid and compliant with labor
law. The assertion that a talent contract exists does not necessarily prevent a regular employment status.
Further, the Sonza case is not applicable. In Sonza, the television station did not exercise control over the
means and methods of the performance of Sonza’s work. In the case at bar, ABC had control over the
performance of petitioner’s work. Noteworthy too, is the comparatively low P28,000 monthly pay of petitioner
vis the P300,000 a month salary of Sonza, that all the more bolsters the conclusion that petitioner was not in
the same situation as Sonza. The duties of petitioner as enumerated in her employment contract indicate
that ABC had control over the work of petitioner. Aside from control, ABC also dictated the work assignments
and payment of petitioner’s wages. ABC also had power to dismiss her. All these being present, clearly,
there existed an employment relationship between petitioner and ABC.

Concerning regular employment, the requisites for regularity of employment have been met in the instant
case. Petitioner’s work was necessary or desirable in the usual business or trade of the employer which
includes, as a pre-condition for its enfranchisement, its participation in the government’s news and public
information dissemination. In addition, her work was continuous for a period of four years. This repeated
engagement under contract of hire is indicative of the necessity and desirability of the petitioner’s work in
private respondent ABC’s business. As a regular employee, petitioner is entitled to security of tenure and can be
dismissed only for just cause and after due compliance with procedural due process. Since private respondents did
not observe due process in constructively dismissing the petitioner, there was an illegal dismissal.

• Lopez vs. Bodega City, G.R. No. 155731, Sept. 3, 2007, citing 2004 Abante & 2005 Consulta

Facts:

Petitioner was the "lady keeper" of Bodega City tasked with manning its ladies' comfort room. In a letter
signed by Yap dated February 10, 1995, petitioner was made to explain why the concessionaire agreement
between her and respondents should not be terminated or suspended in view of an incident that happened
on February 3, 1995, wherein petitioner was seen to have acted in a hostile manner against a lady customer
of Bodega City who informed the management that she saw petitioner sleeping while on duty. In a
subsequent letter dated February 25, 1995, Yap informed petitioner that because of the incident that
happened on February 3, 1995, respondents had decided to terminate the concessionaire agreement
between them.

Issue:

Whether or not employer-employee relationship exists

Ruling:

The Court applies the four-fold test expounded in Abante v. Lamadrid Bearing and Parts Corp.,to wit:
To ascertain the existence of an employer-employee relationship, jurisprudence has invariably applied the
four-fold test, namely: (1) the manner of selection and engagement; (2) the payment of wages; (3) the
presence or absence of the power of dismissal; and (4) the presence or absence of the power of control. Of
these four, the last one is the most important. The so-called "control test" is commonly regarded as the most
crucial and determinative indicator of the presence or absence of an employer-employee relationship. Under
the control test, an employer-employee relationship exists where the person for whom the services are
performed reserves the right to control not only the end achieved, but also the manner and means to be
used in reaching that end.

Petitioner failed to cite a single instance to prove that she was subject to the control of respondents insofar
as the manner in which she should perform her job as a "lady keeper" was concerned. It is true that
petitioner was required to follow rules and regulations prescribing appropriate conduct while within the
premises of Bodega City. However, this was imposed upon petitioner as part of the terms and conditions in
the concessionaire agreement.

Petitioner is likewise estopped from denying the existence of the subject concessionaire agreement. She
should not, after enjoying the benefits of the concessionaire agreement with respondents, be allowed to later
disown the same through her allegation that she was an employee of the respondents when the said
agreement was terminated by reason of her violation of the terms and conditions thereof. The principle of
estoppel in pais applies wherein -- by one's acts, representations or admissions, or silence when one ought
to speak out -- intentionally or through culpable negligence, induces another to believe certain facts to exist
and to rightfully rely and act on such belief, so as to be prejudiced if the former is permitted to deny the
existence of those facts. Petitioner insists that her ID card is sufficient proof of her employment. In Domasig
v. National Labor Relations Commission, this Court held that the complainant's ID card and the cash
vouchers covering his salaries for the months indicated therein were substantial evidence that he was an
employee of respondents, especially in light of the fact that the latter failed to deny said evidence. This is not
the situation in the present case…As to the ID card, it is true that the words "EMPLOYEE'S NAME" appear
printed below petitioner's name. However, she failed to dispute respondents' evidence consisting of
Habitan's testimony, that he and the other "contractors" of Bodega City such as the singers and band
performers, were also issued the same ID cards for the purpose of enabling them to enter the premises of
Bodega City.

Hence, going back to the element of control, the concessionaire agreement merely stated that petitioner
shall maintain the cleanliness of the ladies' comfort room and observe courtesy guidelines that would help
her obtain the results they wanted to achieve. There is nothing in the agreement which specifies the methods
by which petitioner should achieve these results. Respondents did not indicate the manner in which she
should go about in maintaining the cleanliness of the ladies' comfort room. Neither did respondents
determine the means and methods by which petitioner could ensure the satisfaction of respondent
company's customers. In fact, the last paragraph of the concessionaire agreement even allowed petitioner to
engage persons to work with or assist her in the discharge of her functions. Moreover, petitioner was not
subjected to definite hours or conditions of work. The fact that she was expected to maintain the cleanliness
of respondent company's ladies' comfort room during Bodega City's operating hours does not indicate that
her performance of her job was subject to the control of respondents as to make her an employee of the
latter. Instead, the requirement that she had to render her services while Bodega City was open for business
was dictated simply by the very nature of her undertaking, which was to give assistance to the users of the
ladies' comfort room. Lastly, the Court finds that the elements of selection and engagement as well as the
power of dismissal are not present in the instant case. It has been established that there has been no
employer-employee relationship between respondents and petitioner. Their contractual relationship was
governed by the concessionaire agreement embodied in the 1992 letter. Thus, petitioner was not dismissed
by respondents. Instead, as shown by the letter of Yap to her dated February 15, 1995, their contractual
relationship was terminated by reason of respondents' termination of the subject concessionaire agreement,
which was in accordance with the provisions of the agreement in case of violation of its terms and conditions.

• Calamba Medical Center vs. NLRC et al., G.R. No. 176484, Nov. 25, 2008

Facts:

The Calamba Medical Center (petitioner), a privately-owned hospital, engaged the services of medical
doctors-spouses Ronaldo Lanzanas (Dr. Lanzanas) and Merceditha Lanzanas (Dr. Merceditha) in March
1992 and August 1995, respectively, as part of its team of resident physicians. On March 7, 1998, Dr. Meluz
Trinidad (Dr. Trinidad), also a resident physician at the hospital, inadvertently overheard a telephone
conversation of respondent Dr. Lanzanas with a fellow employee, Diosdado Miscala, through an extension
telephone line. Apparently, Dr. Lanzanas and Miscala were discussing the low "census" or admission of
patients to the hospital. Dr. Desipeda whose attention was called to the above-said telephone conversation
issued to Dr. Lanzanas a Memorandum of March 7, 1998. In the meantime, then Sec. Cresenciano Trajano
of the Department of Labor and Employment (DOLE) certified the labor dispute to the NLRC for compulsory
arbitration and issued on April 21, 1998 return-to-work Order to the striking union officers and employees of
petitioner pending resolution of the labor dispute. Petitioner later sent Dr. Lanzanas a notice of termination
which he received on April 25, 1998, indicating as grounds therefor his failure to report back to work despite
the DOLE order and his supposed role in the striking union, thus: On April 23, 1998, you still did not report
for work despite memorandum issued by the CMC Medical Director implementing the Labor Secretary's
ORDER…You are likewise aware that you were observed (re: signatories [sic] to the Saligang Batas of
BMCMC-UWP) to be unlawfully participating as member in the rank-and-file union's concerted activities
despite knowledge that your position in the hospital is managerial in nature (Nurses, Orderlies, and staff of
the Emergency Room carry out your orders using your independent judgment) which participation is
expressly prohibited by the New Labor Code…

For these reasons as grounds for termination, you are hereby terminated for cause from employment
effective today, April 25, 1998, without prejudice to further action for revocation of your license before the
Philippine [sic] Regulations [sic] Commission. Dr. Lanzanas thus amended his original complaint to include
illegal dismissal.

Issue:

Whether or not employer-employee relationship exists

Ruling:

YES. Under the "control test," an employment relationship exists between a physician and a hospital if the
hospital controls both the means and the details of the process by which the physician is to accomplish his
task. As priorly stated, private respondents maintained specific work-schedules, as determined by petitioner
through its medical director, which consisted of 24-hour shifts totaling forty-eight hours each week and which
were strictly to be observed under pain of administrative sanctions.That petitioner exercised control over
respondents gains light from the undisputed fact that in the emergency room, the operating room, or any
department or ward for that matter, respondents' work is monitored through its nursing supervisors, charge
nurses and orderlies. Without the approval or consent of petitioner or its medical director, no operations can
be undertaken in those areas. For control test to apply, it is not essential for the employer to actually
supervise the performance of duties of the employee, it being enough that it has the right to wield the power.
With respect to respondents' sharing in some hospital fees, this scheme does not sever the employment tie
between them and petitioner as this merely mirrors additional form or another form of compensation or
incentive similar to what commission-based employees receive as contemplated in Article 97 (f) of the Labor
Code, thus: …whether fixed or ascertained on a time, task, piece, or commission basis, or other method of
calculating the same… Respondents were in fact made subject to petitioner-hospital's Code of Ethics, the
provisions of which cover administrative and disciplinary measures on negligence of duties, personnel
conduct and behavior, and offenses against persons, property and the hospital's interest. More importantly,
petitioner itself provided incontrovertible proof of the employment status of respondents, namely, the
identification cards it issued them, the payslips and BIR W-2 (now 2316) Forms which reflect their status as
employees, and the classification as "salary" of their remuneration. Moreover, it enrolled respondents in the
SSS and Medicare (Philhealth) program. It bears noting at this juncture that mandatory coverage under the
SSS Law is premised on the existence of an employer-employee relationship, except in cases of compulsory
coverage of the self-employed. Finally, under Section 15, Rule X of Book III of the Implementing Rules of the
Labor Code, an employer-employee relationship exists between the resident physicians and the training
hospitals, unless there is a training agreement between them, and the training program is duly accredited or
approved by the appropriate government agency. In respondents' case, they were not undergoing any
specialization training. They were considered non-training general practitioners, assigned at the emergency
rooms and ward sections. Turning now to the issue of dismissal, the Court upholds the appellate court's
conclusion that private respondents were illegally dismissed. Dr. Lanzanas was neither a managerial nor
supervisory employee but part of the rank-and-file. This is the import of the Secretary of Labor's Resolution
of May 22, 1998 in OS A-05-15-98 which reads: In the motion to dismiss it filed before the Med-Arbiter, the
employer (CMC) alleged that 24 members of petitioner are supervisors, namely Rolando Lanzonas. A close
scrutiny of the job descriptions of the alleged supervisors narrated by the employer only proves that except
for the contention that these employees allegedly supervise, they do not however recommend any
managerial action. At most, their job is merely routinary in nature and consequently, they cannot be
considered supervisory employees. They are not therefore barred from membership in the union of
rank[-]and[-]file, which the petitioner [the union] is seeking to represent in the instant case. Participation in a
strike and intransigence to a return-to-work order must, however, be duly proved in order to justify immediate
dismissal in a "national interest" case. Mere membership in a labor union does not ipso facto mean
participation in a strike. As for the case of Dr. Merceditha, her dismissal was worse, it having been effected
without any just or authorized cause and without observance of due process. In fact, petitioner never
proferred any valid cause for her dismissal except its view that "her marriage to [Dr. Lanzanas] has given rise
to the presumption that her sympath[y] [is] with her husband; [and that when [Dr. Lanzanas] declared that he
was going to boycott the scheduling of their workload by the medical doctor, he was presumed to be
speaking for himself [and] for his wife Merceditha."

• Escasinas et al., vs. Shangri-las Mactan Island Resort et al., G.R. No. 178827, March 4, 2009

Facts:

Registered nurses Jeromie D. Escasinas and Evan Rigor Singco (petitioners) were engaged in 1999 and
1996, respectively, by Dr. Jessica Joyce R. Pepito (respondent doctor) to work in her clinic at respondent
Shangri-la’s Mactan Island Resort (Shangri-la) in Cebu of which she was a retained physician. In late 2002,
petitioners filed with the National Labor Relations Commission (NLRC) Regional Arbitration Branch No. VII
(NLRC-RAB No. VII) a complaint for regularization, underpayment of wages, non-payment of holiday pay,
night shift differential and 13th month pay differential against respondents, claiming that they are regular
employees of Shangri-la. Shangri-la claimed, however, that petitioners were not its employees but of
respondent doctor whom it retained via Memorandum of Agreement (MOA) pursuant to Article 157 of the
Labor Code, as amended. Respondent doctor for her part claimed that petitioners were already working for
the previous retained physicians of Shangri-la before she was retained by Shangri-la; and that she
maintained petitioners’ services upon their request.

Issue:

Whether or not employer-employee relationship exists

Ruling:

The resolution of the case hinges, in the main, on the correct interpretation of Art. 157 vis a vis Art. 280 and
the provisions on permissible job contracting of the Labor Code, as amended. The Court holds that, contrary
to petitioners’ postulation, Art. 157 does not require the engagement of full-time nurses as regular employees
of a company employing not less than 50 workers. Thus, the Article provides:
ART. 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:
(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
Under the foregoing provision, Shangri-la, which employs more than 200 workers, is mandated to "furnish"
its employees with the services of a full-time registered nurse, a part-time physician and dentist, and an
emergency clinic which means that it should provide or make available such medical and allied services to
its employees, not necessarily to hire or employ a service provider. As held in Philippine Global
Communications vs. De Vera:

x x x while it is true that the provision requires employers to engage the services of medical practitioners in
certain establishments depending on the number of their employees, nothing is there in the law which says
that medical practitioners so engaged be actually hired as employees, adding that the law, as written, only
requires the employer "to retain", not employ, a part-time physician who needed to stay in the premises of
the non-hazardous workplace for two (2) hours. The term "full-time" in Art. 157 cannot be construed as
referring to the type of employment of the person engaged to provide the services, for Article 157 must not
be read alongside Art. 280 in order to vest employer-employee relationship on the employer and the person
so engaged. So De Vera teaches:

x x x For, we take it that any agreement may provide that one party shall render services for and in behalf of
another, no matter how necessary for the latter’s business, even without being hired as an employee. This
set-up is precisely true in the case of an independent contractorship as well as in an agency agreement.
Indeed, Article 280 of the Labor Code, quoted by the appellate court, is not the yardstick for determining the
existence of an employment relationship. As it is, the provision merely distinguishes between two (2) kinds of
employees, i.e., regular and casual. x x x The phrase "services of a full-time registered nurse" should thus
be taken to refer to the kind of services that the nurse will render in the company’s premises and to its
employees, not the manner of his engagement.

As to whether respondent doctor can be considered a legitimate independent contractor, the pertinent
sections of DOLE Department Order No. 10, series of 1997, illuminate:
Sec. 8. Job contracting. – There is job contracting permissible under the Code if the following conditions are
met:
(1) The contractor carries on an independent business and undertakes the contract work on his own account
under his own responsibility according to his own manner and method, free from the control and direction of
his employer or principal in all matters connected with the performance of the work except as to the results
thereof; and
(2) The contractor has substantial capital or investment in the form of tools, equipment, machineries, work
premises, and other materials which are necessary in the conduct of his business.
Sec. 9. Labor-only contracting. – (a) Any person who undertakes to supply workers to an employer shall be
deemed to be engaged in labor-only contracting where such person:
(1) Does not have substantial capital or investment in the form of tools, equipment, machineries, work
premises and other materials; and
(2) The workers recruited and placed by such persons are performing activities which are directly related to
the principal business or operations of the employer in which workers are habitually employed.
(b) Labor-only contracting as defined herein is hereby prohibited and the person acting as contractor shall be
considered merely as an agent or intermediary 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…

The existence of an independent and permissible contractor relationship is generally established by

considering the following determinants: whether the contractor is carrying on an independent business; the
nature and extent of the work; the skill required; the term and duration of the relationship; the right to assign
the performance of a specified piece of work; the control and supervision of the work to another; the
employer's power with respect to the hiring, firing and payment of the contractor's workers; the control of the
premises; the duty to supply the premises, tools, appliances, materials and labor; and the mode, manner and
terms of payment. On the other hand, existence of an employer- employee relationship is established by the
presence of the following determinants: (1) the selection and engagement of the workers; (2) power of
dismissal; (3) the payment of wages by whatever means; and (4) the power to control the worker's conduct,
with the latter assuming primacy in the overall consideration. Against the above-listed determinants, the
Court holds that respondent doctor is a legitimate independent contractor. That Shangri-la provides the clinic
premises and medical supplies for use of its employees and guests do not necessarily prove that respondent
doctor lacks substantial capital and investment. Besides, the maintenance of a clinic and provision of
medical services to its employees is required under Art. 157, which are not directly related to Shangri-la’s
principal business – operation of hotels and restaurants. As to payment of wages, respondent doctor is the
one who underwrites the following: salaries, SSS contributions and other benefits of the staff; group life,
group personal accident insurance and life/death insurance for the staff with minimum benefit payable at 12
times the employee’s last drawn salary, as well as value added taxes and withholding taxes, sourced from
her P60,000.00 monthly retainer fee and 70% share of the service charges from Shangri-la’s guests who
avail of the clinic services. It is unlikely that respondent doctor would report petitioners as workers, pay their
SSS premium as well as their wages if they were not indeed her employees. With respect to the supervision
and control of the nurses and clinic staff, it is not disputed that a document, "Clinic Policies and Employee
Manual" claimed to have been prepared by respondent doctor exists, to which petitioners gave their
conformity and in which they acknowledged their co-terminus employment status. It is thus presumed that
said document, and not the employee manual being followed by Shangri-la’s regular workers, governs how
they perform their respective tasks and responsibilities. Contrary to petitioners’ contention, the various office
directives issued by Shangri-la’s officers do not imply that it is Shangri-la’s management and not respondent
doctor who exercises control over them or that Shangri-la has control over how the doctor and the nurses
perform their work. The letter addressed to respondent doctor dated February 7, 2003 from a certain Tata L.
Reyes giving instructions regarding the replenishment of emergency kits is, at most, administrative in nature,
related as it is to safety matters; while the letter dated May 17, 2004 from Shangri-la’s Assistant Financial
Controller, Lotlot Dagat, forbidding the clinic from receiving cash payments from the resort’s guests is a
matter of financial policy in order to ensure proper sharing of the proceeds, considering that Shangri-la and
respondent doctor share in the guests’ payments for medical services rendered. In fine, as Shangri-la does
not control how the work should be performed by petitioners, it is not petitioners’ employer.

• Tongko v. Manufacturer Life Insurance Co. (MANULIFE) Inc., et al., G.R. No 167622, January 25,
2011

Facts:

Tongko was, initially an insurance agent of Manulife who was promoted to the role of a manager. The
contractual relationship between Tongko and Manulife had two basic phases. The initial phase began on July
1, 1977under a Career Agent’s Agreement which regarded him as an independent contractor, not an
employee. As an agent, his tasks were to canvass for applications for insurance products and collect money
due to the Company. The second phase started in 1983 when Tongko was named Unit Manager. In 1990, he
became a Branch Manager. In 1996, Tongko became a Regional Sales Manager, where he earned
commissions, persistency income and management overrides. Since the beginning, Tongko consistently
declared himself self-employed in his income tax returns.

However, in 2001, Manulife instituted manpower development programs which directed the managers to
increase the number of agents to at least 1,000 strong for a start. It was found that Tongko’s region was the
lowest performer in terms of recruiting in 2000. Subsequently, Tongko received another letter, dated
December 18, 2001, terminating his services. Tongko then filed an illegal dismissal complaint with the NLRC
Arbitration Branch. He alleged the existence of an employment relationship. In support of this he asserted
that as Unit Manager, he was paid an annual over-rider, a travel and entertainment allowance in addition to
his overriding commissions. He was tasked with numerous administrative functions and supervisory authority
over Manulife’s employees. He was required to follow at least three codes of conduct. On the other hand,
Manulife contended that what existed between them was a mere agency relationship.

Decisions of the Judicial Tribunals

LA: No employer-employee relationship existed between the parties.

NLRC: It found the existence of an employer-employee relationship. There was illegal dismissal.
CA: It reverted to the labor arbiter’s decision that no employer-employee relationship existed between
them.
SC: In reversing the CA ruling, it declared that an employment relationship existed between them. First,
there exists the possibility of an insurance agent becoming an employee of an insurance company if
evidence shows that the company promulgated rules or regulations that effectively controlled or restricted an
insurance agent’s choice of methods or the methods themselves in selling insurance.

