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SUN TZU NOTES

LABOR LAW REVIEW My Notes


AL L. BERONQUE, CPA

Minimum terms and conditions fixed by law. minimum terms, benefits and conditions of employment which employees are legally entitled to and employers must comply with. The minimum requirements prescribed by existing laws, rules and regulations and other issuances relating to wages, hours of work, cost of living allowances and other monetary and welfare benefits, including those set by occupational safety and health hazards. (Section 7, Rule I, Rules on the Disposition of Labor Standards Cases September 16, 1987) Ex. Overtime pay, night differential pay, premium pay, minimum wage

LABOR STANDARDS I. THE APPLICABLE LAWS


PD 442 AS AMENDED A decree instituting a labor code, thereby revising and consolidating labor and social laws to afford protection to labor, promote employment and human resources development and ensure industrial peace based on social justice. Signed into law May 1, 1974 and took effect 6 months after in accordance with Article 2 because according to Ople, the code was designed to be a dynamic and growing body of laws which will reflect continually the lessons of practical application and experience. As it happened, the code was extensively amended even before it went into effect on November 1,1974. Took effect on November 1, 1974. Since then, the Labor Code has undergone several amendments. The most substantial amendment is RA 6715. It is the law governing Labor Standards and Relations. Significance: Before the effectivity of the labor code, there was no provision on the terms and conditions of employment.

2.

Book I-IV LABOR RELATIONS Refers to the interactions between the employers and employees or their representatives and the mechanism by which the employment standards are negotiated, adjusted and enforced. Marquez: process the terms, benefits and conditions to improve the same through collective bargaining or negotiation. SOCIAL AND WELFARE LEGISLATIONS Legislations that grant benefits which apply to workers who are unable to work on account of sickness or disability or not at work. Refers to a broader category of law that protects or promotes the welfare of society or segments of it in furtherance of social justice. Intended to substitute income Ex. Social Security Act, Retirement Law, PhilHealth

3.

LABOR STANDARDS employee is actually at work SOCIAL AND WELFARE LEGISLATION employee is not at work or unable to work.

NEW TAX RELIEF LAW Most recent social welfare legislation


FOUR SYSTEMS OF LABOR

and

CONCEPT OF LABOR In a general sense, a job, work or service. In a particular sense, it is the exertion of human being by his mental or physical effort towards production of goods or services. Technically, a working force or workingmen.

1.

SLAVERY(not recognized in the phils) Refers to the extraction of work or services from any person by means of enticement, violence, intimidation or threat, use of force or coercion, including deprivation of freedom, abuse of authority or moral ascendancy, debt bondage or deception. (DO 65-04 S2004) not recognized in the Phils SERFDOM(not recognized in the phils)


1.

THREE FIELDS OF LABOR LAWS LABOR STANDARDS

2.

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Enforced labor of serfs on the fields of the landowners, in return for protection and the right to work on their leased fields. A little better off than slavery. ARTISANSHIP OR INDEPENDENT CONTRACTORSHIP (recognized by Labor Code) The same with modern independent contractorship wherein an independent contractor is engaged in a business separately distinct from the principal, the performed job, work or service, and works according to his own means and methods, free from the control and direction of the principal except as to the results thereof. A free person who offers his services to others subject to nobodys will WAGE SYSTEM (recognized by Labor Code) The same with modern employer-employee system where there is an employee under the control and supervision of an employer as to the means, manner or method of which the work is to be accomplished including the result thereof and is paid for the work done in terms of wage. A person offers his services to another under an employment contract for which such service is paid by wages. SUPREME COURT DECISIONS Article 8 CC.- Judicial decisions applying or interpreting the laws or the Constitution shall form part of the legal system of the Philippines. BASES AND LIMITATIONS IN THE ENACTMENT OF LABOR LAWS BASES 1. POLICE POWER Inherent power of the state to enact legislations that may interfere with personal liberty or property in order to promote the general welfare of the people (General Welfare Clause) Consists of imposition of restraint upon liberty or property and in order to foster the common good. General welfare clause deemed written into the employment contract. Power to regulate personal liberty or property rights. Labor Code contains several provisions that affect life and property.

3.

4.

Example: Article 263 LC (g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration Reason: SOLE may compel the employer to admit the employees and the employees to return to their work. 2. SOCIAL JUSTICE The promotion of the welfare of all the people, the adoption by the government of measures calculated to insure economic stability of all the component elements of society through the maintenance of proper economic and social equilibrium in the interrelation of the members of the community, constitutionally through the adoption of measures legally justifiable, or extra-constitutionally through the exercise of powers, underlying the exercise of all governments on the time honored principle of salus populi est suprema lex. (Dr. Jose P. Laurel) The law is geared towards the concern of labor because our legislators realize that social and economic imbalance between the employer and employee. Philippines is a signatory of ILO Convention (International Labor Organization) UN Declaration of Human Rights PROTECTION TO LABOR

OMNIBUS RULES as amended by DO NO. 09 S1997, DO NO. 40-03 S2003, as amended by DO NOS. 40-A-03, 40-B-03, 40-C-03 and 40-C05 Have the force and effect of laws. Provided, however, that these rules and issuances will not expand the law or strip the law. Otherwise, under the rules on statutory construction, these will be considered void. The DOLE is the lead agency in enforcing labor laws and it possesses rule-making power in the enforcement of the Code. But a rule or regulation that exceeds the departments rule-making authority is void. The rule-making power is exceeded when the implementing rule changes, wittingly or unwittingly, the content or meaning of the law which the rule aims to implement. The implementing rule, on other words, must be subordinate to the law itself.

EXAMPLE: Policy Instruction No. 54-88 (issued by former Sec. Franklin Drilon) has been declared void by the Supreme Court because this has expanded Art. 83 of the Labor Code on Employment of Health Personnel by erroneously interpreting that health employees are entitled to a full weekly wage for 7 days if they have completed the 40-hour/5-day workweek.

3.

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Article XIII, Section 3, 1987 Constitution. The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. Reason: Employer stands in a higher footing than the employee because of economic dependence of the employee on the employer and the greater supply of labor than the demand of it. LIMITATIONS 1. NON-IMPAIRMENT CLAUSE the Decision of foreign courts Textbooks/reviewers in labor law Opinions of DOLE IRR issued by DOLE

EFFECTIVITY OF LABOR LAWS, RULES AND REGULATIONS 1. ART. 5. Rules and regulations. - The Department of Labor and other government agencies charged with the administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation. Publication is indispensable. Rules and regulations are still valid even if no publication, however, it is unenforceable.

Article III, Section 10. No law impairing obligation of contracts shall be passed.

2.

Congress could not pass laws which would impair the obligations of the parties, however, the same can pass laws to regulate the obligations and contracts. May be impaired by the exercise of the state of police power. EQUAL PROTECTION CLAUSE

2. ART. 2 NCC. Laws shall take effect after fifteen days following the completion of their publication either in the Official Gazette, or in a newspaper of general circulation in the Philippines, unless it is otherwise provided. (As amended by EO 200). 3. E.O. 292 Administrative Code of the Philippines Sec. 18. When Laws Take Effect. - Laws shall take effect after fifteen (15) days following the completion of their publication in the Official Gazette or in a newspaper of general circulation, unless it is otherwise provided. Sec. 19. Prospectivity. - Laws shall have prospective effect unless the contrary is expressly provided. Sec. 20. Interpretation of Laws and Administrative Issuances. - In the interpretation of a law or administrative issuance promulgated in all the official languages, the English text shall control, unless otherwise specifically provided. In case of ambiguity, omission or mistake, the other texts may be consulted. Sec. 21. No Implied Revival of Repealed Law.- When a law which expressly repeals a prior law itself repealed, the law first repealed shall not be thereby revived unless expressly so provided. Sec. 22. Revival of Law Impliedly Repealed. - When a law which impliedly repeals a prior law is itself repealed, the prior law shall thereby be revived, unless the repealing law provides otherwise. Sec. 23. Ignorance of the Law. - Ignorance of the law excuses no one from compliance therewith. Will not apply unless the people are informed through the required publication

Article III, Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws. 3. Individuals similarly situated must be treated equally under the3 law. Equality among equals PROHIBITION SERVITUDE AGAINST INVOLUNTARY

ARTICLE III, Section 18(2). No involuntary servitude in any form shall exist except as a punishment for a crime whereof the party shall have been duly convicted. 4. DUE PROCESS CLAUSE

TYPES OF LABOR LAW LEGISLATION 1. 2. 3. 4. PROTECTIVE WELFARE OR SOCIAL DIPLOMATIC ADMINISTRATIVE

SOURCES OF LABOR LAWS PRIMARY Constitution Statutes (PD 442, NCC, RPC) Judicial decisions

RULE ON THE IMPLEMENTATION AND INTERPRETAION OF LABOR LAWS 1. ART. 4. Construction in favor of labor. - All doubts in the implementation and interpretation of the

AUXILIARY

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provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor. Reasons: Employer stands in a higher footing than the employees and the State affirms labor as the primary social economic force. The policy is to apply the code to a greater number of employees to enable them to avail of the benefits under the law, in line with the States desire to give maximum aid and protection to labor. It is not always correct to think that the aim of the law is always to favor labor. The mandate under Art 4 is simply to resolve doubt, if any, in favor of labor. If there is no doubt in implementing and interpreting the law, labor will enjoy no built-in advantage and the law will have to be applied as it is. The law in protecting the rights of the laborer, authorizes neither oppression nor self destruction of the employer. Court decisions adopt a liberal approach that favors the exercise of labor rights.

LABOR AND CHATTEL

labor is not a chattel nor a commodity, but human, and must be dealt with from the standpoint of human interest.(asufrim vs. smc)

TRIPARTISM IN DECISION AND POLICY MAKING BODIES OF THE GOVERNMENT ART. 275. Tripartism and tripartite conferences. (a) Tripartism in labor relations is hereby declared a State policy. Towards this end, workers and employers shall, as far as practicable, be represented in decision and policy-making bodies of the government. (b) The Secretary of Labor and Employment or his duly authorized representatives may, from time to time, call a national, regional, or industrial tripartite conference of representatives of government, workers and employers for the consideration and adoption of voluntary codes of principles designed to promote industrial peace based on social justice or to align labor movement relations with established priorities in economic and social development. In calling such conference, the Secretary of Labor and Employment may consult with accredited representatives of workers and employers. (As amended by Section 32, Republic Act No. 6715, March 21, 1989). Reason: Relations between capital and labor are not merely contractual. They are so impressed with public interest that representations from employer and employee in decision and policy-making bodies of the government are necessary. This is also in affirmation of the role of the State as the guardian of the peoples rights and the constitutional provision on protection to labor. Ex. Creation of RTWB which is composed of government, employer and employee representatives. Composition of NLRC, chairman is government appointed, remaining 2 commissioners from employer and employee sectors.

RELATIONS BETWEEN CAPITAL AND LABOR 2. Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

Labor disputes also affect the state and the public at large if employees are engaged in strike or other concerted activities.

PARTIES TO EMPLOYMENT CONTRACT 1. 2. 3. 4. Employer Employee Public State

II. BASIC PRINCIPLES


CONSTITUTIONAL AND STATUTORY RIGHTS OF WORKERS IN GENERAL ART XIII, Section 3, par 1 The state shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. SPECIFIC RIGHTS OF WORKERS IN RELATION TO LABOR STANDARDS & LABOR RELATIONS IN RELATION TO LABOR STANDARDS

PRINCIPLE OF NON-OPPRESSION 3. Art. 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public. Not to require employee to work against his will nor to compel the employer to hire the employee against the formers will.

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

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1. 2. 3.

Humane conditions of work.( ART XIII, Sec 3 par 2) Living wage.( ART XIII, Sec 3 par 2) Just share in the fruits of production. .( ART XIII, Sec 3 par 4)

More money, more demands because there will be an increase in basic production of commodities.

PURPOSE OF LABOR STANDARDS Remedial and Humanitarian SOURCES OF LABOR STANDARDS 1. Employment Contract

IN RELATION TO LABOR RELATIONS (ART XIII, Sec 3 par 2) 1. 2. 3. 4. 5. Self-organization Collective bargaining and negotiations Peaceful concerted activities including the right to strike in accordance with law. Security of tenure Participate in policy and decision making processes affecting their rights and benefits as maybe provided by law.

Reason: LS are terms and conditions fixed by law and the contract is the law between the parties. Ex. Employer hires an employee and gives a high salary in effect the former provides the latter a labor standard plus car, allowances and other benefits. 2. Company Policies Declarations or statements in written form fixing employment benefits usually found in company manual. Ex. Resignation benefit, retirement benefit other than the one mandated by law. Company Practice Customary mode of employers conduct, usually nonverbal fixing employment benefits over a period of time through repetitive employer behavior. Ex. Vacation with pay, birthday leave Administrative Order of DOLE Also prescribes the terms employment. Ex. Compressed workweek and conditions of

ASPECTS OF LABOR STANDARDS PURPOSE AND SOURCE LABOR STANDARDS

The minimum requirements prescribed by existing laws, rules and regulations and other issuances relating to wages, hours of work, cost of living allowances and other monetary and welfare benefits, including those set by occupational safety and health hazards. (Section 7, Rule I, Rules on the Disposition of Labor Standards Cases September 16, 1987)

3.

4.

ASPECTS OF LABOR STANDARDS

1.

MELIORATIVE LABOR STANDARDS Intended to expand the flow of income or benefits to workingman that are required for a decent living. Ex. Overtime pay, premium pay, nightshift differential pay PROTECTIVE LABOR STANDARDS Intended to protect harsh and oppressive conditions of work that inimical to health, safety and well-being of the workers. Ex. Prescribed hours of work 5.

Compulsory or Voluntary Arbitration the award given to the party, it is another source of a Labor Standard

2.

6. Collective Bargaining Agreement or CBA can also be a source of LS because it provides terms and conditions of employment prescribed by law. 7. Statutes

REASON: Principle of Non-diminution of benefits. CONSCEPT OF EMPLOYER EMPLOYEE; NATURAL AND JURIDICAL PERSON IN LABOR STANDARDS Art 97b. Employer includes any person directly or indirectly in the interest of an employer in relation to an employee and shall include the Government and all its branches, subdivision and instrumentalities, all government-owned or controlled corporations and institutions, as well as non-profit private institutions, or organizations.(expanded definition)

CONSEQUENCES OF MELIORATIVE AND PROTECTIVE LABOR STANDARDS A. Social Enjoying a better living conditions, humane conditions, high salary, greater quality of life B. Political Relationship of people and government would be better because people are enjoying healthy living conditions. C. Economic

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Art 97c. Employee includes employed by an employer. IN LABOR RELATIONS Art 212e. Employer includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer. Art 212f. Employee includes any person in the employ of the employer. The term shall not be limited to the employees of a particular employer, unless this code so expressly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment.(expanded definition) COMMENTS: EMPLOYER any individual

An employee is always a NATURAL PERSON [may include Filipino citizens or foreigners]

Example: Dumon Sari-sari Store (single proprietorship). Who is considered the employer? Wilbert Dumon will be the employer, because the sari-sari store does not have a separate juridical personality. So, if Dumon is made a defendant in a labor case, the caption will be Employee vs. Wilbert Dumon, doing business under the name and style of Dumon Sari-sari Store. EMPLOYER-EMPLOYEE RELATIONSHIP it is in personam, involves the rendition of personal service by the employee, and partakes of master and servant relationship.

FOUR-FOLD TEST 1. The selection and engagement of the employee. 2. The payment of wages or salaries for services. 3. The power of dismissal or to impose disciplinary actions.

may be NATURAL OR JURIDICAL, a single proprietorship, a partnership or a corporation.

4.

The Government is an employer within the meaning of the Labor Code in Labor Standards. So, a government agency with an original charter contracts with a security agency to supply security guards, and this security agency is unable to pay the wages of its guards. Q: Is principal government agency considered jointly and severally liable with the security agency? Will Article 106-109, LC apply to them? Can the guards file with the labor complaint with the nearest arbitration branch of the NLRC and sue both the security and government agency? A: YES, the Labor Code will govern. The government agency cannot move for the dismissal of the complaint for lack of jurisdiction on the part of the Labor Arbiter and say that they are governed by the Civil Service Law Rules and Regulations. The government agency contracted the services of an independent contractor, so they are considered principals. Therefore the LC will govern regarding the monetary claims of the security guards. A motion to dismiss filed by the government agency in the above-cited example will not prosper on the ground that the Labor Arbiter has no jurisdiction, because the term Employer includes government agencies. It does not make any qualifications whether it is one with or without original charter. EMPLOYEE

The employers power to control the employee with respect to the means and methods by which the work is to be accomplished. This is also known as the CONTROL TEST.

Tabas vs. California Mfg Co. GR 80680, 01/26/89 QUESTION OF LAW; QUESTION OF FACT The existence or absence of employer-employee relationship is A QUESTION OF LAW AND A QUESTION OF FACTS, each in its defined sense. The character of relationship between the parties is not what they call it in their contract but what the law calls it after examination of the facts. The characterization by law prevails that in the contract. In this case the existence of employer-employee relationship is not a matter of stipulation; it is a QUESTION OF LAW. But the conclusion an employer-employee relationship exists depends upon the facts of each case. In one case an employer-employee relationship may be found to be present, but in another case with different facts, it may be absent. In this sense, the existence of an employeremployee relationship is a QUESTION OF FACT. Philippine Fuji Xerox Corp vs. NLRC GR 111501, 05/05/96 CORE OR NON-CORE JOBS Depending on the applicability of the tests of employment, an employer-employee relationship may exist regardless of the nature of the activities involved. In other words, the kind of work is not the definitive test of whether the worker is an employee or not

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Sevilla vs. CA GR 44182-3, 04/15/88 TITLE AS WEAK INDICATORS The fact that one had been designated branch manager does not make such person an employee. Titles are weak indicators Encyclopedia Britanica vs. NLRC GR 87098, 11/04/96 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 according to the result of his efforts and not the amount thereof, we should not find that the relationship of employer-employee exists. Dy Keh Beng vs. ILMUP GR 100665, 02/13/95 MERE EXISTENCE, NOT ACTUAL EXERCISE But it should be borne in mind that the control test calls MERELY FOR THE EXISTENCE of the right to control the manner of doing the work, NOT THE ACTUAL EXERCISE of the right. Insular Assurance Co. vs. NLRC GR 119930, 03/12/98 Exclusivity of service to the company, control of assignments and removal of agents, collection of premiums, furnishing of facilities and materials as well as capital described as unit development fund are HALLMARKS OF A MANAGEMENT SYSTEM where there can be no escaping the conclusion that one is an employee of the insurance company. Investment Planning Corp v. SSS [ 11/18/67] CONTROL TEST (most important element) That is, 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 Domasig vs. NLRC GR 118101 09/16/96 EVIDENCE OF EMPLOYMENT; ID, VOUCHERS, SSS REGISTRATION, MEMORANDUM Substantial evidence is sufficient as a basis for judgment on the existence of employer-employee relationship. No particular form of evidence is required to prove the existence of such relationship. Flores vs. Nuestra GR 66890 04/15/88 That the respondent registered the petitioners with SSS is proof that the latter is the formers employees. The coverage of SSS Law is predicated on the existence of an employer-employee relationship In a business establishment, an identification card is usually provided not only as a security measure but mainly to identify the holder thereof as a bona fide of the firm that issues it. Together with the cash vouchers covering the petitioners salaries for the months stated therein, these matters constitute substantial evidence adequate to support a conclusion that the petitioner was indeed the employee of the respondent. Philippine FUJI XEROX CORP vs. NLRC GR111501 03/05/96 Appointment letters or employment contracts, payrolls, organization charts, personnel lists, as well as testimony of co-employees, may also serve as evidence of employee status. Opulencia Ice Plant vs. NLRC GR 98368 12/1593 ABSENCE OF NAME IN THE PAYROLL; TESTIMONIAL EVIDENCE If only documentary evidence would be required to show that relationship, no scheming employer would ever be brought before the bar of justice, as no employer would wish to come out with any trace of the illegality he as authored considering that it should take much weightier proof to invalidate a written instrument. Thus, as in this case where the employer-employee relationship between petitioners and Esita was sufficiently proved by testimonial evidence, the absence of time sheet, time record or payroll has become inconsequential. Labor Congress of the Philippines vs. NLRC GR 123938 05/21/98 MODE OF COMPENSATION EMPLOYMENT STATUS. NOT A TEST OF

The presence or absence of employer-employee relationship is not determined by the basis of the employees compensation. Indeed, employment relationship is one thing, pay determination is another. The existence of employment relationship depends on whether the four-fold test is present or not. Zamudio vs. NLRC GR 76723 03/25/90 ON PAKIAO BASIS The nature of their employment i.e pakiao basis, does not make petitioners independent contractors. Pakiao workers are considered employees as long as the employer exercises control over the means by which such workers are to perform their work. Considering that the petitioners did their work inside private

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respondents farm, the latter necessarily exercised control over the work performed by petitioners. The seasonal nature of petitioners work does not detract from the conclusion that employer-employee relationship exists. Seasonal workers whose work is not merely for the duration of the season, but who are rehired every working season are considered regular employees. Q: Why is it important to determine whether the relationship between the parties is that of employer and employee or that of principal and independent contractor or of principal-agent? A: To determine what laws will govern the rights and liabilities of the parties, and what tribunal will have jurisdiction over their disputes.

