labor std reviewer

8/12/2019 Labor Std Reviewer

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Part I

Introductory Materials

Section 1. Labor Law in General

1.1 Labor Law Defined [S, R, J]

1. Labor Legislation Consists of statutes, regulations andjurisprudencegoverning the relations between capital and laborby:

a. providing for certain terms and conditions of employmentor

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

negotiated

adjusted and

administered.

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

promote public welfare

1. Law !lassification

1. Labor Standards Law hat which sets out the minimumterms, conditions and benefits of employment that !"#s mustprovide or comply with and to which !!#s are entitled as a matterof legal right.!$. %&hour labor law

2. Labor Relations Law hat which defines '( " ) * I+

the status, rights and duties

and the institutional mechanismsthat govern the individual and collective interaction of !"#s and!!#s or their representatives.!$. -ook of /abor Code

3. Welfare Legislation designed to take care of contingencieswhich may affect workers, e.g. where there is loss of income forresearch beyond the worker#s control. -!0!1I(2 (ocial (ecurity /aw.

1." #istory and $rigin

1.% &asis for 'nact(ent

1. )rt. II, Sec.*, !onst. + he maintenance of peace and order,the protection of life, liberty, and property, and the promotion of


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general welfare are essential for the enjoyment by all the peopleof the blessing of democracy.

2. )rt. II, Sec. 1, !onst. : he (tate affirms labor as a primarysocial economic force. It shall protect the rights of workers and

promote their welfare.

3. )rt. -III, Sec. I, !onst. : he Congress shall give highestpriority to the enactment of measures that protect and enhancethe right of all the people to human dignity, reduce social,economic and political ine3ualities, and remove culturaline3uities by e3uitably diffusing wealth and political power forthe common good.

o this end, the (tate shall regulate the ac3uisition, ownership,use, and disposition of property and its increments.

2 /abor and social legislation are enacted pursuant to the policepower of the (tate. his is its inherent power to enact wholesomeand reasonable laws to promote order, safety, health, morals andgeneral welfare of society. In its e$ercise the state may interferewith personal liberty, with property and with business andoccupation. (Calalang vs. Williams).

2 0o longer may the due process clause and the freedom ofcontract be invoked to challenge labor and social legislation. hishas long been discarded since the 4567 case of West Coast Hotel vs.

Parish (US) and the 1924 case of Pp. vs. Pomar (P).

2 /abor relation laws enable workers to obtain from theiremployers more than the minimum benefits set by laborstandard laws

1.* Law and or/er

he (C reaffirms its concern for the lowly worker who, often at themercy of his !", must look up to the law for protection. 1ittingly, thelaw regards him with tenderness and even favor and always with

hope in his capacity to help in shaping the nation#s future. It is anerror to take him for granted. (Ce!" o#al Plant vs. $ep"t# %inister of&a!or)

Section . Labor and t0e !onstitution.1!onstitutional ro2isions

1. )rt. II, Sec. 3, !onst. : he (tate shall promote a just anddynamic social order that will ensure the prosperity andindependence of the nation and free the people from poverty

through policies that provide ade3uate social services, promotefull employment, a rising standard of living, and an improved3uality of life for all.

2. )rt. II, Sec. 14, !onst. : he (tate shall promote social justicein all phases of national development.

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3. )rt. II, Sec. 1", !onst. : he (tate recogni8ed the role of theyouth in nation&building and shall promote and protect theirphysical, moral, spiritual, intellectual, and social well&being. . .

4. )rt. II, Sec. 1%, !onst. : he (tate recogni8es the role ofwomen in nation&building, and shall ensure their fundamentale3uality before the law of women and men.

5. )rt. II, Sec. 1, !onst. : he (tate affirms labor as a primarysocial economic force. It shall protect the rights of workers andpromote their welfare.

6. )rt. -III, Sec. 1, !onst. : he Congress shall give highestpriority to the enactment of measures that protect and enhancethe right of all the people to human dignity, reduce social,

economic, and political ine3ualities, and remove culturaline3uities by e3uitably diffusing wealth and political power forthe common good.o this end, the (tate shall regulate the ac3uisition, ownership,use, and disposition of property and its increments.

7. )rt. -III, Sec. " 51st6ar7, !onst. : he (tate shall2afford full protection to labor, local and overseas, organi8ed andunorgani8ed, and2promote full employment and e3uality of employmentopportunities for all . . .

8. )rt. -III, Sec. %, !onst. : he (tate shall, by law, undertake anagrarian reform program founded on the right of farmers andregular farmworkers, who are landless, to win collectively orcollectively the lands they till or, in the case of otherfarmworkers, to receive a just share of the fruits thereof . . .

9. )rt. -III, Sec. 11, !onst. : he (tate shall adopt an integratedand comprehensive approach to health development which shallendeavor to make essential goods, health and other socialservices available to all the people at affordable cost . . .

10.he present Constitution has gone further than the 4576Constitution in guaranteeing vital social and economic rights tomarginali8ed groups of society, including labor. he framers ofthe Constitution intended to give primacy to the rights of laborand afford the sector 9full protection regardless of thegeographical location of the workers and whether they areorgani8ed or not ('lo!e %aca# vs. &C).

. rotection to Labor1. )rt. -III, Sec. ", !onst. : he (tate shall afford full protection

to labor, local and overseas, organi8ed and unorgani8ed, andpromote full employment and e3uality of employmentopportunities for all.

It shall guarantee the rights of all workers to 17 selforgani8ation, 7 collective bargaining and negotiations, and "7

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

hey shall also participate in policy and decision&makingprocesses affecting their rights and benefits as may be provided bylaw.

he (tate shall promote the principle of shared responsibilitybetween workers and !"#s and the preferential use of voluntarymodes in settling disputes, including conciliation, and shall enforcemutual compliance therewith to foster industrial peace.

he (tate shall regulate the relations between worker#s and!"#s, recogni8ing the right of labor to its just share in the fruits ofproduction and the right of enterprises to reasonable returns ininvestment, e$pansion and growth.

456; Const. : he (tate shall afford protection to labor, especially

to working women and minors, and shall regulate the relationbetween landowner and tenant, and between labor and capital inindustry and in agriculture. he (tate may provide for compulsoryarbitration.

Three aggregates of power against which the individualemployee needs protection 4. collective labor &


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Definition[#, ', , )]

1. (ocial justice is neither communism nor despotism, nor atornism,nor anarchy, but the humani8ation of laws and the e3uali8ationof social and economic forces so that justice in its rational and

objectively secular conception may at least be appro$imated. Itmeans the promotion of the welfare of the people, the adoptionof measures by the government to ensure economic stability ofall the competent elements of society, through the e$ercise ofpowers underlying the e$istence of all governments on the time&honored principle of salus populi est suprema lex. (Calalang vs.Williams)

=. hat does social justice guaranteeD(ocial justice does not champion division of property of economicstatus> what it guarantees are e3uality of opportunity, e3uality of

political rights, e3uality before the law, e3uality between valuesgiven and received, and e3uitable sharing of the social andmaterial goods on the basis of efforts e$erted in their production.('"ido vs. P*)

9hose who have less in life should have more in

law

9!3ual pay for e3ual wok

Limits of Use

2 he policy of social justice is not intended to countenancewrongdoing simply because it is committed by the underprivileged. @tbest it may mitigate the penalty but it certainly will not condone theoffense. hose who invoke social justice may do so only if their handsare clean and their motives blameless and not simply because theyhappen to be poor. (P&$- vs. &C)

.* S6ecific Labor Rig0ts

2 @rt. AIII, (ec. 6, Const. : 'In the relation between workers and !"#sthe following rights shall be assured by the (tate:

a. "ights to self&organi8ationb. "ight to collective bargainingc. "ight to collective negotiationsd. "ight to peaceful and concerted @ctivities including the

right to strikee. "ight to security of enuref. "ight to just and humane Conditions of workg. "ight to a living ageh. "ight to participate in policy and )ecision&making

processes ?@C -E0)B

2 Enly to those that affect the rights of employees and haverepercussions on their right to security of tenure.Protection to Labor

4. he law must protect labor, at least to the e$tent of raising himto e3ual footing in bargaining relations with capital and to shieldhim from abuses brought about by the necessity for survival. It is

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safe to presume, therefore, that an !! or laborer who waives inadvance any benefit granted him by law does so, certainly not inhis interest or through generosity but under the forcefulintimidation of urgent need> and hence, he could not have soacted, freely and voluntarily. (Sanche vs. Harr# ons)

.: $t0er Rig0ts

1. )rt. II, Sec. 14, !onst. : 0o law impairing the obligation ofcontracts shall be passed.

;;; !o(6assionate Justice- disregarding rigid rules and giving due weight to all the

e3uities of the case- years of service without derogatory record taken into

account

- harshness of penalty also taken into account

2. )rt. III, Sec. 1:, !onst. : @ll persons shall have the right to aspeedy disposition of their cases before all judicial, 3uasi&judicialor administrative bodies.

3. )rt. III, Sec. 1 57, !onst. : 0o involuntary servitude in anyform shall e$ist e$cept as a punishment for a crime whereof theparty shall have been duly convicted.