Second, Manulife had the power of control over Tongko, sufficient to characterize him as an employee, as
shown by the fact that he complied with 3 different codes of conduct and that he performed administrative
duties. Also, Tongko was tasked to recruit some agents in addition to his other administrative functions.

Hence, a Motion for Reconsideration was filed by Manulife and was granted by the SC.

Issue:

Whether or not there exists an employer-employee relationship.

SC Ruling:
Rules regarding the desired results (e.g., the required volume to continue to qualify as a company agent &
legal/ ethical rules to be followed) are built-in elements of control specific to an insurance agency and should
not and cannot be read as elements of control that attend an employment relationship governed by the Labor
Code.

Based on decided cases, a determination of the presence of the Labor Code element of control was made
on the basis of the stipulations of the subsequent contracts. In this case, while Tongko was later on
designated unit manager in 1983, Branch Manager in 1990, and Regional Sales Manager in 1996, no formal
contract regarding these undertakings appears in the records of the case. Any such contract or agreement,
had there been any, could have at the very least provided the bases for properly ascertaining the juridical
relationship established between the parties.

For this reason, we can take judicial notice that as a matter of Insurance Code-based business practice, an
agency relationship prevails in the insurance industry for the purpose of selling insurance. Significantly,
evidence shows that Tongko’s role as an insurance agent never changed during his relationship with
Manulife. Tongko essentially remained an agent, but moved up in this role through Manulife’s recognition that
he could use other agents approved by Manulife but operating under his guidance. For want of a better term,
Tongko perhaps could be labeled as a "lead agent" who guided under his wing other Manulife agents.

Evidence indicates that Tongko consistently clung to the view that he was an independent agent since he
invariably declared himself a business or self-employed person in his income tax returns. The concept of
estoppel – a legal and equitable concept – necessarily must come into play. Tongko’s previous admissions in
several years of tax returns as an independent agent, as against his belated claim that he was all along an
employee, are too diametrically opposed to be simply dismissed or ignored.

There was, indeed, lack of evidence on record showing that Manulife ever exercised means-and-manner
control, even to a limited extent, over Tongko during his ascent in Manulife’s sales ladder. The reality is, prior
to the directives sent by De Dios, Manulife had practically left Tongko alone not only in doing the business of
selling insurance, but also in guiding the agents under his wing. In addition, the mere presentation of codes
or of rules and regulations is not per se indicative of labor law control. The codes of conduct do not intrude
into the insurance agents’ means and manner of conducting their sales and only control them as to the
desired results.

Guidelines indicative of labor law "control," based on the case of Insular Life, should not merely relate to the
mutually desirable result intended by the contractual relationship; they must have the nature of dictating the
means or methods to be employed in attaining the result, or of fixing the methodology and of binding or
restricting the party hired to the use of these means.

Hence, the failure of Tongko to comply with the guidelines & directives of Manulife is recruiting more agents,
as a ground for termination of Tongko’s agency, is a matter that the labor tribunals cannot rule upon in the
absence of an employer-employee relationship. Jurisdiction over the matter belongs to the courts applying
the laws of insurance, agency and contracts.

SC: Tongko is just an AGENT. In effect, the SC is telling us that, first, there must be an evidence of a
contract that shows that the relationship has been converted from contract of agency to that of employment,
which is absent in the case at bar. Secondly, adherence to a code of conduct is not, per se, indicative of
control when it merely controls the desired results and not the means and the manner by which agents are to
conduct their sales. The directive of De Dios to Tongko (in increasing the number of agents) was merely
suggestive. Hence, not indicative of control

• Caong, Jr. v. Begualos, G.R. No. 179428, January 26, 2011

Facts:

Petitioners Primo E. Caong, Jr. (Caong), Alexander J. Tresquio (Tresquio), and Loriano D. Daluyon
(Daluyon) were employed by respondent Avelino Regualos under a boundary agreement, as drivers of
his jeepneys. In November 2001, they filed separate complaintshttp://sc.judiciary.gov.ph/jurisprudence/2011/
january2011/179428.htm - _ftn2 for illegal dismissal against respondent who barred them from driving the
vehicles due to deficiencies in their boundary payments.

Issue:

Whether or not the policy of suspending drivers pending payment of arrears in their boundary obligations is
reasonable.

Ruling:

It is already settled that the relationship between jeepney owners/operators and jeepney drivers under the
boundary system is that of employer-employee and not of lessor-lessee. The fact that the drivers do not
receive fixed wages but only get the amount in excess of the so-called “boundary” that they pay to the
owner/operator is not sufficient to negate the relationship between them as employer and employee.

Petitioners’ suspension cannot be categorized as dismissal, considering that there was no intent on the part
of respondent to sever the employer-employee relationship between him and petitioners. In fact, it was made
clear that petitioners could put an end to the suspension if they only pay their recent arrears. As it was, the
suspension dragged on for years because of petitioners’ stubborn refusal to pay. It would have been different
if petitioners complied with the condition and respondent still refused to readmit them to work. Then there
would have been a clear act of dismissal. But such was not the case. Instead of paying, petitioners even filed
a complaint for illegal dismissal against respondent.

Respondent’s policy of suspending drivers who fail to remit the full amount of the boundary was fair and
reasonable under the circumstances. Respondent explained that he noticed that his drivers were getting lax
in remitting their boundary payments and, in fact, herein petitioners had already incurred a considerable
amount of arrears. He had to put a stop to it as he also relied on these boundary payments to raise the full
amount of his monthly amortizations on the jeepneys. Demonstrating their obstinacy, petitioners, on the days
immediately following the implementation of the policy, incurred deficiencies in their boundary remittances.

It is acknowledged that an employer has free rein and enjoys a wide latitude of discretion to regulate all
aspects of employment, including the prerogative to instill discipline on his employees and to impose
penalties, including dismissal, if warranted, upon erring employees. This is a management prerogative.
Indeed, the manner in which management conducts its own affairs to achieve its purpose is within the
management’s discretion. The only limitation on the exercise of management prerogative is that the policies,
rules, and regulations on work-related activities of the employees must always be fair and reasonable, and
the corresponding penalties, when prescribed, commensurate to the offense involved and to the degree of
the infraction.

A company policy must be implemented in such manner as will accord social justice and compassion to the
employee. In case of noncompliance with the company policy, the employer must consider the surrounding
circumstances and the reasons why the employee failed to comply. When the circumstances merit the
relaxation of the application of the policy, then its noncompliance must be excused.

In the present case, petitioners merely alleged that there were only few passengers during the dates in
question. Such excuse is not acceptable without any proof or, at least, an explanation as to why passengers
were scarce at that time. It is simply a bare allegation, not worthy of belief. We also find the excuse
unbelievable considering that petitioners incurred the shortages on separate days, and it appears that only
petitioners failed to remit the full boundary payment on said dates.

• Atok Big Wedge Company vs. Gison, G.R. No. 169510, August 8, 2011

Facts:

The respondent in this case, Jesus P. Gison, was engaged as part-time consultant of the petitioner, Atok Big
Wedge Company thorugh its then Asst. VP and Acting Resident Manager, Rutillo A. Torres. As a consultant
on retainer basis, the former assisted the petitioner’s retained legal counsel with matters pertaining to the
prosecution of cases against illegal surface occupants within the area covered by the company’s mineral
claims. He also tasked to perform liason work with government agencies which he said his expertise.
Respondent is not required to report to its office on a regular basis, except when occassionally requested by
the management to discuss the matters which needs of his expertise as a consultant. He is paid a retainer
fee of 3,000Php a month and delivered to him either in his residence or in a local restaurant. They have also
executed a retainer agreement however was misplaced and can no longer be found. This kind of
arrangement continued on for the next 11 years. Since respondent was getting old, he requested petitioner
to cause his registration with the Social Security System but petitioner did not accede to his request
considering the former only a retainer/consultant.

Respondent herein, filed a complaint with SSS against petitioner’s refusal to cause his registration with the
SSS. The Resident Manager of the petitioner issued then a Memorandum advising respondent that within 30
days from receipt thereof, petitioner’s services as a retainer/consultant will be terminated since his services
are no longer necessary. As a result, respondent filed a complaint for illegal dismissal, unfair labor practice,
underpayment of wages, non-payment of 13th Month pay, vacation pay and sick leave with the NLRC,
Regional Arbitration Branch and Cordillera Administrative Region against the petitioner.

The Labor Arbiter rendered a decision in favor of the petitioner ruling that there is no employer-employee
relationship and dismissed the complaint for lack of merit. An appeal was made before the NLRC but same
was dismissed and affirmed the decision of the Labor Arbiter. A petition for review was filed under Rule 65
before the Court of Appeals. The Court of Appeals annuled and has set aside the decision of NLRC. The CA
opined that, both the Labor Arbiter and NLRC overlooked Article 280 of the Labor Code, which distinguishes
between the two kinds of employees, i.e., regular and casual employees. The respondent is deemed a
regular employee of the petitioner after the lapse of one year from his employment. Considering also that the
respondent had been performing services for the petitioner for the last 11 years entitling him to the rights and
privileges of a regular employee. The CA added that although there was an agreement between the parties
that the employment of the respondent will be only temporary, it clearly disregarded the same by repeatedly
giving petitioner several tasks to perform. Moreover, although the respondent may have waived his right to
attain a regular status when he agreed to perform these tasks on a temporary employment status, still it was
the law that recognized and considered him a regular employee after his first year of rendering service to
petitioner. As such, the waiver is ineffective.

Petitioner herein posits that CA erred in applying Article 280 of the Labor Code in determining whether there
exists an employer-employee relationship. Petitioner contends that where the existence of an employer-
employee relationship is in dispute, Article 280 of the Labor Code is inapplicable. The said article only set the
distinction between a casual employee from a regular employee for purposes of determining the rights of an
employee to be entitled to certain benefits.

Issue:
Whether or not CA erred in applying Article 280?

Ruling:
Well-entrenched is the doctrine that the existence of an employer-employee relationship is ultimately a
question of fact and that the findings thereon by the Labor Arbiter and the NLRC shall be accorded not only
respect but even finality when supported by substantial evidence. Being a question of fact, the determination
whether such a relationship exists between petitioner and respondent was well within the province of the
Labor Arbiter and the NLRC. Being supported by substantial evidence, such determination should have been
accorded great weight by the CA in resolving the issue. To ascertain the existence of an employer-employee
relationship jurisprudence has invariably adhered to the four-fold test, to wit: (1) the selection and
engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to
control the employee's conduct, or the so-called "control test." The so-called "control test" is commonly
regarded as the most crucial and determinative indicator of the presence or absence of an employer-
employee relationship

Applying the aforementioned test, an employer-employee relationship is apparently absent in the case at bar.
Among other things, respondent was not required to report everyday during regular office hours of petitioner.
Respondent's monthly retainer fees were paid to him either at his residence or a local restaurant. More
importantly, petitioner did not prescribe the manner in which respondent would accomplish any of the tasks in
which his expertise as a liaison officer was needed; respondent was left alone and given the freedom to
accomplish the tasks using his own means and method. Respondent was assigned tasks to perform, but
petitioner did not control the manner and methods by which respondent performed these tasks. Verily, the
absence of the element of control on the part of the petitioner engenders a conclusion that he is not an
employee of the petitioner. Moreover, the absence of the parties' retainership agreement notwithstanding,
respondent clearly admitted that petitioner hired him in a limited capacity only and that there will be no
employer-employee relationship between them.

Respondent was well aware of the agreement that he was hired merely as a liaison or consultant of the
petitioner and he agreed to perform tasks for the petitioner on a temporary employment status only.
However, respondent anchors his claim that he became a regular employee of the petitioner based on his
contention that the "temporary" aspect of his job and its "limited" nature could not have lasted for eleven
years unless some time during that period, he became a regular employee of the petitioner by continually
performing services for the company.

Respondent is not an employee, much more a regular employee of petitioner. The appellate court's premise
that regular employees are those who perform activities which are desirable and necessary for the business
of the employer is not determinative in this case. In fact, any agreement may provide that one party shall
render services for and in behalf of another, no matter how necessary for the latter's business, even without
being hired as an employee. Hence,respondent's length of service and petitioner's repeated act of assigning
respondent some tasks to be performed did not result to respondent's entitlement to the rights and privileges
of a regular employee.
Furthermore, despite the fact that petitioner made use of the services of respondent for eleven years, he still
cannot be considered as a regular employee of petitioner. Article 280 of the Labor Code, in which the lower
court used to buttress its findings that respondent became a regular employee of the petitioner, is not
applicable in the case at bar. Indeed, the Court has ruled that said provision is not the yardstick for
determining the existence of an employment relationship because it merely distinguishes between two kinds
of employees, i.e., regular employees and casual employees, for purposes of determining the right of an
employee to certain benefits, to join or form a union, or to security of tenure; it does not apply where the
existence of an employment relationship is in dispute.It is, therefore, erroneous on the part of the Court of
Appeals to rely on Article 280 in determining whether an employer-employee relationship exists between
respondent and the petitioner.
Considering that there is no employer-employee relationship between the parties, the termination of
respondent's services by the petitioner after due notice did not constitute illegal dismissal warranting his
reinstatement and the payment of full backwages, allowances and other benefits.

• Semblante vs. CA, G.R. No. 196426, August 15, 2011

Facts:

Petitioners Marticio Semblante and Dubrick Pilar worked in the Gallera de Mandaue owned by the
respondents-spouses Vicente and Maria Luisa Loot. The petitioners rendered their services as the official
massiador and sentenciador in 1993. As the masiador, Semblante calls and takes the bets from the
gamecock owners and other bettors and orders the start of the cockfight. He also distributes the winnings
after deducting the arriba, or the commission for the cockpit. Meanwhile, as the sentenciador, Pilar oversees
the proper gaffing of fighting cocks, determines the fighting cocks' physical condition and capabilities to
continue the cockfight, and eventually declares the result of the
cockfight. As masiador and sentenciador, Semblante receives PhP2,000 per week or a total of PhP8,000 per
month, while Pilar gets PhP3,500 a week or PhP14,000 per month. They work every Tuesday, Wednesday,
Saturday, and Sunday every week, excluding monthly derbies and cockfights held on special holidays. Their
working days start at 1:00 p.m. and last until 12:00 midnight, or until the early hours of the morning
depending on the needs of the cockpit. Petitioners had both been issued employees' identification cards that
they wear every time they report for duty. However on November 14,1993, petitioners were denied entry into
the cockpit upon the instructions of respondents and were informed of the termination of their employment
effective that date.
Respondents denied that petitioners were their employees and alleged that they were associates of
respondents’ independent contractor, Tomas Vega. They claimed that petitioners have no regular working
time or day and they are free to decide for themselves whether to report for work or not on any cockfighting
day. And the identification card issued was only to free them from the normal entrance fees and to
differentiate them from the general public.

The Labor Arbiter found that there exist an employer-employee relationship between the petitioner and the
respondents because the latter performed the works necessary and indispensable to the usual trade or
business of the respondents for a number of years. It has ruled that petitioners were illegally dismissed and
are entitled to their backwages and separation pay. However, the NLRC reversed the Labor Arbiter’s
decision. It held that respondents having no power on the selection and engagement of petitioners and that
no separate individual contract with respondents was ever executed by petitioners. In its appeal to the CA,
the latter ruled in favor for the respondents and held that referees and bet-takers in a cockfight need to have
the kind of expertise that is characteristic of the game to interpret messages conveyed by mere gestures.
Hence, petitioners are akin to independent contractors who possess unique skills , expertise and talent to
distinguish them from ordinary employees. Further, petitioners were not provided by tools and
instrumentalities they needed to perform their work. They only need their unique skills and talents in the
performance of their job as masiador and sentenciador.

Issue:

Whether or not the dismissal of the petitioners is illegal on the ground that that they are regular employees of
the respondents?

Ruling:

Respondents had no part in petitioners' selection and management; petitioners' compensation was paid out
of the arriba (which is a percentage deducted from the total bets), not by petitioners; and petitioners
performed their functions as masiador and sentenciador free from the direction and control of respondents.
In the conduct of their work, petitioners relied mainly on their "expertise that is characteristic of the cockfight
gambling," and were never given by respondents any tool needed for the performance of their work.
Respondents, not being petitioners' employers, could never have dismissed, legally or illegally, petitioners,
since respondents were without power or prerogative to do so in the first place. The rule on the posting of an
appeal bond cannot defeat the substantive rights of respondents to be free from an unwarranted burden of
answering for an illegal dismissal for which they were never responsible.

• Bernarte vs. Phil. Basketball Assoc., G.R. No. 192084, September 14, 2011

Facts:

Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the PBA as
referees. During the leadership of Commissioner Emilio Bernardino, they were made to sign contracts on a
year-to-year basis. During the term of Commissioner Eala, however, changes were made on the terms of
their employment.

Complainant Bernarte, for instance, was not made to sign a contract during the first conference of the All-
Filipino Cup which was from February 23, 2003 to June 2003. It was only during the second conference
when he was made to sign a one and a half month contract for the period July 1 to August 5, 2003.

On January 15, 2004, Bernarte received a letter from the Office of the Commissioner advising him that his
contract would not be renewed citing his unsatisfactory performance on and off the court. It was a total shock
for Bernarte who was awarded Referee of the year in 2003. He felt that the dismissal was caused by his
refusal to fix a game upon order of Ernie De Leon.
On the other hand, complainant Guevarra alleges that he was invited to join the PBA pool of referees in
February 2001. On March 1, 2001, he signed a contract as trainee. Beginning 2002, he signed a yearly
contract as Regular Class C referee. On May 6, 2003, respondent Martinez issued a memorandum to
Guevarra expressing dissatisfaction over his questioning on the assignment of referees officiating out-of-
town games. Beginning February 2004, he was no longer made to sign a contract.


Respondents aver, on the other hand, that complainants entered into two contracts of retainer with the PBA
in the year 2003. The first contract was for the period January 1, 2003 to July 15, 2003; and the second was
for September 1 to December 2003. After the lapse of the latter period, PBA decided not to renew their
contracts.

Complainants were not illegally dismissed because they were not employees of the PBA. Their respective
contracts of retainer were simply not renewed. PBA had the prerogative of whether or not to renew their
contracts, which they knew were fixed.

Both the Labor Arbiter and NLRC decided that the petitioners were employees whose dismissals by
respondents were illegal.

However, the Court of Appeals overturned the decisions of the NLRC and Labor Arbiter on the ground that
the petitioner is an independent contractor since respondents did not exercise any form of control over the
means and methods by which petitioner performed his work as a basketball referee.

Issue:


Whether petitioner is an employee of respondents, which in turn determines whether petitioner was illegally
dismissed.


Ruling

The Supreme Court affirmed the assailed decision of the Court of Appeals.
To determine the existence of an employer-employee relationship, case law has consistently applied the
four-fold test, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the
power of dismissal; and (d) the employer's power to control the employee on the means and methods by
which the work is accomplished. The so-called "control test" is the most important indicator of the presence
or absence of an employer-employee relationship.


In this case, PBA admits repeatedly engaging petitioner's services, as shown in the retainer contracts. PBA
pays petitioner a retainer fee, exclusive of per diem or allowances, as stipulated in the retainer contract. PBA
can terminate the retainer contract for petitioner's violation of its terms and conditions.

However, respondents argue that the all-important element of control is lacking in this case, making
petitioner an independent contractor and not an employee of respondents.

We agree with respondents that once in the playing court, the referees exercise their own independent
judgment, based on the rules of the game, as to when and how a call or decision is to be made. The referees
decide whether an infraction was committed, and the PBA cannot overrule them once the decision is made
on the playing court. The referees are the only, absolute, and final authority on the playing court.
Respondents or any of the PBA officers cannot and do not determine which calls to make or not to make and
cannot control the referee when he blows the whistle because such authority exclusively belongs to the
referees. The very nature of petitioner's job of officiating a professional basketball game undoubtedly calls for
freedom of control by respondents.

Moreover, the following circumstances indicate that petitioner is an independent contractor: (1) the referees
are required to report for work only when PBA games are scheduled, which is three times a week spread
over an average of only 105 playing days a year, and they officiate games at an average of two hours per
game; and (2) the only deductions from the fees received by the referees are withholding taxes.
In other words, unlike regular employees who ordinarily report for work eight hours per day for five days a
week, petitioner is required to report for work only when PBA games are scheduled or three times a week at
two hours per game. In addition, there are no deductions for contributions to the Social Security System,
Philhealth or Pag-Ibig, which are the usual deductions from employees' salaries. These undisputed
circumstances buttress the fact that petitioner is an independent contractor, and not an employee of
respondents.


Furthermore, the applicable foreign case law declares that a referee is an independent contractor, whose
special skills and independent judgment is required specifically for such position and cannot possibly be
controlled by the hiring party.