Under the broader ECONOMIC REALITY TEST, the petitioner can likewise be said to be an employee of respondent corporation because she had served the company for six years before her dismissal, receiving check vouchers indicating her salaries/ benefits, 13th month pay, bonuses and allowances as well as deductions and SSS contributions. It is therefore apparent that petitioner is economically dependent on respondent for her continued employment in the latters line of business. Q: How to determine that a person is economically dependent? A: 1. Number of years in the company 2. Reported to SSS, good indicator of treating him as an employee. 3. Registered in the payroll 4. Identification card 5. Company uniform PRINCIPAL-AGENT RELATIONSHIP Art 1868 NCC: By the contract of agency, a person binds himself to render some service or to do something in representation or on behalf of another, with the consent or authority of the latter. It is the principal who selects the agent An agent is compensated under the contract of agency for services rendered. An agent is disciplined by the principal because former is under the authority of the latter. The principal controls the means and methods of the work of an agent. [Relate above to the four-fold test] There is only one party in a principal-agent relationship, the agent is merely an extension of the principal. They are regarded as one. So if there is a contractor relationship, it is not between 3 parties but is between the principal or the agent as an extension of the principal and the other party.

Relationship EmployerEmployee PrincipalIndependent Contractor PrincipalAgent

Governing Laws Labor laws obligations and Contracts [CC] Civil Code

Tribunal Labor tribunal Regular courts Regular courts

ECONOMIC REALITY TEST Francisco v. NLRC G.R. No. 170087; August 31, 2006 TWO-TIERED APPROACH The better approach would be to adopt a TWOTIERED TEST involving (1) the putative employers 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. This two-tiered test would provide us with a framework of analysis, which would take into consideration the totality of circumstances surrounding the true relationship between the parties. This is especially APPROPRIATE in this case where there is no written agreement or terms of reference to base the relationship on; and due to the complexities of the relationship based on the various positions and responsibilities given to the worker over the period of the latters employment. The determination of the relationship between employer and employee depends upon the circumstances of the whole economic activity. 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.

Note: To make a distinction between a principal-agent relationship and that of an employer-employee relationship, the four-fold test will not be used because the 1) agent is selected by the principal 2) compensated by the principal 3) and most oftentimes, the principal also substitutes his own judgment for that of the agent. PRINCIPAL-CONTRACTOR (FREE ARTISAN) RELATIONSHIP principal selects the contractor contractor is compensated for services rendered. The contractor is not under the discipline of the principal. the contractor is not under the control of the principal. The definition says that aside from engaging in a business separately distinct from the principal, to perform job, work or service, according

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to his own means and methods, free from control and direction of the principal except as to the results thereof. [relate above with four-fold test] this relationship exists also in situations under art 106-109 LC. Article 1713, Civil Code: By contract for a piece of work the contractor binds himself to execute a piece of work for the employer, in consideration of a certain price or compensation. The contractor may either employ only his labor or skill, or also furnish the material. Except as limited by Special Laws, an employer is free to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, time, place and manner or work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, layoff of workers and the discipline, dismissal and recall of workers.(ONE RIGHT OF AN EMPLOYER) LIMITATIONS ON MANAGEMENT PREROGATIVE law contract or CBA principles of fair play and justice (azucena) RIGHTS OF MANAGEMENT 1. 2. 3. 4. Right to ROI Right to prescribe rules Right to select employees Transfer or discharge of employees

CHIEF CHARACTERISTICS OF EMPLOYEE 1. Economic Dependence on the person hiring the services. Employee cannot bargain the terms and conditions of employment. Medical doctors, lawyers, dentists, engineers in the exercise of their profession offer special services, the person engaging their services cannot exercise control over the means and methods of accomplishing the work except the results thereof. They are considered as independent contractors not needing protection from the Labor Code.

EXERCISE OF RIGHT OR PREROGATIVE ABSOLUTE? No, it is a mere prerogative subject to limitations provided by equitable principles of law

1. Subordination in his work relationship

LEGAL LIMITATIONS/PROHIBITIONS PRIOR TO HIRING A. UNDER THE LABOR CODE 1. An employer is prohibited from requiring as a condition of employment that a woman employee shall not get married. Art 136. Stipulation against marriage. - It shall be unlawful for an employer to require as a condition of employment or continuation of employment that a woman employee shall not get married, or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage. Applies to occupations women in ordinary and special

Employer exercises control not only the means and methods but also the results thereof.

III. RIGHT TO HIRE


NATURE: RIGHT OR PREROGATIVE?

Strictly speaking, the employer has no right to hire a person as his employee. The matter of selecting a person as ones employee is more appropriately described as a prerogative. It is not a right in which you can go to court and enforce the right to hire a person, otherwise it will violate the constitutional provision against involuntary servitude, if one is compelled to be anothers employee. No person can be compelled against his will to do an act whether legal or illegal. Thus, an employer cannot go to court and get an injunction to compel a person to become his employee. If at all, the employee can only exercise the prerogative to invite that person and to hire him if he so desires. In that sense, the right to hire is essentially a management prerogative.

It encourage illicit relationship.

PT&T V. NLRC 272 scra 596 It assaults good morals and public policy, tending to deprive a woman of freedom to choose her status, a privilege that by all accounts inheres in the individual as an intangible and inalienable right PAL

MANAGEMENT PREROGATIVE SMC v. Ople

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2. An employer is prohibited from employing any person below 18 years old in an undertaking which is hazardous or deleterious in nature. ART. 139. Minimum employable age. - (a) No child below fifteen (15) years of age shall be employed, except when he works directly under the sole responsibility of his parents or guardian, and his employment does not in any way interfere with his schooling.(amended by RA 7610, which was also amnded by RA 7658 and RA 9231, implemented by DO 65-04) (b) Any person between fifteen (15) and eighteen (18) years of age may be employed for such number of hours and such periods of the day as determined by the Secretary of Labor and Employment in appropriate regulations. (c) The foregoing provisions shall in no case allow the employment of a person below eighteen (18) years of age in an undertaking which is hazardous or deleterious in nature as determined by the Secretary of Labor and Employment. DO NO. 04-99 HAZARDOUS WORK AND ACTIVITIES FOR PERSONS BELOW 18 YEARS OLD Driving or operating heavy equipment such as payloaders, backhoes, bulldozers, cranes, pile driving equipment, trailers, road rollers, tractor lifting appliances, scaffold winches, hoists, excavators and loading machines. Operating or setting motor-driven machines such as saws, presses and wood-working machines Operating power driven tools such as drills and jack hammers Stevedoring Working in airport hangars Working in warehouses Working in docks

4. Work in an unhealthy environment which may expose children to hazardous processes, to temperatures, noise levels or vibrations damaging to their health, to toxic, corrosive, poisonous, noxious, explosive, flammable and combustible substances or composite, to harmful biological agents, or to other dangerous chemicals including pharmaceuticals. Manufacturing of handling pyrotechnics Tanning Pesticide spraying Blacksmithing, hammersmiths, forging Extracting land and oil Titling and greasing of heavy machinery Fiber and plastic preparing Garbage collecting Working in abattoirs Working in hospitals or other healthcare facilities Assisting in laboratories and x-ray work Working in video arcades Working in discotheques Welding

1.

Work which exposes children psychological or sexual abuse. lewd shows cabarets bars (ktv, karaoke bars) dance halls bath houses and massage clinics escort service gambling halls and places

to

physical,

5. Work under particularly difficult conditions such as work for long hours or during the night, or work where the child is unreasonably confined to the premises of the employer.

2. Work underground, underwater, at dangerous heights or at unguarded heights 2 meters and above, or in confined places. Mining Deep sea fishing/diving Installing and repairing of telephone, telegraph and electrical lines; cable fitters Painting buildings Window cleaning Fruit picking involving climbing Work with dangerous machinery, equipment and tools, or which involves manual handling or transport heavy loads. Logging Construction Quarrying Operating agricultural machinery in mechanized farming Metal work and welding

3.

An employer is prohibited from employing children below 15 years old, except: 1) When a child works directly under the sole responsibility of his/her parents or legal guardian and where only members of his/her family are employed: Provided, however, That his/her employment neither endangers his/her life, safety, health, and morals, nor impairs his/her normal development: Provided, further, That the parent or legal guardian shall provide the said child with the prescribed primary and/or secondary education; or 2) Where a childs employment or participation in public entertainment or information through cinema, theater, radio, television or other forms of media is essential: Provided, That the employment contract is concluded by the childs parents or legal guardian, with the express agreement of the child concerned, if possible, and the approval of the Department of Labor and Employment: Provided, further, That the following

3.

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requirements in all instances are strictly complied with: (a) The employer shall ensure the protection, health, safety, morals and normal development of the child; (b) The employer shall institute measures to prevent the childs exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisition of the child. In the above exceptional cases where any such child may be employed, the employer shall first secure, before engaging such child, a work permit from the Department of Labor and Employment which shall ensure observance of the above requirements. Hours of Work of a Working Child. (1) A child below fifteen (15) years of age may be allowed to work for not more than twenty (20) hours a week: Provided, That the work shall not be more than four (4) hours at any given day; (2) A child fifteen (15) years of age but below eighteen (18) shall not be allowed to work for more than eight (8) hours a day, and in no case beyond forty (40) hours a week; (3) No child below fifteen (15) years of age shall be allowed to work between eight oclock in the evening and six oclock in the morning of the following day and no child fifteen (15) years of age but below eighteen (18) shall be allowed to work between ten oclock in the evening and six oclock in the morning of the following day. (RA 7610 as amended, amending art 139 LC) or indirectly promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts, gambling or any form of violence or pornography.

5.

An employer is prohibited from requiring as a condition of employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs. (YELLOW DOG CONTRACT) ART. 248. Unfair labor practices of employers. - It shall be unlawful for an employer to commit any of the following unfair labor practice: (b) To require as a condition of employment that a person or an employee shall not join a labor organization or shall withdraw from one to which he belongs. FULL TEXT OF THE SPECIAL LAWS AMENDING ART 139 LC INCLUDING D0 65-04 REPUBLIC ACT NO. 7610 Special Protection Against Child Abuse, Exploitation and Discrimination Act Sec. 12. Employment of Children. Children below fifteen (15) years of age may be employed except: (1) When a child works directly under the sole responsibility of his parents or legal guardian and where only members of the employers family are employed: Provided, however, That his employment neither endangers his life, safety and health and morals, nor impairs his normal development: Provided, further, That the parent or legal guardian shall provide the said minor child with the prescribed primary and/or secondary education; or (2) When a childs employment or participation in public & entertainment or information through cinema, theater, radio or television is essential: Provided, The employment contract concluded by the childs parent or guardian, with the express agreement of the child concerned, if possible, and the approval of the Department of Labor and Employment: Provided, That the following requirements in all instances are strictly complied with: (a) The employer shall ensure the protection, health, safety and morals of the child; (b) the employer shall institute measures to prevent the childs exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skill acquisition of the child.

4.

An employer is prohibited from employing children as a model in any advertisement directly or indirectly promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts, gambling or any form of violence or pornography. RA 7610 as amended Special Protection Against Child Abuse, Exploitation and Discrimination Act ( amended Art 139 LC) Sec. 14. Prohibition on the Employment of Children in Certain Advertisements. No child shall be employed as a model in any advertisement directly

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In the above exceptional cases where any such child may be employed, the employer shall first secure, before engaging such child, a work permit from the Department of Labor and Employment which shall ensure observance of the above requirement. The Department of Labor and Employment shall promulgate rules and regulations necessary for the effective implementation of this Section. Sec. 14. Prohibition on the Employment of Children in Certain Advertisements. No person shall employ child models in all commercials or advertisements promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts and violence. REPUBLIC ACT NO. 7658 An act prohibiting the employment of children below 15 years of age in public and private undertakings, amending for this purpose section 12, article viii of r. a. 7610. Section 1. Section 12, Article VIII of R. A. No. 7610 otherwise known as the Special Protection of Children Against Child Abuse, Exploitation and Discrimination Act is hereby amended to read as follows: Sec. 12. Employment of Children. Children below fifteen (15) years of age shall not be employed except: (1) When a child works directly under the sole responsibility of his parents or legal guardian and where only members of the employers family are employed: Provided, however, That his employment neither endangers his life, safety, health and morals, nor impairs his normal development; Provided, further, That the parent or legal guardian shall provide the said minor child with the prescribed primary and/or secondary education; or (2) Where a childs employment or participation in public entertainment or information through cinema, theater, radio or television is essential: Provided, The employment contract is concluded by the childs parents or legal guardian, with the express agreement of the child concerned, if possible, and the approval of the Department of Labor and Employment: and Provided, That the following requirements in all instances are strictly complied with: (a) The employer shall ensure the protection, health, safety, morals and normal development of the child; (b) The employer shall institute measures to prevent the childs exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and The employer shall formulate and implement, subject to the approval and supervision of competent authorities, a continuing program for training and skills acquisition of the child. In the above exceptional cases where any such child may be employed, the employer shall first secure, before engaging such child, a work permit from the Department of Labor and Employment which shall ensure observance of the above requirements. The Department of Labor and Employment shall promulgate rules and regulations necessary for the effective implementation of this Section. REPUBLIC ACT NO. 9231 An act providing for the elimination of the worst forms of child labor and affording stronger protection for the working child, amending for this purpose republic act no. 7610, as amended, otherwise known as the special protection of children against child abuse, exploitation and discrimination act Section 1. Section 2 of Republic Act No. 7610, as amended, otherwise known as the Special Protection of Children Against Child Abuse, Exploitation and Discrimination Act, is hereby amended to read as follows: Sec. 2. Section 12 of the same Act, as amended, is hereby further amended to read as follows: Sec. 2. Employment of Children Children below fifteen (15) years of age shall not be employed except: 1) When a child works directly under the sole responsibility of his/her parents or legal guardian and where only members of his/her family are employed: Provided, however, That his/her employment neither endangers his/her life, safety, health, and morals, nor impairs his/her normal development: Provided, further, That the parent or legal guardian shall provide the said child with the prescribed primary and/or secondary education; or 2) Where a childs employment or participation in public entertainment or information through cinema, theater, radio, television or other forms of media is essential: Provided, That the employment contract is concluded by the childs parents or legal guardian, with the express agreement of the child concerned, if possible, and the approval of the Department of Labor and Employment: Provided, further, That the following requirements in all instances are strictly complied with: (a) The employer shall ensure the protection, health, safety, morals and normal development of the child; (b) The employer shall institute measures to prevent the childs exploitation or discrimination taking into account the system and level of remuneration, and the duration and arrangement of working time; and The employer shall formulate and implement, subject to the approval and supervision of competent

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authorities, a continuing program for training and skills acquisition of the child. In the above exceptional cases where any such child may be employed, the employer shall first secure, before engaging such child, a work permit from the Department of Labor and Employment which shall ensure observance of the above requirements. For purposes of this Article, the term child shall apply to all persons under eighteen (18) years of age. Sec. 3. The same Act, as amended, is hereby further amended by adding new sections to be denominated as Sections 12-A, 12-B, 12-C, and 12D to read as follows: Sec. 12-A. Hours of Work of a Working Child. Under the exceptions provided in Section 12 of this Act, as amended: (1) A child below fifteen (15) years of age may be allowed to work for not more than twenty (20) hours a week: Provided, That the work shall not be more than four (4) hours at any given day; (2) A child fifteen (15) years of age but below eighteen (18) shall not be allowed to work for more than eight (8) hours a day, and in no case beyond forty (40) hours a week; (3) No child below fifteen (15) years of age shall be allowed to work between eight oclock in the evening and six oclock in the morning of the following day and no child fifteen (15) years of age but below eighteen (18) shall be allowed to work between ten oclock in the evening and six oclock in the morning of the following day. Sec. 12-D. Prohibition Against Worst Forms of Child Labor. No child shall be engaged in the worst forms of child labor. The phrase worst forms of child labor shall refer to any of the following: (1) All forms of slavery, as defined under the Antitrafficking in Persons Act of 2003, or practices similar to slavery such as sale and trafficking of children, debt bondage and serfdom and forced or compulsory labor, including recruitment of children for use in armed conflict; or (2) The use, procuring, offering or exposing of a child for prostitution, for the production of pornography or for pornographic performances; or (3) The use, procuring or offering of a child for illegal or illicit activities, including the production and trafficking of dangerous drugs and volatile substances prohibited under existing laws; or (4) Work which, by its nature or the circumstances in which it is carried out, is hazardous or likely to be harmful to the health, safety or morals of children, such that it: a) Debases, degrades or demeans the intrinsic worth and dignity of a child as a human being; or b) Exposes the child to physical, emotional or sexual abuse, or is found to be highly stressful psychologically or may prejudice morals; or c) Is performed underground, dangerous heights; or underwater or at

d) Involves the use of dangerous machinery, equipment and tools such as power-driven or explosive power-actuated tools; or e) Exposes the child to physical danger such as, but not limited to the dangerous feats of balancing, physical strength or contortion, or which requires the manual transport of heavy loads; or f) Is performed in an unhealthy environment exposing the child to hazardous working conditions, elements, substances, co-agents or processes involving ionizing, radiation, fire, flammable substances, noxious components and the like, or to extreme temperatures, noise levels, or vibrations; or g) Is performed under particularly difficult conditions; or h) Exposes the child to biological agents such as bacteria, fungi, viruses, protozoans, nematodes and other parasites; or i) Involves the manufacture or handling of explosives and other pyrotechnic products. Section 5. Section 14 of the same Act is hereby amended to read as follows: Sec. 14. Prohibition on the Employment of Children in Certain Advertisements. No child shall be employed as a model in any advertisement directly or indirectly promoting alcoholic beverages, intoxicating drinks, tobacco and its byproducts, gambling or any form of violence or pornography. Department Order No. 65-04 series of 2004 (Rules and regulations implementing republic act no. 9231 amending r.a. 7610, as amended) CHILD LABOR Refers to any work or economic activity performed by a child that subjects him/her to any form of exploitation or is harmful to his/her health and safety or physical, mental or psychosocial development. CHAPTER 2 Prohibition on the Employment of Children

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SECTION 4. General Prohibition. Except as otherwise provided in these Rules, no child below 15 years of age shall be employed, permitted or suffered to work, in any public or private establishment.SECTION 5. Prohibition on the Employment of Children in Worst Forms of Child Labor. No child shall be engaged in the worst forms of child labor. The phrase "worst forms of child labor" shall refer to any of the following: (a) All forms of slavery, as defined under the "Anti-trafficking in Persons Act of 2003", or practices similar to slavery such as sale and trafficking of children, debt bondage and serfdom and forced or compulsory labor, including recruitment of children for use in armed conflict. (b) The use, procuring, offering or exposing of a child for prostitution, for the production of pornography or for pornographic performances; (c) The use, procuring or offering of a child for illegal or illicit activities, including the production or trafficking of dangerous drugs or volatile substances prohibited under existing laws; or (d) Work which, by its nature or the circumstances in which it is carried out, is hazardous or likely to be harmful to the health, safety or morals of children, such that it: i. Debases, degrades or demeans the intrinsic worth and dignity of a child as a human being; or ii. Exposes the child to physical, emotional or sexual abuse, or is found to be highly stressful psychologically or may prejudice morals; or iii. Is performed underground, underwater or at dangerous heights; or iv. Involves the use of dangerous machinery, equipment and tools such as power-driven or explosive power-actuated tools; or v. Exposes the child to physical danger such as, but not limited to the dangerous feats of balancing, physical strength or contortion, or which requires the manual transport of heavy loads; or vi. Is performed in an unhealthy environment exposing the child to hazardous working conditions, elements, substances, co-agents or processes involving ionizing, radiation, fire, flammable substances, noxious components and the like, or to extreme temperatures, noise levels or vibrations; or DAESTI vii. Is performed under particularly difficult conditions; or viii. Exposes the child to biological agents such as bacteria, fungi, viruses, protozoa, nematodes and other parasites; or ix. Involves the manufacture or handling of explosives and other pyrotechnic products. SECTION 6. Prohibition on the Employment of Children in Certain Advertisements. No child below 18 years of age shall 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. CHAPTER 3 Exceptions to the Prohibition SECTION 7. Exceptions and Conditions. The following shall be the only exceptions to the prohibition on the employment of a child below 15 years of age: (a) When the child works under the sole responsibility of his/her parents or guardian, provided that only members of the child's family are employed. (b) When the child's employment or participation in public entertainment or information is essential, regardless of the extent of the child's role. Such employment shall be strictly under the following conditions: i. The total number of hours worked shall be in accordance with Section 15 of these Rules; ii. The employment does not endanger the child's life, safety, health and morals, nor impair the child's normal development; iii. The child is provided with at least the mandatory elementary or secondary education; and iv. The employer secures a work permit for the child in accordance with Section 812 of these Rules. CHAPTER 4 Requirements to Avail of Exceptions to Employment Prohibition SECTION 8. Work Permit. Except as provided in Section 13, no child below 15 years of age shall be allowed to commence work without a work permit. An employer must first secure a work permit from the Regional Office of the Department having jurisdiction over the workplace of the child. In cases where the work is done in more than one workplace falling under the jurisdiction of more than one Regional Office, the application shall be made with the Regional Office having jurisdiction over the principal office of the employer. However, at least two days prior to the performance of the work, the employer shall inform the Regional Office having jurisdiction over the workplace of the activities to be undertaken involving the child. SECTION 9. Requirements for the Issuance of Work Permit. The employer shall submit to the appropriate Regional Office the following: (a) A duly accomplished and verified application for work permit containing the following information: i. Terms and conditions of employment including hours of work, number of working days, remuneration, and rest period, which shall be in accordance with law; ii. Measures to ensure the protection, health, safety, morals, and normal development of the child, including but not limited to the following: 1. comfortable workplace and adequate quarters; 2. break or rest periods in comfortable day beds or couches; 3. clean and separate dressing rooms and toilet facilities for boys and girls; 4. provision for adequate meals and snacks and sanitary eating facility;