Labor as Property

2 he right of a person to his labor is deemed property within themeaning of the Constitutional guarantees. hat is his means oflivelihood. Fe cannot be deprived of his labor or work without dueprocess of law. ?Phil. +ovieworkers @ssn. s. Premiere ProductionsB

ue Process Re!uirements

2 he twin re3uirements of notice and hearing constitutes essentialelements of due process in cases of !! dismissal: the re3uirement ofnotice is intended to inform the !! of the !"#s intent to dismiss and thereason for the proposed dismissal> upon the other hand, the

re3uirement of hearing affords the !! an opportunity to answer his!"#s charges against him and accordingly to defend himself therefrombefore dismissal is effected. 0either of these = re3uirements can bedispensed with without running afoul of the Constitution. "#enturyTe$tile vs% &LR#'

Liberty of #ontract and State (nterference

2 /egislation appropriate to safeguard to people#s vital interests maymodify or abrogate contracts already in effect. "eservation of essentialattributes of sovereign power is read into contracts as a postulate of

the legal order. @ll contracts made with reference to any matter that issubject to regulation under the police power must be understood asmade in reference to the possible e$ercise of that power. ?@bellaGFad.)anao vs. 0/"CB such was the case when @rt. =%6 of the /abor Codegranted severance pay to workers who at the time of their employmentwere not entitled under the law to receive such pay. ?Id.B

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22 !mployees have a vested and demandable right over e$istingbenefits voluntarily granted to them by their employer.

MGuitclai(s are in2alid as against 6ublic6olicy

4. It is only when there is clear proof that the waiver was wangledan unsuspecting person, or the terms of settlement are

unconscionable on its face, that the law will step in to annul the3uestionable transaction.

2. -ut where it is shown that the person making the waiver did sovoluntarily, with full understanding of what he was doing, andthe consideration for the 3uitclaim is credible and reasonable,the transaction must be recogni8ed as a valid and bindingundertaking. (Sicangco vs. &C)

6. (hould a party fail or refuse to comply with the terms of a validcompromise or amicable settlement, the other party could eitherenforce the compromise by a writ of e$ecution, or regard it asrescinded and to insist upon his original demand. ?+orales vs.

0/"CB- oluntary consideration not unconscionable- aiver of future benefits is not valid and binding- he law does not consider as valid any agreement

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

b. to prevent him from demanding benefits to whichhe is entitled

2 Instances w0en >uitclai(, wai2er or co(6ro(ise is 2alid+1. C, a national promoter salesman, with high educational

attainment, tendered his resignation after a spot audit found outthat he had a tentative shortage of PhpH5,;.;5. It isunbelievable that C, occupying a responsible position, and withhigh education attainment, can be rattled and confused intosigning a resignation letter, on account of a mere spot audit.(Callanta vs. &C)

2. -ank and !!#s association, entered into a C-@ providing for thewithdrawal of the pending case of the association against thebank for non&payment of PhpJ. !CE/@. There is nothing inthe compromise which contravenes the law, morals, good

customs, public order, or public policy. (%onte de Piedad vs. %,&/)

3. )uring pendency of appeal before the 0/"C, workers e$ecuted avoluntary affidavit before the /abor @rbiter declaring intention towithdraw appeal in lieu of payment of severance pay. Theaffidavits executed voluntarily and knowingly in the presence of

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the Labor rbiter has the effect and authority of res judicata.(,la#!ar vs. &C)

4. @ number of !!#s made 3uitclaims in e$change for the droppingof charges of embe88lement of P=; million which the !!#s

allegedly embe88led. The consideration for the waiver isade!uate. (P0C vs. /chiveri)

Instances w0en >uitclai(, wai2er or co(6ro(ise in2alid+1. @ worker hospitali8ed for several times for work&related accidents

was told by an immediate supervisor and a personnel officer toretire and e$ecute a 3uitclaim or else would be dismissed andgot nothing. The retirement and !uitclaim was made underthreat of dismissal. (*lcantara)

2. @ messenger with ; years employment resigned and e$ecuted a

3uitclaim after being told by his manager to resign or elsecharges will be filed against him. The threat was unjust since themessenger did not commit any unlawful act. There wasintimidation, which vitiated consent. ('"atson -o"rs vs. &C)

3. @ 3uitclaim of future benefits made by an !! at the time ofemployment (*lcantara)

4. @fter the CI" rendered a decision ordering the !" to pay wagedifferentials, the !!#s e$ecuted a 3uitclaim waiving their rightsunder the decision. The !uitclaim contravenes public policy since

after a civil action is filed in court, the cause of action may notbe subject of compromise unless the same is with leave of court.( Pampanga S"gar $evt. s. S"gar Worers *ssn.)

5. @ 3uitclaim e$ecuted by an E1 repatriated to the Philippinesbecause of an illness re3uiring surgical treatment inconsideration of the return travel fund. There was noconsideration since the "" regularly contributed to the fund.#esides, the !uitclaim is negotiable and in congruous to thedeclared policy of the $tate to afford protection to labor and toassure the right of workers to security of tenure. (C"ales vs. &C)

6. !" appealed the decision of the PE!@ awarding K6,%.disability benefits to worker. )uring pendency of appeal, theworker e$ecuted a 3uitclaim in e$change for Php4%,. sinceat the time the worker needed money for medical treatment. Thelaw does not consider valid any agreement to receive lesscompensation than what the workers should receive. %t was clearthat the worker was forced to accept the payment out ofnecessity.(PSC vs. &C)

7. @fter the finality of judgment awarding them severance pay, theworkers e$ecuted a 3uitclaim before labor arbiter who had no

participation in the case. $uch settlements must be approved bythe labor arbiter before whom the case is being heard. (St. 'othardP"! vs. &C)

Luitclaims are ineffective to bar recovery of the full

measure of the worker#s rights

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)ire 0ecessity is not an acceptable ground to annulreleases unlessthere is showing that

a. workers were forced to e$ecute themb. the considerations for the 3uitclaims where unconscionably

low

Manage(ent rerogati2es4. "ight to select and discharge employees with valid cause=. promulgate reasonable employment rules and regulation6. designation of work to employeesH. transfer and promote employees;. control company operationsJ. install money&saving devices7. re&clarify or abolish positions%. sell or close business

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6. 4 "ole of /aw

1. )rt. 1@44, =!! : he relation between capital and labor aremerely contractual. hey are so impressed with public interestthat labor contracts must yield to common good. herefore, such

contracts are subject to special laws on labor unions, collectivebargaining, strikes, lockouts, closed shops, wages, workingconditions, hours of labor and similar subjects.

6.= !"&!! (tandard of Conduct

2 )rt. 1@41: 0either capital nor labor shall act oppressively againstthe other, or impair the convenience of the public.

Fair Treatment

2 he 0CC states that every person must in the e$ercise of his rights,and in the performance of his duties, act with justice, give everyone hisdue, and observe honesty and good faith. (*HS Phils. vs. &C)

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Law #ompliance

(he return&to&work order in this case not so much confers a right as itimposes a duty and while as a right it may be waived, it must bedischarged as a duty even against a worker#s will. hus, it does not

constitute a violation of the right against involuntary servitude.(Sarmiento vs. -"ico)his is differentiated from the instance where thereis a mere breach of contractual stipulation. hile the !! may be heldliable for damages by virtue of the breach of contract, he may not becompelled to work against his will because this will be involuntaryservitude. (*lcantara)

'' $bedience and !o(6laince 'R $rders

; It is a recogni8ed principle that company policies and regulations are,

unless shown to be grossly oppressive or contrary to law, generallybinding and valid on the parties and must be complied with until finallyrevised or amended unilaterally or preferable through negotiation or bya competent authority. (S%C vs. U!aldo) )eliberate disregard ordisobedience of rules, defiance of management authority by the !!#scannot be countenance.


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%.% I(6le(enting Rules4. )rt. *: Implementing rules and regulations of the )E/! and

other government agencies of the Code shall become effective; 1* days after announcement of their adoption in newspapers of

general circulation.

Li(itation BRule Ma/ing ower

4. 2 his power is limited to the promulgation of rules and regulationsto effectuate policies of the Code. (uch rules and regulations mustconform to the terms and standard prescribed in the statute. heycannot supplant its plain and e$plicit command. (*lcantara)

2 @ rule or regulation promulgated by an administrative body, such asthe )E/!, to implement a law, in e$cess of its rule&making authority is

void. (*"cena)

=. ,$amples of void (RR-s:2 I"" providing the 4&day period specified in @rt. ==6 refers to workingdays as stated in the article.

2 @n I"" providing that !!#s paid by the month shall be presumed to bepaid for all days in the month, whether worked or not. %n effect, willexcept "")s paid by the month from the enjoyment of the holiday paybenefit. (ns"lar 0an // Union vs. nciong)

2 I"" of "@ J74; e$cluding security guards from those allowed to joinunions. (%/*&C, vs. S,&/)

2 I"" including commission in the computation of 46th month pay.*nduly expanded the concept of +basic salary. (0oie3-aeda vs. $e &aSerna)

%.* olicy Declaration

2 )rt. ": he (tate shall 5)'R)7

4. @fford protection to labor=. Promote full employment6. !nsure e3ual work opportunities regardless of se$, race or creedH. "egulate the relations between workers and !"#s.;. @ssure the rights of workers to self&organi8ation, collective

bargaining, security of tenure, and just humane conditions ofwork.