In addition, the fact that PBA repeatedly hired petitioner does not by itself prove that petitioner is an
employee of the former. For a hired party to be considered an employee, the hiring party must have control
over the means and methods by which the hired party is to perform his work, which is absent in this case.
The continuous rehiring by PBA of petitioner simply signifies the renewal of the contract between PBA and
petitioner, and highlights the satisfactory services rendered by petitioner warranting such contract renewal.
Conversely, if PBA decides to discontinue petitioner's services at the end of the term fixed in the contract,
whether for unsatisfactory services, or violation of the terms and conditions of the contract, or for whatever
other reason, the same merely results in the non-renewal of the contract, as in the present case. The non-
renewal of the contract between the parties does not constitute illegal dismissal of petitioner by respondents.

• Lirio vs. Genovia, G.R. No. 169757, November 23, 2011

Facts:

Respondent Wilmer D. Genovia filed a complaint against petitioner Cesar Lirio and/or Celkor Ad Sonicmix
Recording Studio for illegal dismissal, non-payment of commission and award of moral and exemplary
damages.

Respondent Genovia alleged in his position paper that on August 15, 2001, he was hired as studio manager
by petitioner Lirio, owner of Celkor Ad Sonicmix Recording Studio (Celkor). He was employed to manage
and operate Celkor and to promote and sell the recording studio's services to music enthusiasts and other
prospective clients. He received a monthly salary of P7,000.00. They also agreed that he was entitled to an
additional commission of P100.00 per hour as recording technician whenever a client uses the studio for
recording, editing or any related work. He was made to report for work from Monday to Friday from 9:00 a.m.
to 6 p.m. On Saturdays, he was required to work half-day only, but most of the time, he still rendered eight
hours of work or more. All the employees of petitioner, including respondent, rendered overtime work almost
everyday, but petitioner never kept a daily time record to avoid paying the employees overtime pay.

He also alleged that petitioner approached him and told him about his project to produce an album for his
daughter, Celine Mei Lirio. Petitioner asked respondent to compose and arrange songs for Celine and
promised that he (Lirio) would draft a contract to assure respondent of his compensation for such services.
As agreed upon, the additional services that respondent would render included composing and arranging
musical scores only, while the technical aspect in producing the album, such as digital editing, mixing and
sound engineering would be performed by respondent in his capacity as studio manager for which he was
paid on a monthly basis. Petitioner instructed respondent that his work on the album as composer and
arranger would only be done during his spare time, since his other work as studio manager was the priority.
Respondent then started working on the album.

After the album was completed and released, respondent again reminded petitioner about the contract on his
compensation as composer and arranger of the album. Petitioner told respondent that since he was
practically a nobody and had proven nothing yet in the music industry, respondent did not deserve a high
compensation, and he should be thankful that he was given a job to feed his family. Petitioner informed
respondent that he was entitled only to 20% of the net profit, and not of the gross sales of the album, and
that the salaries he received and would continue to receive as studio manager of Celkor would be deducted
from the said 20% net profit share. Respondent objected and insisted that he be properly compensated. On
March 14, 2002, petitioner verbally terminated respondent’s services, and he was instructed not to report for
work.

Respondent asserts that he was illegally dismissed as he was terminated without any valid grounds, and no
hearing was conducted before he was terminated, in violation of his constitutional right to due process.
Having worked for more than six months, he was already a regular employee. Although he was a so called
“studio manager,” he had no managerial powers, but was merely an ordinary employee.

Respondent prayed for his reinstatement without loss of seniority rights, or, in the alternative, that he be paid
separation pay, backwages and overtime pay; and that he be awarded unpaid commission for services
rendered as a studio technician as well as moral and exemplary damages.

Respondent’s evidence consisted of the Payroll dated July 31, 2001 to March 15, 2002, which was certified
correct by petitioner, and Petty Cash Voucher evidencing receipt of payroll payments by respondent from
Celkor.

In defense, petitioner stated in his Position Paper that respondent was not hired as studio manager,
composer, technician or as an employee in any other capacity of Celkor. Respondent could not have been
hired as a studio manager, since the recording studio has no personnel except petitioner.

According to petitioner, respondent had no track record as a composer, and he was not known in the field of
music. Nevertheless, after some discussion, respondent verbally agreed with petitioner to co-produce the
album.

Petitioner asserted that his relationship with respondent is one of an informal partnership and that he had no
control over the time and manner by which respondent composed or arranged the songs, except on the
result thereof. Respondent reported to the recording studio between 10:00 a.m. and 12:00 noon. Hence,
petitioner contended that no employer-employee relationship existed between him and the respondent, and
there was no illegal dismissal to speak of.

The Labor Arbiter rendered a decision finding that an employer-employee relationship existed between
petitioner and respondent, and that respondent was illegally dismissed.

However, the NLRC reversed and set aside the decision of the Labor Arbiter on the ground that respondent
failed to prove his employment tale with substantial evidence. It held that respondent failed to proved with
substantial evidence that he was selected and engaged by petitioner, that petitioner had the power to
dismiss him, and that they had the power to control him not only as to the result of his work, but also as to
the means and methods of accomplishing his work.

The Court of Appeals rendered a decision reversing and setting aside the resolution of the NLRC, and
reinstating the decision of the Labor Arbiter.

Hence, petitioner Lirio filed this petition.

Issue:

Whether respondent is an employee of the petitioner, which in turn determines whether respondent was
illegally dismissed.


Ruling:

The Supreme Court affirmed the assailed decision of the Court of Appeals.

Before a case for illegal dismissal can prosper, it must first be established that an employer-employee
relationship existed between petitioner and respondent.
The elements to determine the existence of an employment relationship are: (a) the selection and
engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the employer’s
power to control the employee’s conduct. The most important element is the employer’s control of the
employee’s conduct, not only as to the result of the work to be done, but also as to the means and methods
to accomplish it.

It is settled that no particular form of evidence is required to prove the existence of an employer-employee
relationship. Any competent and relevant evidence to prove the relationship may be admitted.

In this case, the documentary evidence presented by respondent to prove that he was an employee of
petitioner are as follows: (a) a document denominated as "payroll" (dated July 31, 2001 to March 15,
2002) certified correct by petitioner, which showed that respondent received a monthly salary of P7,000.00
(P3,500.00 every 15th of the month and another P3,500.00 every 30th of the month) with the corresponding
deductions due to absences incurred by respondent; and (2) copies of petty cash vouchers, showing the
amounts he received and signed for in the payrolls.

The said documents showed that petitioner hired respondent as an employee and he was paid monthly
wages of P7,000.00. Petitioner wielded the power to dismiss as respondent stated that he was verbally
dismissed by petitioner, and respondent, thereafter, filed an action for illegal dismissal against petitioner. The
power of control refers merely to the existence of the power. It is not essential for the employer to actually
supervise the performance of duties of the employee, as it is sufficient that the former has a right to wield the
power. Nevertheless, petitioner stated in his Position Paper that it was agreed that he would help and teach
respondent how to use the studio equipment. In such case, petitioner certainly had the power to check on
the progress and work of respondent.

On the other hand, petitioner failed to prove that his relationship with respondent was one of partnership.
Such claim was not supported by any written agreement. The Court notes that in the payroll dated July 31,
2001 to March 15, 2002, there were deductions from the wages of respondent for his absence from work,
which negates petitioner’s claim that the wages paid were advances for respondent’s work in the
partnership.

The Court agrees with the Court of Appeals that the evidence presented by the parties showed that an
employer-employee relationship existed between petitioner and respondent.

In termination cases, the burden is upon the employer to show by substantial evidence that the termination
was for lawful cause and validly made.Article 277 (b) of the Labor Code puts the burden of proving that the
dismissal of an employee was for a valid or authorized cause on the employer, without distinction whether
the employer admits or does not admit the dismissal. For an employee’s dismissal to be valid, (a) the
dismissal must be for a valid cause, and (b) the employee must be afforded due process. Procedural due
process requires the employer to furnish an employee with two written notices before the latter is dismissed:
(1) the notice to apprise the employee of the particular acts or omissions for which his sought, which is the
equivalent of a charge; and (2) the notice informing the employee of his dismissal, to be issued after the
employee has been given reasonable opportunity to answer and to be heard on his defense. Petitioner failed
to comply with these legal requirements; hence, the Court of Appeals correctly affirmed the Labor Arbiter’s
finding that respondent was illegally dismissed, and entitled to the payment of backwages, and separation
pay in lieu of reinstatement.

• Jao vs. BCC Product Sales Inc., G.R. No. 163700, April 18, 2012

Facts:
Petitioner maintained that respondent BCC Product Sales Inc. (BCC) and its President, Terrance Ty,
employed him as comptroller starting from September 1995 with a monthly salary of P20,000.00 to handle
the financial aspect of BCC’s business. On October 19,1995, the security guards of BCC, acting upon the
instruction of Ty, barred him from entering the premises of BCC where he then worked. His attempts to report
to work in November and December 12, 1995 were frustrated because he continued to be barred from
entering the premises of BCC. He then filed a complaint for illegal dismissal, reinstatement with full
backwages, non-payment of wages, damages and attorney’s fees.
 Respondents countered that petitioner was not their employee but the employee of Sobien Food
Corporation (SFC), the major creditor and supplier of BCC; and that SFC had posted him as its comptroller in
BCC to oversee BCC’s finances and business operations and to look after SFC’s interests or investments in
BCC.

Issue:
Whether or not an employer-employee relationship existed between petitioner Jao and BCC

Ruling:
The Supreme Court speaking through Justice Bersamin declared that the court cannot side with petitioner.
In determining the presence or absence of an employer-employee relationship, the Court has
consistently looked for the following incidents, to wit: (a) the selection and engagement of the employee; (b)
the payment of wages; (c) the power of dismissal; and (d) the employer’s power to control the employee on
the means and methods by which the work is accomplished. The last element, the so-called control test, is
the most important element.
Hereunder are some of the circumstances and incidents occurring while petitioner was supposedly employed
by BCC that debunked his claim against respondents. It can be deduced from the March 1996 affidavit of
petitioner that respondents challenged his authority to deliver some 158 checks to SFC. Considering that he
contested respondents’ challenge by pointing to the existing arrangements between BCC and SFC, it should
be clear that respondents did not exercise the power of control over him, because he thereby acted for the
benefit and in the interest of SFC more than of BCC.

• Joy Brothers Inc. vs. NWPC

Facts
Wage Order No. NCR-03, providing for a twenty-seven-peso wage increase for all private sector
workers and employees in the National Capital Region receiving one hundred fifty-four pesos (P154.00) and
below daily, was approved on November 29, 1993.

In February 1994, petitioner applied for exemption from said wage order on the ground that it was a
distressed establishment. The Regional Tripartite Wages and Productivity Board denied petitioner’s
application for exemption after holding that the corporation accumulated profits amounting to P38,381.80 for
the period under review. Petitioner’s motion for reconsideration was likewise denied by the Wages and
Productivity Board on January 5, 1995. On appeal to the National Wages and Productivity Commission,
petitioner was again denied relief.

More specifically, petitioner contended that the interim period to be reckoned with was from January 1, 1993
to December 15, 1993 and not merely up to September 30, 1993 as held by respondent Commission.
Significantly, the period up to December 31, 1993 would reflect losses in petitioner corporation’s books, but
not if the covered interim period was only up to September 30, 1993.

Issue
Whether or not petitioner corporation falls within the exemption for distressed establishments.

Ruling
The petitioner company is not entitled to exemption of the wage order since it is not a distressed
establishment. Under Section 5 of Wage Order No. NCR-03, distressed firms may be exempted from the
provisions of the Order upon application with and due determination of the Board. NWPC Guidelines No. 01,
Series of 1992, providing for the Revised Guidelines on Exemption, indicate the criteria to qualify for
exemption as follows:

“For Distressed Establishments: In the case of a stock corporation, partnership, single proprietorship, non-
stock, non-profit organization or cooperative engaged in a business activity or charging fees for its services
— When accumulated losses for the last 2 full accounting periods and interim period, if any, immediately
preceding the effectivity of the Order have impaired by at least 25 percent the: Paid-up capital at the end of
the last full accounting period preceding the effectivity of the Order, in the case of corporations: Total
invested capital at the beginning of the last full accounting period preceding the effectivity of the Order in the
case of partnerships and single proprietorships. Establishments operating for less than two (2) years may be
granted exemption when accumulated losses for said period have impaired by at least 25% the paid-up
capital or total invested capital, as the case may be.”

Section 8, paragraph a, of the Rules Implementing Wage Order No. NCR-03 provides that exemption from
compliance with the wage increase may be granted to distressed establishments whose paid-up capital has
been impaired by at least twenty-five percent (25%) or which registers capital deficiency or negative net
worth.

The Guidelines expressly require interim quarterly financial statements for the period immediately preceding
December 16, 1993. The last two full accounting periods here are 1991 and 1992, for which years petitioner
incurred net profits of P53,607.00 and P60,188.00, respectively.

• Mabeza vs. NLRC

Facts
Norma Mabeza was an employee hired by Hotel Supreme in Baguio City. In 1991, an inspection was
made by the Department of Labor and Employment (DOLE) at Hotel Supreme, and the DOLE inspectors
discovered several violations by the hotel management. Immediately, the owner of the hotel, Peter Ng,
directed his employees to execute an affidavit which would purport that they had no complaints whatsoever
against Hotel Supreme. Mabeza signed the affidavit, but she refused to certify it with the prosecutor’s office.
Later, when she reported to work, she was not allowed to take her shift. She then asked for a leave but was
not granted; yet she was not being allowed to work. In May 1991, she then sued Peter Ng for illegal
dismissal. Peter Ng, in his defense, said that Mabeza abandoned her work. In July 1991, Peter Ng also filed
a criminal complaint against Mabeza as he alleged that she had stolen a blanket and some other stuff from
the hotel. Peter Ng went on to amend his reply in the labor case to make it appear that the reason why he
dismissed Mabeza was because of his loss of confidence by reason of the theft allegedly committed by
Mabeza. The labor arbiter who handled the case, a certain Felipe Pati, ruled in favor of Peter Ng.

Issues
Whether or not there is abandonment in the case at bar.
Whether or not loss of confidence as ground for dismissal applies in the case at bar.
Whether or not the dismissal by the private respondent of petitioner constitutes an unfair labor practice.

Ruling
No. The side of Peter Ng is bereft of merit, and so is the decision of the Labor Arbiter, which was
unfortunately affirmed by the NLRC.

Abandonment
Abandonment is not present. Mabeza returned several times to inquire about the status of her work or her
employment status. She even asked for a leave but was not granted. Her asking for leave was a clear
indication that she had no intention to abandon her work with the hotel. Even the employer knew that his
purported reason of dismissing her due to abandonment would not fly, so he amended his reply to indicate
that it was actually “loss of confidence” that led to Mabeza’s dismissal.

Loss of Confidence
It is true that loss of confidence is a valid ground to dismiss an employee. But this is ideally only applied to
workers whose positions require a certain level or degree of trust, particularly those who are members of the
managerial staff. Evidently, an ordinary chambermaid who has to sign out for linen and other hotel property
from the property custodian each day and who has to account for each and every towel or bedsheet utilized
by the hotel’s guests at the end of her shift would not fall under any of these two classes of employees for
which loss of confidence, if ably supported by evidence, would normally apply. Further, the suspicious filing
by Peter Ng of a criminal case against Mabeza long after she initiated her labor complaint against him hardly
warrants serious consideration of loss of confidence as a ground of Mabeza’s dismissal.

Unfair Labor Practice

 Without doubt, the act of compelling employees to sign an instrument indicating that the employer
observed labor standards provisions of law when he might have not, together with the act of terminating or
coercing those who refuse to cooperate with the employer’s scheme constitutes unfair labor practice. The
first act clearly preempts the right of the hotel’s workers to seek better terms and conditions of employment
through concerted action.
We agree with the Solicitor General’s observation in his manifestation that “[t]his actuation . . . is analogous
to the situation envisaged in paragraph (f) of Article 248 of the Labor Code” which distinctly makes it an
unfair labor practice “to dismiss, discharge or otherwise prejudice or discriminate against an employee for
having given or being about to give testimony” under the Labor Code. For in not giving positive testimony in
favor of her employer, petitioner had reserved not only her right to dispute the claim and proffer evidence in
support thereof but also to work for better terms and conditions of employment.

• LEGEND HOTEL (MANILA), OLWNED BY TITANIUM CORPORATION AND/OR, NELSON NAPUD, IN

HIS CAPACITY AS THE PRESIDENT OF PETITIONER CORPORATION, PETITIONER,VS.HERNANI
S. REALUYO, ALSO KNOWN AS JOEY ROA, RESPONDENT.

G.R. No. 153511, July 18, 2012

Facts:
Realuyo, whose stage name is Joey R. Roa (Engelbert Humperdink), was a pianist at Legend Hotel Manila’s
Tanglaw Restaurant and Madison Coffee Shop. He was to play from 7pm to 10 pm three to six times a week.
He was paid P450 per day, but later his daily compensation rose to P750 upon recommendation of Christine
Velazco – restaurant manager. He was made to dress in a Barong Tagalog to fit with the Filipiniana motif of
the restaurant. At certain times, he was told to play only Tagalog songs. Sometimes death metal. He was
also subjected to the rules on employees’ representation checks and chits, a privilege granted to other
employees.
On July 9, 1999, Legend Hotel (P350 – 4 hrs) notified Joey Roa that, as a cost-cutting measure, his services
as a pianist are no longer required effective 30 July 1999.
Joey R. Roa filed a complaint for alleged unfair labor practice, constructive illegal dismissal, and the
underpayment/nonpayment of his premium pay for holidays, separation pay, service incentive leave pay, and
13th month pay. He prayed for attorney’s fees, moral damages of P100,000.00 and exemplary damages for
P100,000.00.
In its defense, petitioner denied the existence of an employer-employee relationship with Roa, insisting that
he had been only a talent engaged to provide live music at Legend Hotel’s Madison Coffee Shop for three
hours/day on two days each week; and stated that the economic crisis that had hit the country constrained
management to dispense with his services.
December 29, 1999: the Labor Arbiter (LA) dismissed the complaint for lack of merit upon finding that the
parties had no employer-employee relationship, because Roa was receiving talent fee and not salary, which
was reinforced by the fact that Roa received his talent fee nightly, unlike the regular employees of the hotel
who are paid monthly. NLRC affirmed.
Roa filed a petition for certiorari with the CA. CA set aside NLRC decision. It ruled that there was power of
control because in Roa’s line of work, he was supervised and controlled by the hotel’s restaurant manager
who at certain times would require him to perform only tagalong songs or music, or wear barong tagalong to
conform with the Filipinana motif of the place and the time of his performance is fixed. As to the status of
Roa, he is considered a regular employee of the hotel since his job was in furtherance of the restaurant
business of the hotel. Granting that Roa was initially a contractual employee, by the sheer length of service
(1992 to 1999) he had rendered for the company, he had been converted into a regular employee. CA also
held that the dismissal was due to retrenchment in order to avoid or minimize business losses, which is
recognized by law under Art. 283 of the Labor Code.
Legend Hotel filed a petition for review on certiorari before the SC. They question the propriety of the
remedy of certiorari filed by respondent with the CA as it mainly raised questions of fact and because it did
not demonstrate that the NLRC was guilty of grave abuse of discretion. Petitioner also assails the finding of
employer-employee relationship by the CA.
Issues:
1. Was the certiorari before the CA proper?
2. Was there employer-employee relationship
3. If so, was Roa validly terminated.
Ruling:
 1. Yes.
There is no longer any doubt that a petition for certiorari brought to assail the decision of the NLRC may
raise factual issues, and the CA may then review the decision of the NLRC and pass upon such factual
issues in the process.8 The power of the CA to review factual issues in the exercise of its original jurisdiction
to issue writs of certiorari is based on Section 9 of Batas Pambansa Blg. 129, which pertinently provides that
the CA "shall have the power to try cases and conduct hearings, receive evidence and perform any and all
acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction,
including the power to grant and conduct new trials or further proceedings."
2. Yes, employer-employee relationship existed between the parties.
Roa was undeniably employed as a pianist of the restaurant. The hotel wielded the power of selection at the
time it entered into the service contract dated Sept. 1, 1992 with Roa. The hotel could not seek refuge behind
the service contract entered into with Roa. It is the law that defines and governs an employment relationship,
whose terms are not restricted to those fixed in the written contract, for other factors, like the nature of the
work the employee has been called upon to perform, are also considered.
The law affords protection to an employee, and does not countenance any attempt to subvert its spirit and
intent. Any stipulation in writing can be ignored when the employer utilizes the stipulation to deprive the
employee of his security of tenure. The inequality that characterizes employer-employee relationship
generally tips the scales in favor of the employer, such that the employee is often scarcely provided real and
better options.
The argument that Roa was receiving talent fee and not salary is baseless. There is no denying that the
remuneration denominated as talent fees was fixed on the basis of his talent, skill, and the quality of music
he played during the hours of his performance. Roa’s remuneration, albeit denominated as talent fees, was
still considered as included in the term wage in the sense and context of the Labor Code, regardless of how
petitioner chose to designate the remuneration, as per Article 97(f) of the Labor Code.
The power of the employer to control the work of the employee is considered the most significant
determinant of the existence of an employer-employee relationship. This is the so-called control test, and is
premised on whether the person for whom the services are performed reserves the right to control both the
end achieved and the manner and means used to achieve that end.
Lastly, petitioner claims that it had no power to dismiss respondent due to his not being even subject to its
Code of Discipline, and that the power to terminate the working relationship was mutually vested in the
parties, in that either party might terminate at will, with or without cause. This claim is contrary to the records.
Indeed, the memorandum informing respondent of the discountinuance of his service because of the
financial condition of petitioner showed the latter had the power to dismiss him from employment.
3. No, he was not validly terminated.
The conclusion that Roa’s termination was by reason of retrenchment due to an authorized cause under the
labor Code is inevitable.