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5. provision of all the necessary assistance to ensure the adequate and immediate medical and dental attendance and treatment to an injured or sick child in case of emergency. (b) Except when the child is below seven years old: i. Proof that the child is enrolled and regularly attending elementary or secondary school classes, consisting of certificate of enrolment for the current year or current school identification or report card; or ii. If the child is not enrolled, a brief description of the program for education, training and skills acquisition for the child, in accordance with Section 19(b) of these Rules. (c) An authenticated copy of the child's Birth Certificate or a Certificate of Late Registration of Birth issued by the NSO or the city/municipal registrar; (d) A medical certificate issued by a licensed physician stating that he/she has personally examined the child for whom a work permit is being secured, and that the child is fit to undertake the work in which he/she is to be engaged. Such certificate must bear in print the certifying physician's full name and his/her license number; (e) Two passport size photographs of the child; employer, or the child himself or herself as may be appropriate, to validate the information indicated in the application and to educate such parent, guardian, or employer, on child labor laws and regulations. The Regional Office, through the Regional Director, shall issue the work permit within three days from compliance with all the foregoing requirements. Noncompliance with the requirements shall automatically result in the denial of the application. In such instances, the application shall be deemed not filed and the Regional Office shall immediately return it to the applicant, indicating the requirements that were not complied with. SECTION 12. Validity of Work Permit. The work permit shall state the period of its validity based on the employment contract or the application for work permit, as the case may be. However, the period of validity shall in no case exceed one year. SECTION 13. Employment of Spot Extras. In public entertainment or information, the requirements for the issuance of work permit stated in Sections 812 shall not be applicable to the employment of spot extras or those being cast outright on the day of the filming or taping. Instead, the employer shall file a notice with the Regional Office where the work is to be performed that it will undertake activities involving child work. The notice shall be in the form prescribed by the Department and shall state the approximate number of child workers to be employed, the date, place and time the work is to be performed, and an undertaking that the employment shall be in conformity with Republic Act No. 9231 and these Rules. B. UNDER SPECIAL LAWS

(f) When the employer is the parent, guardian, or a family member other than the parent of the child, he/she shall present any valid document such as latest passport, latest postal/company identification card, and driver's license establishing his/her identity. A legal guardian is required to present a duly authenticated proof of legal guardianship while a family member shall present any proof of relationship to the child; (g) When the employer is in public entertainment or information, he/she shall submit a certified true copy of the employer's business permit or certificate of registration and a written employment contract to be concluded between the employer and the child's parents or guardian and approved by the Department. An express agreement of the child to the provisions of the contract is needed when such child is between seven and below 15 years of age. SECTION 10. Application Fee. The employer shall pay an application fee of One Hundred Philippine Pesos (P100.00) to cover administrative costs. This amount may be reviewed and adjusted by the Secretary of Labor and Employment from time to time subject to applicable regulations. SECTION 11. Action on the Application. Within three working days from the employer's compliance with Sections 810, the Regional Office shall require the appearance of the child's parent, guardian, or

6.

In a work-related or employment environment, an employer is prohibited from asking sexual favor from any individual as a condition in the hiring or in the employment of said individual. REPUBLIC ACT NO. 7877 [Anti-Sexual Harassment Act of 1995] SECTION 3. Work, Education or Training -Related, Sexual Harassment Defined. - Work, education or training-related sexual harassment is committed by an employer, employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach, trainor, or any other person who, having authority, influence or moral ascendancy over another in a work or training or education environment, demands, requests or otherwise requires any sexual favor from the other, regardless of whether the demand, request or requirement for submission is accepted by the object of said Act. (a) In a work-related or employment environment, sexual harassment is committed when:

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(b) Using qualification standards, employment tests or other selection criteria that screen out or tend to screen out a disabled person unless such standards, tests or other selection criteria are shown to be jobrelated for the position in question and are consistent with business necessity; (c) Utilizing standards, administration that: criteria, or methods of

(1) The sexual favor is made , or in granting said individual favorable compensation, terms of conditions, promotions, or privileges; or the refusal to grant the sexual favor results in limiting, segregating or classifying the employee which in any way would discriminate, deprive ordiminish employment opportunities or otherwise adversely affect said employee;

7.

An employer is prohibited from discriminating in any form from preemployment to post employment, including hiring based on the actual, perceived or suspected HIV status of an individual. REPUBLIC ACT NO. 8504 [Philippine Aids and Prevention Control Act of 1998] ARTICLE VII DISCRIMINATORY ACTS AND POLICIES SECTION 35. Discrimination in the workplace. Discrimination in any form from pre-employment to post-employment, including hiring, promotion or assignment, based on the actual, perceived or suspected HIV status of an individual is prohibited. Termination from work on the sole basis of actual, perceived or suspected HIV status is deemed unlawful. 8. No entity, whether public or private, shall discriminate against a qualified disabled person by reason of disability in regard to job application procedures, the hiring, promotion, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment. REPUBLIC ACT NO. 7277 [Magna Carta for Disabled Persons] Qualified Individual with a Disability shall mean an individual with a disability who, with or without reasonable accommodations, can perform the essential functions of the employment position that such individual holds or desires Sec. 32. Discrimination on Employment. No entity, whether public or private, shall discriminate against a qualified disabled person by reason of disability in regard to job application procedures, the hiring, promotion, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment. The following constitute acts of discrimination: (a) Limiting, segregating or classifying a disabled job applicant in such a manner that adversely affects his work opportunities;

(1) have the effect of discrimination on the basis of disability; or (2) perpetuate the discrimination of others who are subject to common administrative control. (d) Providing less compensation, such as salary, wage or other forms of remuneration and fringe benefits, to a qualified disabled employee, by reason of his disability, than the amount to which a non-disabled person performing the same work is entitled; (e) Favoring a non-disabled employee over a qualified disabled employee with respect to promotion, training opportunities, study and scholarship grants, solely on account of the latter's disability; (f) Re-assigning or transferring a disabled employee to a job or position he cannot perform by reason of his disability; (g) Dismissing or terminating the services of a disabled employee by reason of his disability unless the employer can prove that he impairs the satisfactory performance of the work involved to the prejudice of the business entity: Provided, however, That the employer first sought to provide reasonable accommodations for disabled persons; (h) Failing to select or administer in the most effective manner employment tests which accurately reflect the skills, aptitude or other factor of the disabled applicant or employee that such tests purports to measure, rather than the impaired sensory, manual or speaking skills of such applicant or employee, if any; and (i) Excluding disabled persons from membership in labor unions or similar organizations. 9. No bank shall employ casual or non regular personnel on too lengthy probationary personnel in the conduct of its business involving bank deposits REPUBLIC ACT NO. 8791 [General Banking Laws of 2000] Sec 55.4. Consistent with the provisions of Republic Act No. 1405, otherwise known as the Banks Secrecy Law, no bank shall employ casual or non regular personnel on too lengthy probationary personnel in the conduct of its business involving bank deposits.

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RA 9208 [Anti-trafficking of Persons Act of 2003] (d) Forced Labor and Slavery - refer to the extraction of work or services from any person by means of enticement, violence, intimidation or threat, use of force or coercion, including deprivation of freedom, abuse of authority or moral ascendancy, debt-bondage or deception. Sec. 4. Acts of Trafficking in Persons. - It shall be unlawful for any person, natural or juridical, to commit any of the following acts: (a) To recruit, transport, transfer; harbor, provide, or receive a person by any means, including those done under the pretext of domestic or overseas employment or training or apprenticeship, for the purpose of prostitution, pornography, sexual exploitation, forced labor, slavery, involuntary servitude or debt bondage; (b) To introduce or match for money, profit, or material, economic or other consideration, any person or, as provided for under Republic Act No. 6955, any Filipino woman to a foreign national, for marriage for the purpose of acquiring, buying, offering, selling or trading him/her to engage in prostitution, pornography, sexual exploitation, forced labor, slavery, involuntary servitude or debt bondage; INVOLUNTARY SERVITUDE Art. 1703. No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid. REVISED PENAL CODE Art 272. Slavery.- The penalty of prision mayor and a fine of not exceeding 10,000 pesos shall be imposed upon anyone who shall purchase, sell, kidnap, or detain a human being for the purpose of enslaving him. If the crime be committed for the purpose of assigning the offended party to some immoral traffic, the penalty shall be imposed in its maximum. Art 273. Exploitation of child labor.- the penalty of prision correccional in its minimum and medium periods and a fine not exceeding 500 pesos shall be imposed upon anyone, who under the pretext of reimbursing himself of a debt incurred by an ascendant, guardian or person entrusted with the custody of a minor, shall, against the latters will, retain him in his service. Art 274. Services rendered under compulsion in payment of debt.- The penalty of arresto mayor in its maximum period to prision correccional in its minimum period shall be imposed upon any person, who, in order to require or enforce the paymebt of a debt, shall compel the debtor to work for him, against his will, as household servant or farm laborer. Art 278. Exploitaion of minors.- the penalty of prision correccional in its minimum and medium periods and a fine not exceeding 500 pesos shall be imposed upon: 1. Any person who shall cause any boy or girl under 16 years of age to perform any dangerous feat of balancing, physical strength or contortion. Any person, who, being an acrobat, gymnast, ropewalker, diver, wild animal tamer, or circus manager or engaged in a similar calling , shall employ in exhibitions of this kinds, children under 16 years of age who are not his children or descendants. Any person engaged in any of the callings enumerated in the next preceding paragraph who shall employ any descendant of his under 12 years of age in such dangerous exhibitions. Any ascendant, guardian, teacher, or person entrusted in any capacity with the care of a child under 16 years of age, who shall deliver such child gratuitously to any person following any of the callings enumerated in paragraph 2 hereof, or to any habitual vagrant or beggar.

2.

3.

4.

If the delivery shall have been made in consideration of ant price, compensation or promise, the penalty shall in every case be imposed in its maximum period. In either case, the guardian or curator convicted shall also be removed from office as guardian or curator, and in the case of the parents of the child, they may be deprived temporarily or perpetually, in the discretion of the court, of their parental authority. 5. Any person who shall induce any child under 16 years of age to abandon the home of its ascendants, guardians, curators, or teachers to follow any person engaged, in any of the callings mentioned in paragraph 2 hereof, or to accompany any habitual vagrant or beggar.

DO No. 4, Series of 1999 [Hazardous Work and Activities for Persons Below 18 years of age]

See full text under topic on prohibitions prior to hiring.

DOLE Memo Cir. No. 2 series of 1998 [Technical Guidelines for Classifying Hazardous and NonHazardous Establishments, Workplaces and Work Processes], see p. 585 FOZ DO NO. 65-04, SERIES OF 2004

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Evangelista may have involved wage earners, but the petitioner in Espejo was a General Manager with a monthly salary of P9,000.00 plus privileges. That wage and salary are synonymous has been settled in Songco v. National Labor Relations Commission. We said: Broadly, the word salary means a recompense or consideration made to a person for his pains or industry in another mans business. Whether it be derived from salarium, or more fancifully from sal, the pay of the Roman soldier, it carries with it the fundamental idea of compensation for services rendered. Indeed, there is eminent authority for holding that the words wages and salary are in essence synonymous (Words and Phrases, Vol. 38 Permanent Edition, p. 44 citing Hopkins vs. Cromwell, 85 N.Y.S.839, 841, 89 App. Div. 481; 38 Am. Jur. 496). Salary, the etymology of which is the Latin word salarium, is often used interchangeably with wage, the etymology of which is the Middle English word wagen. Both words generally refer to one and the same meaning, that is, a reward or recompense for services performed. Likewise, pay is the synonym of wages and salary (Blacks Law Dictionary, 5th Ed). x x x FAIR DAYS WAGE FOR A FAIR DAYS LABOR PAL vs. NLRC GR 55159 June 22, 1989 If there is no work performed by the employee there can be no wage or pay unless the laborer was able, willing and ready to work but was prevented by management or was illegally locked out, suspended or dismissed. Where the employees dismissal was for a just cause, it would neither be fair nor just to allow the employee to recover something he has not earned and could not have earned. SSS v. SSS Supervisors Union GR L-31832 10/23/82 Where the failure of workers to work was not due to the employers fault, the burden of economic loss suffered by the employees should not be shifted to the employer. Each party must bear his own loss. EQUAL PAY FOR EQUAL WORK ISAE v. Quisumbing G.R. No. 128845 June 1, 2000 This doctrine/legal truism means that persons who work with substantially equal qualification, skill, effort & responsibility, under similar conditions should be paid similar salaries, notwithstanding its international character. If an employer accords employees the same position and rank, the presumption is that these employees perform equal work. There is no evidence that foreignhires perform 25% more efficiently or effectively than local-hires. Both groups have similar functions and

See full text under topic on prohibitions prior to hiring.

HIRING OF EMPLOYEES RA 7920, sec 33(b), ART IV [New Electrical Engineering Law] RA 8495, Sec 34(C), ART IV [Philippine Mechanical Engineering Act of 1998]

IV. WAGES & WAGE RATIONALIZATION ACT


WAGE AND SALARY; CONCEPT WAGE VS. SALARY WAGE

applies to the compensation for manual labor, skilled or unskilled, paid at stated times, and measured by the day, week, month, or season. Indicates inconsiderable pay for a lower and less responsible character of employment.

SALARY

Denotes a higher degree of employment or a superior grade of services, and implies a position or office. Suggestive of a larger and more permanent or fixed compensation for more important service.

By some of the authorities, the word wages in its ordinary acceptance, has a less extensive meaning than the word salary, wages being ordinarily restricted to sums paid to artisans, mechanics, laborers, and other employees of like class, as distinguished from the compensation of clerks, officers of public corporations, and public offices. In many situations, however, the words wages and salary are SYNONYMOUS. [35 Am. Jur. Sec. 63, p. 496-497] Our SC reached the same conclusion, the words wages and salary are in essence synonymous. Equitable PCIB vs. Sadac G.R. No. 164772, June 8, 2006 WAGE SYNONYMOUS WITH SALARRY; DISTINCTION MERELY SEMANTICS The distinction between salary and wage in Gaa was for the purpose of Article 1708 of the Civil Code which mandates that, the laborers wage shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance. In labor law, however, the distinction appears to be merely semantics. Paramount and

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responsibilities, which they perform under similar conditions. The dislocation factor and the foreign-hires limited tenure also cannot serve as valid bases for the distinction in salary rates. The dislocation factor and limited tenure affecting foreign-hires are adequately compensated by certain benefits accorded to them which are not enjoyed by the local-hires such as housing, transportation, shipping cost, taxes, and home leave travel allowance. We find the point-of-hire classification employed by respondent school to justify the distinction in the salary rates of foreign-hires and local-hires to be an invalid classification. There is no reasonable distinction between the services rendered by foreignhires and local-hires. Employees in the Philippines, if they are performing similar functions and responsibilities under similar working conditions, should be paid under this principle. 3. The provision on deductible facilities must voluntarily accepted by the employee in writing. be

More significantly, the food and lodging, or the electricity and water consumed by the petitioner were not facilities but supplements. A benefit or privilege granted to an employee for the convenience of the employer is not facility. The criterion in making a distinction between the two not so much lies in the kind (food, lodging) but the purpose. Considering therefore that hotel workers are required to work different shifts and are expected to be available at various odd hours, their ready availability is a necessary matter in the operations of a small hotel, such as the private respondents hotel. If the requisites are all present, that facilities may take the place of the cash payment of the employees wage. This is one exception of the requirement that an employees wage shall be paid in legal tender, you cannot pay it in kind. Art 97f provides that wage includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee.

RIGHT TO A LIVING WAGE

( ART XIII, Sec 3 par 2) No jurisprudence yet

FACILITIES &SUPPLEMENT; EMPLOYEE BENEFITS FACILITIES; defined Book III, Rule 7, Sec. 5 FACILITIES shall include articles or services for the benefit of the employee or his family but shall not include tools of the trade or articles or service primarily for the benefit of the employer or necessary to the conduct of the employers business. Atok-Big Wedge Assn v. Atok-Big Wedge Co. 97 phil 294 FACILITIES are items of expense necessary for the laborers and his familys existence and subsistence so that by express provision of law, they form part of the wage and when furnished by the employer are deductible therefrom, since if they are not so furnished the laborer would spend and pay for them just the same. Mabeza vs. NLRC GR 118506 04/18/97 REQUISITES FOR FACILITIES TO BE CONSIDERED AS AN INTEGRAL PART OF AN EMPLOYEES WAGE (deductibility)

This means that an employer may provide, for instance, food and housing to his employees but he may deduct their values from the employees wages. STEPS TO DETERMINE IF A FACILITY OR NOT: ascertain the purpose for whose benefit? Employer or employee? If for employee, is it deductible or not?(apply the 3 requisites for deductibility )

SUPPLEMENTS; defined Atok-Big Wedge Assn v. Atok-Big Wedge Co. 97 phil 294 SUPPLEMENTS constitute extra remuneration or special privileges or benefits given to or received by the laborers over and above their ordinary earnings or wages. FACILITIES VS. SUPPLEMENTS Facilities are wage-deductible, supplements are not. The classification of an item of expense as a facility or a supplement will depend on the purpose and not on the kind. So if it is principally or mainly for the benefit of the employee, classify as facilities, and the fair and reasonable value of that can be considered as deductible from the employees wage.

1. 2.

Must be customarily furnished by the employer to the employee; Must be charged at fair and reasonable value; and

EMPLOYEE BENEFITS

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WORKERS LIEN Art 1707 CC: The laborers wages shall be a lien on the goods manufactured or the work done. Reason: By virtue of this new lien, the laborers who are not paid by an unscrupulous and irresponsible industrialist or manager may by legal means have the goods manufactured thru the sweat of their brow sold, and out of the proceeds get their salary, returning the excess, if any [Report Code Commission, p.14] Goods Manufactured or the work done Refers to personal property, not real property. And even here, the lien is allowed the laborer only if he was directly employed or engaged by the owner. The rule does not apply if contractor, with men under him, had undertaken the job. EXEMPTION FROM EXECUTION OR ATTACHMENT Art 1708 CC: The laborers wages shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance. GR: Wages are not subject to execution. Exception: Debts incurred for support such as food, shelter, clothing, medical attendance. The rule applies even when the wages are still in the possession of the employer whose properties may have been attached. There are certain laws which exclude certain employees from enjoying certain benefits depending on the methods of fixing their compensation. Ex. 13th mo. Pay which excludes job or task basis and purely on commission employees, under Art 82, workers paid by results are exempted from overtime pay, service incentive leave, etc. (conditions of employment).

WAGE; defined Art 97(f)

WAGE paid to employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee. A. TIME SPENT

Once the agreed period of work is completed, the compensation is earned and becomes due regardless of result. The standard forms of compensation based on time spent are salaries or wages by the day, week, or monthly.