%.: Law Inter6retation

4. )rt. % : @ll doubts in the implementation and interpretation of

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

=. )rt. 1@4, =!!: In case of doubt, all labor legislation and laborcontracts shall be construed in favor of the safety and decentliving of the laborer.

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(n Favor Labor)Rationale

2 his kind of interpretation gives meaning and substance to theliberal and compassionate spirit of the law. he policy is to e$tendthe decree#s applicability to a greater number of !!#s to enable

them to avail of the benefits under the law, in consonance with the(tate#s avowed policy to give ma$imum aid and protection to labor.(*!ella vs. &C)

Liberal #onstruction

2 @re the provisions violative of the e3ual protection clauseD 0o. he!" and the laborer do not stand on e3ual footing> to ensuree3uality, the latter must, be afforded protection. Insofar as laborcontracts are concerned, the same are usually drafted and preparedby the !". @ll doubts in their provisions should therefore be resolved

against it. (*lcantara)

oubt

2 hen these are = or more possible e$planations regarding an issueaffecting worker#s rights, that which favors the worker must be chosen.(Clemente vs. 'SS)

&o doubt

2 he provision in case of doubt does not apply where the pertinentprovisions of the /abor Code leave no room for doubt either in theirinterpretation or application. (0onifacio vs. 'SS)

Sweeping (nterpretation

2 he (upreme Court cannot also adopt a sweeping interpretation ofthe law, lest it engages itself in judicial legislation. (0ravo vs. //C)

Factual #onsideration and Rationality

2 he care and solitude in the protection and vindication of the right ofworkingmen cannot justify disregard of relevant facts or schewal ofrationality in the construction of the te$t of applicable rules in order toarrive at disposition in favor of an !!. (P*& vs. &C)

,!uity and .oral #onsideration

; Considerations of e3uity and social justice cannot prevail against the

e$pressed provisions of labor laws. (%anning vs. &C)

/alancing #onflicting #laims

2 he basic policy of the law is to balance or to coordinate the rightsand interests of both workers and !"#s. It should not be deduced thatthe basic policy is to favor labor to prejudice capital. (*"cena)

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H.7 !nforcement and (anctions

1. )rt. 1@ 5a7 57, 5"7, 5%7, 5:7: -urisdiction of Labor rbiters andthe Commission

4. he /abor @rbiters shall have e$clusive and original jurisdiction,e$cept as otherwise provided, the following cases involving allworkers: ?unfair labor practiceB

=. ermination disputes ?3ualified by @rt. =J4 which grant voluntaryarbitrators original and e$clusive jurisdiction over all unresolvedgrievances arising from C-@s and company personnel policiesB>

3. Cases involving terms and conditions of employment, ifaccompanied with a claim for reinstatement ?including claims ofE1#s arising out of an !"&!! relationship, including claims foractual, moral and e$emplary damages, as provided in $ec. /,0igrant 1orkers ctB>

H. Claims for actual, moral, e$emplary and other damages arisingfrom the !"&!! relations>

;. !$cept claims for !!#s Compensation, (ocial (ecurity, +edicareand maternity benefits, all other claims, arising from the !"&!!relations> including

- those of persons in domestic or household service,involving an amount e?ceeding 06*,444, regardless ofwhether of whether accompanied with a claim forreinstatement.

J. )isputes arising from @rt. =JH including legality of strikes andlockouts

. )rt. 1 : 2isitorial and "nforcement 3ower of the $ecretary ofLabor or his duly authori4ed representative.

4. @ccesss to !"#s records and premises at anytime of the day ornight whenever work is being undertaken therein and copythereform>

=. Luestion any !!> and6. Investigate any fact, condition or matter which may be necessary

to determine violations of this Code of any labor law, wage orderor rules and regulations issued pursuant thereto.

2 In cases where the relationship of !"&!! still e$ists, the power toissue Compliance Erders to give effect to the labor standard provisionsof this Code and other social legislation.

rits of e$ecution to the appropriate authority shall beissued for the enforcement of the said orders, e$cept incases:

a. where the !" contests the findings of the laboremployment and enforcement officer> and

b. raises issues supported by documentary profitswhich were not considered in the course of

inspection.

2 Erder (toppage of work or suspension of operations of any unit ordepartment of an establishment when non&compliance poses graveand imminent danger to the health and safety of workers in theworkplace.

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ithin =H hours, a hearing shall be conducted to determinewhether an order for the stoppage of work and suspensionof operations shall be lifted or not.

In case the violation is attributable to the fault of the !",he shall pay !!#s their !!#s their salaries or wages during

said period.

2 It shall be unlawful for any person to Ebstruct, impede, delay orotherwise render ineffective the order of the (ecretary of /abor.2 0o inferior court shall issue a temporary or permanent injunction orrestraining order or otherwise assume jurisdiction over any caseinvolving the enforcement orders in accordance with this @rticle.2 @ny government !! found guilty of violation, after appropriateadministrative investigation, be subject to (ummary dismissal from theservice.2 he (ecretary of /abor may re3uire !"#s to keep and maintain

!mployment records as may be necessary. ?@( CE0!(B

". )rt. 13. Recovery of wages0 simple money and otherbenefits%2 he "egional )irector of the )E/! or any of the duly authori8edhearing officers of the )epartment is empowered, through summaryproceedings and after due notice, to hear and decide any matterinvolving the recovery of wages and other monetary claims andbenefits, including legal interest owing to a person employed indomestic or household service: Provided

such complain does not include claim for reinstatement

aggregate money claims of each househelper does note$ceed P;,.

2 he complaint shall be resolved within 6 days from the date of thefiling of the same.

%. )rt. + Penalties and 1urisdiction )a. !$cept, as otherwise provided in the Code, or unless the

acts complained of hinges in a 3uestion or interpretationor implementation of ambiguous provisions of an e$istingC-@, any violation of this Code declared to be unlawful orpenal in nature shall be punished with:

a fine not less than P4,. nor more than P4,..

or imprisonment of not less than 6 months nor more than 6years.

Er both such fine and imprisonment at the discretion of thecourt.In addition to such penalty any alien found guilty shall be

summarily deported upon completion of service of service.b. @ny criminal offense punished under this Code shall be

under the concurrent jurisdiction of the +C and the "C.

*. )rt. 3 + he penalty ?of the offenses listed in the /abor CodeBshall be imposed upon the guilty officer of officers of a corporation,trust, firm, partnership, association pr entity which committed saidoffenses.

:. )rt. 34. Prescription of 2ffensses )2 Effenses penali8ed under this Code and the I""#s 6 years.

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;. substituteJ. contractual

4. Is the purchaser of the assets of an !" corporation considered asuccessor !" of the latter#s !!D 0o. /abor contracts are not

enforceable against a transferee of an enterprise, labor contractsbeing in personam, thus binding only between parties.

,R),, Relationship 3 (ndependent #ontractor and Labor#ontractor

1. )rt. 14: + #ontractor or subcontractorB

a. henever an !" enters into a contract with anotherperson for the performance of the former#s work, the !!#sof the contractor and of the latter#s subcontractor, if any

shall be paid in accordance with the provisions of thisCode.

In the event that the contractor or the subcontractor fails to paythe wages of his !! in accordance with this Code, the !" shall bejointly and severally be liable with his contractor or subcontractor tosuch !!#s to the e$tent of the work performed under the contract, inthe same manner and e$tent that he is liable to !!#s directly employedby him.

b% There is 4labor)only5 contracting where6

1. the person supplying in workers to an !" does not have [!,I] substantial capital

'substantial investment in the form of tools, e3uipment,machineries, work premises, among others

=. and the workers recruited and placed by such persons areperforming activities which are directly related to the principalbusiness of such !".

In such cases, the person or intermediary shall be consideredmerely as an agent of the !" who shall be responsible to theworkers in the same manner and e$tent as if the latter were directly

employed by him.

2. Sec. 3, Rule III, &oo/ III, IRREs : ?aB @ny person whoundertakes to supply workers to an !" shall be deemed to beengaged in labor&only contracting where such person :

; Does not 0a2e

substantial capital

'substantial investment in the form of tools, e3uipment,machineries, work premises and other materials> and

2 he workers recruited and placed by such person are performingactivities which are directly related to the principal business oroperations of the !" in which the workers are habitually employed.

/abor&only contracting as defined herein is hereby prohibited and theperson acting as contractor shall be considered merely as an agent orintermediary of the !" who shall be responsible to the workers in thesame manner and e$tent as if the latter were directly employed byhim.

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?cB 1or cases not falling under this @rticle, the (ecretary of /abor shalldetermine through whether or not the contracting out is permissible inthe light of the circumstances of each case and after considering theoperating needs of the !" and the rights of the workers involved.

3. )rt. 14@ : %ndirect "7 he provisions of the immediatelypreceding @rticle shall likewise apply in any person, partnership,association or corporation which, not being an !", contracts withan independent contractor for the performance of any work, jobor project.