Retrenchment is one of the authorized causes for the dismissal of employees recognized by the Labor Code.
It is a management prerogative resorted to by employers to avoid ro to minimize business losses. On this
matter, Article 283 of the Labor Code states:

Article 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. xxx. In case
of retrenchment to prevent losses and in cases of closures or 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.

Justifications for retrenchment include: a) the expected losses should be substantial and not merely de
minimis in extent; b) the substantial losses apprehended must be reasonably imminent; c) the retrenchment
must be reasonably necessary and likely to effectively prevent the expected losses; and d) the alleged
losses, if already incurred, and the expected imminent losses sought to be forestalled must be proved by
sufficient and convincing evidence.
In termination cases, the burden of proving that the dismissal was for a valid or authorized cause rests upon
the employer. Here, petitioner did not submit evidence of the losses to its business operations and the
economic havoc it would thereby imminently sustain. It only claimed that Roa’s termination was due to its
“present business/financial condition.” This bare statement fell short of the norm to show a valid
retrenchment. Hence, there was no valid cause for the retrenchment of respondent. Since the lapse of time
since the retrenchment might have rendered Roa’s reinstatement to his former job no longer feasible,
Legend Hotel should pay him separation pay at the rate of one month pay for every year of service
computed from September 1992 until the finality of this decision, and full backwages from the time his
compensation was withheld until the finality of this decision.

Petition denied imo mama.

• INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS v. QUISUMBING

333 SCRA 13
G.R. No. 128845
June 1, 2000

FACTS:
Private respondent International School, Inc. (School), pursuant to PD 732, is a domestic educational
institution established primarily for dependents of foreign diplomatic personnel and other temporary
residents. The decree authorizes the School to employ its own teaching and management personnel
selected by it either locally or abroad, from Philippine or other nationalities, such personnel being exempt
from otherwise applicable laws and regulations attending their employment, except laws that have been or
will be enacted for the protection of employees. School hires both foreign and local teachers as members of
its faculty, classifying the same into two: (1) foreign-hires and (2) local-hires.
The School grants foreign-hires certain benefits not accorded local-hires. Foreign-hires are also paid a salary
rate 25% more than local-hires.
When negotiations for a new CBA were held on June 1995, petitioner ISAE, a legitimate labor union and the
collective bargaining representative of all faculty members of the School, contested the difference in salary
rates between foreign and local-hires. This issue, as well as the question of whether foreign-hires should be
included in the appropriate bargaining unit, eventually caused a deadlock between the parties.
The labor union and the collective bargaining representative of all faculty members of the School, contested
the difference in salary rates between foreign and local-hires.
The Union claims that the point-of-hire classification employed by the School is discriminatory to Filipinos
and that the grant of higher salaries to foreign-hires constitutes racial discrimination.

ISAE filed a notice of strike. Due to the failure to reach a compromise in the NCMB, the matter reached the
DOLE which favored the School. Hence this petition.

ISSUE: Whether or not the School’s system of compensation is violative of the principle of “equal
pay for equal work”

RULING: Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 135, for
example, prohibits and penalizes the payment of lesser compensation to female employees as against a
male employee for work of equal value. Art. 248 declares it an unfair labor practice for an employer to
discriminate in regard to wages in order to encourage or discourage membership in an labor organization.
Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar
conditions, should paid similar salaries. If an employer accords employees the same position and rank, the
presumption is that these employees perform equal work. This presumption is borne by logic and human
experience. If the employer has discriminated against an employee, it is for the employer to explain why the
employee is treated unfairly.
The employer in this case had failed to do so. There is no evidence here that foreign-hires perform 25%
more efficiently or effectively than local-hires. Both groups have similar functions and responsibilities, which
they perform under similar working conditions.

ISSUE:
Whether the foreign-hires should be included in bargaining unit of local- hires.
RULING:
NO. The Constitution, Article XIII, Section 3, specifically provides that labor is entitled to “humane conditions
of work.” These conditions are not restricted to the physical workplace – the factory, the office or the field –
but include as well the manner by which employers treat their employees.
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code. Article 248 declares it an
unfair labor practice for an employer to discriminate in regard to wages in order to encourage or discourage
membership in any labor organization.
The Constitution enjoins the State to “protect the rights of workers and promote their welfare, In Section 18,
Article II of the constitution mandates “to afford labor full protection”. The State has the right and duty to
regulate the relations between labor and capital. These relations are not merely contractual but are so
impressed with public interest that labor contracts, collective bargaining agreements included, must yield to
the common good.

However, foreign-hires do not belong to the same bargaining unit as the local-hires.
A bargaining unit is a group of employees of a given employer, comprised of all or less than all of the entire
body of employees, consistent with equity to the employer indicate to be the best suited to serve the
reciprocal rights and duties of the parties under the collective bargaining provisions of the law.
The factors in determining the appropriate collective bargaining unit are (1) the will of the employees (Globe
Doctrine); (2) affinity and unity of the employees’ interest, such as substantial similarity of work and duties, or
similarity of compensation and working conditions (Substantial Mutual Interests Rule); (3) prior collective
bargaining history; and (4) similarity of employment status. The basic test of an asserted bargaining unit’s
acceptability is whether or not it is fundamentally the combination which will best assure to all employees the
exercise of their collective bargaining rights.

In the case at bar, it does not appear that foreign-hires have indicated their intention to be grouped together
with local-hires for purposes of collective bargaining. The collective bargaining history in the School also
shows that these groups were always treated separately. Foreign-hires have limited tenure; local-hires enjoy
security of tenure. Although foreign-hires perform similar functions under the same working conditions as the
local-hires, foreign-hires are accorded certain benefits not granted to local-hires such as housing,
transportation, shipping costs, taxes and home leave travel allowances. These benefits are reasonably
related to their status as foreign-hires, and justify the exclusion of the former from the latter. To include
foreign-hires in a bargaining unit with local-hires would not assure either group the exercise of their
respective collective bargaining rights.

• Ilaw at Buklod ng Manggagawa (IBM) v. NLRC, 198 S 586 (91)

FACTS:

IBM representing 4500 employees of SMC working at various plants, offices and warehouses in NCR
presented to the company a demand for correction of the significant distortion in the workers’ wages
pursuant to the Wage Rationalization Act.

In that demand, the Union explicitly invoked Section 4 (d) of RA 6727 which reads as follows: Where the
application of the increases in the wage rates under this Section results in distortions as defined under
existing laws in the wage structure within an establishment and gives rise to a dispute therein, such dispute
shall first be settled voluntarily between the parties and in the event of a deadlock, the same shall be finally
resolved through compulsory arbitration by the regional branches of the National Labor Relations
Commission having jurisdiction over the workplace. It shall be mandatory for the NLRC to conduct
continuous hearings and decide any dispute arising under this Section within twenty (20) calendar days from
the time said dispute is formally submitted to it for arbitration. The pendency of a dispute arising from a wage
distortion shall not in any way delay the applicability of the increase in the wage rates prescribed under this
Section.

Demand unheeded by company hence the union members refused to render overtime services until the
distortion has been corrected by SMC.
It appears that the employees working hours/schedule has been freely observed by the employees for the
past 5 years and due to the abandonment of the longstanding schedule of work and reversion to the eight-
hour shift substantial losses were incurred by SMC.

SMC filed a complaint with arbitration branch of NLRC then before the NLRC for the latter to declare the
strike illegal.

Union’s contention: workers’ refusal to work beyond 8 hours was a legitimate means of compelling SMC to
correct distortion.

SMC: The coordinated reduction by the Union’s members of the work time in order to compel SMC to yield to
the demand was an illegal and unprotected activity.

ISSUE: Whether or not the strike is legal in the resolution of wage distortion.

HELD:

ILLEGAL.

The strike involving the issue of wage distortion is illegal as a means of resolving it. The legality of these
activities is usually dependent on the legality of the purposes sought to be attained and the means employed
therefore. It goes without saying that these joint or coordinated activities may be forbidden or restricted by
law or contract. In the instance of "distortions of the wage structure within an establishment" resulting from
"the application of any prescribed wage increase by virtue of a law or wage order," Section 3 of Republic Act
No. 6727 prescribes a specific, detailed and comprehensive procedure for the correction thereof, thereby
implicitly excluding strikes or lockouts or other concerted activities as modes of settlement of the issue.

The provision states that 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) 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 there from 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.

The legislative intent that solution of the problem of wage distortions shall be sought by voluntary negotiation
or arbitration, and not by strikes, lockouts, or other concerted activities of the employees or management, is
made clear in the rules implementing RA 6727 issued by the Secretary of Labor and Employment pursuant
to the authority granted by Section 13 of the Act. Section 16, Chapter I of these implementing rules, after
reiterating the policy that wage distortions be first settled voluntarily by the parties and eventually by
compulsory arbitration, declares that, "Any issue involving wage distortion shall not be a ground for a strike/
lockout."

• ECOP vs. NWPC Case Digest

Employees Confederation of the Philippines (ECOP) vs. NWPC
201 SCRA 759 (1991)

Facts:
Petitioners ECOP questioned the validity of the wage order issued by the RTWPB dated October 23, 1990
pursuant to the authority granted by RA 6727. The wage order increased the minimum wage by P17.00 daily
in the National Capital Region.

The wage order is applied to all workers and employees in the private sector of an increase of P 17.00
including those who are paid above the statutory wage rate. ECOP appealed with the NWPC but dismissed
the petition.

The Solicitor General in its comment posits that the Board upon the issuance of the wage order fixed
minimum wages according to the salary method. Petitioners insist that the power of RTWPB was delegated,
through RA 6727, to grant minimum wage adjustments and in the absence of authority, it can only adjust
floor wages.

Issue:

Whether or not the wage order issues by RTWPB dated October 23, 1990 is valid.

Ruling:

The Court agrees with the Solicitor General. It noted that there are two ways in the determination of wage,
these are floor wage method and salary ceiling method. The floor wage method involves the fixing of
determinate amount that would be added to the prevailing statutory minimum wage while the salary ceiling
method involves where the wage adjustment is applied to employees receiving a certain denominated salary
ceiling.

RA 6727 gave statutory standards for fixing the minimum wage.

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-a-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 of employment generation and family income; and

(j) The equitable distribution of income and wealth along the imperatives of economic and social
development."

The wage order was not acted in excess of board’s authority. The law gave reasonable limitations to the
delegated power of the board
6. RA 8042 - "Migrant Workers and Overseas Filipinos Act of 1995."

MIGRANT WORKER - refers to a person who is to be engaged, is engaged or has been engaged in a
remunerated activity in a state of which he or she is not a legal resident to be used interchangeably with
overseas Filipino worker.

DEPLOYMENT OF OFWs.
The State shall allow the deployment of OFWs: Only in countries where the rights of Filipino migrant workers
are protected. The government recognizes any of the following as guarantee on the part of the receiving
country for the protection and the rights of overseas Filipino workers:
(a) It has existing labor and social laws protecting the rights of migrant workers;
(b) It is a signatory to multilateral conventions, declaration or resolutions relating to the
protection of migrant workers;
(c) It has concluded a bilateral agreement or arrangement with the government protecting the rights
of overseas Filipino workers; and
(d) It is taking positive, concrete measures to protect the rights of migrant workers.
Note: the government, in pursuit of the national interest or when public welfare so requires, may, at any time,
terminate or impose a ban on the deployment of migrant workers.

ILLEGAL RECRUITMENT - illegal recruitment shall mean any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, procuring workers and includes referring, contact services, promising or
advertising for employment abroad, whether for profit or not, when undertaken by a non-license or non-
holder of authority. Provided, that 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 persons, whether a non-licensee, non-holder, licensee or
holder of authority.

The following prohibited acts when committed by any persons, whether a non-licensee, non-holder,
licensee or holder of authority, shall be considered illegal recruitment:
(a) To charge or accept directly or indirectly any amount greater than the specified in the schedule of
allowable fees prescribed by the Secretary of Labor and Employment, 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 the Labor Code;

(d) To induce 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 persons or entity not to employ any worker who has not applied
for employment through his agency;

(f) To engage in the recruitment of placement of workers in jobs harmful to public health or morality or to
dignity of the Republic of the Philippines;

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and Employment or by his duly
authorized representative;

(h) To fail to submit reports on the status of employment, placement vacancies, remittances of foreign
exchange earnings, separations from jobs, departures 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 on indirectly in the management of a
travel agency;

(k) To withhold or deny travel documents from applicant workers before departure for monetary or financial
considerations other than those authorized under the Labor Code and its implementing rules and
regulations;

(l) Failure to actually deploy without valid reasons as determined by the Department of Labor and
Employment; and

(m) Failure to reimburse expenses incurred by the workers 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.

Types of illegal recruitment

1. Simple or licensee –committed by a licensee or holder of authority against one or two persons only. The
prescriptive period is five (5) years.
2. Non-licensee –committed by any person who is neither a licensee nor a holder of authority;
3. Syndicated –committed by a syndicate if carried out by a group of three or more persons in conspiracy or
confederation with one another. (considered as offense committed with economic sabotage);
4. Large scale or qualified –committed against three or more persons individually or as a group.
(considered as offense committed with economic sabotage)

Persons prohibited from engaging in the business of recruiting migrant workers:

1. It is unlawful for any official or Ee of the following agencies to engage in recruiting migrant workers:
a. DOLE
b. POEA
c. Overseas Workers Welfare Administration (OWWA)
d. DFA
e. Other Government agencies involved in the implementation of R.A. 8042
2. The relatives within the 4th civil degree of consanguinity or affinity of such official or Ee are also prohibited
from engaging directly or indirectly in the business of recruiting migrant workers

VENUE for criminal action arising from illegal recruitment = RTC of the province or city where the offense
was committed or where the offended party actually resides at the same time of the commission of the
offense.
Note: Court where action is first filed acquires jurisdiction to the exclusion of other courts.

PRESCRIPTIVE PERIODS.
Simple Illegal Recruitment – 5 years
Illegal Recruitment w/ Economic Sabotage – 20 years

MANDATORY REPATRIATION OF UNDERAGE MIGRANT WORKERS.

Upon discovery or being informed of the presence of migrant workers whose actual ages fall below
the minimum age requirement for overseas deployment, the responsible officers in the foreign service shall
without delay repatriate said workers and advise the Department of Foreign Affairs through the fastest means
of communication availavle of such discovery and other relevant information.

7. When is Overseas Employment Contract not approved by POEA/DOLE considered valid?

An Overseas Employment Contract (OEC) not approved by POEA/DOLE may be considered valid when
there is an unauthorized alteration, modification or substitution on the original POEA-approved contract,
where such alteration, modification and substitution does not cause any detriment but rather a benefit to the
worker.

The law prohibits the unauthorized alteration, modification and substitution of the overseas contract from the
time of actual signing thereof by the parties up to and including the period of their expiration without the
approval of the POEA as it constitute a prohibited act for illegal recruitment. However, in cases where the
overseas worker and the foreign employer modified the contract in relation to the former’s request of
increasing its wage, the contract entered into by the foreign employer and the overseas worker is valid.

8. Illegal Recruitment vs. Estafa

Illegal Recruitment and estate are two and distinct actions. Illegal Recruitment is punishable under the Labor
Code (a special law) while estate is punishable under the Revised Penal Code (a general law). The
commission of estafa in the process of illegal recruitment does not preclude therefor under the Revised
Penal Code. Illegal recruitment is mala prohibita where criminal intent is not necessary; while estafa is mala
in se where the fact alone that the accused violated the law warrants its conviction and intent is imperative.
Estafa is broader and wider in scooe as it covers deceits whether related to recruitment or not. It is well
established in jurisprudence that a person may be charged and convicted for both crimes.

9. Cite the grounds for disciplinary action by the POEA against overseas workers.

Commission by an Oversea Filipino Worker of any of the offences enumerated below shall be a ground for
disciplinary action for which the corresponding penalties shall be imposed:
Pre-Employment Offenses
a.) Submitting, furnishing or using false information or documents or any form of
misrepresentation for the purpose of job application or employment.
b.) Unjustified refusal to continue his/her application after signing an employment contract, or
to depart for the worksite after all employment and travel documents have been duly approved
by the appropriate government agencies.
During Employment
a.) Commission of a felony, or crime punishable by the laws of the Philippines or by the
host country, committed during employment.
b.) Assaulting a fellow worker, the principal/employer or any member of his/her family, or
any of the directors, officers, managerial or supervisorial staff of the principal/employer.
c.) Grave abuse of authority by an officer exercising supervision over other employees/
d.) Possession or use of prohibited drugs, contraband, alcohol or pornographic materials in
violation of company policy or laws of the host country.
e.) Unjustified refusal to be repatriated in case of mandatory repatriation in accordance with
the declaration of the Philippine government.

10. What are the exceptions to the prohibition against alien employment in nationalised
industries?
1. Secretary of Justice specifically authorizes the employment of technical personnel;
2. Aliens are elected members of the board of directors or governing body of corporations or
associations engaging in partially nationalized activities shall be allowed in proportion to their
allowable participation or share in the capital of such entities [Section 2-A of Anti-Dummy Law, as
amended by P.D. 715]; or
3. Enterprises registered under the Omnibus Investment Code in case of technical, supervisory or
advisory positions, but for a limited period.

11. Are aliens qualified for employment in the Philippines?

Yes, as long as he obtain an employment permit from the DOLE, after a determination of the non-
availability of a person in the Philippines who is competent, and he is able and willing at the time of
application to perform the services for which the alien is desired. He will also need an alien
employment registration certificate.
12. Who may employ apprentices?
Highly technical industries. The highly technical occupation should require more than 3 months of
practical training with theoretical instruction officially endorsed by a tripartite body and approved for
apprenticeship by the Authority.

13. Differentiate a Learner from an Apprentice, if there is a difference.

Source: Chan Labor Law Reviewer, 2017
The following are the distinctions:

1. Practical training. Both learnership and apprenticeship involve practical training on-the-job.

2. Training agreement. Learnership is governed by a learnership agreement; while apprenticeship is

governed by an apprenticeship agreement.

2. Occupation. Learnership involves learnable occupations consisting of semi-skilled and other industrial

occupations which are non-apprenticeable; while apprenticeship concerns apprenticeable occupations

or any trade, form of employment or occupation approved for apprenticeship by the DOLE Secretary.

3. Theoretical instructions. Learnership may or may not be supplemented by related theoretical

instructions; while apprenticeship should always be supplemented by related theoretical instructions.

4. Ratio of theoretical instructions and on-the-job training. For both learnership and apprenticeship, the

normal ratio is one hundred (100) hours of theoretical instructions for every two thousand (2,000) hours

of practical or on-the-job training. Theoretical instruction time for occupations requiring less than two

thousand (2,000) hours for proficiency should be computed on the basis of such ratio.
5. Competency-based system. Unlike in apprenticeship, it is required in learnership that it be implemented

based on the TESDA-approved competency-based system.

6. Duration of training. Learnership involves practical training on the job for a period not exceeding

three (3) months; while apprenticeship requires for proficiency, more than three (3) months but not

over six (6) months of practical training on the job.

7. Qualifications. The law does not expressly mention any qualifications for learners; while the following

qualifications are required to be met by apprentices under Article 59 of the Labor Code:

(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.

CONFLICT IN THE AGE REQUIREMENT FOR APPRENTICES:

Under the Labor Code as stated above – 14 years of age

Under the Labor Code’s Implementing Rules – “Be at least 15 years of age, provided those who are at

least 15 years of age but less than 18 may be eligible for apprenticeship only in non-hazardous

occupations.”