Salaries due to government employees cannot be garnished before they are paid to the employees concerned because: 1. The incentive for work would be lost 2. Generally, the state cannot be sued; and 3. Finallly, technically, before disbursements, the money still belongs to the government. Art 1709 CC: The employer shall neither seize nor retain any tool or other articles belonging to the laborer. No seizure or retention by the employer

2 CLASSIFICATIONS OF EMPLOYEES BASED ON TIME SPENT 1. 2. Daily-paid Monthly-paid

1. DAILY-PAID EMPLOYEES Those employees who are paid on the days actually worked except unworked regular holidays when they are paid their basic wage if they are present or a leave with pay on the working day preceding the regular holiday. No work no pay Advantage: Flexibility in the reduction of work force fro any given period according to circumstances such as slack in demand, non-availability of materials, etc.

METHODS OF FIXING COMPENSATION

A.
B. C. D.

Time [daily and monthly paid workers] Commission Job or task basis Piece-rate basis [payment by results]

REMEDY FOR DOWNSIZING Compressed workweek Reduce working days Temporary suspension of operations of not more than 6 months (no work no pay)

IMPORTANCE OF METHODS OF FIXING COMPENSATION Not determinative relationship. of employer-employee

2. MONTHLY-PAID EMPLOYEES

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Paid everyday of the month including unworked rest days, special days and regular holidays. It is the standard compensation rate for managerial personnel, professionals, administrative employees and other white collar workers, including clerical employees and higher grade skilled workers. ADVANTAGE: relative economy in recordkeeping, and higher morale of employees resulting from association of this method with tenure and permanency. B. JOB OR TASK RATE SECOND, by giving the boards enough powers to achieve this objective. POLICIES OF THE STATE

1.

To rationalize the fixing of the minimum wage. [important] It has been rationalized because article 124 of this RA provides for the standards and criteria that should guide the agency of government when it comes to fixing the minimum wage. It is noted that under the standard criteria, that the congress has tried to weigh the factors involving the employers, as well as the factors involving the laborers when it comes to fixing of employees wage in order to rationalize it. Before RA 6727, it was only Malacaang through a PD that dictates how much should be the minimum wage in the Philippines. Most often than not, those employers in the far-flung areas are adversely affected because the fixing of minimum wage is not rationalized. It does not take into consideration, for example, the capitalization of the employer, the profit expected, the cost of living in a particular area. With the advent of RA 6727, the law deems it necessary that there shall be tandard criteria in fixing the employees wage.

A flat or fixed sum for each particular job or task completed, without regard to the number f hours actually spent in the performance or completion.

Appropriate only on the following conditions: a. b. C. PIECE WORK, OR BY THE OUTPUT IN TERMS OF WORK UNITS a. b. c. Without regard to time spent. Labor contributed by each determinable and separable from each other The value of the labor input for any particular stage is standard.

More advantageous from those paid on time spent. D. COMMISSION

Standards or Criteria for Minimum Wage Fixing Art 124 RA 6727 a. The demand for living wages; b. Wage adjustment vis--vis the consumer price index; c. The cost of living and changes or increases therein; d. The needs of workers and their families e. The need to induce industries to invest in the countryside; f. Improvements in standards of living g. The prevailing wage levels; h. Fair return of the capital invested and capacity to pay of employers; i. Effects on employment generation and family income; and j. The equitable distribution of income and wealth along the imperatives of economic and social development. 2. To promote productivity-improvement and gainsharing measures to ensure a decent standard of living for the workers and their family. 3. To guarantee the rights of labor to its just share in the fruits of production 4. To enhance employment generations in the countryside through industry dispersal. 5. To allow business and industry reasonable returns on investment, expansion and growth.

ADVANTAGE: Encourage the worker to be more productive. Fixed percentage is effected on sales.

TAKE NOTE: Workers shall be paid the minimum wage even if paid on job or piece rate basis. FIXING EMPLOYEES WAGE a. b. wage increase resolving wage distortion

RA 6727 WAGE RATIONALIZATION ACT IMPORTANCE: this law which amended the labor code will tell us the different government agencies involved in the fixing of wages and also how to resolve wage distortion(procedure in case wage distortion results in fixing wage) PURPOSE: was intended to rationalize wages; FIRST, by providing for full-time boards to police wages round-the-clock.

6.

The state shall promote collective bargaining as the primary mode of setting wages and other terms and conditions of employment; and whenever

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necessary, the minimum wage rates shall be adjusted in a fair and equitable manner, considering existing regional disparities in the cost-of-living and other sociao-economic factors and the national economic and social development plans. [important] This is an important policy because it promotes collective bargaining as a mode of settling labor disputes

2. Ex-Officio Vice-Chairman Director-General of NEDA 3. Two (2) members each from workers and employers sectors who shall be appointed by the President of the Phil upon recommendation of the Secretary of DOLE to be made on the basis of the list of nominees submitted by the workers and employers sectors, respectively. 4. The Executive Director shall also be a member of the Commission Secretariat [headed by Executive Director] Executive Director shall be appointed by the President of the Phil upon recommendation of the Secretary of DOLE 2 Deputy Directors shall be appointed by the President of the Phil upon recommendation of the Secretary of DOLE B. Regional Tripartite Wages and Productivity Boards [RTWPB] ART. 122 LC. Creation of Regional Tripartite Wages and Productivity Boards. - There is hereby created Regional Tripartite Wages and Productivity Boards, hereinafter referred to as Regional Boards, in all regions, including autonomous regions as may be established by law. The Commission shall determine the offices/headquarters of the respective Regional Boards. (As amended by Republic Act No. 6727, June 9, 1989). The SC is of the opinion that Congress meant the boards to be creative in resolving the annual question of wages without labor and management knocking on the legislatures door at every turn. The Courts opinion is that if RA 6727 intended the board alone to set floor wages, the Act would have no need for a board but an accountant to keep track of the latest consumer price index, or better would have Congress done it as the need arises, as the legislature, prior to the Act has done so for years.

Ilaw at Buklod ng Manggagawa vs. NLRC GR 91980, 06/27/91 The policy of the state is promoting collective bargaining as a mode of settling labor dispute. There was a wage distortion affecting the establishment and what the employees did was to stage a strike in order to compel the employer to solve wage distortion. The SC said NO. If RA 6727 is examined, strike is not provided as a solution in resolving wage distortion. It should be through collective bargaining. Therefore, the SC declared the strike as illegal because the Rules Implementing RA 6727 provides for a specific and detailed approach on how to resolve wage distortion short of strike or lockout. GOVERNMENT AGENCIES INVOLVED A. National Wages and Productivity Commission [NWPC] ART. 120 LC. Creation of National Wages and Productivity Commission. - There is hereby created a National Wages and Productivity Commission, hereinafter referred to as the Commission, which shall be attached to the Department of Labor and Employment (DOLE) for policy and program coordination. (As amended by Republic Act No. 6727, June 9, 1989). Determines the offices/headquarters of the respective Regional Tripartite Wages and Productivity Boards. Art 121C (As amended by Republic Act No. 6727, June 9, 1989) grants the NWPC the power to prescribe rules and guidelines for the determination of appropriate wages in the country.

Composition [7] Art 122 LC (As amended by Republic Act No. 6727, June 9, 1989).

Note: Guidelines issued by the RTWPB without the approval of, or worse, contrary to those promulgated by the NWPC are ineffectual, void and cannot be the source of rights and privileges. Composition [7] Art 121 LC (As amended by Republic Act No. 6727, June 9, 1989).

1. Chairman Regional Director of DOLE 2. Vice-Chairmen Regional Director of NEDA Regional Director of DTI 3. Two (2) members each from workers and employers sectors who shall be appointed by the President of the Phil, upon the recommendation of the Secretary of

1. Ex-Officio Chairman Secretary of DOLE

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DOLE, to be made on the basis of the list of nominees submitted by the workers and employers sectors, respectively. Secretariat Assisting each Board PROHIBITION AGAINST INJUNCTION Art 126 LC. Prohibition Against Injunction.No preliminary or permanent injunction or temporary restraining order may be issued by any court, tribunal or other entity against any proceedings before the Commission or the Regional Boards (As amended by Republic Act No. 6727, June 9, 1989). NWPC Guidelines No. 001-95 Revised Rules of Procedures on Minimum Wage Fixing, Series of 1995 this is adopted and promulgated by NWPC pursuant to Art 121C LC (As amended by Republic Act No. 6727, June 9, 1989) these are rules governing proceedings in the NWPC and the RTWPB in the fixing of minimum wage rates. For full text refer to FOZ p476 STATUTORY 4. To affirm, as the Constitution expresses it, labor as a primary social economic force. 5. That wages are distributed evenly, and more importantly, social justice is subserved. ADVANTAGES OF MINIMUM WAGE 1. Reduces the evils of the sweating system. Sweating System: the exploiting of workers at wages so low as to be insufficient to meet the bare cost of living. 2. Benefits directly the low-paid employees, who now receive inadequate wages on which to support themselves and their families. 3. Benefits all wage earners indirectly by setting a floor below which their remuneration cannot fall. 4. It raises the standard of competition among employers, since it would protect the fair-minded employer who voluntarily pays a wage that supports the wage earner from the competition of the employer who operates at lower cost only by reason of paying his workers a wage below subsistence. 5. Helps employees pay off the needed social security program. This program would require contribution from the employees themselves, and would be unjust to require such a contribution of those whose wages are not enough for their subsistence. It is unreasonable to ask a man to set aside something for the future when he does not have enough to eat today.

CONCEPTS; BASIC WAGE; MINIMUM WAGE; WAGE ORDER BASIC WAGE

means all the remuneration or earnings paid by an employer to a worker for services rendered on normal working days and hours but does not include cost-of-living-allowances, profit sharing payments, premium payments, 13th month pay or other monetary benefits which are not considered as part of or integrated into the regular salary of the workers on the date the act became effective. (definition of terms IRR of RA6727)

DISADVANTAGES OF MINIMUM WAGE 1. causes wage distortion. It May

2.

lead to unemployment. Professor King declared it is clear that the effect to throw out employment to all persons whose qualifications are not such that enable them to earn more than the legal minimum. If wages are forced up to the point higher than what the worker is economically worth, the power worker may be dismissed and the law is anti-social.

STATUTORY MINIMUM WAGE

is the lowest wage rate fixed by law that an employer can pay his workers. (definition of terms IRR of RA6727)

3. 4. 5.

WAGE ORDER refers to the order promulgated by RTWPB pursuant to its wage fixing authority. PURPOSE OF MINIMUM WAGE 1. To promote productivity-improvement and gainsharing measures to ensure a decent standard of living for the workers and their families. 2. To guarantee the rights of labor to its just share in the fruits of production. 3. To enhance employment generation in the countryside through industry dispersal and to allow business and industry reasonable returns on investment, expansion and growth.

It would pauperize the worker, destroy their selfrespect and make them miserable. Brings depression and thus impoverish the nation. Constit utes infringement to the workers right to labor as he could not dispose of the same under terms and conditions he may see fit. 6. Will tend to become the maximum.

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EMPLOYEES RIGHT TO A LIVING WAGE VS. RIGHT OF EMPLOYER TO REASONABLE RETURN OF INVESTMENT BALANCING OF RIGHTS While labor is entitled to a just share in the fruits of production, the enterprise has an equally important right not only to reasonable returns on investment but also to expansion and growth. The Constitution recognizes that the private sector plays an indispensable role something the state cannot do without. At the same breath, labor is called the primary social economic force. Because one is indispensable and the other is primary, how can it be said that one is more important, or deserves greater protecti0n than the other?(Azucena Book I p13) (b) grounds relied upon to justify the increase being sought; (c) amount of increase being sought; (d) area and/or industry covered. 2) Board Action. If the petition conforms with the requirements prescribed in the preceding sub-section b.1., the Board shall conduct public hearings in the manner prescribed under this Rule and Rule III, to determine whether a wage order should be issued. The Board may also conduct consultations with concerned sectors/industries. 3) Publication of Notice of Petition/Public Hearing. A notice of the petition and/or public hearing shall be published in a newspaper of general circulation in the region and/or posted in public places as determined by the Board. The notice shall include the name/s and address/es of the petitioner/s, the subject of the petition and the date/s, place/s and time of the hearings. The publication or posting shall be made at least fifteen (15) days before the date of initial hearing and shall be in accordance with the suggested form attached as Annex "A". 4) Opposition. Any party may file his opposition to the petition on or before the initial hearing, copy furnished the petitioner/s. The opposition shall be filed with the appropriate Board in ten (10) typewritten legible copies which shall contain the following: (a) name/s and address/es of the oppositor/s and signature/s of authorized official/s; (b) reasons or grounds for the opposition; and (c) relief sought. 5) Consolidation of Petitions. If there is more than one petition filed, the Board may, motu propio or on motion of any party, consolidate these for purposes of conducting joint hearings or proceedings to expedite resolutions of petitions. Petitions received after publication of an earlier petition need not go through the publication/posting requirement. 6) Assistance of Other Government and Private Organizations. The Board may enlist the assistance and cooperation of any government agency or private person or organization to furnish information in aid of its wage fixing function. PROPER PARTY

POWER TO ISSUE WAGE ORDERS Art 122 LC. The Regional Boards shall have the following powers and functions in their respective jurisdiction: b. To determine and fix minimum wage rates applicable in their region, provinces or industries therein and to issue the corresponding wage orders subject to guidelines issued by the Commission (As amended by Republic Act No. 6727, June 9, 1989). Wage Orders issued by the Boards cover only private sector workers, except for household helpers and persons in the personal employ of another, including family drivers.

PROCEDURES IN MINIMUM WAGE FIXING Section 3. Procedures in Minimum (a) Motu Proprio by the Board Whenever conditions in the region, province or industry so warrant, the Board may, motu proprio or as directed by the Commission, initiate action or inquiry to determine whether a wage order should be issued. The Board shall conduct public hearings in the manner prescribed under this Rule and Rule III. The Board may also conduct consultations with concerned sectors/ industries. (b) By Virtue of a Petition Filed 1) Form and Content of Petition. Any party may file a verified petition for wage increase with the appropriate Board in ten (10) typewritten legible copies which shall contain the following: (a) name/s, and address/es of petitioner/s and signature/s of authorized official/s; Wage Fixing.

Legitimate labor organization or the employer

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If employed in an establishment, the employee cannot go to court and file a petition for a wage increase because the employee is not considered a proper party. It must be an employer or a legitimate labor organization. shall state the grounds relied upon and the arguments in support of the appeal. The Board shall serve notice of the appeal to concerned parties. Failure to file an appeal within the reglementary period fixed under this section or to submit the required documents shall be a ground for dismissal of the appeal. Section 2. Grounds for Appeal. An appeal may be filed on the following grounds: (a) non-conformity with prescribed guidelines and/or procedures; (b) questions of law; (c) grave abuse of discretion. Section 3. Transmittal of Records. Immediately upon receipt of the appeal, the Board Secretariat shall transmit to the Commission Secretariat the appeal and a copy of the subject Wage Order together with the complete records of the case and all relevant documents. Section 4. Period to Act on Appeal. The Commission shall decide on the appeal within sixty (60) days from the filing of said appeal. Section 5. Effect of Appeal. The filing of the appeal does not operate to stay the Order unless the party appealing such Order shall file with the Commission an undertaking with a surety or sureties satisfactory to the Commission for payment to employees affected by the Order of the corresponding increase, in the event such Order is affirmed. Pag-asa Steel Works v. CA GR 166647; 03/31/06 No right to wage increase for employees already receiving minimum wage; no across the board effect. Metrobank. vs. NWPC & RTWPB- Region II GR 144322, February 26, 2007 When it issues a wage order, the RTWPB exercises a quasi-legislative power and not quasi-judicial power. The decision of RTWPB is appealable to NWPC, not to CA. The Court finds that Sec. 1, Wage Order No. R02-03 is void insofar as it grants a wage increase to employees earning more than the minimum wage rate and valid with respect to employees earning the prevailing minimum wage rate. The Court in Employers Confederation of the Philippines v. National Wages and Productivity Commission declared that there are two ways of fixing the minimum wage: the floor-wage method which involves the fixing of a determinate amount to be added to the prevailing statutory minimum wage rates and the salary-ceiling method in which the wage adjustment was to be applied

BOARD May deny, grant or not take an action

Wage Order if granted, maybe issued by the Board pursuant to its rule-making power and takes effect 15 days after publication.

Q: Remedy for the issuance of Wage Order A: Appeal to NWPC not later than ten (10) days from the date of publication of the Order. Q: Grounds? A: (a) non-conformity with prescribed guidelines and/or procedures; (b) questions of law; (c) grave abuse of discretion. Q: Does it suspend the effectivity of the WO? A: No, post a bond equivalent to the increase embodied in the wage order if you want it suspended. REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD [RTWPB] Metropolitan Bank and Trust Company, Inc. vs. NWPC and RTWPB- Region II G.R. No. 144322, 02/26/07 In line with RA No. 6727s policy, NWPC was created to prescribe rules and guidelines for the determination of appropriate minimum wage and productivity measures at the regional, provincial or industry levels. It authorized RTWPB to determine and fix the minimum wage rates in their respective regions, provinces or industries therein and issue the corresponding wage orders, subject to the guidelines issued by the NWPC. Pursuant to its wage- fixing authority, the RTWPB may issue wage orders which set the daily minimum wage rates based on the standards or criteria set by Art. 124 of the Labor Code. APPEAL PROCEDURE [NWPC]

The Commission may review the Wage Order issued by the Board motu proprio or upon appeal No more appeal from NWPC Remedy is Rule 65 (grave abuse, CA), then Rule 45 (questions of law, SC); note: not Rule 43 (because it excludes NWPC)

Section 1. Appeal to the Commission. Any party aggrieved by a Wage Order issued by the Board may appeal such Order to the Commission by filing a verified appeal with the Board in three (3) typewritten legible copies,. The appeal shall be accompanied by a memorandum of appeal which

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to employees receiving a certain denominated salary ceiling. In the instant case, the RTWPB did not set a wage level nor a range to which a wage adjustment or increase shall be added. Instead it granted an across-the-board wage increase of P15 to all employees and workers of Region II. In doing so, it exceeded its authority by extending the coverage of the Wage Order to wage earners receiving more than the prevailing minimum wage rate, without a denominated salary ceiling. It granted additional benefits not contemplated by RA No. 6727. WAGE ORDERS APPLICABLE IN CEBU, MANDAUE AND LAPU-LAPU CITY ---------INSERT NEW WAGE ORDER--------------EXEMPTION FROM MINIMUM WAGE Exemption from minimum wage may be by: a. Operation of Law (ex. Art 98 LC); or b. Application (NWPC Guidelines) A. BY APPLICATION 1. NWPC Guidelines No. 01 Series of 1996 Revised Guidelines on Exemption from Wage orders EXEMPTED FROM WAGE ORDERS ISSUED BY RTWPB 1. Distressed Establishments 2. New Business Enterprises 3. Retail/Service Establishments Regularly Employing Not More Than Ten Workers 4. Establishments Adversely Affected by Natural Calamities Note: The Board, upon strong and justifiable reasons, subject to the review or approval by the Commission may exempt establishments other than those enumerated above if they are in accord with the rationale of exemption. See page 469 FOZ Appendix Z for the full text These are rules on exemption from compliance with the prescribed wage increases/cost of living allowances granted by the RTWPBs. work in or at his home, that person is exempted from employing the minimum wage by operation of law. So employers of these employees are not obliged to comply with the minimum wage. If you are employing a house helper, you are not covered by the minimum wage by operation of law. That means you do not have to file an application for exemption, and you do not have to comply with the prevailing minimum wage. 3. Exemption Under Special Law Barangay Micro Business Enterprises Act of 2002 [RA 9178] Section 3. Definition of Terms (a) "Barangay Micro Business Enterprise," hereinafter referred to as BMBE, refers to any business entity or enterprise engaged in the production, processing or manufacturing of products or commodities, including agro-processing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the particular business entity's office, plant and equipment are situated, shall not be more than Three Million Pesos (P3,000,000.00) The Above definition shall be subjected to review and upward adjustment by the SMED Council, as mandated under Republic Act No. 6977, as amended by Republic Act No. 8289. For the purpose of this Act, "service" shall exclude those rendered by any one, who is duly licensed government after having passed a government licensure examination, in connection with the exercise of one's profession. Section 5. Who are Eligible to Register Any person, natural or juridical, or cooperative, or association, having the qualifications as defined in Section 3(a) hereof may apply for registration as BMBE. Section 8. Exemption from the Coverage of the Minimum Wage Law The BMBEs shall be exempt from the coverage of the Minimum Wage Law: Provided, That all employees covered under this Act shall be entitled to the same benefits given to any regular employee such as social security and healthcare benefits. POWER TO ISSUE RULES ON EXEMPTION; NWPC ART. 121. Powers and functions of the Commission. - The Commission shall have the following powers and functions: (b) To formulate policies and guidelines on wages, incomes and productivity improvement at the enterprise, industry and national levels; (As amended by Republic Act No. 6727, June 9, 1989) Power to Grant Exemptions; RTWPB