4. )rt. 143 : !very !" or indirect !" shall be held responsible withhis contractor or subcontractor for any violation of the provisionsof this Code. 1or purposes of determining the e$tent of their civilliability under this Chapter, they shall be considered direct !"#s.

5. Sec. , Rule III, &oo/ III, IRREs +-ob Contracting 8 here isjob contracting permissible under the Code if the followingconditions are met:

4. he contractor carries on an independent business andundertakes the contract work '@ " + & 1

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

all matters connected with the performance of the work

e$cept as to the results thereof> and=. he contractor has

a. substantial capital orb. 'substantial investment in the form of tools, machineries,

work premises, and other materials which are necessary inthe conduct of his business.

2here the !"&!! relationship has become ascertained, the !"becomes bound by statutory re3uirements pertaining, though notlimited, to terms and conditions of employment, labor relations andpost employment. (Phone3Po"lenc vs. &C) 0onetheless, when a

contractor fails to pay the wages of his !!#s, the !" who contracted outthe job to the contractor becomes jointly and severally liable with hiscontractor to the !!#s of the latter 9to the e$tent of the workperformed under the contract as if such !" were the !" of thecontractor#s !!#s. he law itself, establishes an !"&!! relationshipbetween the !" and the job contractor#s !!#s for a limited purpose i.e.in order to ensure that the latter get paid the wages due them. @similar situation obtains where there is a 9labor&only contracting. histime, however, for a comprehensive purpose: 9!" for purposes of thisCode, to prevent any violation or circumvention of any provision of thisCode. he law in effect holds both the !" and the 9labor only

contractor responsible to the latter#s !!#s for more effectivesafeguarding of the !!#s rights under the /abor Code. (P0C vs. &C)

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facts and all the features of the relationship must be considered.(illal"ga vs. &C)

22 the e$istence of an !"&!! relationship is a 3uestion of law andcannot be made the subject of agreement

2 the nature of ones business is not determined by self&servingappellations one attaches thereto but by the tests provided by statuteand prevailing case law

&. C)! andd. the power to control the !!#s conduct

?!)(B although the latter is the most important element. (osario0rothers vs. ,ple)0o particular form of evidence is re3uired to prove thee$istence of an !"&!! relationship. @ny competent and relevantevidence to prove the relationship may be admitted (,p"lencia vs. &C)

=. Is there an !"&!! relationshipD

2 orkers under a pakiao agreement arranged by N whom P"Cconsidered as an independent contractor. !" gives orders to N, on

where to store the copra, when to bring out, how much to load andwhere, and what class of copra to handle. he e3uipment used isowned by P"C. Mes. 37C has direct control over the handling of thecopra. The control test is satisfactorily met.

2 Piece workers subject to specifications. Mes. The fact that the makingof the basket is subject to Dy)s specifications indicates the existence ofcontrol. ($# oh 0eng vs. &%U)

2 ailors, pressers, stitchers and similar workers employed by CE) on apiece&work basis. he !!#s are governed by the company#s regulations

i.e. %&hour workday, recording of attendance etcO 1urthermore, amaster cutter distributes job orders e3ually, supervises the work andsees to it that they were finished as soon as possible. Mes. The worker)sconduct in the performance of their work was controlled by thecompany (osario vs. ,ple)

2 Cargadores and pahinantes recruited by (+C through a laborcontractor who are governed by the regulations of the (+C whose workconsisted of loading, unloading, pilling or palleting empty bottles andwooden shells from company trucks and warehouses. Mes. Theevidence firmly establishes the control exercised by the $0C. (0&U% vs.

5amora)

2 (hoe shiners who had their own customers but shared proceeds withcompany. 0o. The company does not exercise any degree of control orsupervision over his work. The shoe shiner is a partner in trade. (0esavs. -ra6ano)

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2 endees of cigarettes who are governed by the regulations of thevendor company i.e. definite sales territory, re3uirement to submitdaily, weekly and monthly reports, etc. Mes. 2endor company hadcontrol over the vendee. (SSS vs. C*)

2I. (, a prominent social figure, had an agreement with ( to act as9branch manager> he agreement provided that she would be entitledto a part of the commission on sale of tickets> and that she would sharein the e$penses of maintaining the office. (he was also a signatory to alease agreement covering the branch#s premises, holding herselfsolidarily liable for the prompt payment of rentals. 0o. %. $ was notsubject to the control by T1$. The services rendered by %.$ must havebeen done by her pursuant to a contract of agency. (Sevilla vs. C*)

2 @ plant manager hired by a marble company which was about toclose in a few month#s time due to business losses. he company had

no control over the former, either as to hours of work or method ofaccomplishing the work. he former was entitled to a percentage of thenet profits of the company for that period. 0o. 0anager was merely aparty to a joint venture. (C%C vs. &C)

2 1ishermen&crew of a trawl fishing vessel subject to control andsupervision of the owner of the vessel i.e. conduct of fishingoperations> time to report to fishing port, etcO Mes. ("ga vs. &C)

2 ailors, seamstresses and other workers of a haberdashery who werepaid on a piece&rate basis. hey were directed by the proprietor of the

establishment as specified by the customers. hey were re3uired tofinish jobs orders in one day before due date. Mes. They did notexercise independence in their own methods, but on the contrary weresubject to the control of the establishment from the beginning of theirtask to their completion. They also had to rely on the tools ande!uipment supplied by the haberdashery. (%aati Ha!erdasher# vs. &C)

2 he power of control refers merely to the e$istence of the power andnot the actual e$ercise thereof.

2 Caddles who are not under the control and supervision of the golf

club as to working hours, manner of carrying out their services, etc.0o. he club did not have the measure of control over the incidents ofthe caddy#s work and compensation that the !" would possess. (%anilavs. *C)

2 College teachers. Mes. The Court takes judicial notice that auniversity controls the work of the members of its faculty9 that itprescribes the courses or subjects that they teach and the time andplace for teaching. (+eati vs. 0a"tista)

2 eepney drivers working under the boundary system. Mes. The driver

does not have any interest in the business because he did not investanything in the ac!uisition of jeeps and did not participate in themanagement thereof. (Citien7s &eag"e of +ree Worers vs. *!!as)

!. !$=


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222 here is an !"&!! relationship where the !" controls or hasreserved the right to control the !! not only as the result of the workbut also as to the means by which said work is to be accomplished(Paradise vs. g). he test merely calls for the e$istence of the right tocontrol the manner of doing the work not the actual e$ercise of the

right. ("ga vs. &C) he line should be drawn between rules thatmerely serve as guidelines towards the achievement of the mutuallydesired results without dictating the means or methods employed inattaining it, and those that control or fi$ the methodology and bind orrestrict the party hired to the use of such means. he first , which aimonly to promote the result, create no !"&!! relationship unlike thesecond, which addresses both the result and the means to achieve it.(ns"lar &ife vs. &C)he control test calls merely for the e$istence ofthe right to control and manner of doing work, not the actual e$erciseof the right. ($# eh 0eng)

D. '!$=$MI!


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=. and the workers recruited and placed by such persons areperforming activities which are directly related to the principalbusiness of such !".

ith respect to the second re3uirement, the service provided by

janitors, firemen, mechanics, hired helpers and similar workers areconsidered directly related to the operations of a company since this isnecessary to the proper maintenance of the premises and machineriesas well as the protection of the company premises against fires. ('"arinvs. &C)

In such cases, the person intermediary shall be considered merelyas an agent of the !" who shall be responsible to the workers in thesame manner and e$tent as if the latter were directly employed byhim.

;;; Cactors to Deter(ine e?istence of Inde6endent !ontractorRelations0i6+

4. whether the contractor is carrying on an independent business>=. whether the work is part of the !"#s general business>6. the nature and e$tent of the work>H. the skill re3uired>;. the terms and duration of the relationship>J. the right to assign the performance of the work to another>7. the control and supervision of the work and the !"#s powers with

respect to the hiring, firing and payment of salaries>8. the duty to supply premises, tools and appliances. (%afinco vs.