CONFLICT, HOW RESOLVED:

It should be 15 years of age but the more appropriate basis is not the Labor Code’s Implementing Rules

(which cannot amend the Labor Code) but another law, R.A. No. 9231, (“AN ACT PROVIDING FOR

THE ELIMINATION OF THE WORST FORMS OF CHILD LABOR AND AFFORDING

STRONGER PROTECTION FOR THE WORKING CHILD“) where it is provided that:

(1) All persons under eighteen (18) years of age shall be considered as a “child”; and

(2) Children below fifteen (15) years of age shall not be employed EXCEPT if he/she falls under any

of the exceptions mentioned and enumerated in the law.

8. Circumstances justifying hiring of trainees. Unlike in apprenticeship, in learnership, the law, Article 74

of the Labor Code, expressly prescribes the pre-requisites before learners may be validly employed, to

wit:

(a) When no experienced workers are available;

(b) The employment of learners is necessary to prevent curtailment of employment opportunities; and

(c) The employment does not create unfair competition in terms of labor costs or impair or lower

working standards.

9. Limitation on the number of trainees. In learnership, a participating enterprise is allowed to take in

learners only up to a maximum of twenty percent (20%) of its total regular workforce. No similar cap is

imposed in the case of apprenticeship.

10. Option to employ. In learnership, the enterprise is obliged to hire the learner after the lapse of the

learnership period; while in apprenticeship, the enterprise is given only an “option” to hire the

apprentice as an employee.

11. Wage rate. The wage rate of a learner or an apprentice is set at seventy-five percent (75%) of the

statutory minimum wage.
14. When is an apprenticeship program compulsory?
Source: http://www.chanrobles.com/implementingrulesofthelaborcode2.html#.W79zxWgza70
Omnibus Rule Implementing the Labor Code
SECTION 41. Compulsory apprenticeship. — (a) When grave national emergencies, particularly those
involving the security of the state, arise or particular requirements of economic development so demand, the
Secretary of Labor and Employment may recommend to the President of the Philippines the compulsory
training of apprentices required in a certain trades, occupations, jobs or employment levels where shortage
of trained manpower is deemed critical;
(b) Where services of foreign technicians are utilized by private companies in apprenticeable trades said
companies are required to set up appropriate apprenticeship programs.
15. Differentiate “Handicapped Workers” from “Workers with disability”
Source: Azucena, 2016 ; Chan Labor Law Reviewer, 2017;
http://www.ncda.gov.ph/disability-laws/implementing-rules-and-regulations-irr/irr-of-ra-7277/
file:///C:/Users/hp/Downloads/ra_10524_and_its_irr_-_booklet%20(2).pdf
“Persons with Disability” are those suffering from restriction or 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.
“Disability” means (1) a physical or mental impairment that substantially limits one or more psychological,
physiological or anatomical functions of an individual or activities of such individual; (2) a record of such an
impairment; or (3) being regarded as having such an impairment.
“Handicap” refers to a disadvantage for a given individual, resulting from an impairment or a disability

that limits or prevents the function or activity that is considered normal given the age and sex of the
individual
"Handicapped workers" are those whose earning capacity is impaired by age or physical or mental deficiency
or injury.
Disabled Worker – means a worker whose earning capacity is impaired by mental, physical or sensory
deficiency or injury.
Qualified Individual with a Disability shall mean an individual with disability who, with or

without reasonable accommodations, can perform the essential functions of the employment

position that such individuals holds or desires. However, consideration shall be given to the

employer’s judgment as to what functions of a job are essential, and if an employer has prepared a written
description before advertising or interviewing applicant for the job, this description shall be considered
evidence of the essential functions of the job.
A qualified employee with disability 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.
Disabled persons are qualified 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.

16. When are qualified deaf-mute workers not considered handicapped workers, but regular
employees?

Deaf-mutes are not considered handicapped workers but regular employees when their disability did not
render them unqualified or unfit for the tasks assigned to them. A qualified disabled employee should be
given the same terms and conditions of employment as qualified able-bodied person as provided by Section
5 of RA 7277. Since the Magna Carta accords them the rights of qualified disabled person, they are thus
covered by Article 280 of the Labor Code defining regular employees as those performing activities which
are usually necessary or desirable in the usual business or trade of the employer.
17. What do you understand by “Dual Training System”?
"Dual training system" refers to an instructional delivery system of technical and vocational education and
training that combines in-plant training and in-school training based on a training plan collaboratively
designed and implemented by an accredited dual system educational institution/training centre and
accredited dual system agricultural, industrial and business establishments with prior notice and advice to
the local government unit concerned. Under this system, said establishments and the educational institution
share the responsibility of providing the trainee with the best possible job qualifications, the former
essentially through practical training and the latter by securing an adequate level of specific, general and
occupation-related theoretical instruction. The word "dual" refers to the two parties providing instruction: the
concept "system" means that the two instructing parties do not operate independently of one another, but
rather coordinate their efforts (Dual Training System Act of 1994)
The DTS, as its name suggests, is a training modality that combines theoretical and practical
training. It is called dual training because learning takes place alternately in two venues: the school
or training center and the company or workshop.
In DTS, the school and workplace share the responsibility of providing trainees with well-
coordinated learning experiences and opportunities.
This close cooperation between the school and the company ensures that the trainees are fully
equipped with employable skills, work knowledge, and attitudes at the end of the training.
The general and occupation-related theoretical instruction provided by the school is complemented
by on-the-job training in the workplace. Trainees under the DTS spend at least 40 percent of the
training/learning time in school and 60 percent for practical training inthe company.

18. Cite at least five benefits or working conditions that are minimum requirements in an employment
relationship? What are its exceptions?

A. Meal Break - Every employer is required to give his employees, regardless of sex, not less than one
(1) hour (or 60 minutes) time-off for regular meals
B. Overtime Pay - additional compensation for work performed beyond eight (8) hours a day.

General rule.

The general rule remains that no employee may be compelled to render overtime work against his will.

Exceptions when employee may be compelled to render overtime work:

1. 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;

2. When overtime work is necessary to prevent loss of life or property or in case of imminent
danger to public safety due to actual or impending emergency in the locality caused by serious
accident, fire, floods, typhoons, earthquake, epidemic or other disasters or calamities;

3. When there is urgent work to be performed on machines, installations or equipment, or in order

to avoid serious loss or damage to the employer or some other causes of similar nature;

4. When the work is necessary to prevent loss or damage to perishable goods;

5. When the completion or continuation of work started before the 8th hour is necessary to prevent
serious obstruction or prejudice to the business or operations of the employer; and
 6. When overtime work is necessary to avail of favorable weather or environmental conditions
where performance or quality of work is dependent thereon.

C. Night Shift Differential - applies not only to women but 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 o'clock in the morning, to be determined by the
DOLE Secretary, after consulting the workers’ representatives/labor organizations and employers.
(RA 10151)

D. Holiday Pay - Generally, all employees are entitled to and covered by the law on holiday pay.

Excluded from the Holiday Pay:

a. Those of the government and any of the political subdivisions, including government-owned and
controlled corporations;

b. Those of retail and service establishments regularly employing less than ten (10) workers;

c. Domestic workers or Kasambahays;

d. Persons in the personal service of another;

e. Managerial employees as defined in Book III of the Labor Code;

f. Field personnel and other employees whose time and performance is unsupervised by the
employer;

g. Those who are engaged on task or contract basis or purely commission basis;

h. Those who are paid a fixed amount for performing work irrespective of the time consumed in
the performance thereof;

i. Other officers and members of the managerial staff;

j. Members of the family of the employer who are dependent on him for support.

E. Payment of Minimum Wage –

1. It is the remuneration or earnings, however designated, for work done or to be done or for
services rendered or to be rendered;
2. It is capable of being expressed in terms of money, whether fixed or ascertained on a time, task,
piece or commission basis, or other method of calculating the same;
3. It 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
4. It includes the fair and reasonable value, as determined by the DOLE Secretary, 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
The minimum wage rates prescribed by law shall be the basic cash wages without deduction
therefrom of whatever benefits, supplements or allowances which the employees enjoy free of
charge aside from the basic pay.
19. Under what condition may a “compressed work week” schedule be legally authorized as an
exception to the “eight-hour a day” requirement under the Labor Code?
Alternative answer:
The conditions for an allowable compressed work week are the following: the workers agree to the
temporary change of work schedule and they do not suffer any loss of overtime pay, fringe benefits or their
weekly or monthly take-home pay. (DOLE Explanatory Bulletin on the Reduction of Workdays on Wages
issued on July 23, 1985)
Alternative answer:
Compressed work week is resorted to by the employer to Prevent serious losses due to causes beyond his
control, such as when there is a substantial slump in the demand for his goods or services or when there is
lack of raw materials. (Explanatory Bulletin on the Reduction of Workdays on Wages Issued by DOLE, July
23, 1985)
20. What do you mean by “Hours Worked”?
Hours worked is defined as “all time during which an employee is required to be on duty or to be at a
prescribed workplace” and “all time during which an employee is suffered or permitted to work”.
21. Cite the principles in determining Hours Worked.
The following general principles shall govern in determining whether the time spent by an employee is
considered hours worked:
1. All hours are hours worked which the employee is required to give to his employer, regardless of
whether or not such hours are spent in productive labor or involve physical or mental exertion;
2. An employee need not leave the premises of the workplace in order that his rest period shall not be
counted, it being enough that he stops working, may rest completely and may leave his workplace,
to go elsewhere, whether within or outside the premises of his workplace;
3. 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 considered as hours worked, if the work as with the knowledge of his
employer or immediate supervisor;
4. The time during which an employee is inactive by reason of interruptions in his work beyond his
control shall be considered time either if the imminence of the resumption of work requires the
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.
22. When is sleeping, eating and playing considered “hours worked”?

Eating:

Being time-off, eating during meal time is not compensable hours worked. In this case, the employee is free
to do anything he wants, except to work.

However if he is required to work while eating, it should be included in the hours worked and should be
compensated accordingly.

Sleeping:

GR: Express or implied agreement between parties determines whether sleeping time will be considered part
of his hours worked.

In the absence of agreement, the rules are:

• Sleeping may be considered hours worked if it is subject to serious interruption or takes place under
conditions substantially less desirable than would be likely to exist at the employee’s home.

• Sleeping will not be regarded as hours worked if there is an opportunity for comparatively
uninterrupted sleep under fairly desirable conditions, even though the employee is required to remain
on or near the employers premises and must hold himself in readiness for a call to action
employment.
23. For a covered employee and employer, how do you compute the overtime of an employee who
worked from 8am to 12 noon, then from 1pm to 6pm during regular days, special holiday, rest day,
regular holiday, or on special holiday which falls on the employees scheduled rest day?

What are some basic principles on overtime work?

1. Work rendered after normal eight (8) hours of work is called “overtime work.”

2. In computing overtime work, "regular wage" or "basic salary" means "cash" wage only without
deduction for facilities provided by the employer.

3. "Premium pay" means the additional compensation required by law for work performed within eight
(8) hours on non-working days, such as regular holidays, special holidays and rest days.

4. "Overtime pay" means the additional compensation for work performed beyond eight (8) hours.

Illustrations on how overtime is computed:

Facts: Overtime of an employee who worked from 8am to 12 noon, then from 1pm to 6pm

No of OT hours= 9 hours – 8 hours= 1 hour OT

a. For overtime work performed on an ordinary day, the overtime pay is plus 25% of the basic

hourly rate. OT pay= 1 hour X hourly rate X 1.25

b. For overtime work performed on a rest day or on a special day, the overtime pay is plus

30% of the basic hourly rate which includes 30% additional compensation as provided in

Article 93 [a] of the Labor Code. OT pay= 1 hour X hourly rate X 1.3 X 1.3

c. For overtime work performed on a rest day which falls on a special day, the overtime pay is

plus 30% of the basic hourly rate which includes 50% additional compensation as provided in Article
93 [c] of the Labor Code. OT pay= 1 hour X hourly rate X 1.5 X 1.3

d. For overtime work performed on a regular holiday, the overtime pay is plus 30% of the

basic hourly rate which includes 100% additional compensation as provided in Article 94 [b] of the
Labor Code. OT pay= 1 hour X hourly rate X 2 X 1.3

e. For overtime work performed on a rest day which falls on a regular holiday, the overtime

pay is plus 30% of the basic hourly rate which includes 160% additional compensation.

OT pay=1 hour X hourly rate X 2.6 X 1.3

24. When may employees exempted from the coverage of the provisions on working conditions be
considered entitled to labor standards benefits?

Q: Who determines working conditions?

A: Generally, they are determined by the employer, as he is usually free to regulate, according to his
discretion, all aspects of employment.

Q: What is the limitation on the employer’s power to regulate working conditions?

A: It must be done in good faith and not for the purpose of defeating or circumventing the rights of the
employees. Such are not always absolute and must be exercised with due regard to the rights of labor.

Q: When does the condition on employment under the Labor Code apply?

A: Only if an Er-Ee relationship exists.

Q: Who are the employees that are covered by the conditions of employment?

A: GR: It applies to all Ee’s in all establishments.

XPN:

1.Gov’t employees

2.Managerial employees

3.Field personnel

4.The employers family members who depend on him for support

5.Domestic helpers and persons in the personal service of another, and

6.Workers who are paid by results as determined under DOLE regulations

Q: When may employees exempted from the coverage of the provisions on working conditions be
considered entitled to labor standards benefits?

1. When such benefit is provided for in the company policy

2. When such benefit is provided for in the collective bargaining agreement

3. In cases where a managerial employee is not in fact performing a managerial function

25. When is the prescriptive period of filing a complaint for Service Incentive Leave?

Answer:
Auto Bus Transport Systems, Inc. vs. Antonio Bautista
G.R. No. 156367. May 16, 2005

Applying Article 291 of the Labor Code in light of this peculiarity of the service incentive leave, we can
conclude that the three (3)-year prescriptive period commences, not at the end of the year when the
employee becomes entitled to the commutation of his service incentive leave, but from the time when the
employer refuses to pay its monetary equivalent after demand of commutation or upon termination of
the employees services, as the case may be.
In the case at bar, respondent had not made use of his service incentive leave nor demanded for its
commutation until his employment was terminated by petitioner. Neither did petitioner compensate his
accumulated service incentive leave pay at the time of his dismissal. It was only upon his filing of a complaint
for illegal dismissal, one month from the time of his dismissal, that respondent demanded from his former
employer commutation of his accumulated leave credits. His cause of action to claim the payment of his
accumulated service incentive leave thus accrued from the time when his employer dismissed him and
failed to pay his accumulated leave credits.
Therefore, the prescriptive period with respect to his claim for service incentive leave pay only
commenced from the time the employer failed to compensate his accumulated service incentive
leave pay at the time of his dismissal. Since respondent had filed his money claim after only one month
from the time of his dismissal, necessarily, his money claim was filed within the prescriptive period provided
for by Article 291 of the Labor Code.

26. Cite at least 7 other leaves recognized by law other than service incentive leave. What are its
conditions for entitlement?

1. MATERNITYLEAVE
Basis: RA 1161 Social Security Law as amended

“Maternity leave” is the period of time which may be availed of by a woman employee, married or
unmarried, to undergo and recuperate from childbirth, miscarriage or complete abortion during which
she is permitted to retain her rights and benefits flowing from her employment.

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:

CONDITIONS FOR ENTITLEMENT

(1) 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;
(2) The full payment shall be advanced by the employer within thirty (30) days from the filing of the maternity
leave application;
(3) 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;
(4) That the maternity benefits provided under this section shall be paid only for the first four (4)
deliveries or miscarriages;
(5) 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
(6) 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. [Sec. 14-A, RA 1161 as
amended by RA8282]

2. PATERNITY LEAVE
Basis: RA 8187 – PATERNITY LEAVE ACT OF 1996

PATERNITY LEAVE – The leave credits granted to a married male employee to allow him to earn
compensation for seven (7) working days without reporting for work, provided that his spouse has delivered
a child or had a miscarriage or an abortion for the purpose of lending support to his wife during her period of
recovery and/or the nursing of the newly born child. [Sec. 1[a], Rules Impl. RA 8187]

Note: “Spouse” refers to the lawful wife. For this purpose, “lawful wife” refers to a woman who is legally
married to the male employee concerned.

CONDITIONS FOR ENTITLEMENT

1. An employee at the time of the delivery of his child;
2. Cohabiting with his spouse at the time that she gives birth or suffers a miscarriage;
3. Applied for paternity leave with his employer within a reasonable period of time; and
4. His wife has given Birth, suffers a Miscarriage or an abortion. (Sec. 3, Rules Impl. RA 8187)

3. PARENTAL LEAVE/SOLO PARENT LEAVE

Basis: RA 8972 – SOLO PARENT’S WELFARE ACT OF 2000

WHO ARE CONSIDERED SOLO PARENTS

Solo Parent is 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 mother keeps and raises the child.
(2) Parent Left solo or alone with the responsibility of parenthood due to the following circumstances:
(a) Due to Death of spouse.
(b) Spouse is Detained or is serving sentence for a criminal conviction for at least one (1) year.
(c) Physical and/or mental Incapacity of spouse as certified by a public medical practitioner.
(d) 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.
(e) 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.
(3) 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.
(4) Any Other person who solely provides parental care and support to a child or children.
(5) 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. [Sec. 3(a), RA 8972]

NOTE: 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. [Id]

CONDITIONS FOR ENTITLEMENT

(a) He/She has rendered at least one (1) year of service whether continuous or broken at the time of the
effectivity of the Act;
(b) He/She has notified his/her employer of the availment thereof within a reasonable time period; and
(c) He/She has presented a Solo Parent Identification Card to his/her employer. [Sec. 19, Art. V, Rules Impl.
RA 8972]
4. VICTIMS OF VIOLENCE AGAINST WOMEN AND CHILDREN LEAVE

Basis: RA 9262 – ANTI-VIOLENCE AGAINST WOMEN AND CHILDREN ACT OF 2004 (RA 9262) and
IMPLEMENTING RULES AND REGULATIONS OF RA 9262

10 days Leave with pay for Victims of Violence Against Women and their Children (VAWC) is granted
to women employees who are victims of physical, sexual, psychological harm or suffering, or economic
abuse. The leave benefit shall cover the days that the woman employee has to attend to medical and legal
concerns.

CONDITION FOR ENTITLEMENT

1. The victim woman employee presents to her employer a certification from the barangay chairman
(Punong Barangay) or barangay kagawad or prosecutor or the Clerk of Court that an action relative
to the matter is pending. (Section 42, IRR of RA 9262)

5. SPECIAL LEAVES FOR WOMEN WORKERS

Basis: (MAGNA CARTA OF WOMEN)

RA 9710, SEC. 18. Special Leave Benefits for Women. — 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.

Note: “Gynecological disorders” refer to disorders that would require surgical procedures such as, but not
limited to, dilatation and curettage and those involving female reproductive organs such as the vagina,
cervix, uterus, fallopian tubes, ovaries, breast, adnexa and pelvic floor, as certified by a competent physician.
Gynecological surgeries shall also include hysterectomy, ovariectomy, and mastectomy.

CONDITIONS FOR ENTITLEMENT

1. She has rendered at least six (6) months continuous aggregate employment service for the last twelve
(12) months prior to surgery;
2. In the event that an extended leave is necessary, the female employee may use her earned leave credits;
and
3. This special leave shall be non-cumulative and non-convertible to cash.

6. VACATION LEAVE
Vacation (VL) is voluntary as compared to the 5 day SIL, which is mandatory. The grant of VL in a
private enterprise results from the employer’s discretionary policy or from bargaining with the employees or
their representative.
Vacation Leave aims to afford a laborer a chance to get a much needed rest to replenish his worn
out energies and acquire new vitality to enable him to efficiently perform his duties. This benefit must
be demanded at their opportune time and if an employee allows the years to go by in silence, he waives it.

COMMUTATION OF VACATION LEAVES

Vacation leave benefits and its conversion to cash are voluntary, not statutory, in character. Entitlement to
them, especially by a corporate executive, must be proved.

CONDITIONS FOR ENTITLEMENT

(The employer may impose certain conditions in administrating leave privileges of employees.)

7. SICK LEAVE
Sick leave (SL) is voluntary as compared to the 5 day SIL, which is mandatory. The grant of Sick
Leave in a private enterprise results from the employer’s discretionary policy or from bargaining with the
employees or their representative. Sick Leave’s benefits, like other economic benefits, are by their nature,
intended to be replacement for regular income which otherwise would not be earned because an employee
is not working during the period of said leaves. By their nature, by agreement of the parties, Sick Leave
benefits are intended to alleviate the economic condition of the workers.
This benefit must be demanded at their opportune time and if an employee allows the years to go by
in silence, he waives it.
COMMUTATION OF SICK LEAVES
Sick Leave benefits and its conversion to cash are voluntary, not statutory, in character. Entitlement to them,
especially by a corporate executive, must be proved.