B. BY OPERATION OF LAW 2. Exemption under the Labor Code Art 98. Application of Title. --- This title [Wages] shall not apply to farm tenancy or leasehold, domestic service and persons working in their respective homes in needle work or in any cottage industry duly registered in accordance with law. Relate this to employment of home workers, page 33 FOZ. If a home worker performs needle

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ART. 122. Creation of Regional Tripartite Wages and Productivity Boards. xxx The Regional Boards shall have the following powers and functions in their respective territorial jurisdictions: (e) To receive, process and act on applications for exemption from prescribed wage rates as may be provided by law or any Wage Order; and Reason for Exemption: A wage exemption is intended to assist financially beleaguered companies to meet their labor cost without endangering the viability of the company. Nasipit Lumber vs. NWPC 289 SCRA 667 The power to prescribe guidelines is lodged in the NWPC, not in the RTWPB. This is clearly provided for in Article 121 of RA 6727, amending the Labor Code. It grants the NWPC, not the RTWPB, the power to prescribe rules and guidelines for the determination of minimum wage and productivity measure. While the RTWPB may issue wage orders under Article 122(b) of the Labor Code, such orders must be under the guidelines of the NWPC. However, the NWPC has the power not only to prescribe guidelines to govern wage but also to issue exemptions therefrom, as the said rule provides that whenever a wage order provides for an exemption, application thereto must be filed with the appropriate Board which shall process the same, subject to guidelines which the RTWPB implements. Significantly, the NWPC authorized the RTWPB to issue exemptions from wage orders, but subject to its review and approval. Since the NWPC never assented to Guideline No.3 of the RTWPB, the said guideline is inoperative and cannot be used by the latter in deciding or acting on petitioners application for exemption. RCPI vs. National Wages Council 207 SCRA 581 PURPOSE OF WAGE ESTABLISHMENT EXEMPTION; DISTRESSED exemptions, however, the retained earnings arising from appraisal increment do not represent hard cash but merely theoretical increases resulting from upward valuations of old fixed assets. There is no income or profit from the sale of goods or services. No income is realized from the reappraisal of fixed assets until such a time as the machinery, equipment, and other fixed assets are sold or disposed of in the event of a liquidation of assets. The NWPC ruling treats the revaluation increment as similar to the sale of fixed assets. In the same way, however, that machinery and equipment should not be sold in order to meet increases in the wages of workers (for this would destroy not only the company but the employment of the workers themselves) so should a similar attitude be adopted when machinery or equipment is not sold but merely revalued. On December 16, 1986, the NWPC, through then Secretary Augusto B. Sanchez - its chairman, approved the application for exemption of RCPI and stated, among other things, that: "The Executive Committee, therefore, recognizes the necessity to set aside technicalities required by existing criteria under NWC Policy Guidelines Nos. 6 and 8 and bestow greater significance to the actual financial condition of RCPI." NWPC found that RCPI's compliance with the Wage Orders would result in the company's financial dislocation and, accordingly, granted it the prayed for exemption. We see no reason from the records why a different treatment should apply in the following year. C Planas Commercial vs. NLRC 303 SCRA 49 RETAIL ESTABLISHMENT Petitioners invoke the exemption provided by law for retail establishments which employ not more than 10 workers to justify their non-liability for the salary differentials in question. They insist that PLANAS is a retail establishment leasing a very small and cramped stall in the Divisoria Market which cannot accommodate more than 10 workers in the conduct of its business. The SC is unconvinced. The records disclosed de los Reyes clear entitlement to salary differentials. Section 4 (c) of RA 6727 categorically provides: Retail or service establishments regularly employing not more than 10 workers may be exempted from the applicability of this Act upon application with and as determined by the appropriate Regional Board in accordance with the applicable rules and regulations issued by the Commission. Whenever an application for exemption has been duly filed with the appropriate Regional Board, action on any complaint for alleged non-compliance with this Act shall be deferred pending resolution of the application for exemption by the appropriate Regional Board. In the event that the applications for exemptions are not granted, employees shall receive the appropriate compensation due them as provided for by this Act plus the interest of 1% per month retroactive to the effectivity of this Act

The purpose of wage exemptions is to help financially distressed companies meet their labor costs without endangering the existence or viability of the firm upon which both management and labor depend for a living. Under the spirit of Wage Order No. 6, it is the actual ability of a firm to spend for its current needs and costs and not how the assets and liabilities of a firm may appear in the technical jargon of higher accounting principles which is important. True, the retained earnings account constitutes a company's accumulated profits of losses. However, it is not enough to treat said earnings as "earnings" in the real sense of the word for purposes of wage exemptions. For purposes of compliance with the law on wage

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(emphasis supplied). WAGE DISTORTION; CONCEPT & ELEMENTS ART. 124. Standards/Criteria wage fixing. for minimum subordinate, but, because of a wage order increase given to B, the P100 advantage disappeared or was reduced to say, P30, then it may be said that the salary distinction between A and B has been distorted. A may complain of a salary distortion. Disparity in pay of two or more employees holding the same position does not necessarily mean salary distortion referred to in Art 124. There is no distortion if the employees, whose wages are being compared, are located in different regions. This is because wage-fixing has been regionalized by RA 6727. How to rectify the distortion is not specified in the law. The Court has pointed out that through Art. 124 the law recognizes the validity of negotiated wage increases to correct wage distortions. The legislative intent is to encourage the parties to seek solution to the problem of wage distortions through voluntary negotiation or arbitration, rather than strikes, lockouts, or other concerted activities of the employees or management.

xxx As used herein, a Wage Distortion shall mean a situation where an increase in prescribed wage rates results in the elimination or severe contraction of intentional quantitative differences in wage or salary rates between and among employee groups in an establishment as to effectively obliterate the distinctions embodied in such wage structure based on skills, length of service, or other logical bases of differentiation.xxx (As amended by Republic Act No. 6727, June 9, 1989). ELEMENTS OF WAGE DISTORTION Bankard Employees Union Workers Alliance Trade Unions v. NLRC & Bankard, GR No. 140689, Feb. 17, 2004 ELEMENTS OF WAGE DISTORTION

1. 2. 3. 4.

An existing hierarchy of corresponding salary rates.

positions

with

A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one. Elimination of the distinction between the two levels. Existence of the distortion in the same region of the country.

The Court has adopted the following formula as "just and equitable" to correct a salary distortion:

Mini Wage , -------------- = % Actual salary

_ . Prescribed Increase = Distortion Adjustment

Basic assumption is there exists a classification of employees that establishes distinctions among them on some relevant or legitimate bases.

Any issue involving wage distortion is not a valid ground for a strike or lockout.

For salary distortion to exist, as defined in Art. 124, the law does not require that there be an elimination or total abrogation of quantitative wage or salary differences; a severe contraction is enough. This means, briefly, the disappearance or virtual disappearance of pay differentials between lower and higher positions in an enterprise because of compliance with a wage order.

Each region has a regional wage board which, in fixing the wage level, considers criteria or standards existing in the region. Since those criteria vary from one region to another, the pay levels of comparable jobs also tend to vary among regions. But pay disparity of same or comparable jobs in different regions cannot be considered wage distortion. Wage distortion, in other words, involves comparison of jobs located in the same region. Examination of alleged salary distortion is limited to jobs or positions in the same employer within a region. Therefore, the comparison of salaries has to be intra-region not inter-region region.

An employee has reason to complain whose pay level advantage is equaled or almost equaled or overtaken through a mandated wage increase. For instance, if a wage order raised a messenger's daily pay from P198 to P223, almost equaling a technician's pay of P225, the technician may complain of salary distortion because his pay advantage (due to nature of job) has been significantly reduced from P27 to P2 only. Example: If A was receiving a daily salary which was P100 higher than that of B who is As

Q: Is an employer legally obliged to try and correct a wage distortion? A: It appears so, under Art. 124- It says that "the employer and the union shall negotiate to correct the distortions." If there is no union, "the employer and workers shall endeavor to correct such distortions." Q: Must the previous pay advantage be restored? A: That indeed is the aim but not necessarily to the last peso. An appreciable differential, a significant pay gap, should suffice as correction of the distortion.

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Q: When does wage distortion happen? A: When the employer grants an increase only to a certain group of employees drastically reducing or eliminating the normal salary differential or gap. Possible Causes of Wage Distortion 1. Government decreed increase through wage orders. 2. Merger of establishments [confusion or elimination of the status of the employee] 3. Increase granted by the employers 4. Passage of RA 6727 or the Wage Rationalization Act Prubankers Association vs. Prudential Bank and Trust Company 302 SCRA 74 Distortion does not arise when a wage order gives the employees in one branch of a bank higher compensation than that given to their counterparts in other regions occupying the same pay scale, who are not covered by the said wage order. In short, the implementation of the wage orders in one region but not in others does not in itself necessarily result in wage distortion. Bankard Employees Union Workers Alliance Trade Unions vs. NLRC & Bankard GR No. 140689, Feb. 17, 2004 The Board of Directors of Bankard, Inc. approved a new salary scale made retroactive for the purpose of making its hiring rate competitive in the industrys labor market. This increased the hiring rate of new employees by P1000 for levels I & V and P900 for levels II, III and IV. Petitioner pressed for the increase in the salary of its old, regular employees. Bankard replied that there was no obligation on the part of the management to grant to all its employees the same increase in and across the board manner. SC ruled that: Since it is clear that there is no hierarchy of positions between the newly hired & regular employees of Bankard, first element is wanting. The formulation of wage structure through the classification of employees is a matter of management judgment and discretion. In relation to the significant as to contraction of the in the salary rates 3rd element, the said gap is not obliterate or result in severe intentional qualitative differences between the employee group. the increase in the wages and salaries of the newly hired was not due to a prescribed law on wage order. Reliance in Metro Transit Ong vs. NLRC is misplaced because there existed a company practice in that case, in which not present in the instant case. METHODS OF RESOLVING WAGE DISTORTION & TWO METHODS IN DETERMINING WAGES METHODS OF RESOLVING WAGE DISTORTION (Brought about by the enactment or passage of a wage order)

The court has pointed out that thru the passage of Art 124, the law recognizes the validity of negotiated wage increases to correct wage distortion. The legislative intent is to encourage the parties to seek solution to the problem of wage distortions through voluntary negotiation or arbitration, rather than strikes, lockouts, or other concerted activities of the employees or management.

A. IF ORGANIZED a) The matter should be brought to the grievance (machinery) procedure under their CBA. c) If no settlement is arrived at, the dispute should be submitted to voluntary arbitration (voluntary arbitrator or panel of voluntary arbitrators) No number of VA specified by law No prohibition of Labor Arbiter to be Arbiter NCMB has a list of VA Voluntary

Decision of VA is final and executory after 10 days from the receipt of the copy of the decision by the parties, however, no MR is allowed, a TRO maybe applied with CA or SC to stay execution of the assailed judgment, and a Petition for Review under Rule 43 may be made to CA for question of law or facts or both, then to SC under Rule 45

ORGANIZED ESTABLISHMENT Refers to a firm or a company where there is a recognized or certified exclusive bargaining agreement. WHAT SHOULD BE CONTAINED IN A CBA 1. 2. 3. 4. terms and conditions of employment wages hours of work procedure for resolving grievances

B. IF UNORGANIZED a) The employer and the workers should negotiate to correct the distortion.

Furthermore, petitioner cannot legally obligate Bankard to correct the alleged wage distortion as

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b) If negotiations fail, the matter should be brought to the National Conciliation and Mediation Board (NCMB) NCMB has no compulsory power, conciliate but cannot decide a case. can only

UNORGANIZED ESTABLISHMENT Where there is no recognized union or collective bargaining agreement. TWO METHODS IN DETERMINING WAGES Employers Confederation of the Philippines vs. NWPC 201 SCRA 759 TWO WAYS OF FIXING THE MINIMUM WAGE 1. FLOOR-WAGE method which involves the fixing of a determinate amount to be added to the prevailing statutory minimum wage rates. 2. SALARY-CEILING method in which the wage adjustment was to be applied to employees receiving a certain denominated salary ceiling.

PROCEDURE

(a) (b)

Initiated by the filing of a complaint with the NCMB on the ground of wage distortion. Fill up the complaint form provided by the NCMB.

(c) The Regional Director of the NCMB will now issue a NOTICE OF HEARING directed to the employer inviting him to meet with them at a designated time, date, and place. (d) At the NCMB, the complainant B and the employer will have to be present. This proceeding will be supervised by an NCMB Hearing Officer. This is entirely different from the first step because the third person (NCMB Hearing Officer) now interferes and asks the employers, How much can you afford? And to the employees, How much increase do you want? In so doing, in takes into consideration the financial capacity of the employer and the need of the workers. (e) The NCMB will try to settle the dispute through AMICABLE SETTLEMENT. Example: Employer wants to pay P1 increase. Employee wants P5 increase. NCMB will settle for P3 and suggests this solution to both parties. (f) Should the employer refuse to accede to the remedy suggested by the NCMB, the NCMB cannot make negotiations to bind both parties because the main purpose of NCMB is to conciliate and it will suggest that the parties submit to VOLUNTARY ARBITRATION. c) If no settlement is arrived after 10 calendar days of conciliation, the dispute should be brought to the appropriate branch of the NLRC for compulsory arbitration, which shall conduct continuous hearings and decide the dispute within 20 calendar days from the time said dispute is submitted for compulsory arbitration.

The first method was adopted in the earlier wage orders, while the latter method was used in RA 6640 and RA 6727. The shift from the first method to the second method was brought about by labor disputes arising from wage distortions, a consequence of the implementation of the wage orders. The shift from the first to the second method was due to the fact that the latter minimized wage distortion disputes.

JURISDICTION OVER WAGE DISTORTION DISPUTES LABOR ARBITRATION Reference of a labor dispute to a third party for determination on the basis of evidence and arguments presented by such parties, who are bound to accept the decision. Arbitration may be classified on the basis of obligation on which it is based, it may either be: 1. VOLUNTARY ARBITRATION

It is the policy of the State to encourage voluntary arbitration on all labor-management disputes. Before or at any stage of the compulsory arbitration process, the parties may opt to submit their dispute to voluntary arbitration. (Implementing Rules, Book V, Rule XIX, Sec. 5.) Defined as a contractual proceeding whereby the parties to any dispute or controversy in order to obtain a speedy and inexpensive final disposition of the matter, select a judge of their own choice and by consent, submit their controversy to him for determination.

Appropriate branch of NLRC means to Labor Arbiter ( a complaint has to be filed), then appealable to NLRC in 10 calendar days (no appeal), remedy is Rule 65 to CA, then Rule 45 to SC.

Under voluntary arbitration, the "judge" is named by the parties, pursuant to a voluntary arbitration clause in

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their collective agreement. He is an impartial third person authorized by the parties to make a final and binding decision or award. Process of settlement of labor disputes by a government agency [or by other means provided by the government] which has the authority to investigate and to make award which is binding on all the parties. Parties are compelled to forgo their right to strike A disinterested person or party is usually appointed by the state. It is compulsory because the law declares the dispute subject to arbitration, regardless of the consent of the parties. Done by the Regional Arbitration Branch of NLRC [refer to Art 217] It is an adversarial proceeding initiated by a complaint [usually by a union] for wage distortion before the Labor Arbiter. The other party is required to answer. It is the Labor Arbiter who is clothed with the original and exclusive authority to conduct compulsory arbitration under Art. 217. Proceedings after a labor arbiter's decision is brought up to the National Labor Relations Commission cannot be considered as part of the arbitration proceedings. This is because in the appeal stage, the Commission merely reviews the Labor Arbiter's decision for errors of fact or law. It does not duplicate the proceedings held at the Labor Arbiter's level. Thus, the clause "pending final resolution of the case by arbitration" should be understood to be limited only to the proceedings before the Labor Arbiter, so that when the latter rendered his decision, the case could be considered finally resolved by arbitration. [See Philippine Airlines, Inc. vs. National Labor Relations Commission, G.R. No. 55159, Dec. 22, 1989.] The Commission itself, through any of its divisions, also conducts compulsory arbitration, but only in "national interest cases" certified or referred to it by the DOLE secretary under Art. 263(g).

A voluntary arbitrator "is not a public tribunal imposed upon the parties by a superior authority which the parties are obliged to accept. He has no general character to administer justice for a community. He is rather part of a system of selfgovernment created by and confined to the parties." [Maurice S. Trotta, Arbitration of Labor Management Disputes, American Management Association, New York, 1974, p. 73.]

Voluntary arbitration, indeed, is a private judicial system. The judge is called a VOLUNTARY ARBITRATOR. The power of voluntary arbitrator to try and decide the case is the same as that of a Labor Arbiter. The parties can agree to select a Labor Arbiter as a voluntary arbitrator because it is as to the agreement of the parties. Arbitration may be initiated either by 1) a Submission Agreement or 2) by a Demand or Notice invoking a collective agreement arbitration clause. Sometimes both instruments are used in a case. Although the contract may establish the breadth of the arbitrator's power and the limits of his authority, his power may be more sharply defined in the submission agreement. In Philippine context, the "judge" in voluntary arbitration is called arbitrator, while that in compulsory arbitration is labor arbiter. Proceedings are Non-litigious in nature, not governed by technical rules of procedure used in courts but due process is always observed.

VOLUNTARY ARBITRATOR Any person accredited by the Board as such; or Any person named or designated in the CBA by the parties to act as their voluntary arbitrator; or One chosen, with or without the assistance of the NCMB, pursuant to selection procedure agreed upon in the CBA; or Any official that may be authorized by the Sec of Labor to act as voluntary arbitrator upon the written request and agreement or the parties to a labor dispute. APPEAL PROCEDURE IN COMPULSORY AND VOLUNTARY ARBITRATION ------------------For

research------------------------SPECIAL CIVIL ACTION RULE 65 CERTIORARI, PROHIBITION AND MANDAMUS SECTION 1. Petition for certiorari.When any tribunal, board or officer exercising judicial or quasi-

2. COMPULSORY ARBITRATION

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judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require. The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. (1a) SEC. 2. Petition for prohibition.When the proceedings of any tribunal, corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent to desist from further proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice may require. The petition shall likewise be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. (2a) SEC. 3. Petition for mandamus.When any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent, immediately or at some other time to be specified by the court, to do the act required to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the respondent. The petition shall also contain a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. (3a) SEC. 4. When and where to file the petition. The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the petition shall be filed not later than sixty (60) days counted from notice of the denial of the motion. If the petition relates to an act or an omission of a municipal trial court or of a corporation, a board, an officer or a person, it shall be filed with the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed with the Court of Appeals or with the Sandiganbayan, whether or not the same is in aid of the courts appellate jurisdiction. If the petition involves an act or an omission of a quasi-judicial agency, unless otherwise provided by the law or these rules, the petition shall be filed with and be cognizable only by the Court of Appeals. In election cases involving an act or an omission of a municipal or a regional trial court , the petition shall be filed exclusively with the Commission on Elections, in aid of its appellate jurisdiction. (as amended by A.M. 07-7-12-SC) RULE 43 APPEALS FROM THE COURT OF TAX APPEALS AND QUASI-JUDICIAL AGENCIES TO THE COURT OF APPEALS SECTION 1. Scope.This Rule shall apply to appeals from judgments or final orders of the Court of Tax Appeals and from awards, judgments, final orders or resolutions of or authorized by any quasi-judicial agency in the exercise of its quasi-judicial functions. Among these agencies are the Civil Service Commission, Central Board of Assessment Appeals, Securities and Exchange Commission, Office of the President, Land Registration Authority, Social Security Commission, Civil Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer, National Electrification Administration, Energy Regulatory Board, National Telecommunications Commission, Department of Agrarian Reform under Republic Act No. 6657, Government Service Insurance System, Employees Compensation Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic Energy Commission, Board of Investments, Construction Industry Arbitration Commission, and voluntary arbitrators authorized by law. (n) SEC. 2. Cases not covered.This Rule shall not apply to judgments or final orders issued under the Labor Code of the Philippines. (n) SEC. 3. Where to appeal.An appeal under this Rule may be taken to the Court of Appeals within the period and in the manner herein provided, whether the appeal involves questions of fact, of law, or mixed questions of fact and law. (n)