,ple)

;; '?a(6les of Inde6endent !ontractor+

2 !o((ission agent : IPC Company entered into agreement withregistered representatives who worked on a commission basis. hilethe agents were subject to a set of rules and regulations governing theperformance bond> the termination for certain causes, however, theagents were not re3uired to report to work> to devote their timee$clusively for the company> to account for their time nor submit arecord of their activities> and that they were paid on a commission

based on a certain percentage of sales. The fact that for a certainspecified causes &failure to meet annual !uota' the relationship maybe terminated does not mean such control exists, for the causes oftermination have no relation to the means and methods of work. (PCvs. SSS)

2 Dealers0i6 : @ contract whereby one engages to purchase and sellsoft drinks on trucks supplied by the manufacturer but providing thatthe other party ?peddlerB shall have the right to employ his ownworkers, shall post a bond to protect the manufacturer against lossesshall be responsible for damages caused to third person, shall obtain

the necessary licenses and permits and bear the e$penses incurred inthe sale of the soft drinks. (%afinco vs. &C)

@nother dealership agreement wherein the dealer: handles theproducts in accordance with e$isting laws and regulations> sends hisorders to the factory plant> is supplied by the factory with a deliverytruck and all e$penses for repairs are borne by the factory> receives no

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commission but given a discount for all sales> is responsible alone forany violation of the law, sells the product at the price agreed uponbetween the parties> and posts a surety bond of not less thanP4,.. (&a S"erte vs. $irector of &a!or elations)

2 Security )gency : (hipping company entered into an agreementwith a security agency wherein the security agency was responsible forthe hiring and assignment of the guards, the guards were not known tothe shipping company for it dealt directly with the agency, and apayment of a lump sum to the agency who in turn paid thecompensation of the individual watchmen. *nder the circumstances,the guards cannot be considered "")s of the shipping company. %t isthe security agency that recruits, hires and assigns the work of thewatchmen. %t is the wages to which the watchman is entitled. Thepowers to dismiss lies with the agency. Lastly, since the company hasto deal with the agency, and not with the individual watchmen, on

matters, pertaining to the contracted task, it stands to reason that thecompany does not exercise any power or control over the watchmen)sconduct. (*P& vs. Clave)

2 Ste2edoring Ser2ices : (FIP(I)! entered into a 9Contract for(ervices with /a


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-CC, capitali8ed at P4 million fully subscribed and paid forprovided janitorial and other services to various firms. It hired @ and -and assigned them to work for 1!-C. he two reported for workwearing the prescribed uniform of the -CC> their leave of absenceswere filed directly with -CC> and their salaries drawn only from -CC.

1!-C however issued a job description which detailed the functions oftwo.pplying the control test, #CC is the "7 of the two. ;urthermore, ithad substantial capital. The guidelines in the job description were laiddown merely to ensure the desired result was achieved. %t did not,however, tell how the work should be performed. (eri vs. &C)

2 Re6air and Maintenance Ser2ice + 1 doing business, was hiredby (hell to conduct a hydro&pressure test. Fe was paid a lump sum forthe work he and his men accomplished. Fe utili8ed his own tools ande3uipment. Fe accepted business from other companies. Fe was notcontrolled by (hell with regard to the manner in which he conducted

the test. (Pilipinas Shell vs. C*)

22 Instances of LaborA$nly !ontracting

2 )gency 0iring : P-C and C!(I entered into an agreement underwhich the latter undertook to supply the former with 44 messengers.he agreement provided that the messengers would remain !!#s ofC!(I> P-C remitted to C!(I amount e3uivalent to the wages of themessengers> C!(I in turn paid them and their names are not includedin the P-C#s payroll> the bank, in cases of dismissal would re3uest C!(I,

and C!(I would in fact withdraw such messenger, and the messengersperformed their functions within the bank#s premises. C"$% cannot beconsidered a job contractor because its undertaking is not theperformance of a specific job9 it merely undertook to provide the bankwith a certain number of persons able to carry out the work ofmessengers. (P0C vs. &C)


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employment application forms and submitted the forms to the (ecurity)epartment of the hotel. heir wages were paid directly by Fyatt andtheir assignments, promotions, supervisions and dismissal wereapproved by the Chief (ecurity Efficer of Fyatt. (all"m Sec"rit# vs. &C)

(ection J. !mployment Policies, "ecruitment and Placement oforkers, and @gencies

J. 4 '(6loy(ent olicies

4. )rt. 1 : (tatement of Ebjectives (t is the policy of the State:

a. o promote and maintain a state of 1ull employment throughimproved manpower training, allocation and utili8ation>

b. o protect every citi8en desiring to work locally or overseas by

securing for him the best possible terms and conditions ofemployment>c. o facilitate a free choice of @vailable employment by personsseeking work in conformity with national interest>

d. o facilitate and regulate the +ovement of workers in conformitywith national interest>

e. o regulate the employment of @liens, including the establishment ofa registration andGor work permit system>

f. o strengthen the network of public employment offices andrationali8e the participation of the private sector in the "ecruitmentand placement of workers, locally and overseas, to serve nationaldevelopment objectives>

g. o issue careful selection of 1ilipino workers for overseasemployment in order to protect the good name of the Philippinesabroad. ?@1P +@"CB

J.= '(6loy(ent )gencies

3rivate $ector


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2. )rt. : Capitali8ation (ubstantial capitali8ation as determinedby the (ecretary of /abor. ?P4 +B

Sec. 1, Rule , &oo/ I, IRREs : =ualification of pplicants for

3rivate employment agencies 8 @ll applicants for licenses to operateprivate employment agencies either for local or overseasrecruitment and placement shall possess the following3ualifications. . .

3. )rt. 3: >on or2 at any place other than that stated in the license of authority2 nor such license or authority be transferred, conveyed or assignedto any other person or entity.

2 @ny transfer of business address, appointment or designation ofany agent or representative including the establishment ofadditional offices everywhere shall be subject to the prior approvalof the )E/!.

4. )rt. 1* 5a7 : ?aB he -ureau of !mployment (ervices shall beprimarily responsible for developing and monitoring acomprehensive employment program. It shall have the powerand duty:=B o establish and maintain a registration andGor licensing

system to regulate private sector participation in the recruitment

and placement of workers, locally or overseas, and to secure thebest possible terms and conditions of employment for 1ilipinocontract workers and compliance therewith under such rules andregulations as may be issued by the +inister of /abor.

5. )istinguish authority from licenseD 4+uthority5 means adocument issued by the (ecretary of /abor and !mploymentauthori8ing a person or association to engage in recruitment andplacement activities as a private recruitment entity> while a4license5 is the document issued to a person or entity tooperate a private employment agency. ?@rt. 46B

J. hat is the duration of a license recruitD @ license is valid for aperiod of = years from the date of issuance unless soonercancelled, revoked or suspended for violation of the /abor Codeor its I""#s.

2 non&tranferrable

C.= &onds

4. @rt. 64 : @ll applicants for license or authority shall post suchcash and surety bonds as determined by the (ecretary of /abor

to guarantee compliance with prescribed recruitmentprocedures, rules and regulations, and terms and conditions ofemployment as appropriate.

=. he purpose of bonds is to insure that if the rights of theseoverseas workers are violated by their !"#s recourse would stillbe available to them against the local companies that recruitedthem for the foreign principal. ?(tronghold vs. C@B

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C.6 or/ers Cees

2 )rt. " : @ny person applying with a private fee or=. he has actually commenced employment. (uch fee shall be

always covered with the appropriate receipt clearly showing theamount paid. he (ecretary of /abor shall promulgate theschedule of allowable fees.

C.H Re6orts Sub(ission

2 )rt. "" : henever the public interest re3uires, the (ecretary of/abor may direct all persons or entities within the coverage of this itle

to submit a report on the status of employment, including jobvacancies, details of job re3uisitions, separation from job, wages, otherterms and conditions, and other employment data.

ercentage of salary re(ittance4. seaman %Q=. construction worker 7Q6. professional workers with free board and lodging 7QH. professional without board and lodging ;Q;. domestic helpers ;QJ. other workers ;Q

C.; ro0ibited ractices [IC C)I

7. o obstruct or attempt to obstruct inspection by the secretary of/abor or by his duly authori8ed representatives>

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22 Illegal ter(ination- full reimbursement fees R 4=Q- salaries for une$pired portion or 6 mos. 1or every year of

une$pired term whichever is lower

;; Liability of 6ri2ate e(6loy(ent agency B e(6loy(entcontract- joint and solidary with employer- all claims and liabilities that may arise in connection with

the implementation of the contracts

=. @ny recruitment activities, including the prohibited practices,enumerated under @rt. 6H of this Code, to be undertaken by non&licensees or non&holders of authority shall be deemed illegal andpunishable under @rt. 65 of this Code.

2 (llegal recruitment when committed by a6 syndicate

or in large scaleshall be considered an offense involving economic sabotage and shallbe penali8ed in accordance with @rt. 65 hereof.

- non&bailable- life imprisonment

22 Illegal recruit(ent by a syndicate Carried out by a group of 6or more persons conspiring andGor confederating with one another incarrying out any unlawful or illegal transaction, enterprise or scheme

defined under the first paragraph hereof.

22 Illegal recruit(ent in large scale Committed against 6 or morepersons individually or as a group.

'hen the /abor Code speaks of illegal recruitment, 9committedagainst 6 or more persons, it must be understood as referring to thenumber of complainants therein, otherwise, prosecutions for singlecrimes of illegal recruitment can be cumulated to make out a case oflarge scale illegal recruitment. In other words, a conviction for large>7, Rule II, &oo/ I, Rules andregulations on $2erseas '(6loy(ent

1. 4#ontract Wor*er5 & @ny person working or who has workedoverseas under a valid employment contract.

2. 4.anning agency5 @ny person or entity recruiting seamen forvessels plying international waters and fore related maritimeactivities.

3. 4&ame 7ire5 orker who is able to secure employmentoverseas on his own without the assistance or participation of anagency.

4. 42verseas employment5 !mployment of a worker outsidethe Philippines, including employment on hoard vessels plyinginternational waters covered by a valid employment contract.

5. 4Placement fee5 @mount charged by a private employmentagency from a worker for its services in securing employment.

6. 4Service fee5 @mount charged by a license from its foreign !"as payment for actual services rendered in relation to therecruitment and employment of workers for said principal.