CONDITIONS FOR ENTITLEMENT:

(The employer may impose certain conditions in administrating leave privileges of employees.)

27. May “wages” embrace within its scope “separation pay”?

Answer: Yes.

Republic vs. Peralta (1987)

Wages under Article 110 of the Labor Code may be regarded as embracing within its scope
severance pay or termination or separation pay.
We continue to believe that, for the specific purposes of Article 110 and in the context of insolvency
termination or separation pay is reasonably regarded as forming part of the remuneration or other
money benefits accruing to employees or workers by reason of their having previously rendered services to
their employer; as such, they fall within the scope of "remuneration or earnings — for services rendered or to
be rendered — ." Liability for separation pay might indeed have the effect of a penalty, so far as the employer
is concerned. So far as concerns the employees, however, separation pay is additional remuneration to
which they become entitled because, having previously rendered services, they are separated from the
employer's service. The relationship between separation pay and services rendered is underscored by the
fact that separation pay is measured by the amount (i.e., length) of the services rendered. This construction
is sustained both by the specific terms of Article 110 and by the major purposes and basic policy embodied in
the Labor Code. 6 It is also the construction that is suggested by Article 4 of the Labor Code which directs
that doubts — assuming that any substantial rather than merely frivolous doubts remain-in the interpretation
of the provisions of the labor Code and its implementing rules and regulations shall be "resolved in favor of
labor."
Article 110 must be read in relation to the provisions of the Civil Code concerning the classification,
concurrence and preference of credits, which provisions find particular application in insolvency proceedings
where the claims of all creditors, preferred or non-preferred, may be adjudicated in a binding manner.
Duties, taxes and fees due on specific movable property of the insolvent to the state or any
subdivision thereof and taxes due upon the insolvent's land or building are preferred in respect of the
particular movable or immovable property to which the tax liens have attached.
Claims for unpaid wages do not fall within the category of specially preferred claims under Articles
2241 and 2242 of the Civil Code as they are covered by Article 2241 No, 6 and Article 2242 No. 3.
28. Exceptions to the prohibition against elimination or diminution of benefits.

The following are the exceptions to the prohibition against elimination or diminution of
benefits:

a. Correction of error;
b. Negotiated benefits;
c. Wage order compliance;
d. Benefits on reimbursement basis;
e. Reclassification of position;
f. Contingent benefits or conditional bonus; and
g. Productivity incentives.

29. Distinguish labor-only contractor from legitimate job contractor.

A labor-only contractor is one who supplies workers to an employer, but does not have
substantial capital or investment in the form of tools, equipment, machineries, or work premises,
among others, and the workers recruited, or placed by such person, are performing activities which
are directly related to the principal business of such employer. On the other hand, a legitimate job
contractor is one who conducts an independent business with adequate capital to do the job and pay
his people and exercises direct control over the performance of the workers.

30. Is the practice of directly deducting payments of debts from the employee’s wages allowed?

Yes, the practice of directly deducting payments of debts from the employee’s wages is
allowed, provided that such indebtedness has become due and demandable.
 Article 113 of the Labor Code on Wage Deduction provides that “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.” One of the
deductions authorized by law is provided under Article 1706 of the Civil Code, which states,
“Withholding of the wages, except for a debt due, shall not be made by the employer.”

31. Under the Labor Code, is the right of first preference a lien on the property of the insolvent debtor
in favor of the workers? Explain.

NO. It is not a lien, since it does not attach to specific property. A lien creates charges on a particular
property. The right of first preference as regards on the unpaid wages does not constitute a lien on the
property of an insolvent debtor in favor of workers. It is but a preference of credit in their favor, a preference
in application.

32. What is meant by “Wage Distortion”?

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.

NOTE: The employer CANNOT legally be obligated to correct “wage distortion” if the increase in the wages
and salaries of the employees was NOT due to a prescribed law or wage order.

33. How do you resolve disputes involving “Wage distortion”? Is it a ground for holding a strike?

1. In organized establishments: 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.

2. In unorganized establishments: The employers and workers shall endeavor to correct such
distortions. Any dispute arising therefrom shall be settled through the National Conciliation and Mediation
Board (NCMB) 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.

NO. It is NOT a proper ground to be invoked in support of or holding a strike, because there are only
two (2) grounds for holding a strike, which are the following: (1) deadlock; and (2) unfair labor practice. The
said grounds are exclusive, and wage distortion is not one of those mentioned. Thus, wage distortion is NOT
a proper ground for holding a strike.

34. Visitorial power and enforcement power of Secretary of Labor and Employment Art. 128 as
distinguished from the SIMPLE money claims on Art 129


What is visitorial and enforcement power of the Secretary of Labor and Employment?

These two complementary powers to administer and to enforce the law are conferred by the
Labor Code of the Philippines, as amended, on the Secretary of Labor and Employment or his duly
authorized representatives, i. e., the DOLE Regional Directors.

The visitorial grants to said DOLE officials, including labor and employment officers, access
to employer's records and premises at any time of the day or night whenever work is being
undertaken therein, and the right to copy there from such records, 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 the Labor Code and of any labor law, wage order or rules and
regulations issued pursuant thereto (Art. 128 (a).

The enforcement power to issue compliance orders to give effect to the labor standards
provisions of the Labor Code and other labor legislation based on the findings of labor
and employment officers or industrial safety engineers made in the course of inspection, and to 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 and employment officers and raises issues
supported by documentary proofs which were not considered in the course of inspection." (Art. 128
(b).
Secretary of Labor and Employment (SLE)?
A:
1. Restrict and regulate the recruitment and placement activities of all agencies
2. Issue orders and promulgate rules and regulations

Q: What constitute visitorial power?

A:
1. Access to employer’s records and premises at any time of the day or night, whenever work is being
undertaken
2. To copy from said records
3. 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 the Labor Code and of any labor law,
wage order, or rules and regulation issued pursuant thereto.

Q: Give 4 instances where the visitorial power of the SLE may be exercised under the Labor
Code.
A: Power to:
1.Inspect books of accounts and records of any person or entity engaged in recruitment and placement,
require it to submit reports regularly on prescribed forms and act in violations of any provisions of the LC
on recruitment and placement. (Art. 37)
2. Have access to employer’s records and premises to determine violations of any provisions of the LC
on recruitment and placement. (Art. 128)
3. Conduct industrial safety inspections of establishments. (Art. 165)
4. Inquire into the financial activities of legitimate labor organizations (LLO) and examine their books of
accounts upon the filing of the complaint under oath and duly supported by the written consent of at least
20% of the total membership of the LO concerned.

Q: Can SLE issue search warrants or warrants of arrest?

A: No. Only a judge may issue search and arrest warrants. Art 38 (c) of the Labor Code is
unconstitutional inasmuch as it gives the SLE the power to issue search or arrest warrants. The labor
authorities must go through the judicial process.

How does one initiate a complaint for violations of labor standards laws, rules and regulations?

If employer-employee relationship still exists, any aggrieved employee may file a complaint,
regardless of the amount of monetary claims, before the DOLE regional office, or its provincial field
offices, which has territorial jurisdiction over the workplace.
On the other hand, if employer-employee no longer exists, either:
1. before the DOLE regional office, provided, that the claim involves recovery of wages and other
monetary claims and benefits, including legal interest, provided further, the following requisites are
present: a) the claim is presented by an employee, or a person employed in domestic or household
service, or house helper; b) the claim arise from employer-employee relations; c) the claimant does not
seek reinstatement; and d) the aggregate money claim of each claimant does not exceed P5,000.00; or
2. before the Regional Arbitration Branch of the National Labor Relations Commission, in the absence
of any of the above enumerated requisites pursuant to Article 217 of the Labor Code, except claims for
employees’ compensation, social security, medicare and maternity benefits.

What happens after the filing of a complaint before the DOLE regional office?

All such complaints for violation of labor standards law, rules and regulations, including safety and
health, shall immediately be forwarded to the Regional Director who shall refer the case to the
appropriate unit in the Regional Office for assignment to a Labor and Employment Officer (LEO) for field
inspection (Section 2, Rule II of the Rules on the Disposition of Labor Standards Cases in the Regional
Offices).
What is a Notice of Inspection Results?

A "Notice of Inspection Results" refers to the inspection form duly accomplished and issued by the
labor and employment officers or industrial safety engineers to the employer/s or any representative/s
and the employee/s or any representative/s after the completion of the inspection. The notice shall
specify the violations discovered, if any, together with the officers recommendation and computation of
the unpaid benefits due each worker with notifications that said notice shall be posted conspicuously in
the premises of the workplace, and removal thereof by the employer or by any of the workers shall be
penalized in accordance with Article 288 of the Labor Code, as amended and that any question on the
noted findings shall be submitted to the regional office concerned within five (5) working days from receipt
thereof, otherwise an order of compliance shall be issued.

When can plant-level restitution be effected?

Where the employer has agreed to make the necessary restitutions of violations discovered in the
course of inspection, such restitutions may be effected at the plant-level within five (5) calendar days from
receipt of the inspection results by the employer or his authorized representative.
Plant-level restitutions may be effected for money claims not exceeding Fifty Thousand Pesos
(P50,000.00). A report of the restitutions shall be immediately submitted to the Regional Director for
verification and confirmation. In case the Regional Director finds that the restitutions effected at the plant-
level are not in order, he may direct the TSSD Chief to check the correctness of the restitution report.
Restitutions in excess of the aforementioned amount shall be effected at the Regional Office or at
the worksite subject to the prior approval of the Regional Director. (Section 7, Rule II of the Rules on the
Disposition of Labor Standards Cases in the Regional Offices)

What is a valid compromise agreement/ release, waiver, or quitclaim?

Should the parties arrive at an agreement as to the whole or part of the dispute, said agreement
shall be reduced in writing and signed by the parties in the presence of the Regional Director or his duly
authorized representative (Section 8, Rule II of the Rules on the Disposition of Labor Standards Cases in
the Regional Offices).
The law looks with disfavor on releases, waivers, and quitclaims by employees who have been
inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal
responsibilities and frustrate just claims of employees. However, in certain cases, the same is given effect
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.

When should hearing be conducted?

Where no proof of compliance is submitted by the employer after seven (7) calendar days from
receipt of the inspection results, the Regional Director shall summon the employer and the complainants
to a summary investigation. In regular routine inspection cases, however, such investigation shall be
conducted where no complete field investigation can be made for reasons attributable to the fault of the
employer or his representatives, such as those but not limited to instances when the field inspectors are
denied access to the premises, employment records, or workers of the employer (Section 11, Rule II of
the Rules on the Disposition of Labor Standards Cases in the Regional Offices).
When should a compliance order be issued?

If the Regional Director finds after hearing that violations have been committed, he shall issue an
Order directing the employer to restitute other corrective measures within ten (10) calendar days upon
receipt of the Order and to submit proof of compliance. The Order shall specify the amount due each
worker and shall include the computations on which the Order was based (Section 18, Rule II of the
Rules on the Disposition of Labor Standards Cases in the Regional Offices).

How to assail a compliance order issued by the Regional Director?

The aggrieved party may assail the order of the Regional Director by filing a motion for
reconsideration or an appeal pursuant to the Rules on the Disposition of Labor Standards Cases in the
Regional Offices.
A motion for reconsideration from the Order of the Regional Director is filed within seven (7)
calendar days from receipt of a copy thereof. A motion for reconsideration filed beyond the seven-day
reglementary period shall be treated as an appeal if filed within the ten-day reglementary period for
appeal, but subject to the requirements for the perfection of an appeal. Further, no second motion for
reconsideration shall be entertained (Section 19, Rule II of the Rules on the Disposition of Labor
Standards Cases in the Regional Offices).
An appeal from the Order/Resolution of the Regional Director shall be filed within ten (10)
calendar days from receipt thereof; otherwise, the same shall be rendered final and executory.

Where to file an appeal?

The appeal shall be filed in five (5) legibly typewritten copies with the Regional Office which
issued the Order. The appeal shall not be deemed perfected if it is filed with any other office or entity
(Section 3, Rule IV of the Rules on the Disposition of Labor Standards Cases in the Regional Offices).

What are the requirements for filing an appeal?

The appeal shall be filed within ten (10) calendar days from receipt of a copy of the assailed
order/resolution and subject to the following mandatory requirements:
a) It shall be under oath and accompanied by a memorandum of appeal which shall state the date
appellant received the Order/Resolution, and the grounds relied upon and the arguments in support
thereof (Section 4(a), Rule IV of the Rules on the Disposition of Labor Standards Cases in the Regional
Offices).
b) In case said Order/Resolution 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/resolution appealed from (Article 128 (b) of the Labor Code of the Philippines, as amended by
Republic Act No. 7730). No motion for the reduction of appeal bond is allowed under the Rules.

What is Labor Standards Enforcement Framework (LSEF)?

To remedy severe shortage of labor inspectors and to build a culture of compliance among
employers based on voluntariness instead of compulsion, the Department of Labor and Employment
issued Department Order No. 57-04, also called the Labor Standards Enforcement Framework (LSEF)
which involves three approaches: 1) self-assessment; 2) inspection; and 3) advisory service. Also, under
D.O. No. 57-04, the DOLE may delegate to local government units the conduct of technical safety
inspection required under Article 165 of the Labor Code.
What is Self-assessment approach?

Self-assessment is a voluntary mode applicable to and encouraged in establishments with at

least 200 workers and is unionized establishments with certified collective bargaining agreement,
regardless of the number of workers. The employers of these establishments will be provided with a
checklist in the first quarter of every year. Within a month after receipt of such checklist, a committee
composed of the employer and the employee representatives shall accomplish the same which shall be
submitted to the concerned DOLE regional office not later than five (5) days from assessment.

What is a training and inspection approach?

An inspection approach is the conduct of inspection in all workplaces with 10-199 workers which
shall be undertaken by labor inspectors based on the following inspection priorities:
1. Existence of complaints, imminent danger or imminent occurrence of accidents and illnesses/
injuries;
2. Highly hazardous and hazardous workplaces;
3. Construction sites; and
4. Establishments employing women/child workers.

What is an advisory service approach?

This approach shall be undertaken in workplaces with less than 10 workers and those registered
as barangay micro-business enterprises (BMBEs). The conduct of training and advisory visits (TAVs) by
the DOLE regional offices is designed to assist small and micro establishments to improve their
productivity, thereby facilitating their eventual compliance with labor standards.
!

DOLE REGIONAL DIRECTORS

JURISDICTION
Small money claims
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 do not exceed five thousand
pesos (P5,000).

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.

(a) 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.

(b) 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.

xxx
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.

DOLE SECRETARY
VISITORIAL AND ENFORCEMENT POWERS
The Secretary of Labor and Employment or his duly authorized representatives, including labor
regulation officers, shall have access to employer’s 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.

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. [Article 128, LC, As amended by Republic Act No. 7730, June 2,
1994]

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. [Article 37, LC]

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. [Article 274, LC, As amended by Section 31, Republic Act No. 6715, March 21,
1989]

POWER TO SUSPEND EFFECTS OF TERMINATION

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 the implementation of a mass lay-off. [Article 277 (b)]

ASSUMPTION OF JURISDICTION
When in his opinion, there exist a labor dispute causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, the SOLE may assume jurisdiction over the dispute and decide it
or certify the same to the Commission for compulsory arbitration. [Art. 263] 


APPELLATE JURISDICTION
(a) Orders issued by the duly authorized representative of the SOLE under Art. 128 may be appealed to
the latter.
(b) Denial of application for union registration or cancellation of union registration originally rendered by
the BLR may be appealed to the SOLE (if originally rendered by the Regional Office, appeal should be
made to the BLR)
(c) Decisions of the Med-Arbiter in certification election cases are appealable to the SOLE (decisions of
med-arbiters in intra-union disputes are appealable to the BLR) [Art. 259]

VOLUNTARY ARBITRATION POWERS

Before or at any stage of the compulsory arbitration process, the parties may opt to submit their dispute
to voluntary arbitration.
The Secretary of Labor and Employment, xxx shall decide or resolve the dispute xxx. [Art. 263, LC]
!
 Art. 128 Art. 129
VP and EP of SLE RD

Inspection of establishments and issuance of orders Adjudication of Ees claims for wages and benefits
to compel compliance with labor standards, wage
orders and other labor laws

Enforcement of labor legislation in general Limited to monetary claims

Proceeding is an offshoot of routine inspections Initiated by sworn complaints filed by any interested party

No Jurisdictional req’ts Jurisdictional req’ts:

1) Complaint arises from Er‐Ee relationship
2) Claimant is an Ee or person employed in domestic or
household service or a HH
3) Complaint does NOT include a claim for reinstatement
4) Aggregate money claim of EACH claimant does not exceed
P5,000

Appealable to SLE (In case compliance order is Appealable to NLRC

issued by Regional Office)

NOTE: ADDITIONAL RA WAY LABOT JUD NI SA COVERAGE, Related Topics Ra!!

MONEY CLAIMS
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.
Workmen's 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.
The Labor Code has no specific provision on when a monetary claim accrues. Thus, again the general
law on prescription applies. Article 1150 of the Civil Code provides that –

Article 1150. The time for prescription for all kinds of actions, when there is no special provision which
ordains UP
otherwise, shall be counted from the day they may be brought.

The day the action may be brought is the day a claim started as a legal possibility. In the present case,
the day came when petitioner learned of Asiakonstrukt’s deduction from his salary of the amount of
advances he had received but had, by his claim, been settled, the same having been reflected in his
payslips, hence, it is assumed that he learned of it at the time he received his monthly paychecks.
[Anabe v Asian Const, et al., 2009]

35. Exempted from the coverage of PD851

PD 851
REVISED GUIDELINES ON THE IMPLEMENTATION OF THE 13TH MONTH PAY LAW.
August 13, 1986
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.


OLD VERSION NI SA LAW PD 851
22 December 1975
For YES OR NO purposes as regards to Distressed employers!

Sec. 3. Employers covered. - The Decree shall apply to all employers except to:



(a) Distressed employers, such as (1) those which are currently incurring substantial losses or (2) in
the case of non-profit institutions and organizations, where their income, whether from donations,
contributions, grants and other earnings from any source, has consistently declined by more than forty
(40%) percent of their normal income for the last two (2) years, subject to the provision of Section 7 of
this issuance;
Sec. 7. Exemption of Distressed employers. - Distressed employers shall qualify for exemption from the
requirement of the Decree upon prior authorization by the Secretary of Labor. Petitions for exemptions
may be filed within the nearest regional office having jurisdiction over the employer not later than January
15, 1976. The regional offices shall transmit the petitions to the Secretary of Labor within 24 hours from
receipt thereof.



(b) The Government and any of its political subdivisions, including government-owned and controlled
corporations, except those corporations operating essentially as private subsidiaries of the Government;



(c) Employers already paying their employees 13-month pay or more in a calendar year or its
equivalent at the time of this issuance;



(d) Employers of household helpers and persons in the personal service of another in relation to such
workers; and



(e) Employers of those who are paid on purely commission, boundary, or task basis, and those who
are paid a fixed amount for performing a 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 be covered by this issuance insofar as such workers are concerned.


CURRENT ANSWER TO WHO ARE EXEMPTED!
Q: Are there employers who are exempted from paying the 13th month?
A: Yes. The following employers are exempted to pay 13th month under PD 851:
(a) Government and any of its political subdivision, including government-owned and controlled
corporations, except those corporations operating essentially as private subsidiaries of the Government;

(b) Employers already paying their employees 13th month pay or more in a calendar year or its
equivalent at the time of this issuance;

(c) Persons in the personal service of another in relation to such workers; and

(d) Employers who are paid on purely commission, boundary, or task basis, and those who are paid a
fixed amount for performing a 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 shall grant the required 13th month pay to such workers.
The other day, Secretary Baldoz issued Labor Advisory No. 15 Series of 2014 exhorting all private sector
employers to voluntarily comply with the law and pay their workers the 13th month pay, including all other
lawful employee compensation and benefits.

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.
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. chan robles virtual law
library

(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.

8. Prohibitions against reduction or elimination of benefits. Nothing herein shall be construed to

authorize any employer to eliminate, or diminish in any way, supplements, or other employee benefits or
favorable practice being enjoyed by the employee at the time of promulgation of this issuance.

36.Provisions in Labor Code which are design to protect Women

Chapter I EMPLOYMENT OF WOMEN

ART. 130. [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. 131. [133] Maternity Leave Benefits.

(a) Every employer shall grant to any pregnant woman employee who has rendered an aggregate
service of at least
six (6) months for the last twelve (12) months, maternity leave of at least two (2) weeks prior to the
expected date of delivery and another four (4) weeks after normal delivery or abortion with full pay based
on her regular or average weekly wages. The employer may require from any woman employee applying
for maternity leave the production of a medical certificate stating that delivery will probably take place
within two weeks.
(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.
(c) The maternity leave provided in this Article shall be paid by the employer only for the first four (4)
deliveries by a woman employee after the effectivity of this Code.