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SEC. 4. Period of appeal.The appeal shall be taken within fifteen (15) days from notice of the award, judgment, final order or resolution, or from the date of its last publication, if publication is required by law for its effectivity, or of the denial of petitioners motion for new trial or reconsideration duly filed in accordance with the governing law of the court or agency a quo. Only one (1) motion for reconsideration shall be allowed. Upon proper motion and the payment of the full amount of the docket fee before the expiration of the reglementary period, the Court of Appeals may grant an additional period of fifteen (15) days only within which to file the petition for review. No further extension shall be granted except for the most compelling reason and in no case to exceed fifteen (15) days. (n) SEC. 5. How appeal taken..Appeal shall be taken by filing a verified petition for review in seven (7) legible copies with the Court of Appeals, with proof of service of a copy thereof on the adverse party and on the court or agency a quo. The original copy of the petition intended for the Court of Appeals shall be indicated as such by the petitioner. Upon the filing of the petition, the petitioner shall pay to the clerk of court of the Court of Appeals the docketing and other lawful fees and deposit the sum of P500.00 for costs. Exemption from payment of docketing and other lawful fees and the deposit for costs may be granted by the Court of Appeals upon a verified motion setting forth valid grounds therefor. If the Court of Appeals denies the motion, the petitioner shall pay the docketing and other lawful fees and deposit for costs within fifteen (15) days from notice of the denial. (n) SEC. 6. Contents of the petition.The petition for review shall (a) state the full names of the parties to the case, without impleading the court or agencies either as petitioners or respondents; (b) contain a concise statement of the facts and issues involved and the grounds relied upon for the review; (c) be accompanied by a clearly legible duplicate original or a certified true copy of the award, judgment, final order or resolution appealed from, together with certified true copies of such material portions of the record referred to therein and other supporting papers; and (d) contain a sworn certification against forum shopping as provided in the last paragraph of section 2, Rule 42. The petition shall state the specific material dates showing that it was filed within the period fixed herein. (2a) SEC. 7. Effect of failure to comply with requirements.The failure of the petitioner to comply with any of the foregoing requirements regarding the payment of the docket and other lawful fees, the deposit for costs, proof of service of the petition, and the contents of and the documents which should accompany the petition shall be sufficient ground for the dismissal thereof. (n) SEC. 8. Action on the petition.The Court of Appeals may require the respondent to file a comment on the petition, not a motion to dismiss, within ten (10) days from notice, or dismiss the petition if it finds the same to be patently without merit, prosecuted manifestly for delay, or that the questions raised therein are too unsubstantial to require consideration. (6a) SEC. 9. Contents of comment.The comment shall be filed within ten (10) days from notice in seven (7) legible copies and accompanied by clearly legible certified true copies of such material portions of the record referred to therein together with other supporting papers. The comment shall (a) point out insufficiencies or inaccuracies in petitioners statement of facts and issues; and (b) state the reasons why the petition should be denied or dismissed. A copy thereof shall be served on the petitioner, and proof of such service shall be filed with the Court of Appeals. (9a) SEC. 10. Due course.If upon the filing of the comment or such other pleadings or documents as may be required or allowed by the Court of Appeals or upon the expiration of the period for the filing thereof, and on the basis of the petition or the records the Court of Appeals finds prima facie that the court or agency concerned has committed errors of fact or law that would warrant reversal or modification of the award, judgment, final order or resolution sought to be reviewed, it may give due course to the petition; otherwise, it shall dismiss the same. The findings of fact of the court or agency concerned, when supported by substantial evidence, shall be binding on the Court of Appeals. (n) SEC. 11. Transmittal of record.Within fifteen (15) days from notice that the petition has been given due course, the Court of Appeals may require the court or agency concerned to transmit the original or a legible certified true copy of the entire record of the proceeding under review. The record to be transmitted may be abridged by agreement of all parties to the proceeding. The Court of Appeals may require or permit subsequent correction of or addition to the record. (8a) SEC. 12. Effect of appealThe appeal shall not stay the award, judgment, final order of resolution sought to be reviewed unless the Court of Appeals shall direct otherwise upon such terms as it may deem just. (10a) SEC. 13. Submission for decision.If the petition is given due course, the Court of Appeals may set the case for oral argument or require the parties to submit memoranda within a period of fifteen (15) days from notice. The case shall be deemed submitted for decision upon the filing of the last pleading or memorandum required by these Rules or by the Court of Appeals. (n) RULE 45 APPEAL BY CERTIORARI TO THE SUPREME COURT SECTION 1. Filing of petition with Supreme Court.A party desiring to appeal by certiorari from a judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition may include an application for a writ of preliminary injunction

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or other provisional remedies and shall raise only questions of law which must be distinctly set forth. The petitioner may seek the same provisional remedies by verified motion filed in the same action or proceeding at any time during its pendency. (as amended by A.M. 07-7-12-SC) SEC. 2. Time for filing; extension.The petition shall be filed within fifteen (15) days from notice of the judgment or final order or resolution appealed from, or of the denial of the petitioners motion for new trial or reconsideration filed in due time after notice of the judgment. On motion duly filed and served, with full payment of the docket and other lawful fees and the deposit for costs before the expiration of the reglementary period, the Supreme Court may for justifiable reasons grant an extension of thirty (30) days only within which to file the petition. (1a, 5a) SEC. 3. Docket and other lawful fees; proof of service of petition.Unless he has theretofore done so, the petitioner shall pay the corresponding docket and other lawful fees to the clerk of court of the Supreme Court and deposit the amount of P500.00 for costs at the time of the filing of the petition. Proof of service of a copy thereof on the lower court concerned and on the adverse party shall be submitted together with the petition. (1a) SEC. 4. Contents of petitionThe petition shall be filed in eighteen (18) copies, with the original copy intended for the court being indicated as such by the petitioner, and shall (a) state the full name of the appealing party as the petitioner and the adverse party as respondent, without impleading the lower courts or judges thereof either as petitioners or respondents; (b) indicate the material dates showing when notice of the judgment or final order or resolution subject thereof was received, when a motion for new trial or reconsideration, if any, was filed and when notice of the denial thereof was received; (c) set forth concisely a statement of the matters involved, and the reasons or arguments relied on for the allowance of the petition; (d) be accompanied by a clearly legible duplicate original, or a certified true copy of the judgment or final order or resolution certified by the clerk of court of the court a quo and the requisite number of plain copies thereof, and such material portions of the record as would support the petition; and (e) contain a sworn certification against forum shopping as provided in the last paragraph of section 2, Rule 42. (2a) SEC. 5. Dismissal or denial of petition.The failure of the petitioner to comply with any of the foregoing requirements regarding the payment of the docket and other lawful fees, deposit for costs, proof of service of the petition, and the contents of and the documents which should accompany the petition shall be sufficient ground for the dismissal thereof. The Supreme Court may on its own initiative deny the petition on the ground that the appeal is without merit, or is prosecuted manifestly for delay, or that the questions raised therein are too unsubstantial to require consideration. (3a) SEC. 6. Review discretionary.A review is not a matter of right, but of sound judicial discretion, and will be granted only when there are special and important reasons therefor. The following, while neither controlling nor fully measuring the courts discretion, indicate the character of the reasons which will be considered: (a) When the court a quo has decided a question of substance, not theretofore determined by the Supreme Court, or has decided it in a way probably not in accord with law or with the applicable decisions of the Supreme Court; or (b) When the court a quo has so far departed from the accepted and usual course of judicial proceedings, or so far sanctioned such departure by a lower court, as to call for an exercise of the power of supervision. (4a) SEC. 7. Pleadings and documents that may be required; sanctions.For purposes of determining whether the petition should be dismissed or denied pursuant to section 5 of this Rule, or where the petition is given due course under section 8 hereof, the Supreme Court may require or allow the filing of such pleadings, briefs, memoranda or documents as it may deem necessary within such periods and under such conditions as it may consider appropriate, and impose the corresponding sanctions in case of non-filing or unauthorized filing of such pleadings and documents or noncompliance with the conditions thereof. (n) SEC. 8. Due course; elevation of records.If the petition is given due course, the Supreme Court may require the elevation of the complete record of the case or specified parts thereof within fifteen (15) days from notice. (2a) SEC. 9. Rule applicable to both civil and criminal cases.The mode of appeal prescribed in this Rule shall be applicable to both civil and criminal cases, except in criminal cases where the penalty imposed is death, reclusion perpetua or life imprisonment. (n)

V. VIOLATION OF WAGE ORDERS


DOUBLE INDEMNITY AND IMPRISONMENT RA 6727 [amended by RA 8188] Section 12. Any person, corporation, trust, firm, partnership, association or entity which refuses or fails to pay any of the prescribed increases or adjustments in the wage rates made in accordance with this Act shall be punished by a fine not less than Twenty-five thousand pesos (P25,000) nor more than One hundred thousand pesos (P100,000) or imprisonment of not less than two (2) years nor more than four (4) years, or both such fine and imprisonment at the discretion of the court: Provided, That any person convicted under this Act shall not be entitled to the benefits provided for

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under the Probation Law. "The employer concerned shall be ordered to pay an amount equivalent to double the unpaid benefits owing to the employees: Provided, that payment of indemnity shall not absolve the employer from the criminal liability imposable under this Act. "If the violation is committed by a corporation, trust or firm, partnership, association or any other entity the penalty of imprisonment shall be imposed upon the entity's responsible officers, including, but not limited to, the president, vice-president, chief executive officer, general manager, managing director or partner." described as inquisitorial. Why? Because the SOLE inquires ask for documents, investigate, etc.

Article 129 machinery of wage recovery via the administrative process initiated by a complaint. This is described as adversarial. Why? Because it requires a complaint for its initiation.

JURISDICTION Regular Courts RA 7691 AN ACT EXPANDING THE JURISDICTION OF THE METROPOLITAN TRIAL COURTS, MUNICIPAL TRIAL COURTS, AND MUNICIPAL CIRCUIT TRIAL COURTS, AMENDING FOR THE PURPOSE BATAS PAMBANSA BLG. 129, OTHERWISE KNOWN AS THE "JUDICIARY REORGANIZATION ACT OF 1980" Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: SECTION 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980," is hereby amended to read as follows: "SEC. 19. Jurisdiction in civil cases. - Regional Trial Courts shall exercise exclusive original jurisdiction: "(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; "(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty thousand pesos (P20,000.00) or, for civil actions in Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts; "(3) In all actions in admiralty and maritime jurisdiction where the demand or claim exceeds One hundred thousand pesos (P100,000.00) or, in Metro Manila, where such demand or claim exceeds Two hundred thousand pesos (P200,000.00); "(4) In all matters of probate, both testate and intestate, where the gross value of the estate exceeds One hundred thousand pesos (P100,000.00) or, in probate matters in Metro Manila, where such gross value exceeds Two hundred thousand pesos (P200,000.00); "(5) In all actions involving the contract of marriage and marital relations;

Failure or refusal to pay mandatory wage increase is considered a criminal offense under Republic Act No. 8188, approved on June 11, 1996. The violator may be sentenced to imprisonment of not less than two (2) years nor more than four (4) years. He may also be punished by a fine of P25,000 to PIOO.OOO.OO. Moreover, he shall be ordered to pay an amount equivalent to double the unpaid benefits owing to the employee. Penalty for Violation of the Prescribed Increase or Adjustment in the Wage Rate (RA 8188): 1. 2. Payment of a fine of not less than P25,000 nor more than P100,000; or Imprisonment for not less than 2 years nor more than 4 years, the imprisonment being non-probationable. (The case should therefore be filed with the MTC pursuant to BP 129 as amended by RA 7691); or Both imprisonment and discretion of the Court. fine, at the

3.

4.

Paying double the unpaid benefits/amounts owing the employees, provided that the Payment of Indemnity shall not absolve the employer from criminal liability imposable under the Labor Code.

Aside from the penal provision provided under RA 6727, there are provisions in the Labor Code on the enforcement and recovery of minimum wage provisions. There are general two provisions for the enforcement and recovery of minimum wage provisions Articles 128 and 129. Remember that the minimum wage is fixed by a wage order and there is a built-in mechanism in the Labor Code which provides the so-called enforcement tools for the recovery of wages, particularly the minimum wage provisions. Article 128 enforcement machinery in aid of the visitorial power of the Secretary of Labor. This is

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"(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising jurisdiction of any court, tribunal, person or body exercising judicial or quasi-judicial functions; "(7) In all civil actions and special proceedings falling within the exclusive original jurisdiction of a Juvenile and Domestic Relations Court and of the Court of Agrarian Relations as now provided by law; and "(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and costs or the value of the property in controversy exceeds One hundred thousand pesos (P100,000) or, in such other cases in Metro Manila, where the demand, exclusive of the abovementioned items exceeds Two hundred thousand pesos (P200,000)." SEC. 2. Section 32 of the same law is hereby amended to read as follows: "SEC. 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Criminal Cases. - Except in cases falling within the exclusive original jurisdiction of Regional Trial Courts and of the Sandiganbayan, the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise: "(1) Exclusive original jurisdiction over all violations of city or municipal ordinances committed within their respective territorial jurisdiction; and "(2) Exclusive original jurisdiction over all offenses punishable with imprisonment not exceeding six (6) years irrespective of the amount of fine, and regardless of other imposable accessory or other penalties, including the civil liability arising from such offenses or predicated thereon, irrespective of kind, nature, value or amount thereof: Provided, however, That in offenses involving damage to property through criminal negligence, they shall have exclusive original jurisdiction thereof." SEC. 3. Section 33 of the same law is hereby amended to read as follows: "SEC. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. - Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise: "(1) Exclusive original jurisdiction over civil actions and probate proceedings, testate and intestate, including the grant of provisional remedies in proper cases, where the value of thepersonal property, estate, or amount of the demand does not exceed One hundred thousand pesos (P100,000.00) or, in Metro Manila where such personal property, estate, or amount of the demand does not exceed Two hundred thousand pesos (P200,000.00), exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses, and costs, the amount of which must be specifically alleged: Provided, That interest, damages of whatever kind, attorney's fees, litigation expenses, and costs shall be included in the determination of the filing fees: Provided, further, That where there are several claims or causes of actions between the same or different parties, embodied in the same complaint, the amount of the demand shall be the totality of the claims in all the causes of action, irrespective of whether the causes of action arose out of the same or different transactions; "(2) Exclusive original jurisdiction over cases of forcible entry and unlawful detainer: Provided, That when, in such cases, the defendant raises the question of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession; and "(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or any interest therein where the assessed value of the property or interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses and costs: Provided, That in cases of land not declared for taxation purposes, the value of such property shall be determined by the assessed value of the adjacent lots." SEC. 4. Section 34 of the same law is hereby amended to read as follows: "SEC. 34. Delegated Jurisdiction in Cadastral and Land Registration Cases. - Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts may be assigned by the Supreme Court to hear and determine cadastral or land registration cases covering lots where there is no controversy or opposition, or contested lots where the value of which does not exceed One hundred thousand pesos (P100,000.00), such value to be ascertained by the affidavit of the claimant or by agreement of the respective claimants if there are more than one, or from the corresponding tax declaration of the real property. Their decisions in these cases shall be appealable in the same manner as decisions of the Regional Trial Courts."

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inspection. (As amended by Republic Act No. 7730, June 2, 1994). [* The phrase after the word issues, was an amendment by RA 7730 to delete the clause which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection.] An order issued by the duly authorized representative of the Secretary of Labor and Employment under this Article may be appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor and Employment in the amount equivalent to the monetary award in the order appealed from. (As amended by Republic Act No. 7730, June 2, 1994). (c) The Secretary of Labor and Employment may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when non-compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace. Within twenty-four hours, a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation. (d) It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the orders of the Secretary of Labor and Employment or his duly authorized representatives issued pursuant to the authority granted under this Article, and no inferior court or entity shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with this Article. (e) Any government employee found guilty of violation of, or abuse of authority, under this Article shall, after appropriate administrative investigation, be subject to summary dismissal from the service. (f) The Secretary of Labor and Employment may, by appropriate regulations, require employers to keep and maintain such employment records as may be necessary in aid of his visitorial and enforcement powers under this Code.

SEC. 5. After five (5) years from the effectivity of this Act, the jurisdictional amounts mentioned in Sec. 19(3), (4), and (8); and Sec. 33(1) of Batas Pambansa Blg. 129 as amended by this Act, shall be adjusted to Two hundred thousand pesos (P200,000.00). Five (5) years thereafter, such jurisdictional amounts shall be adjusted further to Three hundred thousand pesos (P300,000.00): Provided, however, That in the case of Metro Manila, the abovementioned jurisdictional amounts shall be ). SEC. 6. All laws, decrees, and orders inconsistent with the provisions of this Act shall be considered amended or modified accordingly. SEC. 7. The provisions of this Act shall apply to all civil cases that have not yet reached the pretrial stage. However, by agreement of all the parties, civil cases cognizable by municipal and metropolitan courts by the provisions of this Act may be transferred from the Regional Trial Courts to the latter. The executive judge of the appropriate Regional Trial Court shall define the administrative procedure of transferring the cases affected by the redefinition of jurisdiction to the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts. REGIONAL DIRECTOR ART. 128. Visitorial and enforcement power. (a) The Secretary of Labor and Employment or his duly authorized representatives, including labor regulation officers, shall have access to employers records and premises at any time of the day or night whenever work is being undertaken therein, and the right to copy therefrom, to question any employee and investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules and regulations issued pursuant thereto. (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employer-employee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises issues* supported by documentary proofs which were not considered in the course of

This Article is the nucleus of administrative enforcement of Philippine labor laws. The job is lodged with the Secretary of Labor and Employment, the regional directors and other duly authorized representatives. The enforcement function is broad. It covers "any fact, condition or matter which may be necessary to

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determine violations or which may aid in the enforcement" of the Code and any labor law, wage order or regulations. complaint. (See Aboitiz Shipping Corp. vs. De la Sema, etc.,G.R. No. 88538, April 25, 1990.)

Law enforcement includes inspection of establishments, but every inspection should be supported by an authorization duly issued. Where violations are found, appropriate report will be submitted. Subsequently, a "compliance order" may issue which is a command to rectify the violation found and proven.

The issuance of a Compliance Order must observe the "cardinal primary requirements" of due process in administrative proceedings. The requirements are: (1) The alleged violator (employer or anyone else) must first be heard and given adequate opportunity to present evidence on his behalf; (2) The evidence presented must be duly considered before any decision is reached; (3) The decision should be based on substantial evidence which means evidence adequate for a reasonable mind to support a conclusion; (4) the decision is based on evidence presented in the hearing, or at least contained in the record and disclosed to the parties; (5) The decision is that of the decisionmaking authority and not mere views of subordinates; and (6) the decision should explain the issues involved and the reasons for the decision rendered.

The regional director, in cases where employeremployee relationship still exists, has the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of the Labor Code and other legislation based on the findings of labor regulation officers or industrial safety engineers made in the course of inspection. He may also issue writs of execution to the appropriate authority for the enforcement of his orders in line with the provisions of Article 128 in relation to Article 289 and 290 of the Labor Code.

However, in those cases where the employer contests the findings of the labor standards and welfare officers and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection, the regional director must endorse the case to the appropriate arbitration branch (labor-arbiter) of the NLRC for adjudication (Sec. 1, Rule X, Book III, Omnibus Rules Implementing the Labor Code). The visitorial enforcement power is thorough and piercing; it extends even to issues not formally included in the complaint. LABOR ARBITER ART. 217. Jurisdiction of the Labor Arbiters and the Commission. (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or nonagricultural: 1. Unfair labor practice cases; 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment; 4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and

It should be noted that the authority under Art. 128 may be exercised regardless of monetary value involved, unlike in Art 129 which fixes a maximum of P5,000.00 per claimant. R.A. No. 7730 (June 2, 1994) changed Art. 128(b) to its present wording so as to free it from the jurisdictional limitations found in Art. 129 and 217.

In the exercise of his power under this Article the Secretary of Labor and Employment may even order the stoppage of work or suspension of operations of the inspected establishment or parts of it. The employer, if at fault, may be ordered to pay the employees' wages during the work stoppage or suspension of operations. But, again, due process of law must be observed.

A regional director of DOLE has the power to order rectification of a labor standards violation even if such violation is not mentioned in the employee's

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6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. (b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters. (c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be provided in said agreements. (As amended by Section 9, Republic Act No. 6715, March 21, 1989).

1. 2.