J. 6 Sanctions

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1. )rt. "* : $uspension andAor Cancellation of License or uthority he (ecretary of /abor shall have the power to suspend orcancel any license or authority to recruit !!#s for overseasemployment for violations of rules and regulations by the )E/!,the PE!@, or for violation of the provisions of this, and other

applicable laws . .

2. )rt. "3 : 3enalties 8 iolations of any provisions of this ile orI""#s by license or holder of authority :

a. imprisonment of not less than = years nor more than ;years

b. or a fine of not less than P4,. nor more thanP;,.

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

6. iolation of any of the provisions thereof or its implementingrules and regulations by a non&license or non&holder of authority

a. imprisonment of not less than H years nor more than %years

b. or a fine of not less than P=,. nor more thanP4,.

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

H. If the offender is a corporation, partnership, association or entity,the penalty shall be imposed upon the officer or officers of the

corporation, partnership, association or entity responsible forviolation> and if such officer is an alien, he shall in addition to thepenalties herein prescribed, be deported without furtherproceedings:

2 Illegal recruit(ent+a. imprisonment of not less than J years and 4 day but not

more than 4= years andb. a fine of not less than P=,. nor more than

P;,..

2 Illegal recruit(ent constituting 'cono(ic Sabotage+c. life imprisonment> andd. a fine of not less than P;,. nor more than

P4,,..

2 or b. committed by a non&license or non&holder of authority.

2 he (ecretary of /abor or his duly authori8ed representative may

order the closure of illegal recruitment establishments.

5. @rt. 6% ?cB of the /abor Code granting the (ecretary of /abor thepower to issue search or arrest warrants is declaredunconstitutional and null and void. (Salaar vs. *chacoso)

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- money claims arising from !"&!! relationship prescribes in6 years

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

;. In case of breach of the employment contract by a foreign&based !",may the private employment agency or recruitment entity be heldliableD hat is the nature of the liability of the recruitment andplacement agency and its principalD Mes. he agency or entityundertakes under oath to assume full and complete responsibility forall claims and liabilities which may arise in connection with the use ofthe license or authority. he agency is jointly severally liable with theprincipal or foreign&based !" for any of the violations of recruitmentagreement contract of employment. (*m!ra"e vs. &C: Pp vs. Catan)

Section @. )lien '(6loy(ent

7. 4 ue of RegulationA'(6loy(ent er(it

1. )rt. %4 : "mployment 3ermit of >on

b. +ass media 4Q owned by 1ilipino citi8ensc. @dvertising 7Q 1ilipino ownedd. "etail -usiness 4Q 1ilipino ownede. 1inancing business JQ 1ilipino owned

4. @re there e$ceptions to the prohibition against employment ofaliens in entities engaged in nationali8ed activitiesD Mes, when ?aBthe (ecretary of ustice specifically authori8es the employment oftechnical personnel> or ?bB where aliens are elected members of-oard of )irectors in proportion to their allowable participation in

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the capital> or ?cB when allowed under certain special laws.(*lcantara)

#overage

2 @ resident alien need not obtain an employment permit in order to beemployed in the Philippines. (*lmodiel vs. &C)

,mployment Permit 3 #onditions for 8rant

1. )rt. %4 : he employment permit may be issued to a non&resident alien or to the applicant !" after a determination of: [) !]

a. competentb. able andc. willing

at the time of the application to perform the services for which thealien is desired. 'he )E/! is the agency vested with jurisdiction todetermine the 3uestion of availability of the local workers. ('eneral%illing vs. -orres)

2. Sec. *, Rule -I, &oo/ I, IRREs : "e!uirements for"mployment 3ermit pplicants 8 he applicant for anemployment permit shall be accompanied by the following:

a. Curriculum vitae signed by the applicant indicating theeducational background, his work e$perience and otherdata showing that he possesses technical skills in his trade

or profession.

b. Contract of employment between the !" and the principal,which shall embody the following, among others:

hat the non&resident alien shall comply with all applicablelaws and rules and regulations>

hat the non&resident alien worker and !" shall bindthemselves to train at least = 1ilipino understudies> and

@ designation by the !" of at least = understudies whichmust be the most ranking regular !!#s in the section ordepartment for which the e$patriates are being hired to

ensure actual transfer of technology.

Section . De2elo6(ent of #u(an Resources

%.4 $b8ecti2es A Definitions

1. )rt. %": It is the objectives of this [C ' D]a. itle to )evelop human resourcesb. !stablish training institutions, andc. 1ormulate such plans and programs as will ensure efficient

allocation, development and utili8ation of the nation#s

manpower and thereby promote employment andaccelerate economic and social growth.

2. hat is human resources developmentD Process by which theactual and potential labor force is made systematically to ac3uiregreater knowledge, skills and capabilities for the nation#s

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sustained economic and social growth. &$ec. , 7ule %, #ook %%,%77)s'

3. )efine manpowerD Is the portion of the population which hasactual or potential capability to contribute to the production of

goods and services. &$ec. &c', 7ule %, #ook %%, %77)s'

4. Is human resources development intended solely to trainworkersD 0o. +anpower development also means training forself&employment. his is known as 9entrepreneurship &rt. @@&b'.

;. hat is dual systemGtrainingD It refers to a delivery system of3uality technical and vocational education which re3uirestraining to be carried out alternatively in = venues:

a. in school andb. in the production plant.

In school, training provides the trainee the theoretical foundation, basictraining, develops his skill and proficiency in actual working conditionsas it continues personal discipline and work value. &$ec. @ &p', 7BB6'

%.= rogra( Incenti2e

2 )rt. * : )eduction from ta$able income of S of the value of labortraining but not to e$ceed 4Q direct labor wage: Provided, hat in thecase of apprenticeship programs, the program is recogni8ed by )E/!.

%.6


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@. )R'=


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3. @pprenticeship program must be duly approved by !()@ orapprentices becomes regular !!. his must be evidenced by anapprenticeship agreement. (itto /nterprises vs. &C)

Ratio of t0eoretical 2s. on t0e 8ob training 144+ 444

& may work overtime duly credited as his training time

2 )rt. @: he (ecretary of /abor may authori8e the:1. hiring of apprentices without compensation whose training on

the job is re3uired by the school or training program curriculumas a re3uisite for graduation or board e$amination. here is no!"&!! relationship between students on one hand, and schools,where there is written agreement between them under whichthe former agree to work for the latter in e$change for theprivilege to study free of charge. &$ec. @, 7ule F, #ook %%%, %77)s'

2. @ clerk in the College of /aw of a


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'ML$'Ra. habitual absentismb. willful disobedience e.g. rulesc. insubordination lawful orderd. poor physical conditions apprentice

e. theft or malicious destructionf. poor efficiency of performanceg. engaging in violenceh. gross misconducti. bad health or continuing illness. &$ec. 5, 7ule 2%, #ook %%,

%77)s'

2 employer must make a commitment to employ the business

-. L')R='RS& learnership must be approved by !()@

4. )rt. @*:4. )uration of the learnership period shall be 6 months>=. ages and salary rates begin at not less than 7;Q minimum

wage> and6. @ commitment to employ learners if they so desire, as regular

!!#s upon completion of the learnership.

@ll learners who have been allowed or suffered work duringthe first =nd months to be deemed !!#s training isterminated by the !" before the end of the stipulatedperiod though no fault of the learner.

=. )rt. @:: /earners employed in piece or incentive&rate jobs duringtraining shall be paid in full for the work done.

6. entered into a learnership agreement with employer @. -efore theend of = months, @ terminated the agreement. hen re3uested for achance to let him finish the 6 months period. @t the end of 6 months, @refused to hire . Is the stand of @ sustainableD 0o. @ has acommitment under the learnership agreement to employ as a regularworker upon the completion of the learnership.

C. #)=DI!)'D $R'RS') M I

1. )rt. 4:

"ates to be paid to handicapped workers shall not be lessthan 7;Q of the applicable minimum wage.

!mployment agreement must state the duration of theemployment period and the work to be performed.

2. )rt. 1: Fandicapped workers may be hired as apprentices orlearners if their handicap is not such as to effectively impede theperformance of job operations in the particular occupations forwhich they are hired.

,nforcement

1. )rt. ::: ppeal to the $ecretary of Labor < he decision of theauthori8ed agency of the )E/! may be appealed to the(ecretary of /abor within ; days from receipt of the decision. hedecision of the (ecretary of /abor shall be final and e$ecutory.

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2. )rt. :@ : "xhaustion of dministative 7emedies 8 0o personshall institute any action for the enforcement of anyapprenticeship agreement or damages for breach of any suchagreement, unless he has e$hausted all available administrative

remedies.