ART. 132. [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.
(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.

ART. 133. [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 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.

ART. 134. [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.

ART. 135. [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.

ART. 136. [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.

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 be 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 case
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 protectionand benefits connected
with maternity leave under existing laws.


37. Maternity leave benefit, entitlement

What is maternity leave?

“Maternity leave” is the period of time which may be availed of by a woman employee, married or unmarried,
to undergo and recuperate from childbirth, miscarriage or complete abortion during which she is permitted to
retain her rights and benefits flowing from her employment. (Chan, 2014)

A covered female Ee, regardless of her civil status, is entitled to a daily maternity benefit equivalent to 100%
of her present basic salary, allowances and other benefits or the cash equivalent of such benefits for 60 days
or 78 days in case of caesarean delivery.

Every pregnant woman is entitled to maternity leave benefits regardless off her civil status, whether married
or unmarried. Being an unmarried woman is not an obstacle for the grant of such benefits provided she is a
covered employee. Her plight should be the moving spirit of the law to grant such benefits to the less
fortunate. (Poquiz, page 300)

Conditions:
1. The Ee shall have notified her Er of her pregnancy and the probable date of her childbirth which notice
shall be transmitted to the SSS;
2. The payment shall be advanced by the Er in 2 equal installments within 30 days from the filing of the
maternity leave application;
3. In case of caesarean delivery, the Ee shall be paid the daily maternity benefit for 78 days;
4. Payment of daily maternity benefits shall be a bar to the recovery of sickness benefits for the same
compensable period of 60 days for the same childbirth, abortion, or miscarriage;
5. The maternity benefits provided under Sec. 14- A shall be paid only for the first four deliveries; 6. The SSS
shall immediately reimburse the Er of 100% of the amount of maternity benefits advanced to the Ee by the Er
upon receipt of satisfactory proof of such payment and legality thereof; and
7. If an Ee should give birth or suffer abortion or miscarriage without the required contributions having been
remitted for her by her Er to the SSS, or without the latter having been previously notified by the Er of the
time of the pregnancy, the Er shall pay to the SSS damages equivalent to the benefits which said Ee would
otherwise have been entitled to, and the SSS shall in turn pay such amount to the Ee concerned.
Requirements in order that maternity benefits may be claimed

1. There is childbirth, abortion or miscarriage

2. She has paid at least three monthly contributions

What is the period of leave?

60 days – for normal delivery

78 days – for caesarian delivery

What is the amount granted?

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

What is the number of delivery or miscarriage covered?

The maternity benefits shall be paid only for the first four (4) deliveries or miscarriages

Is an unmarried woman entitled to maternity leave benefit?

Yes. For as long as a woman is pregnant, she is entitled to maternity leave benefit regardless of whether she
is married or unmarried.

Note:

*Maternity leave benefits are excluded in the computation of 13th month pay Maternity leave benefits and
other benefits provided by Social Security Act are granted to employees in lieu of wages. Thus, the same are
excluded in computing the employee's 13th month pay for the calendar year.

**GR: Self-employed members not entitled to maternity leave benefits;

Voluntary or self-employed members of the SSS are not entitled to maternity leave benefits
because the law requires the corresponding maternity contributions to be paid by the
employers. Voluntary or self-employed members have no employers to remit such
contributions (Sec. 14-A, R.A. 8282)

EXCEPT: However, under Circular 36-V issued by the SSS dated 24 May 1997, if they have
qualifying contributions using the new contribution schedule, they shall be entitled to maternity
benefits.

38. Bona fide occupational qualification, principle

There must be a finding of any BFOQ to justify an Er’s no spouse employment rule. There must be a
compelling business necessity for which no alternative exists other than the discriminating practice. To justify
a BFOQ, the Er must prove two factors:

1. That the employment qualification is reasonably related to the essential operation of the job involved;
and

2. That there is a factual basis for believing that all or substantially all persons meeting the qualification
would be unable to properly perform the duties of the job (Star Paper v. Simbol, G.R. No. 164774, April
12, 2006).

Is the prohibition against marriage valid?

Article 136 of the Labor Code considers as an unlawful act of the employer to require as a condition for 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.

It is likewise an unlawful act of the employer, to actually dismiss, discharge, discriminate or otherwise
prejudice a woman employee merely by reason of her marriage.

Importance of the BFOQR

1. To ensure that the Ee can effectively perform his work

2. So that the no-spouse employment rule will not impose any danger to business.

EXAMPLES:

** The prohibition against marriage embodied in the following stipulation in the employment contract was
held as valid:

“10. You agree to disclose to management any existing or future relationship you may have, either by
consanguinity or affinity with co-employees or employees of competing drug companies. Should it
pose a possible conflict of interest in management discretion, you agree to resign voluntarily from the
Company as a matter of Company policy.”

The Supreme Court ruled that the dismissal based on this stipulation in the employment contract is a valid
exercise of management prerogative. The prohibition against personal or marital relationships with
employees of competitor companies upon its employees was held reasonable under the circumstances
because relationships of that nature might compromise the interests of the company. In laying down the
assailed company policy, the employer only aims to protect its interests against the possibility that a
competitor company will gain access to its secrets and procedures.

The prohibition against personal or marital relationships with Ees of competitor companies upon Glaxo’s Ees
is reasonable under the circumstances because relationships of that nature might compromise the interest of
the company. Glaxo does not impose an absolute prohibition against relationships between its Ees and those
of competitor companies. Its Ees are free to cultivate relationships with and marry persons of their own
choosing. What the company merely seeks to avoid is a conflict of interest between the Ee and the company
that may arise out of such relationships. Furthermore, the prohibition forms part of the employment contract
and the employee was aware of such restrictions when he entered into a relationship with Bettsy (Duncan
Assoc. of Detailman-PTGWO v. Glaxo Wellcome Phil. Inc., G.R. No. 162994, September 17, 2004).

**Art. 136 of the LC, explicitly prohibits discrimination merely by reason of marriage of a female Ee. The
policy of not accepting or disqualifying from work any woman worker who contracts marriage is afoul of the
right against discrimination provided to all women workers by our labor laws and by our Constitution (PT&T
Co. v. NLRC, G.R. No. 118978, May 23, 1997)

** The following policies were struck down as invalid for violating the standard of reasonableness which is
being followed in our jurisdiction, otherwise called the “Reasonable Business Necessity Rule”

“1. New applicants will not be allowed to be hired if in case he/she has [a] relative, up to [the] 3rd degree of
relationship, already employed by the company.

“2. In case of two of our employees (both singles [sic], one male and another female) developed a friendly
relationship during the course of their employment and then decided to get married, one of them should
resign to preserve the policy stated above.” (Star Paper Corp. v. Simbol, Comia and Estrella)

** It was declared here that the company policy of not accepting or considering as disqualified from work any
woman worker who contracts marriage runs afoul of the test of, and the right against, discrimination afforded
all women workers by our labor laws and by no less than the Constitution. (Philippine Telegraph and
Telephone Company v. NLRC)

39. Prohibition on discrimination of women on solely on account of sex, marriage and pregnancy
What are the prohibited acts against women under the Labor Code?

Article 137 of the Labor Code and its implementing rule consider unlawful the followings acts of the
employer:

1. To discharge any woman employed by him for the purpose of preventing such woman from enjoying
maternity leave, facilities and other benefits provided under the Labor 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;

4. To discharge any woman or any other employee for having filed a complaint or having testified or being
about to testify under the Labor Code; or

5. To require as a condition for 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 marriage.

Persons covered under the classification of certain women workers

Any women who is permitted or suffered to work:

1. With or without compensation;

2. In any night club, cocktail lounge, massage clinic, bar or similar establishment;

3. Under the effective control or supervision of the Er for a substantial period of time; and

4. Shall be considered as an Ee of such establishment for purposes of labor and social legislation.

Discharging a woman due to pregnancy

Article 137 contemplates the following prohibited acts in connection with the pregnancy of a woman
employee: 1. To discharge her on account of her pregnancy ; or 2. To discharge her while she is on leave
due to her pregnancy; or 3. To discharge her while she is in confinement due to her pregnancy; or 4. To
discharge her upon returning to her work for fear that she may again be pregnant; or 5. To refuse her
admission upon returning to her work for fear that she may again be pregnant.(Section 13, Rule XII, Book III,
Rules to Implement the LC)

Penalty for commission of the prohibited acts mentioned

The offender would be subject to the penalties provided under Article 288 of the LC, the general penalty
clause under said code.

40. Classification of certain women who are considered “employees” for purposes of labor and
social legislation:

Persons covered under the classification of certain women workers Any women who is permitted or
suffered to work:
1. With or without compensation;
2. In any night club, cocktail lounge, massage clinic, bar or similar establishment;
3. Under the effective control or supervision of the Er for a substantial period of time; and
4. Shall be considered as an Ee of such establishment for purposes of labor and social
legislation.

41. Anti-Sexual Harassment Act of 1995. When is it committed in a work-related, training-related and
educational environment; When are employers liable?

Persons who may be held liable for sexual harassment:

In a work, education or training-related environment Sexual Harassment may be committed by an:
1. Employer
2. Manager
3. Supervisor
4. Agent of the Employer
5. Teacher, instructor, professor
6. Coach, trainer, or
7. Any other person who, having authority, influence or moral ascendancy over another in a work or
training or education environment:
a. Demands
b. Requests or
c. Requires any sexual favor from the other, regardless of whether the demand, request or requirement
for submission is accepted by the object of R.A. 7877 (R.A. 7877, Sec. 3).

The definition of sexual harassment does not require a categorical demand or request for
sexual favor. While the provision states that there must be a “demand, request or requirement of a
sexual favor.” It is not necessary that the demand, request or requirement of a sexual favor be
articulated in a categorical manner. It may be discerned, with equal certitude, from the acts of the offender.

Likewise, it is not essential that the demand, request or requirement be made as a condition for
continued employment or for promotion to a higher position. It is enough that the respondent’s acts
result in creating an intimidating, hostile or offensive environment for the employee (Domingo
v.Rayala, G.R. No. 155831, February 18, 2008).

Places where sexual harassment are committed

Specifically:

1. In a work-related or employment environment:

a. The sexual favor is made as a condition in the hiring or in the employment, reemployment 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 (Quid Pro Quo Sexual Harassment);
b. The above acts would impair the Employees’ rights or privileges under existing labor laws; or
c. The above acts would result in an intimidating, hostile, or offensive environment for the Employee
(Hostile Environment Harassment).

2. In an education or training environment sexual harassment is employed:

a. Against one who is under the care, custody or supervision of the offender;
b. Against one whose education, training, apprenticeship or tutorship is entrusted to the offender;
c. When 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
d. When sexual advances result in an intimidating, hostile or offensive environment for the

Liability of the Er, head of office, educational or training institution Employer shall be solidarily liable for
damages arising from the acts of Sexual Harassment committed in the employment, education or
training environment provided:

1. The Er or head of office, educational or training institution is informed of such acts by the
offended party; and
2. No immediate action is taken thereon (R.A. 7877, Sec. 5).

42. Discuss the statutory restrictions on the employment of minors. (2007 Bar)

Rules on employment of minor workers:

General Rule:
1. No person under 18 years of age will be allowed to be employed in an undertaking which is
hazardous or deleterious in nature.
2. No Employer shall discriminate against any person in respect to terms and conditions of employment on
account of his age.

Exemptions:
A. Below 15 yrs. Old
1. The child works directly under the sole responsibility of his parents or legal guardian and where
only members of the family are employed, subject to the following conditions:
a. Employment does not endanger the child’s safety, health and morals
b. Employment does not impair the child’s normal development
c. Employer-parent or legal guardian provides the child with the primary and/or secondary education
prescribed by the Department of Education
2. The child’s employment or participation in public entertainment or information through cinema, theater,
radio or television is essential provided:
a. Employment contract is concluded by the child’s parents or legal guardian,
b. With the express agreement of the child concerned, if possible, and
c. The approval of DOLE, the following must be complied with:
i. The employment does not involve advertisement or commercials promoting alcoholic
beverages, intoxicating drinks, tobacco and its by-products or exhibiting violence
ii. There is a written contract approved by DOLE
iii. The conditions provided in the first instance are met
B. Above 15 but below 18 – May be employed in any non-hazardous work
C. Above 18 – No prohibition

43. Prohibited employment for all minors and children

It is absolutely prohibited for any person below 18 years of age to be employed in hazardous work, harmful
to health and safety (Sec. 3, Rule 12, Book 3, ties Implementing the Labor Code), including construction
work, logging, firefighting, mining, quarrying, stevedoring, dock work, deep sea fishing and mechanized
fishing (Sec. 8[2], Rule 1, Book 4, Rules Implementing the Labor Code).

No child below 18 years of age is also allowed to be employed as a model in any advertisement directly or
indirectly promoting alcoholic beverages, intoxicating drinks, tobacco, and its by-products, gambling or any
form of violence or pornography (Sec. 14, RA 7610 as amended by RA 9231).

44. Household helpers vs. Homeworkers; who are considered “employers” of Homeworkers

A house helper or domestic helper is one who performs services in the employer’s house 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 employer‘s household, including the services of a family
driver (Art. 141, Labor Code). A homeworker, on the other hand, is an industrial worker who works in his/her
home processing raw materials into finished products for an employer. It is a decentralized form of
production with very limited supervision or regulation of methods of work (Art. 153, Labor Code).

Under Article 155 of the Labor Code, 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:

a) 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

b) 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.

45. Is a sales lady paid on commission basis, task to sell shares of the company and subject to some
procedural rules regarding her duties covered by SSS?

Yes. Coverage under the SSS is compulsory where employer-employee relations exist. A sales lady paid on
commission basis, task to sell shares of the company and subject to some procedural rules regarding her
duties, is an employee being under the control and supervision of the employer. Hence, she is covered by
the SSS.

46. Is membership in the SSS subject to bilateral or consensual agreement?

Answer:

No, membership in the SSS is not subject to bilateral or consensual agreement where the rights and the
obligations of the parties are defined by and subject to their will. Ra 1161, as amended by RA8282, requires
compulsory coverage of employers and employees under the System. It is actually a legal imposition, on
said employers and employees, designed to provide social security to the workingmen. Membership in the
SSS is, therefore, in compliance with a lawful exercise of the police power of the State, to which the principle
of non-impairment of the obligation of contract is not a proper defense. [(Phil. Blooming Mills, Inc., et al. vs.
SSS, 17 SCRA 1077, 1080 (1966); cf. Roman Catholic Archbishop vs. SSS, 1 SCRA 10 (1961)]

47. Can a member of a cooperative be deemed an employee for purposes of compulsory coverage
under the Social Security System?

Answer:

Yes, a member of a cooperative can be deemed an employee for purposes of compulsory coverage under
the Social Security System if there is a showing of an employer-employee relationship. The compulsory
coverage of the SSS Law is predicated on the existence of such relationship. A cooperative acquires juridical
personality upon its registration with the Cooperative Development Authority. A cooperative can be likened to
a corporation with a personality separate and distinct from its owners-members. Consequently, an owner-
member of a cooperative can be an employee of the latter and an employer-employee relationship can exists
between them. (Republic vs. Asiapro Cooperative, G.R. No. 172101, November 23, 2007).

48. Is a domestic helper who was hired as such on January 1, 2018 but was terminated on January
29, 2018 covered by the SSS Law?

Answer:

No, the domestic helper is not covered by the SSS Law. Under Section 30 of RA 10361 otherwise known as
the Domestic Workers Act, a domestic worker who has rendered at least one (1) month of service shall be
covered by the Social Security System (SSS), the Philippines Health Insurance (PhilHealth), and the Home
Development Mutual Fund or Pag-IBIG, and shall be entitled to all the benefits in accordance with the
pertinent provisions provided by law. Here, the domestic helper has not rendered at least one month of
service having hired on January 1, 2018 but was terminated on January 29, 2018.

49. State the respective coverage of Social Security Law

"SEC. 9. Coverage. -

compulsory upon all employees not over sixty (60) years of age and their employers:

Provided, domestic helpers, their monthly income shall not be less than One thousand pesos (P1,000.00) a
month:

(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.

(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 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 Sec. 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.

50. Is separation from employment or interruption of business or professional income terminate SSS
membership or entitlement to SSS benefits?

No. In case of Separation from employment, the employee may continue to pay the total contributions to
maintain his right to full benefit.

As to his employer's obligation to pay contribution, it 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 Act.

Interruption of business---

No. the Self- employed may be allowed to continue paying contributions under the same rules and
regulations applicable

If the self-employed member realizes no income in any given month, he shall not be required to pay
contributions for that month. He may, however, to a separated employee member: Provided, That no
retroactive payment of contributions shall be allowed.

LIMITED PORTABILITY SCHEME AND TOTALIZATION RULE

51. How are the "portability" provisions of Republic Act No. 7699 beneficial or
advantageous to SSS and GSIS members in terms of their creditable employment
services in the private sector or the government, as the case may be, for purposes
of death, disability or retirement? Please explain your answer briefly.

SUGGESTED ANSWER: Portability provisions of R.A. No. 7699 shall benefit a covered
worker who transfers employment from one sector to another or is employed in both
sectors, whose creditable services or contributions in both systems credited to his service
or contribution record in each of the system and shall be totalized for purposes of old-age,
disability, survivorship and other benefits. (Sec. 3, R.A. No. 7699) The "portability"
provisions of R.A. No. 7699 allow the transfer of funds for the account and benefit of the
worker who transfers from one system to another. This is advantageous to the SSS and
GSIS members for purposes of death, disability or retirement benefits. In the event the
employees transfer from the private sector to the public sector, or vice-versa, their
creditable employment services and contributions are carried over and transferred as well

52. Is the employer bound to pay its share of the premium to the SSS during employee’s leave
without pay?
Yes, in Insular Lumber Co. vs. SSS, G.R. No. L-17623, Jan. 31, 1963, the Supreme Court held that payment
of contributions by an employer is compulsory during its coverage, and in accordance with the provisions of
Section 9 of the Social Security Act, coverage is determined solely by the existence of an employer-
employee relationship. While an employee is on leave, even without pay, he is still an employee of his
employer, their contract of employment has not yet terminated. So much so that the employee may still
return to work and the employer is still bound to accept him. His responsibility as an employee still exists. He
is still entitled to the benefits of the System when he returns. Consequently, his employer is still liable to pay
his contributions to the Commission on account of its employee who is on leave without pay.
53. Employer E failed to report for coverage to the SSS his employee W, who has been working for
him for over 15 years. Upon W’s death, the widow applied for SSS death benefits. Is the widow
entitled thereto? Why? (1983 BAR)
Yes, under the law, an employer who fails to report his employee for social security coverage is liable to [1]
pay the benefits of those who die, become disabled, get sick or reach retirement age; [2] pay all unpaid
contributions plus a penalty of three percent per month; and [3] be held liable for a criminal offense
punishable by fine and/or imprisonment. But an employee is still entitled to social security benefits even is
(sic) his employer fails or refuses to remit his contribution to the SSS. (Gapayao vs. Fulo, G. R. No. 193493,
June 13, 2013)
54. Are ALIEN BENEFICIARY entitled to the benefits?
Yes, according to Section 8 of the SS Law, RA 8282, if there are no dependent spouse, no dependent
children and no dependent parents, the beneficiaries will be any other person designated by the member
as his/her secondary beneficiary. For there is no law prohibiting aliens as beneficiary of SSS benefits, they
are entitled to the benefits. [I have not seen any jurisprudence to the contrary, so my answer is YES ☺].
PROHIBITION ON DOUBLE RECOVERY

55. 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
(SSS Law, Sec 14-A)

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 caesarean 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.

THE GOVERNMENT SERVICE INSURANCE SYSTEM ACT OF 1997 (OR GSIS LAW)

56. State briefly the compulsory coverage of the Government Service Insurance Act

SECTION 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 protection such as
disability, survivorship, separation, and unemployment benefits.

SECTION 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.

57. Who are primary and secondary beneficiaries

1. Primary beneficiaries — The legal dependent spouse until he/she remarries and the dependent children;

2. Secondary beneficiaries — The dependent parents and, subject to the restrictions on dependent children,
the legitimate descendants;

58. Describe briefly the Compulsory and Voluntary coverage of the Government Service Insurance
Act.
Source: http://www.gsis.gov.ph/downloads/publications/20140414-
IMPLEMENTING_RULES_AND_REGULATIONS_RA8291.pdf
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.
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.
59. In general, what are the type of benefits granted under the Government Service Insurance System
Act.
Source: http://www.gsis.gov.ph/about-us/gsis-laws/republic-act-no-8291/
BENEFITS

“SECTION 9. Computation of the Basic Monthly Pension. — (a) the basic monthly pension is equal to:
“1) thirty-seven and one-half percent (37.5%) of the revalued average monthly compensation; plus

“2) two and one-half percent (2.5%) of said revalued average monthly compensation for each year of service
in excess of fifteen (15) years: Provided, That the basic monthly pension shall not exceed ninety percent
(90%) of the average monthly compensation.