ARTICLE 128. VISITORIAL AND ENFORCEMENT POWER ARTICLE 129. RECOVERY OF WAGES, SIMPLE MONEY CLAIMS AND OTHER BENEFITS. ENFORCEMENT PROCESS (a) There is a report on the non-compliance of the employer with the minimum wage law. (b) Upon receipt of the Regional Director of this information, there will be an ORDER OF INSPECTION. The SOLE or the Regional Director. The order of inspection will simply state that this person is authorized to conduct an inspection on this date, place and time. (c) This inspection authority will then be implemented by a Labor and Employment Officer of the DOLE. And this person will visit the employers premises and then conduct an inspection. He will inspect the payroll to determine if indeed there was underpayment of wages, inspect the employers premises, interview and ask the employees themselves if they are indeed paid such amount of wages, compare the payment records and confer with the employees. (d) If the inspector finds that there is a violation or underpayment of wages, he will make an INSPECTION REPORT Usually embodied in a NOTICE OF INSPECTION RESULTS. All violations that the Labor Employment Officer will find in the employers premises will be enumerated and be put as his findings in the notice. (e) The employer is first informed of the results of the inspection.

This Article enumerates the cases falling under "original and exclusive" jurisdiction of labor arbiters. This gives the impression that none but a labor arbiter can hear and decide the six categories of cases listed. But this is not really so. Any or all of these cases can, by agreement of the parties, be presented to and decided with finality by a voluntary arbitrator or panel of voluntary arbitrators. (See Articles 261 and 262.) The law prefers or gives primacy to voluntary arbitration (Art. 211) instead of compulsory arbitration. And this, in turn, is the reason the law (Art. 261, last paragraph, and Art. 217 [c]) forbids a labor arbiter from entertaining a dispute properly belonging to the jurisdiction of a voluntary arbitrator. The cases a labor arbiter can hear and decide are employment-related. One unifying element runs through all the cases and disputes enumerated in Art. 217. That element is employment connection. But, additionally, as regards money claims, the law applicable to grant the relief sought should likewise be considered. If the principal relief sought will be resolved by applying the Labor Code or other labor relations statute or a collective bargaining agreement, then the case belongs to the labor arbiter. But if the applicable law is the general civil law, the jurisdiction over the dispute belongs to the regular courts, such as the regional trial court. (See San Miguel Corf. vs. NLRC, G.R. No. 80774, May 31,1988.)

(f)

The employer is given the opportunity to comply within 7 days; or

(g)

The employer may contest the notice of inspection results and raise issues which cannot be resolved without considering DOCUMENTARY PROOFS that are not verifiable in the normal course of inspection. HOW SOON? The employer shall raise such objections during the hearing of the case or at any time after the receipt of the notice of inspection results.

VI. WAGE ENFORCEMENT AND RECOVERY


TWO ENFORCEMENT TOOLS

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(h) If on the other hand, the employer does not or fails to contest the notice of inspection result, as well as fails to comply with such notice. The Regional Director will issue an ORDER OF COMPLIANCE. The order of compliance will basically be based on the notice of inspection results, so if the inspection says that you are underpaying 10 workers or just paying them P100, the RD will issue an order of compliance ordering this time the employer to pay the following workers the following sums of money. (i) Remedy of the employer from the order of compliance. proceeding which the RD is not equipped to handle. RD has no other recourse but to endorse it to the Arbitration Branch of the NLRC. Note: It is very important that you be able to contest the notice of inspection results within the time frame authorized by the RULES ON DISPOSITION OF LABOR STANDARDS CASES. Because if you fail or if you contest but the wrong way, or you fail to contest it at all, then the RD will have no recourse but to issue an order of compliance. And then your remedy therefore is no longer to contest but to a motion for reconsideration or probably an appeal to the SOLE. In case you still fail to do that, then that order of compliance will become final and executory for which the SOLE or the Rd for that matter is now authorized to issue a writ of execution. Then that is the end of the case. SOLE (no appeal), Remedy to CA R65, then to SC Rule 45. If SOLE personally conducts inspection, Remedy to CA Rule 65, then to SC Rule 45. VISITORIAL AND ENFORCEMENT POWER Article 128. Visitorial and Enforcement Power(a) The Secretary of Labor or his duly authorized representatives, including labor regulation officers,

The order of compliance can be questioned within 10 calendar days thru an APPEAL with SOLE (filing of bond) Then the employer will file a motion for reconsideration with the RD within 7 calendar days. If the employer files it beyond 7 days but not beyond 10 days, that will be considered an appeal from the RD to the SOLE. (j) If the employer will not file a motion for reconsideration, what will happen to the order of compliance? It becomes final and executory. The SOLE or RD can issue a WRIT OF EXECUTION, then it will levy. Pursuant to Rule 39 in Civil Procedure, the final judgment can be subject of execution and the RD can levy on the properties of the employer to satisfy the judgment or the order of compliance. Note: that this is if there is no obedience to the order of compliance or there is no contesting done or no motion for reconsideration resorted to by the employer in that regard. (k) On the other hand, if the employer validly contests by raising issues supported by documentary proofs which were not considered in the course of inspection what will happen? Can the RD still proceed with the case? NO. The RD will endorse the case to the appropriate Arbitration Branch of the NLRC. Why? It is no longer a summary proceeding. It now becomes an adversarial

shall have access to employers records and premises at any time of the day or night whenever work is being undertaken therein, and

the right to copy therefrom, to question any employee and

investigate any fact, condition or matter which may be necessary to determine violations or which may aid in the enforcement of this Code and of any labor law, wage order or rules and regulations issued pursuant thereto. (b) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases where the relationship of employeremployee 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

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enforcement of their orders, except in cases where the employer contests the findings of the labor employment and enforcement officer and raises the issues supported by documentary proofs which were not considered in the course of inspection. ]EXCEPTION CLAUSE An order issued by the duly authorized representative of the Secretary of Labor and Employment [Regional Director] under this Article may be appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the SOLE in the amount equivalent to the monetary award in the order appealed from. in aid of his visitorial and enforcement powers under this Code. SCOPE OF THE VISITORIAL POWER OF THE SECRETARY OF LABOR Cirineo Bowling Plaza vs. Gerry Sensing GR 146572, 01/14/2005 The visitorial and investigatory power under ART 128(a) is broad enough to cover any fact, condition or matter related to the enforcement not only of the Labor Code but of any labor law. Such power is likewise unlimited by the amount of monetary liability involved. The liability, determined through appropriate proceedings, may be enforced through an order or writ of execution regardless of the amount involved, according to ART 128b as amended by RA 7730. Pursuant to RA 7730, the jurisdictional limitations imposed by ART 129 on the visitorial and enforcement powers of the RD under ART 128, have been repealed. The phrase NOTWITHSTANDING THE PROVISIONS OF ARTICLES 129 AND 217 OF THE LC TO THE CONTRARY, erases all doubts as to the amendatory nature of RA b7730. The amendment in effect overturned the rulings in the Aboitiz and Servandos cases in so far as the restrictive effect of ART 129 on the use of the power under ART 128 is concerned. The SOLE or his duly authorized representative, in the exercise of their visitorial and enforcement powers, are now authorized to issue COMPLIANCE ORDERS to give effect to the labor standards provisions of this Code and other labor legislation based on the findings of the labor employment and enforcement officers or industrial safety engineers made in the course of inspection, SANS, any restriction with respect to the jurisdictional amount of 5, 000 provided under ART 129 and ART 217.

(c)

The SOLE may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when non-compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace. Within 24 hours, a hearing shall be conducted to determine whether an order for stoppage of work or suspension of operations shall be lifted or not. In case the violation is attributable to the employer, he shall pay the employees concerned their salaries or wages during the period of such stoppage or work or suspension of operation. ]- CROSS REFER TO ARTICLE 286 ON CONSEQUENCE OF SUSPENSION OF OPERATIONS

(d)

It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the orders of the SOLE or his duly authorized representatives issued pursuant to the authority granted under this Article, and no inferior court or entity shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with this Article.

Q: Does the Labor Code confer this Visitorial Power to be exercised by the Regional Director? A: YES. The Regional Director is the duly authorized representative of the SOLE. ENFORCEMENT POWER ON HEALTH/SAFETY OF WORKERS Article 128. Visitorial and enforcement power. (c) The Secretary of Labor and Employment may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when non-compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace. Within twenty-four hours, a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation.

(e)

Any government employee found guilty of violation of, or abuse of authority, under this Article shall, after appropriate administrative investigation, be subject to summary dismissal from the service. (f) The SOLE may, by appropriate regulations, require employers to keep and maintain such employment records as may be necessary

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exercise of that authority; otherwise they would be penalized under that provision of the LC. That is how comprehensive and that is how strong the visitorial and enforcement power of the SOLE is. BONA FIDE SUSPENSION OF OPERATIONS ART. 286. When employment not deemed terminated. - The bona-fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one (1) month from the resumption of operations of his employer or from his relief from the military or civic duty. Sebuguero,et al. vs. NLRC, G.T.I. Sportswear Corp., et al G.R. No. 115394, September 27, 1995 Article 283 speaks of a permanent retrenchment as opposed to a temporary lay-off. There is no specific provision of law which treats of a temporary retrenchment or lay-off. To remedy this situation or fill the hiatus, Article 286 may be applied but only by analogy to set a specific period that employees may remain temporarily laid-off or in floating status. Six months is the period set by law that the operation of a business or undertaking may be suspended thereby suspending the employment of the employees concerned. The temporary lay-off wherein the employees likewise cease to work should also not last longer than six months. After six months, the employees should either be recalled to work or permanently retrenched following the requirements of the law. Failing to comply with this would be tantamount to dismissing the employees and the employer would thus be liable for such dismissal. Agro Commercial Security Services Agency, Inc. vs. National Labor Relations Commission G.R. Nos. 82823-24, July 31, 1989 When the "floating status" of the employees lasts more than six (6) months, they may be considered to have been constructively dismissed from the service. Thus, they are entitled to the corresponding benefits for their separation. DISPOSITION OF LABOR STANDARD CASES A Labor Standard Case is processed administratively under Articles 128 and 129 of the LC, as amended.

This provision does not refer to violation of minimum wage laws. It refers to the instance that when the non-compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace, the SOLE can issue an order for the stoppage of work or the suspension of operations of any unit or department in an establishment.

ILLUSTRATION: When there is a leak in a chemical plant, there is hazard to the employees. The SOLE can order suspension of operation. Q: Is the power of SOLE to order suspension of operation similar to Article 286 on bona fide suspension of operations? A: NO. They are different. In Article 286, it is the employer who suspends the operations while on the other hand, Article 128 speaks of suspension by the Secretary of Labor. Example, for causes attributable to the employer and in the interest of health and safety of the workers, the Regional Director orders the suspension of the companys operation. The logical question there is What is the consequence of that? Will the employees be paid their wages? In Article 286, for example, if the employer decides to suspend his operations unilaterally, will the employees be entitled to their daily wages?

What is being inquired in Article 128 is whether or not the employer complies with labor standards laws, rules and regulations, as well as social legislations. The power to visit the employers premises is so broad enough as to enable the SOLE or his duly authorized representative to make a finding after making such inspection. Since what will be involved would be inquiring on violations of labor standard laws as well as wage orders, it would be important for us to know the step-by-step procedure in the conduct of inspection under Article 128. And since what is involved would be labor standard provisions such as the minimum wages laws or rules Is the employer obliged to maintain a payroll? YES. The employer is obliged to maintain a payroll pursuant to the power of the SOLE under Article 128 (f) to issue such rules and regulations pertinent thereto. Under implementing rules, see Section 6, Rule X, Book III.

Q: In the exercise of the visitorial power, can the SOLE be interfered with by the courts? A: NO. This is pursuant to Article 128 (d). If the SOLE or the Regional Director, for that matter, decides to inspect the employers premises, then no entity can lawfully interfere, obstruct or delay the

Maternity Children's Hospital vs. Secretary of Labor and Regional Director of Labor G.R. No. 78909, June 30, 1989 Under the present rules, a Regional Director exercises both visitorial and enforcement power over labor standard cases, and is, therefore, empowered to adjudicate money claims, provided

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there still exists an employer-employee relationship, and the findings of the regional office are not contested by the employer concerned. Employment or his duly authorized representatives issued pursuant to the authority granted under this Article, and no inferior court or entity shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with this Article. MAINTENANCE OF EMPLOYMENT RECORDS ART. 128. Visitorial and enforcement power. (f) The Secretary of Labor and Employment may, by appropriate regulations, require employers to keep and maintain such employment records as may be necessary in aid of his visitorial and enforcement powers under this Code. SIMPLE MONEY CLAIMS AND JURISDICTION 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 employeremployee relations: Provided, That such complaint does not include a claim for reinstatement: Provided further, That the aggregate money claims of each employee or househelper does not exceed Five thousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or resolve the complaint within thirty (30) calendar days from the date of the filing of the same. Any sum thus recovered on behalf of any employee or househelper pursuant to this Article shall be held in a special deposit account by, and shall be paid on order of, the Secretary of Labor and Employment or the Regional Director directly to the employee or househelper concerned. Any such sum not paid to the employee or househelper because he cannot be located after diligent and reasonable effort to locate him within a period of three (3) years, shall be held as a special fund of the Department of Labor and Employment to be used exclusively for the amelioration and benefit of workers. Any decision or resolution of the Regional Director or hearing officer pursuant to this provision may be appealed on the same grounds provided in Article 223 of this Code, within five (5) calendar days from receipt of a copy of said decision or resolution, to the National Labor Relations Commission which shall resolve the appeal within ten (10) calendar days from the submission of the last pleading required or allowed under its rules. The Secretary of Labor and Employment or his duly authorized representative may supervise the payment of

Pursuant to the provisions of Article 5, in relation to Article 128[b] of the Labor Code, the Secretary of Labor and Employment issued on September 16, 1987 the Rules on the Disposition of Labor Standards Cases in the Regional Offices to govern the enforcement of labor standards at the regional level. After the issuance of those Rules, Article 128[b] was amended by Republic Act No. 7730 on June 2, 1944 whose provisions are now reflected in the present Article 128.

Revised Rules on Disposition of Labor Standard Cases 1987 series --------See FOZ page 513 for full text---------------See diagram in separate page-------Department Order No. 7-A series of 1995 ------------Wa pa kit i!-------------DOLE Memo Circular No. 02-A series of 1992 -------------insert here--------------------APPEAL PROCEDURE An order issued under this Article is appealable to the DOLE secretary, the administrative superior of the regional director.

University of Immaculate Conception vs. SOLE GR 143557, June 25, 2004 The decision of the SOLE becomes final and executory after ten (10) calendar days from receipt of the records of the case. A motion for reconsideration of the SOLEs decision has to be filed as a precondition for any further or subsequent remedy. If the motion is denied, a special civil action for certiorari under R65 may be filed with the CA within 60 days from receipt of the denial of the motion. National Federation of Labor vs. Laguesma GR 123426, March 10, 1999 Following the rationale of St. Martin ruling, decisions of the Secretary of Labor, such as those in Articles 128, 239, 259, and 263 maybe elevated initially to the CA through certiorari. ANTI-INJUNCTION ART. 128. Visitorial and enforcement power. (d) It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise render ineffective the orders of the Secretary of Labor and

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unpaid wages and other monetary claims and benefits, including legal interest, found owing to any employee or househelper under this Code. (As amended by Section 2, Republic Act No. 6715, March 21, 1989). This is the second method of the enforcement and recovery of minimum wage provisions, which refers to simple money claims.

1. The

claim is presented by an employee or a person employed in domestic or household service, or a househelper. 2. The claim arises from employer-employee relations. 3. The claimant does not seek reinstatement.

4. The

aggregate money claim of each employee or househelper does not exceed P5,000.00. If there is question of reinstatement or if the claimant's demand exceeds P5,000.00, the labor arbiter has jurisdiction over the case, pursuant to Art. 217, paragraph 6, except claims for employees' compensation, social security, Medicare (Philhealth) and maternity benefits. Even as regards labor arbiter, however, employer-employee relation is a prerequisite as basis of the claim. Articles 128 and 129 are operative only in the context of employment relationship. A regular court , not DOLE or NLRC, has jurisdiction over claim of an independent contractor to adjust contractual fee.

ARTICLES 128 AND 129 COMPARED The two articles are similar as they both speak of labor law administration and enforcement Art. 129 is more limited in scope than Art. 128 Art 129 Adjudicatory power vested upon a Regional Director or any duly authorized hearing officer of DOLE. Refers to adjudication through summary proceedings after notice and hearing, of employees claims for wages and benefits Initiated by sworn complaints filed by any interested party. The regional director's authority under Art. 129 is subject to four Requisites.

Art 128 empowers the Secretary of Labor or any of his "duly authorized representatives who may or may not be a RD. Speaks of inspection of establishments and the issuance of compliance orders on labor standards, wage orders and other labor laws and regulations Proceedings under this article are offshoots of inspections done by labor officers or safety engineers Jurisdictional limits in Art 129 do not apply to the exercise of powers under Art 128. Par B of Art 128 was changed to its present wording by RA 7730 purposely to strengthen the visitorial enforcement power by freeing it from the limitations of Art 129. A decision under Article 128, on the other hand, is administrative and therefore appealable to the Secretary of Labor who is the administrative superior of all regional directors of the Department.

Urbanes vs. SOLE GR 122791 02/19/2003 It is well settled in law and jurisprudence that where no employer-employee relationship exists between the parties and no issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining agreement, it is the Regional Trial Court that has jurisdiction. While the resolution of the issue involves the application of labor laws, reference to the Labor Code was only for the determination of the SOLIDARY LIABILITY of the petitioner to the respondent where no employeremployee relation exists. PROCEDURE UNDER ARTICLE 129 a. The employee files a pro-forma complaint with the Regional Director. b. The Regional Director dockets the complaint as simple money claim. c. The Regional Director issues summons served upon employer (respondent), together with the copy of the compliant, and sends a copy of the same to the respondent. d. The employer-respondent is given 5 calendar days to answer the complaint. The employer can either admit the allegations or deny it. e. After receiving the answer, the Regional Director calls for a summary hearing and decides on the matter within 30 calendar days from the date of filing of the complaint. f. If the decision is adverse, the employer may appeal the decision to the NLRC within 5 calendar days from the receipt of the copy of said decision or resolution. The appeal must conform to the requirements provided for under Article 217 and

A decision rendered under this Article, being adjudicatory in nature, is appealable to the National Labor Relations Commission (NLRC)

THE REGIONAL DIRECTOR'S AUTHORITY UNDER ART. 129 IS SUBJECT TO FOUR REQUISITES, NAMELY:

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the NLRC Rules. To perfect the appeal, the employer must post a cash or surety bond. In the appeal from the RD decision to the NLRC, the aggrieved party has 5 calendar days, while in the appeal from LA decision to the NLRC, the aggrieved party has 10 days. g. From the adverse decision of the NLRC, the employer can then file a motion for reconsideration. h. If said motion is denied, the employer may still file a Special Civil Action for Certiorari with the Court of Appeals under Rule 65 of the Rules of Court within a period of 60 days from receipt of the decision. The Regional Tripartite Wages and Productivity Board (RTWPB) do not have the power to promulgate rules providing who is exempted from minimum wage. It is the National Wages and Productivity Board (NWPC) that has the rulemaking power to promulgate rules on exemption and minimum wage fixing, and not the RTWPB.

Not all waivers and quitclaims are invalid as against public policy. If the agreement was voluntarily entered into and represents a reasonable settlement, it is binding on the parties and may not later be disowned simply because of a change of mind. A judgment rendered in accordance with a compromise agreement is not appealable and is immediately executory, unless a motion is filed to set aside the agreement on the ground of fraud, mistake, or duress, in which case an appeal may be taken against the order denying the motion. (Master Tours and Travel Corp. vs. CA, 219 SCRA 321; United Housing Corp. vs. Dayrit, 181 SCRA 285.) A compromise agreement by union officers must be authorized by the union members. The authority must be produced in evidence. Each laborer must authorize the union officers to enter into a compromise before the laborer's right may be affected. (Kaisahan ng mga Manggagawa sa La Campana vs. Sarmiento, 133 SCRA 220 [1984].) See further discussion under Art. 242.

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

Already discussed Wage Orders

under Topic 5 Violation of

Art 2028 NCC. A compromise is a contract where the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced. APPEAL PROCEDURE ART. 223. Appeal. - Decisions, awards, or orders of the Labor Arbiter are final and executory unless appealed to the Commission by any or both parties within ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on any of the following grounds: (a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter; (b) If the decision, order or award was secured through fraud or coercion, including graft and corruption; (c) If made purely on questions of law; and (d) If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant. In case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in the amount equivalent to the monetary award in the judgment appealed from.

COMPROMISE OF LABOR STANDARD CASES ART. 227. Compromise agreements. - Any compromise settlement, including those involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor Relations Commission or any court, shall not assume jurisdiction over issues involved therein except in case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained through fraud, misrepresentation, or coercion.

Dispute resolution through compromise is a pervading philosophy of Philippine labor laws. This is emphasized in this Article 227 and it conforms with the statement of basic policy in Art. 211 (a) and the second paragraph of Art. 221. The law looks with disfavor upon quitclaims and releases by employees who are inveigled or pressured into signing them by unscrupulous employers seeking to evade their legal responsibilities. On the other hand, there are legitimate waivers that represent a voluntary settlement of a laborer's claims that should be respected by the courts as the law between the parties.