Section 3. !onditions of '(6loy(ent B #ours of or/

5. 4 #ours Regulation

7ationale and "nforcement

2 he %&hour labor law was designed not only to safeguard the healthand welfare of the laborer but in a way to minimi8e unemployment byforcing !"#s, in cases, where more than an %&hour operations is

necessary, to utili8e different shifts of laborers working only for % hourseach. (%anila -erminal vs. C)

5.= !o2erage

I. )rt. : he provisions of this itle shall apply to !!#s in allestablishments and undertakings whether for profit or not but to[GMSA CMD]

1. Novernment !!#s 'whether employed by the 0ationalNovernment or any of its political subdivisions, including thoseemployed in NECC#s with original charters. &$ec. 5, 7ule %, #ook

%%%, %77)sG

=. +anagerial !!#s 'refer to those who meet all of the followingconditions, namely:

a. heir primary duty consists of the management of theestablishment in which they are employed or of adepartment or sub&division thereof>

b. Customarily or regularly direct the work of = or more !!#sc. Fas the authority to hire or fire other !!#s of lower rank> or

their suggestions and recommendations as to the hiringand firing and as to the promotion or any change of status

of other !!#s are given, particular weight. ?d.B

+ere designation to a position with a high&sounding title,does not make an !! a managerial !! where the e$erciseof the independent judgment is not present. (Sierra vs.&C)

6. Ether officers or members of the managerial staff if they performthe following duties and responsibilities:

a. Primary duty consists of the performance of work directlyrelated to management policies of the !">

b. Customarily and regularly, e$ercise discretion andindependent judgment>

c. "egularly directly assist a proprietor or managerial !! ore$ecute under general supervision work along speciali8edor technical lines re3uiring special training, e$perience orknowledge> or e$ecute under general supervision specialassignment and tasks> and

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d. )o not devote more than =Q of their hours worked toactivities which are not directly and closely related to theperformance of the work described in the precedingparagraphs. ?Id.B

4. 1ield personnel '0on&agricultural !!#s who regularly perform theirduties away from the principal place of business or branch officeof the !" and whose actual hours of work in the field cannot bedetermined with reasonable certainty. &rt. H5'

5. +embers of the family of the !" who are dependent on him forsupport domestic helpers and persons in the personal service ofanother. 3erform such serviceI

a. In the !"#s home which are usually necessary or desirablefor the maintenance or enjoyment thereof>

b. Er minister to the personal comfort, convenience or safety

of the !" as well as the members of his !"#s household.&sec. 5, 7ule %, #ook %%%, %77)s'

Fowever, house personnel hired by a ranking companyofficial, but paid for the company itself, to maintain a staffhouse provided for the official, are not the latter#s domestichelpers but regular !!#s of the company. (Cadi vs. PhilippineSinter)

he function of a managerial employee re3uires the use ofdiscretion and independent judgment ?nature of his

functionsB

J. @nd workers who are paid by results. 'Including those who arepaid on piece&work, 9takay, 9pakiao, or task basis if theiroutput rates are in accordance with the standards prescribed.

II. Nive the reason for the e$ceptionsD1. Jovernment "")s erms and conditions of employment are

governed by the Civil (ervice /aw

2. 0anagerial "")s !mployed by reason of their special training,

e$pertise or knowledge and for positions re3uiring the e$ercise ofdiscretion and independent judgment. alue of work cannot bemeasured in terms of hours.

3. >on


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6. 1orkers paid by results Compensation computed on the basisof work accomplished and not on time spent in accomplishingthe work. (*lcantara)

III. )etermine whether e$empted !! or notD1. 1oremen, inspectors and supervisors given the power torecommend hiring and firing of !!#s but where ultimate power tohire or fire rested with personnel managerD 0o. 1here suchrecommendatory powers are subject to evaluation and review,the same are not effective and not an exercise of independentjudgment as re!uired by law. ( +ranlin 0aer Compan# vs. -ra6ano)

2. (upervisory !!#s are given the following duties and functionsassist the department superintendent in various aspects ofmanagement such as in the planning of systems and procedures,

recommends disciplinary action against erring subordinates orpromotion of deserving personnel, train and guide subordinates>communicate and coordinate with other supervisors> recommendmeasures to improve work method> and other related tasks asmay be assigned by his immediate superior. Mes. They dischargeduties and responsibilities which !ualify them as members of themanagerial staff. (*lcantara)

3. Cutter in tailoring shop was assigned chore of distributing workto shop#s tailors when the shop#s manager were absent. Fe sawto it that work conformed with pattern he had prepared and if

not, had them redone, repaired or sewn. 0o. :e did notparticipate in policy


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4. )rt. %: Fours worked shall include:@. all time during which an !! is re3uired

to be on duty

to be at a prescribed workplace and

-. all time during which an !! is suffered or permitted towork.

"est periods of short duration during working hours shall be counted ashours worked.

=. Sec. %, Rule III, &oo/ III, IRREs:Principles in etermining 7ours Wor*ed

4. @ll hours are hours worked which the !! is re3uired to give to his!" regardless of whether or not such hours are spent inproductive labor or involve physical or mental e$ertion>

=. @n !! need not leave the premises of the workplace in order thathis rest period shall not be counted, it being enough that

a. he stops working,b. may rest completely andc. may leave his workplace, to go elsewhere, whether within

or outside the premises of the workplace>

6. If the work performed was necessary or it benefited the !" or the!! could not abandon his work at the end of the normal workinghours because he had no replacement, all the time spent for

such work shall be considered as hours worked, if the work waswith the knowledge of his !" or immediate supervisor>

H. he time during which an !! is inactive by reasons ofinterruptions in his work beyond his control shall be consideredworking time either if the imminence of the resumption of thework re3uires the !!#s presence at the place of work or if theinterval is too brief to be utili8ed effectively and gainfully in the!!#s own interest.

6. ose works as a janitor. Fe continues sweeping the floors after ;:

p.mO he manager is aware of this, but he does not stop ose fromdoing work after ;: p.m. Is this hours of workD Mes. @lthough osewas not instructed e$pressly to render work, he was impliedly allowedto do so by failure of the !" to warn him against rendering such work.-esides the work rendered by ose benefited the !".

Waiting Time

1. Sec. *, Rule I, &oo/ III, IRREs: aiting time spent by an !!shall be considered as working time if waiting is an

a. integral part of his work, or

b. the !! is re3uired to engage by an !" to waithe controlling factor is whether waiting time spent in idleness isso spent predominantly for the !"#s benefit or for the !!#s.?@8ucenaB

2. (, a company driver has the following work schedule: %:6 a.m. &fetches N.+.> 5: a.m. 4=: noon does nothing on call for

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N.+. at the company premises > 4= noon 4: p.m. lunch>4: p.m. ;: p.m. drives the N.+. to conferences> ;: p.m.goes home. he company refuses to pay him for the 5: a.m. to4=: noon period. Is this validD 0o. ( is not free to make use ofthe period effectively and gainfully for his own purposes. Fe

must remain in the premises as at any time he may be called todrive for the N.+. (*lcantara)

3. 6 minutes prior to the start of the scheduled working hours, theworkers of an enterprise assembled at a designated area toanswer roll call. @s their houses are situated right where thefarms are located, the workers can go back in their houses afterroll call to do some chores. Is the assembly time working timeD0o. he works are not subject to the absolute control of thecompany during the period. he workers were not deprived ofthe time to attend to other personal pursuits. (*ria vs. &C)

(dle Time4. @ laborer need not leave the premises of the factory, shop or

boat in order that his period of rest shall not be counted, it beingenough that he 9cease to work, may rest completely and leaveor may leave at his will the spot where he actually stays whileworking, or go somewhere else, whether within or without thefactory, shop or boat. (&"on Stevedoring vs. &"on %arine $ept. Union)

2. @, an accountant in the manufacturing firm, has idle time in herwork schedule, 9waiting for company papers to work on. (he

dovotes this time working on papers of other firms for which shereceives remuneration. Is the firm obligated to pay her for thistimeD Mes. @lthough she is working on the papers of othercompanies, she has no absolute control over her time. Fer !"may at any time re3uire her to do some work. (he cannotfurthermore leave the place of work during her work schedule.(*lcantara)

6. , a machine operator was forced to stop operating his machinefor 4 hour during a brownout. Is this working timeD Mes. heinterruption was not due to the fault of . -esides 4 hour is too

brief to be utili8ed effectively and gainfully for his own interest.

.eal Time

1. Sec. @, Rule I, &oo/ III, IRREs: !very !" shall give his !!#s notless than 4 hour time&off for regular meals, e$cept in thefollowing cases where a meal period of not less than = minutesmay be given by the !" provided

2?hat such shorter meal period is credited as compensable hoursworked hours worked of the !! -ut if it is the !! who re3uested for the

shorter meal time, then such shortened meal period is notcompensable. (*"cena); [= $ ']

here work is 0on&manual in nature or does not involvestrenuous physical e$ertion>

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here the establishment regularly Eperates less than 4Jhours a day>

In cases of actual or impending !mergency or there isurgent work to be performed on machineries and

e3uipment to avoid serious loss which the !" wouldotherwise suffer> and

here the work is necessary to Prevent serious loss ofperishable goods.

2 "est periods or coffee breaks running from ; to = minutes shall beconsidered as compensable working time.

2. here during the so&called meal period, the laborers are re3uiredto stand by for emergency work, or where said meal hour is not

one of complete rest, such period is considered overtime. (Pan *mvs. Pan *m //7s *ssociation)

Wor*ing While Sleeping

2 (leeping time may be considered working time if it is subject toserious interruption or takes place under conditions substantially lessdesirable than would be likely to e$ist at the !! home i.e. firemenpermitted to sleep a portion of the time they are so on duty at the firestation. (*"cena)

2n #all

4. Sec. *, Rule I, &oo/ III, IRREs : @n !! while he is re3uired toremain on call in the !"#s premises or so close thereto that hecannot use the time effectively and gainfully for his own purposeshall be considered as working hours while on call. @n !! who isnot re3uired to leave word at his own or with company officialswhere he may be reached is not working while on call.