“(b) The basic monthly pension may be adjusted upon the recommendation of the President and General
Manager of the GSIS and approved by the President of the Philippines in accordance with the rules and
regulations prescribed by the GSIS: Provided, however, That the basic monthly pension shall not be less
than One thousand and three hundred pesos (P1,300.00): Provided, further, That the basic monthly pension
for those who have rendered at least twenty (20) years of service after the effectivity of this Act shall not be
less than Two thousand four hundred pesos (P2,400.00) a month.

“SECTION 10. Computation of Service. — (a) The computation of service for the purpose of determining the
amount of benefits payable under this Act shall be from the date of original appointment/election, including
periods of service at different times under one or more employers, those performed overseas under the
authority of the Republic of the Philippines, and those that may be prescribed by the GSIS in coordination
with the Civil Service Commission.

“(b) All service credited for retirement, resignation or separation for which corresponding benefits have been
awarded under this Act or other laws shall be excluded in the computation of service in case of reinstatement
in the service of an employer and subsequent retirement or separation which is compensable under this Act.

“For the purpose of this section the term service shall include full time service with compensation: Provided,
That part time and other services with compensation may be included under such rules and regulations as
may be prescribed by the GSIS.

SEPARATION BENEFITS

“SECTION 11. Separation Benefits. — The separation benefit shall consist of: (a) 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) payable upon reaching sixty (60) years of
age or upon separation, whichever comes later: Provided, That the member resigns or separates from the
service after he has rendered at least three (3) years of service but less than fifteen (15) years; or

“(b) A cash payment equivalent to eighteen (18) times his basic monthly pension payable at the time of
resignation or separation, plus an old-age pension benefit equal to the basic monthly pension payable
monthly for life upon reaching the age of sixty (60): Provided, That the member resigns or separates from the
service after he has rendered at least fifteen (15) years of service and is below sixty (60) years of age at the
time of resignation or separation.

“SECTION 12. Unemployment or Involuntary Separation Benefits. — Unemployment benefits in the form of
monthly cash payments equivalent to fifty percent (50%) of the average monthly compensation shall be paid
to a permanent employee who is involuntarily separated from the service due to the abolition of his office or
position usually resulting from reorganization: Provided, That he has been paying integrated contributions for
at least one (1) year prior to separation. Unemployment benefits shall be paid in accordance with the
following schedule:
“Contributions Made Benefit Duration

1 year but less than 3 years 2 months

3 or more years but less than 6 years 3 months

6 or more years but less than 9 years 4 months

9 or more years but less than 11 years 5 months

11 or more years but less than 15 years 6 months

“The first payment shall be equivalent to two (2) monthly benefits. A seven-day (7) waiting period shall be
imposed on succeeding monthly payments.

“All accumulated unemployment benefits paid to the employee during his entire membership with the GSIS
shall be deducted from voluntary separation benefits.

“The GSIS shall prescribe the detailed guidelines in the operationalization of this section in the rules and
regulations implementing this Act.

“RETIREMENT BENEFITS

“SECTION 13. Retirement Benefits. — (a) Retirement benefit 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 at 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.

“SECTION 13-A. Conditions for Entitlement. — A member who retires from the service shall be entitled to the
retirement benefits in paragraph (a) of Section 13 hereof: Provided, That:

(1) he has rendered at least fifteen (15) 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.

“SECTION 14. Periodic Pension Adjustment. — The monthly pension of all pensioners including all those
receiving survivorship pension benefits shall be periodically adjusted as may be recommended by the GSIS’
actuary and approved by the Board in accordance with the rules and regulations prescribed by the GSIS.

“PERMANENT DISABILITY BENEFITS

“SECTION 15. General Conditions for Entitlement. — A member who suffers permanent disability for reasons
not due to his grave misconduct, notorious negligence, habitual intoxication, or willful intention to kill himself
or another, shall be entitled to the benefits provided for under Sections 16 and 17 immediately following,
subject to the corresponding conditions therefor.

“SECTION 16. Permanent Total Disability Benefits. — (a) If the permanent disability is total, he shall receive
a monthly income benefit for life equal to the basic monthly pension effective from the date of disability:
Provided, That:

(1) he is in the service at the time of disability; or

(2) if separated from the service, he has paid at least thirty-six (36) monthly contributions within the five (5)
year period immediately preceding his disability, or has paid a total of at least one hundred eighty (180)
monthly contributions, prior to his disability: Provided, further, That if at the time of disability, he was in the
service and has paid a total of at least one hundred eighty (180) monthly contributions, in addition to the
monthly income benefit, he shall receive a cash payment equivalent to eighteen (18) times his basic monthly
pension: Provided, finally, That a member cannot enjoy the monthly income benefit for permanent disability
and the old-age retirement simultaneously.

“(b) If a member who suffers permanent total disability does not satisfy conditions (1) and (2) in paragraph
(a) of this section but has rendered at least three (3) years service at the time of his disability, he shall be
advanced 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) which should have been his separation benefit.

“(c) Unless the member has reached the minimum retirement age, disability benefit shall be suspended
when:

“(1) he is reemployed or

“(2) he recovers from disability as determined by the GSIS, whose decision shall be final and binding; or

“(3) he fails to present himself for medical examination when required by the GSIS.
“(d) The following disabilities shall be deemed total and permanent:

“(1) complete loss of sight of both eyes;

“(2) loss of two (2) limbs at or above the ankle or wrist;

“(3) permanent complete paralysis of two(2) limbs;

“(4) brain injury resulting in incurable imbecility or insanity; and

“(5) such other cases as may be determined by the GSIS.

“SECTION 17. Permanent Partial Disability Benefits. — (a) If the disability is partial, he shall receive a cash
payment in accordance with a schedule of disabilities to be prescribed by the GSIS: Provided, That he
satisfies either conditions (1) or (2) of Section 16(a);

“(b) The following disabilities shall be deemed permanent and partial:

“(1) complete and permanent loss of the use of:

(i) any finger

(ii) any toe

(iii) one arm

(iv) one hand

(v) one foot

(vi) one leg

(vii) one or both ears

(viii) hearing of one or both ears

(ix) sight of one eye

“(2) such other cases as may be determined by the GSIS.

“TEMPORARY DISABILITY BENEFITS

“SECTION 18. Temporary Total Disability Benefit. — (a) A member who suffers temporary total disability for
reasons not due to any of the conditions enumerated in Section 15 hereof shall be entitled to seventy-five
percent (75%) of his current daily compensation for each day or fraction thereof of temporary disability
benefit not exceeding one hundred twenty (120) days in one calendar year after exhausting all his sick leave
credits and collective bargaining agreement sick leave benefits, if any, but not earlier than the fourth day of
his temporary total disability: Provided, That:

“(1) he is in the service at the time of his disability; or

“(2) if separated, he has rendered at least three (3) years of service and has paid at least six (6) monthly
contributions in the twelve-month period immediately preceding his disability.

Provided, however, That a member cannot enjoy the temporary total disability benefit and sick leave pay
simultaneously: Provided, further, That if the disability requires more extensive treatment that lasts beyond
one hundred twenty (120) days, the payment of the temporary total disability benefit may be extended by the
GSIS but not to exceed a total of two hundred forty (240) days.

“(b) The temporary total disability benefit shall in no case be less than Seventy pesos (P70.00) a day.

“(c) The notices required of the member and the employer, the mode of payment, and the other requirements
for entitlement to temporary total disability benefits shall be provided in the rules and regulations to be
prescribed by the GSIS.

“SECTION 19. Non-scheduled Disability. — For injuries or illnesses resulting in a disability not listed in the
schedule of partial/total disability, as provided herein, the GSIS shall determine the nature of the disability
and the corresponding benefits therefor.

“SURVIVORSHIP BENEFITS

“SECTION 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 children’s pension not exceeding fifty percent (50%) of the basic monthly pension.

“SECTION 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 the 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 children’s 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 children’s 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):
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 legitimate
children.

“SECTION 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 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.

“FUNERAL BENEFITS

“SECTION 23. Funeral Benefit. — The amount of funeral benefit shall be determined and specified by the
GSIS in the rules and regulations but shall not be less than Twelve thousand pesos (P12,000.00): Provided,
That it shall be increased to at least Eighteen thousand pesos (P18,000.00) after five (5) years and shall be
paid upon the death of:
(a) an active member as defined under Section 2(e) of this Act; or

(b) a member who has been separated from the service, but who may be entitled to future benefit pursuant
to Section 4 of this Act; or

(c) a pensioner, as defined in Section 2(o) of this Act; or

(d) a retiree who at the time of his retirement was of pensionable age under this Act but who opted to retire
under Republic Act No. 1616.

“LIFE INSURANCE BENEFITS

“SECTION 24. Compulsory Life Insurance. — All employees except for Members of the Armed Forces of the
Philippines (AFP) and the Philippine National Police (PNP) shall, under such terms and conditions as may be
promulgated by the GSIS, be compulsorily covered with life insurance, which shall automatically take effect
as follows:

(1) for those employed after the effectivity of this Act, their insurance shall take effect on the date of their
employment;

(2) for those whose insurance will mature after the effectivity of this Act, their insurance shall be deemed
renewed on the day following the maturity or expiry date of their insurance;

(3) for those without any life insurance as of the effectivity of this Act, their insurance shall take effect
following said effectivity.

“SECTION 25. Dividends. — An annual dividend may be granted to all members of the GSIS whose life
insurance is in force for at least one (1) year in accordance with a dividend allocation formula to be
determined by the GSIS.

“SECTION 26. Optional Insurance. — Subject to the rules and regulations prescribed by the GSIS, a
member may apply for insurance and/or pre-need coverage embracing life, health, hospitalization,
education, memorial plans, and such other plans as may be designed by the GSIS, for himself and/or his
dependents. Any employer may likewise apply for group insurance coverage for its employees. The payment
of the premiums/installments for optional insurance and pre-need products may be made by the insured or
his employer and/or any person acceptable to the GSIS.

“SECTION 27. Reinsurance. — The GSIS may reinsure any of its interests or part thereof with any private
company or reinsurer whether domestic or foreign: Provided, That the GSIS shall submit an annual report on
its reinsurance operations to the Insurance Commission.
EMPLOYEES’ COMPENSATION AND STATE INSURANCE FUND (OR EMPLOYEES’ COMPENSATION
LAW)
60. Under the employee's compensation law, who are considered "employees" and "dependents"?
Source: http://www.chanrobles.com/amendedrulesonemployeescompensation.htm#.W8Czbmgza70
http://ecc.gov.ph/wp-content/uploads/2015/04/PD_626.pdf

"Employee" means any persons compulsorily covered by the GSIS under Commonwealth Act numbered
one hundred eighty-six, as amended, including 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 SSS under Republic act numbered eleven hundred sixty-one, as amended.

'Dependents' means the legitimate, legitimated, legally adopted or acknowledged natural child who is
unmarried, not gainfully employed, and not over twenty-one years of age or over twenty-one 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." (As amended by Sec. I, P.D. 1921).
61. State the respective coverages of the Employees’ Compensation Act. (wala jud ko kasabot unsay
gipangutana ni sir ani but nakakita ko ani sa employee’s compensation commission nga website)

a. Who are covered under the Employees’ Compensation Program?

Private sector workers who are compulsory members of the Social Security System (SSS) and sea-based
Overseas Filipino Workers (OFWs).
Government sector employees who are members of the Government service Insurance System (GSIS),
including members of the Armed Forces of the Philippines, elective government officials who are receiving
regular salary and all casual, emergency, temporary and substitute or contractual employees.

b. When shall coverage of the employees under the Employees’ Compensation Program start?

Employees shall be covered starting on the first day of their employment.

c. When is sickness or injury compensable under the Employees’ Compensation Program?

For the sickness and the resulting disability or death to be compensable, the sickness must be the result of
an occupational disease listed under Annex “A” of the Amended Rules on Employees’ Compensation with
the conditions set therein satisfied, otherwise, proof must be shown that the risk of contracting the disease is
increased by the working conditions.

For the injury and the resulting disability or death to be compensable, the injury must be the result of
accident arising out of and in the course of the employment.

d. What are the benefits under the Employees’ Compensation Program?

The benefits are the following:

Loss-of-income benefits;
Medical services, appliances and supplies;
Carers’ allowance;
Rehabilitation services;
Death benefits;
Funeral benefits

e. Who are the employees’ beneficiaries?

The beneficiaries shall be either primary or secondary, and determined at the time of employee’s death.

f. The following beneficiaries shall be considered primary:

The legitimate spouse living with the employee at the time of the employee’s death until he remarries; and
Legitimate, legitimated, legally adopted or acknowledged natural children, who are unmarried, not gainfully
employed, not over 21 years of age, or over 21 years of age provided he is incapacitated and incapable of
self-support due to physical or mental defect which is congenital or acquired during minority.
 g. The following beneficiaries shall be considered secondary:

The legitimate parents wholly dependent upon the employee for regular support;
The legitimate descendants and illegitimate children who are unmarried, not gainfully employed, not over 21
years of age, or over 21 years of age provided he is incapacitated and incapable of self-support due to
physical or mental defect which is congenital or acquired during minority.
Primary beneficiaries shall have priority claim to death benefits over secondary beneficiaries. Whenever
there are primary beneficiaries, no death benefit shall be paid to his secondary beneficiaries.

h. When shall EC claims be filed?

EC claims must be filed within a period of three years from:

In case of sickness, from the time the employee was unable to report for work;
In case of injury, from the time of the incident;
In case of death, from the date of death.
The filing of disability or death benefits either under the SSS law or the GSIS law within three years from the
time the cause of action accrued would stop the running of the prescriptive period.

i. Where are EC claims filed?

All EC claims may be filed by the claimant at his option in the GSIS Regional Office (for the public sector) or
SSS Branch (for the private sector) nearest to his place of work or residence.

j. What if my EC claim was denied at the GSIS or the SSS?

He/she may file a request for reconsideration with the GSIS or SSS main office. If still denied, the claimant
can write a letter of appeal to the Employees’ Compensation Commission.

62. When are injuries, disabilities, or death considered compensable?

An injury is considered compensable when the same takes place within the period of employment, at
a place where the employee may reasonably be in the performance of his duties, and while he is fulfilling
those duties or engaged in doing something incidental thereto, or where he is engaged in the furtherance of
the employer’s business.
Any work-connected INJURY or SICKNESS, resulting to DISABILITY or DEATH of a covered
employee is compensable under the ECP, when such injury or resulting disability or death is a result of an
accident arising out of and in the course of the employment.

63. What do you understand by the following: (1) Personal Comfort Doctrine, (2) Dual Purpose
Doctrine, (3) Going To And Coming From the Place of Work” Rule, (4) “Military on Pass” Policy, (5)
“Presumptive Compensability”

(1) Personal Comfort Doctrine

It is a legal principle that states that the course of employmentis not interrupted by certain acts relating to the
employee’s personal comfort such as short breaks for eating, drinking, using the restroom, smoking, seeking
relief from discomfort and the like.

(2) Dual Purpose Doctrine

The doctrine considers as compensable an injury that an employee sustains while on a trip undertaken for
the benefit of the employer even if in the course thereof the employee pursues also a personal purpose

(3) “Going To And Coming From the Place of Work” Rule

The injury or death of the of a covered member in an accident while he is going to, or coming from, the
workplace, shall be considered compensable on the following provisions:

(a) the act of the employee of going to, or coming from the workplace, must have been a continuing
act, that is, he had not been diverted therefrom by any other activity, and he had not departed from his route
to, or from, his workplace, and
 (b) in cases where the employee is on a special errand, the special errand must have been
official and in connection with his work.

(4) “Military on Pass” Policy

A policy by considers the injury or death compensable incurred anywhere not the workplace, provided that
he is permitted to be in such place.The concept of “workplace” cannot always be literally applied to a soldier
on active duty status. A soldier must go where he is stationed or where he had permission to be at.

(5) “Presumptive Compensability

The doctrine of presumptive compensability is applicable when an illness supervenes during the course of
employment it is deemed to have either arisen out of or been aggravated by petitioner’s employment has
been abandoned. (Zozobrado vs. ECC)

65. When may beneficiaries of a deceased employee be entitled to an income under the Employees’
Compensation Law?
Source: http://ecc.gov.ph/wp-content/uploads/2015/09/Booklet_Amended_Rules_on_EC_2014.pdf
RULE XIII - DEATH SECTION
Section 1. Condition to entitlement. (a) The beneficiaries of a deceased employee shall be entitled to an
income benefit if all of the following conditions are satisfied:
(1) The employee has been duly reported to the System;
(2) He died as a result of an injury or sickness; and
(3) The System has been duly notified of his death, as well as the injury or sickness which caused his death.
His employer shall be liable for the benefit if such death occurred before the employee is duly reported for
coverage to the System.
(b) If the employee has been receiving monthly income benefit for permanent total disability at the time of his
death, the surviving spouse must show that the marriage has been validly subsisting at the time of his
disability.
In addition, the cause of death must be a complication or natural consequence of the compensated
Permanent Total Disability. (as provided under Board Resolution No. 19-09-116, dated Sept. 2, 2010)
SECTION 2. Period of entitlement.
A. For Primary Beneficiaries:
(a) The income benefit shall be paid beginning at the month of death and shall continue to be paid for as long
as the beneficiaries are entitled thereto.
With respect to the surviving legitimate spouse, the qualification is that he/ she has not remarried. For the
dependent children, the qualifications are:
a. Unmarried;
b. Not gainfully employed; and
c. Over 21 years of age provided he/she is incapable of self-support due to a physical or mental defect which
is congenital or acquired during minority. (as provided under Board Resolution No. 12-07-16, dated July 27,
2012)
(b) The monthly income benefit shall be guaranteed for five years which in no case shall be less than fifteen
thousand pesos (P15, 000.00). Thereafter, the beneficiaries shall be paid the monthly income benefit for as
long as they are entitled thereto. (ECC Resolution No. 2799, July 25, 1984).
B. For Secondary Beneficiaries:
(a) The income benefit shall be sixty (60) times the monthly income benefit of a primary beneficiary which in
no case be less than P 15,000.00, which shall likewise be paid in monthly pension. (ECC Resolution No.
2799, July 25, 1984).
SECTION 3. Amount of benefit.12 (a) In the case of primary beneficiaries, the monthly income benefit shall
be equivalent to the monthly income benefit for permanent total disability, which shall be guaranteed for five
years, increased by ten percent for each dependent child but not exceeding 5, beginning with the youngest
and without substitution: Provided That, The aggregate monthly benefit payable in the case of the GSIS shall
in no case exceed the monthly wage or salary actually received by the employee at the time of his death;
and Provided Further, That the minimum income benefit shall not be less than Fifteen Thousand Pesos
(P15,000.00). The death benefit shall be paid during the entire period for which they are entitled thereto.
If the employee has been receiving income benefits for permanent total disability at the time of his death, the
primary beneficiaries shall be paid the monthly income benefit equivalent to eighty percent plus the
dependent's pension equivalent to 10 percent thereof for every dependent child but not exceeding five
counted from the youngest and without substitution.
(b) In the case of secondary beneficiaries, the income benefit is payable in monthly pension which shall not
exceed the period of 60 months and the aggregate income benefit shall not be less than P15,000.00.
If the employee has been receiving monthly income benefit for permanent total disability at the time of his
death, the secondary beneficiaries shall be paid the monthly pension, excluding the dependent's pension of
the remaining balance of the five year guaranteed period. (ECC Resolution No. 2799, July 25, 1984).
SECTION 4. Entitlement to the new income benefit under PD 1641. - The new amount of the monthly income
benefit computed under these amended Rules shall be applicable to all contingencies occurring on or after
January 1, 1980. However, for contingencies which occurred before May 1, 1978, the limitation of P12, 000
or 5 years, whichever comes first, shall be enforced.
In the case of the SSS, the present monthly income benefit of current pensioners shall be increased by 20
percent effective January 1, 1980.
In the case of the GSIS, the monthly income benefit of the current pensioners shall be adjusted and
recomputed to reflect the 20 percent increase over the benefit under PD 1146 effective January 1, 1980.
SECTION 5. - The new amount of lump sum benefit computed under these Amended Rules shall be
applicable to all contingencies occurring on or after May 1, 1980, otherwise entitlement thereto shall be
governed by the immediately preceding Section.