2. If an !! is kept within reach through a cellular phone. Is it oncallD 0o. (*"cena)

Travel Time

222Principles which determine whether or not time spent in travel is working time:

Travel from 7ome to Wor* 0ormal travel from home towork is no work time but an emergency call outside ofregular working hours re3uiring him to go to his regularplace of business is working time.

Travel that is all in the day-s wor* ime spent by an!! in traveling from one job site to another, during theworkday, must be counted as hours worked.

Travel away from home ravel away from home isclearly worktime when it cuts across the !!#s workday,e$cept during meal period or when !! is permitted to sleepin ade3uate facilities furnished by the !". he time is not

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only hours worked on regular workdays but also duringcorresponding working hours on non&working days. Eutsideof these regular working hours, travel away from home isnot considered working time. "+zucena'

Lectures0 .eetings0 Training Programs

2 Sec. :, Rule I, &oo/ III, IRREs: @ttendance at lectures, meetings,training programs and other similar activities shall not be counted asworking time if all of the following conditions are met:

4. @ttendance is outside of the !"#s regular working hours>=. @ttendance is in fact voluntary> and6. he !! does not perform any productive work during such

attendance.

Semestral /rea*

2 "egular full&time teachers are entitled to salary and CE/@ duringsemestral break. (U.Pang. +ac"lt# Union vs. U. Pang.)

5.; $2erti(e or/ and $ffsetting ro0ibition

4. )rt. @: Evertime 1ork 8 regular work day plus =;Q basic hourly rate

(pecial days, holiday or rest day plus 6Q of the regularhourly rate on said days.

=. )rt. 3: "mergency Evertime 1ork < @ny !! may be re3uiredby the !" to perform overtime work in any of the following cases:['DAHS]

a. hen the country is at warb. hen any other national or local emergency has been

declaredc. hen it is necessary to prevent loss of life or property or in

case of imminent danger to the public safety due to anactual or impending emergency in the locality caused byserious accidents, fire, flood, typhoon, earth3uake,epidemic or other )isaster or calamity.

d. hen there is


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Permission given to the !! to go on leave on some otherday of the week shall not e$empt the !" from paying theadditional compensation re3uired.

H. )rt. 34 : 1or purposes of computing overtime and other

additional remuneration as re3uired by this Chapter the 9regularwage of an !! shall include the cash wage only, withoutdeduction on account of facilities provided by the !".

;. M, corporation, as a company policy, re3uired its !!#s to renderonly J hours of work daily but pays them the minimum wagecorresponding to % hours work. /ater, the full %&hours wasre3uired without any increase in wages. @re the !!#s entitled toovertime payD Mes. hough voluntary practice or policy, thecompany has fi$ed the normal workday at J hours. It nowconstitute part of the terms and conditions of employment and

cannot be unilaterally withdrawn by the !". (*lcantara)

J. )istinguish overtime pay from premium pay : $2erti(e 6ay isadditional compensation for work done beyond the normal workhours on ordinary working days. re(iu( 6ay is additionalcompensation for work rendered by the !! on days normally heshould not be working. -ut additional compensation for workrendered in e$cess of % hours during these days is alsoconsidered overtime pay.

7. @ was late for work on a particular day. o offset for the time he

was late, @ worked on additional period e3uivalent to the periodhe was late for work. he period was offset against @# undertime.Is this validD Mes. he prohibition to offset overtime againstundertime applies to undertime incurred and overtime renderedon different days.

Provisions for overtime covers both profit and non&profitestablishment or undertaking

1or purposes of computing overtime

"!N he isdelayed in going home to his family to enjoy the comforts thereof> hemight have no time for rela$ation, amusement or sports> he might missimportant pre&arranged arrangements. (P0 vs. P/%*)

#ompressed Wee* 3 2oluntary basis

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2 hile as a general rule, the right to overtime pay cannot be waivedunder e$isting laws, the !!#s and !" can agree to a compressedworkweek of ; days of 5 hours each with no payment of overtime ifthis will redound to the benefit of the workers i.e. if the original

workweek is reduced from +onday (aturday to +onday 1riday.(*"ena)Fowever, @lcantara answered in a 45%H problem differentlywhen he answered that overtime pay should be paid. In that problem,the workers were re3uired to render 5.; hours of work for ; days.?hat is the answer, I really do not know, ask the reviewerB

!onditions for K#ompressed Wor* Wee*N4. voluntary agreed upon=. not to e$ceed H% hoursG week6. no diminution on take home pay or fringe benefitsH. waivers must be made

;. all hours e$ceeding H% hoursGweek considered overtimeJ. must submit report to )E/!

Retail 'stablis0(ent- sale of goods for personal or household use

e$. grocery

Ser2ice 'stablis0(ent- sale of services to individuals for their own or household

usee$. .. repair shop

&o Formula /asic #ontract

2 hen the contract of employment re3uires work for more than %hours at specific wages per day, without providing for a fi$ed hourlyrate or that the daily wages include overtime pay, said wages cannotbe considered as including overtime compensation. (%anila -erminal vs.C)

/uilt)(n #ompensation

2 he employment contract may provide for a 9built


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6. 2ther officers or members of the managerial staff'if theyperform the following duties and responsibilities:

a. Primary duty consists of the performance of work directlyrelated to management policies of the !">

b. Customarily and regularly e$ercise discretion and

independent judgment>c. "egularly directly assist a proprietor or managerial !! ore$ecute under general supervision work along speciali8edor technical lines re3uiring special training, e$perience orknowledge, or e$ecute under general supervision specialassignment and tasks> and

d. )o not devote more than =Q of their hours worked toactivities which are not directly and closely related to theperformance of the work described in the precedingparagraphs. ?IdB

H. Field personnel '0on&agricultural !!#s who regularly performtheir duties away from the principal place of business or branchoffice of the !" whose actual hours of work in the field cannot bedetermined with reasonable certainty &rt. H5'G

=% .embers of the family of the ,R who are dependent onhim for support

J. omestic helpers and persons in the personal service ofanother. 'Perform such services:

a. In the !"#s home which are usually necessary or desirable

for the maintenance or enjoyment thereof>b. Er minister to the personal comfort, convenience, or safety

of the !" as well as the members of his !"#s household&$ec. 5, 7ule %, #ook %%%, %77)s'

Fowever, house personnel hired by a ranking companyofficial, but paid for by the company itself, to maintain astaff house provided for the official, are not the latter#sdomestic helpers but regular !!#s of the company. (Cadi vs.Philippine Sinter)

7. @nd wor*ers who are paid by results. 'Including those who

are paid on piece&work, 9takay, 9pakiao, or task basis if theiroutput rates are in accordance with the standards prescribed.

Sec. 1, Rule III, &oo/ III, IRREs: his rule shall apply to all !"#swhether operating for profit pr not, including public utilitiesoperated by private persons.

4.= Sc0eduling of Rest DayO 0en !o(6ulsory or/ )llowedOand !o(6ensation

4. )rt. 31 : It shall be for the duty of every !", whether operatingfor profit or not, to provide !! a rest period of not less than =H

consecutive hours after every J consecutive normal workingdays.

2 he !" shall determine and schedule the weekly rest day of his!!#s

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Fowever, the !" shall respect the preference of !!#s as totheir weekly rest day when such preference is based onreligion grounds.

Sec. %, Rule III, &oo/ III, IRREs: here however the choice of the

!!#s as to their rest day based on religious grounds will inevitablyresult in serious prejudice or obstruction to the operation of theundertaking, the !" may so schedule the weekday rest day of theirchoice at least = days in a month.

=. )rt. 3 + KWhen ,R may re!uire Wor* on rest day5 3 [D H) A = )]

a. In case of actual or impending emergency caused byserious accident, fire, flood, typhoon, earth3uake,epidemic, or other )isaster or calamity to prevent loss oflife, or imminent danger to public safety.

b. In case of

d. o prevent or damage to Perishable goods>e. here the 0ature of work re3uires continuous operations

and stoppage of the work may result in irreparable injuryor loss to the !"> and

f. @nalogous ?avail of favorable weatherB or similarcircumstances 'P@0@)


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advancement. En these days, the laborer spends longer hours in thecompany of his family. he deprivation of that opportunity to satisfymental, moral and spiritual needs should not be ignored, and should beproperly compensated. (%/*&C, vs. P"!lic Utilities //7s *ssociation)

Section 11 + !onditions of '(6loy(ent #olidays

44.4 !o2erage

1. ; )rt. 3%: !very worker shall be paid his regular daily wage duringholidays, e$cept: [RSI$, G, D#, M, C]a. in retail and service establishments regularly employing less than 4workers>

Sec. 1, Rule I, &oo/ III, IRREs:b. hose of the government and any of its political subdivisions,

including NECC#s.c. )omestic helpers and persons in the personal service of anot

labor std reviewer

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