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In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein. To discourage frivolous or dilatory appeals, the Commission or the Labor Arbiter shall impose reasonable penalty, including fines or censures, upon the erring parties. In all cases, the appellant shall furnish a copy of the memorandum of appeal to the other party who shall file an answer not later than ten (10) calendar days from receipt thereof. The Commission shall decide all cases within twenty (20) calendar days from receipt of the answer of the appellee. The decision of the Commission shall be final and executory after ten (10) calendar days from receipt thereof by the parties. Any law enforcement agency may be deputized by the Secretary of Labor and Employment or the Commission in the enforcement of decisions, awards or orders. (As amended by Section 12, Republic Act No. 6715, March 21, 1989). Legal Holiday, the appeal can be filed on the next business day. Aquino vs. NLRC and Robktt Industrial Construction, Inc., G.R. No. 98101, September 3, 1993. If the tenth day to perfect an appeal from the decision of the Labor Arbiter to the NLRC falls on a Saturday, the appeal shall be made on the next working day. Star Angel Handicraft vs. NLRC and Spouses FribaMas, G.R. No. 108914, September 20, 1994. There is a clear distinction between the filing of an appeal within the reglementary period and its perfection. The appeal from the Labor Arbiter to the Commission must be filed within the reglementary period. C.W. Tan Mfg. vs. NLRC G.R. No. 79596, February 10, 1989. The payment of the appeal fee is by no means a mere technicality but is an essential requirement in the perfection of an appeal. However, where the fee had been paid belatedly, the broader interest of justice and the desired objective in deciding the case on the merits demand that the appeal be given due course.

Rules of technicality must yield to the broader interests of substantial justice. The dismissal of an appeal on purely technical grounds is frowned upon. (Modem Fishing Gear Labor Union vs. NLRC, G.R. No. 53907, Ma-y 6, 1988.)

ISSUES ON APPEAL; REMEDIES

Appeal means the elevation by an aggrieved party of any decision, order or award of a lower body to a higher body, by means of a pleading which includes the assignment of errors, arguments in support thereof, and the reliefs prated for. A. mere notice of appeal, therefore, does not constitute the appeal as herein defined and understood, and shall not stop the running of the period for perfecting an appeal. (Implementing Rules, Book V, Rule I, Sec. 1) Perfection of an Appeal" includes the filing, within the prescribed period, of the memorandum of appeal containing, among others, the assignment of error/s, arguments in support thereof, the relief sought and, in appropriate cases, posting of an appeal bond.

Roche Philippines vs. NLRC G.R. No. 83335, October 5, 1989 Under Section 5 (c) of the Rules of Procedure of the National Labor Relations Commission, the Commission shall, in cases of perfected appeals, limit itself to reviewing those issues which are raised on appeal. Those which are not raised shall be final and executory. The issues raised on appeal, however, shall be open for review and any actions taken thereon by the Commission are within the parameters of its jurisdiction. Sodol vs. Filipinos Koo, Inc., Requito Vega, Belen Gomez, Arturo Gomez, NLRC, G.R. No. 87530, June 13, 1990. A party who failed to appeal on time from the decision of Labor Arbiter may still file a motion for reconsideration of the NLRC decision. The decision of the Commission shall be final and executory after ten calendar days from receipt by the parties. Pure Foods Corporation vs. NLRC G.R. No. 78591, March 21,1989.

SM Agri and General Machineries vs. NLRC G.R. No. 748906, January 9, 1989. The 10-day period provided in Article 223 refers to ten calendar days, not working days. This means that Saturdays, Sundays and Legal Holidays are not to be excluded, but included, in counting the 10day period. Where the 10th day is a Sunday or

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The losing party, however, is not without recourse. Under the New Rules of the National Labor Relations Commission, a party is allowed to file a motion for reconsideration of any order, resolution or decision of the Commission based on palpable or patent errors, provided that the motion is under oath and filed within ten (10) calendar days from receipt of the order, resolution or decision. In addition, the party may also seasonably avail of the special civil action for certiorari under Rule 65 of the Rules of Court. The action is allowed if the tribunal, board or officer exercising judicial functions has acted without or in excess of its jurisdiction, or with grave abuse of discretion. WHEN AND WHERE TO FILE PETITION Under the 1997 Rules of Civil Procedure, effective July 1, 1997, the petition for certiorari may be filed not later than sixty (60) days from notice of the judgment, order of resolution sought to be assailed in the Supreme Court x x x. It may also be filed in the Court of Appeals whether or not the same is in aid of its appellate jurisdiction, or in the Sandiganbayan if it is in aid of its jurisdiction. (Sec. 4, Rule 65, Rules of Court.) But the same Section and Rule provide that "if [the petition] involves the acts or omissions of a quasijudicial agency, and unless otherwise provided by law or [the] Rules, the petition shall be filed and cognizable only by the Court of Appeals." St. Martin Funeral Homes vs. NLRC G.R. No. 130866, September 16, 1998. PRINCIPLE OF HIERARCHY OF COURTS Solidly buttressing the CA's jurisdiction is the Supreme Court ruling in the St. Martin case. After a discreet analysis of the legislative intent in delineating judicial jurisdictions, the Court (through Mr. Justice Regalado) declared that: Both the Supreme Court and the Court of Appeals have the power to review NLRC decisions. However, the petition by certiorari should initially be filed with the Court of Appeals, in line with the principle of hierarchy of courts. National Federation of Labor (NFL) vs. Laguesma, G.R. No. 123426, March 10, 1999 The Supreme Court held that challenges against rulings of the labor secretary and those acting on his behalf, like the director of labor relations, shall be acted upon by the Court of Appeals, which has concurrent jurisdiction with the Supreme Court over petitions for certiorari. FINALITY ON FINDINGS OF FACTS Manila Mandarin Employees Union vs. NLRC G.R. No. 76989, September 21, 1987.

Quasi-judicial agencies like the National Labor Relations Commission have acquired expertise because their jurisdiction is confined to specific matters. Hence, their findings of facts are generally accorded not only respect but at times even finality if such findings are supported by substantial evidence. EXCEPTIONS Industrial Timber Corp. vs. NLRC, Concordia Dos Pueblos, et al., G.R. No. 83616, January 20, 1989. However, the Supreme Court has never hesitated to exercise its corrective powers and to reverse administrative decisions in the following cases: (1) the conclusion is a finding grounded speculations, surmises and conjectures; on

(2) the inferences made are manifestly mistaken, absurd or impossible; (3) there is a grave abuse of discretion; (4) there is a misapprehension of facts; (5) the court [or quasi-judicial body] in arriving at its findings went beyond the issues of the case and the same are contrary to the admissions of the parties or the evidence presented; (6) where respondent commission has sustained irregular procedures and through the invocation of summary methods, including rules on appeal, has affirmed an order which tolerates a violation of due process; and (7) where the rights of a party were prejudiced because the administrative findings, conclusions or decisions were in violation of constitutional provisions, in excess of statutory authority, or jurisdiction, made upon irregular procedure, vitiated by fraud, imposition or mistake, not supported by substantial evidence adduced at the hearing or contained in the records or disclosed to the parties, or arbitrary, or capricious. LEGAL REMEDIES Special Civil Action (Rule 65, 1997 Rules of Civil Procedure) See Topic 4 Petition for Review (Rule 43 and Rule 45, 1997 Rules of Civil Procedure) See topic 4

VII. WAGE PROTECTION PROVISIONS AND PROHIBITIONS REGARDING WAGES


NON-INTERFERENCE IN DISPOSAL OF WAGES

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determined by the Secretary of Labor and Employment in appropriate rules and regulations. refer to Five J Taxi and Jardin Cases

ART. 112. Non-interference in disposal of wages. - No employer shall limit or otherwise interfere with the freedom of any employee to dispose of his wages. He shall not in any manner force, compel, or oblige his employees to purchase merchandise, commodities or other property from any other person, or otherwise make use of any store or services of such employer or any other person. ART. 288 REVISED PENAL CODE Art. 288 RPC. Other Similar Coercions; (Compulsory purchase of merchandise and payment of wages by means of tokens.) The penalty of arresto mayor or a fine ranging from 200 to 500 pesos, or both, shall be imposed upon any person, agent or officer, of any association or corporation who shall force or compel, directly or indirectly, or shall knowingly permit any laborer or employee employed by him or by such firm or corporation to be forced or compelled, to purchase merchandise or commodities of any kind. The same penalties shall be imposed upon any person who shall pay the wages due a laborer or employee employed by him, by means of tokens or objects other than the legal tender currency of the laborer or employee. WAGE DEDUCTION ART. 113. Wage deduction. - No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except: (a) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the amount paid by him as premium on the insurance; (b) For union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized in writing by the individual worker concerned; and (c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor and Employment. ART. 114. Deposits for loss or damage. - No employer shall require his worker to make deposits from which deductions shall be made for the reimbursement of loss of or damage to tools, materials, or equipment supplied by the employer, except when the employer is engaged in such trades, occupations or business where the practice of making deductions or requiring deposits is a recognized one, or is necessary or desirable as

DEPOSITS FOR LOSS/DAMAGE ART. 115. Limitations. - No deduction from the deposits of an employee for the actual amount of the loss or damage shall be made unless the employee has been heard thereon, and his responsibility has been clearly shown. WITHHOLDING/KICKBACKS ART. 116. Withholding of wages and kickbacks prohibited. - It shall be unlawful for any person, directly or indirectly, to withhold any amount from the wages of a worker or induce him to give up any part of his wages by force, stealth, intimidation, threat or by any other means whatsoever without the workers consent. DEDUCTION TO ENSURE EMPLOYMENT ART. 117. Deduction to ensure employment. - It shall be unlawful to make any deduction from the wages of any employee for the benefit of the employer or his representative or intermediary as consideration of a promise of employment or retention in employment. RETALIATORY MEASURES ART. 118. Retaliatory measures. - It shall be unlawful for an employer to refuse to pay or reduce the wages and benefits, discharge or in any manner discriminate against any employee who has filed any complaint or instituted any proceeding under this Title or has testified or is about to testify in such proceedings. FALSE REPORTING ART. 119. False reporting. - It shall be unlawful for any person to make any statement, report, or record filed or kept pursuant to the provisions of this Code knowing such statement, report or record to be false in any material respect. WITHHOLDING OF WAGES NEW CIVIL CODE ART. 1706. Withholding of the wages, except for a debt due, shall not be made by the employer.

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tickets, chits, or any object other than legal tender, even when expressly requested by the employee. Payment of wages by check or money order shall be allowed when such manner of payment is customary on the date of effectivity of this Code, or is necessary because of special circumstances as specified in appropriate regulations to be issued by the Secretary of Labor and Employment or as stipulated in a collective bargaining agreement. The wages will have to be paid in the form of legal lender.

ART. 1707. The laborers wages shall be a lien on the goods manufactured or the work done. ART. 1708. The laborers wages shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance. ART. 1709. The employer shall neither seize nor retain any tool or other articles belonging to the laborer. PRINCIPLE OF NON-DIMINUTION OF BENEFITS ART. 100. Prohibition against elimination or diminution of benefits. - Nothing in this Book shall be construed to eliminate or in any way diminish supplements, or other employee benefits being enjoyed at the time of promulgation of this Code.

LEGAL TENDER Is that currency which has been made suitable by law for the purpose of a tender of payment of debts. All notes and coins issued by the Central Bank are legal tender.

it essentially means that benefits being given to employees cannot be taken back or reduced unilaterally by the employer because the benefit has become part of the employment contract, written or unwritten.

Q: The payment of wages in the form of cash considered legal tender? A: YES. Q: Can the employer pay the employee partly in cash and partly in kind? A: Generally NO. There are cases decided by the Supreme Court wherein such is allowed, such as payment for facilities. Q: Can the employer pay the employee in the form other than cash? A: YES, through money order or check. This is by way of exception, the rules allow the employer to pay employees wages in these forms. Note the instances. Note: Payment of wages by bank checks, postal checks or money order is allowed: NEW CIVIL CODE ART. 1705. The laborers wages shall be paid in legal currency. REVISED PENAL CODE Art. 288 RPC. Other Similar Coercions; (Compulsory purchase of merchandise and payment of wages by means of tokens.) The penalty of arresto mayor or a fine ranging from 200 to 500 pesos, or both, shall be imposed upon any person, agent or officer, of any association or corporation who shall force or compel, directly or indirectly, or shall knowingly permit any laborer or employee employed by him or by such firm or corporation to be forced or compelled, to purchase merchandise or commodities of any kind. The same penalties shall be imposed upon any person who shall pay the wages due a laborer or employee

THE RULE AGAINST DIMINUTION OF SUPPLEMENTS OR BENEFITS IS APPLICABLE IF IT IS SHOWN THAT:

1. The

grant of the benefit is based on an express policy or has ripened into a practice over a long period of time; 2. The practice is consistent and deliberate.

3. The

practice is not due to error in the construction or application of a doubtful or difficult question of law. 4. The diminution or discontinuance isdone unilaterally by the employer. ART. 127. Non-diminution of benefits. - No wage order issued by any regional board shall provide for wage rates lower than the statutory minimum wage rates prescribed by Congress. (As amended by Republic Act No. 6727, June 9, 1989). ---Read Sevilla, Davao Fruits and Honda case

VIII. PAYMENT OF WAGES


----Read Mabeza and Millares case-----FORM ART. 102. Forms of payment. - No employer shall pay the wages of an employee by means of promissory notes, vouchers, coupons, tokens,

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employed by him, by means of tokens or objects other than the legal tender currency of the laborer or employee. EXCEPTION Rule VIII, Book III, Sec 2 Sec. 2. Payment by check.-Payment of wages by bank checks, postal checks or money orders is allowed: 1. Where such manner of wage payment is customary on the date of effectivity of the Code (November 1, 1974); or 2. Where it is stipulated in a collective agreement; or 3. Where all the following conditions are met: a. There is a bank or other facility for encashment within a radius of 1 kilometer from the workplace; b. The employer, or any of his agents or representatives, does not receive any pecuniary benefit directly or indirectly from the arrangement; except as otherwise provided by such regulations as the Secretary of Labor and Employment may prescribe under conditions to ensure greater protection of wages. Q: Is there an instance when the employer may be allowed to pay the employees wage other than at the place of undertaking? A: Yes. EXCEPTIONS A. Rule VIII, Book III, Sec 4 Section 4. Place of Payment.(a) As a general rule, the place of payment shall be at or near the place of undertaking. Payment in a place other than the workplace shall be permissible only under the following circumstances: 1. When payment cannot be effected at or near the place of work by reason of the deterioration of peace and order conditions, or by reason of actual or impending emergencies caused by fire, flood, epidemic or other calamity rendering payment thereat impossible;

2. 3.

c.

The employees are given reasonable time during banking hours to withdraw their wages from the bank which time shall be considered compensable hours worked if done during working hours; and

When the employer provides for transportation to the employees back and forth; and Under any other analogous circumstances; provided that the time spent by the employees in collecting their wages shall be considered as compensable hours worked. (b) No employer shall pay his employees in any bar, night or day club, drinking establishment, massage clinic, dance hall, or other similar places or in places where games are played with stakes of money or things representing money except in the case of persons employed in said places. Payment in recreational places prohibited:

d.

The payment by check is with the written consent of the employees concerned if there is no collective agreement authorized the payment of wages by bank checks. If all of these conditions are met, the employer can validly, by himself, pay wages by checks. Note the differences of the instances in the rules that allow payment by check and place of payment, because that it usually the mistake of students when they interchange the instances and of course, these being different, they will end up wrong. Note that the employer should not enter into an arrangement with the bank that the employer will receive commission if the employer pays in the form of check. There should be no pecuniary benefit from this arrangement of payment through check.

B. RA 6727 THRU BANKS Sec. 7. Upon written petition of the majority of the employees or workers concerned, all private establishments, companies, businesses, and other entities with twenty-five (25) or more employees and located within one (1) kilometer radius to a commercial, savings or rural bank shall pay the wages and other benefits of their employees through any of said banks and within the period for payment of wages fixed by Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines. Q: Is the employer allowed by existing rules and regulations to pay the employees wage through the facility of the ATM? A: YES, note the conditions [RA 6727 Sec 7]

PLACE ART. 104. Place of payment. - Payment of wages shall be made at or near the place of undertaking,

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Q: When we say ATM, is that same as the payment of wages through the banks? A: That may, or may not be different. There is an ATM in a bank, but an ATM is not always located in a bank. Q: Is it possible to pay the employees wage through the facilities in a bank? A: YES, note the conditions [RA 6727 Sec 7] PAYMENT OF WAGES THROUGH BANKS IN CASH, ALL OF THESE MUST CONCUR Section 7, RA 6727 (1) Upon written permission of the majority of the employees or workers concerned; (2) All private establishments, companies, businesses, and other entities with at least 25 or more employees; and (3) Located within 1 kilometer radius to a commercial, savings, or rural banks shall pay wages or benefits of their employees through any of said banks; (4) Within the period of payment of wages fixed by PD 442, the Labor Code, as amended. Wages shall be paid at least once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days [art 103 ] (5) Upon request of the concerned employee/s, the employer shall issue a record of payment of wages, benefits and deductions for a particular period. (6) There shall be no additional expenses and no diminution of benefits and privileges as a result of the ATM system of payment. (7) The employer shall assume responsibility in case the wage protection provisions of law and regulations are not complied with under the arrangement. The point here is that, if the employer elects to pay the employees wage through the ATM, there should be no diminution of the employees wage. The employees can also demand from the employer, proof of how much they are paid including the itemized deduction. In other words, it will not dispense with the requirement of the pay slip. Remember, that the employers decide on their own without the employees consent to pay their wages through the ATM facilities. Evidently in violation or non-conformity with the guidelines issued by the DOLE. If that happens, then the remedy of the employees would be to report it to the DOLE for an inspection and for the correction of that particular system. The DOLE, in the exercise of its visitorial and enforcement power can order the employer to correct any deficiency in that kind of practice.

LABOR ADVISORY ON PAYMENT OF SALARIES THROUGH AUTOMATED TELLER MACHINE (ATM) [Issued by then Secretary Leonardo Quisumbing] Article 104, as amended, requires that payment of wages shall be made at or near the place of undertaking, except as otherwise provided by such regulations as the Secretary of Labor may prescribe under conditions that would ensure prompt payment and protection of wages. Based on Article 104, as well as the provisions of Section 4, Rule VIII, Book III and considering present-day circumstances, practices and technology, employers may adopt a system of payment other than in the workplace, such as through ATMs of banks, provided that the following CONDITIONS are met: (1) The ATM system of payment is with the written consent of the employees concerned. (2) The employees are given reasonable time to withdraw their wages from the bank facilities which time, if done during working hours, shall be considered as compensable hours worked. (3) The system shall allow workers to receive their wages within the period or frequency and in the amount prescribed under the Labor Code.

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

(4)

There is a bank or ATM facility within a radius of 1 kilometer to the place of work.

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earns that money and it should be paid directly to him and not to his girlfriend, not to his lola, or whoever. Otherwise, it is not a valid payment. As learned in Civil Law, payment or performance is a mode of extinguishing an obligation. And if there is an improper payment or performance, it will not extinguish your obligation. That is how important this rule is. EXCEPTIONS IS IT POSSIBLE TO PAY THE WAGE TO OTHER THAN THE EMPLOYEE HIMSELF? YES, note the circumstances provided in Article105: check-off provision for union dues, the employer will pay a portion of your salary directly to the union and it will no longer pass through you, and this is a valid form of payment. TIME OR FREQUENCY OF PAYMENT ART. 103. Time of payment. - Wages shall be paid at least once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days. If on account of force majeure or circumstances beyond the employers control, payment of wages on or within the time herein provided cannot be made, the employer shall pay the wages immediately after such force majeure or circumstances have ceased. No employer shall make payment with less frequency than once a month. The payment of wages of employees engaged to perform a task which cannot be completed in two (2) weeks shall be subject to the following conditions, in the absence of a collective bargaining agreement or arbitration award: (1) That payments are made at intervals not exceeding sixteen (16) days, in proportion to the amount of work completed; (2) That final settlement is made upon completion of the work. Rule VIII, Book III, Sec 3 Sec. 3. Time of Payment (a) Wages shall be paid not less often than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days, unless payment cannot be made with such regularity due to force majeure or circumstances beyond the employers control, in such case the employer shall pay the wages immediately after such force majeure or circumstances have ceased. (b) In case of payment of wages by results involving work which cannot be finished in two (2) weeks, payment shall be made at intervals not exceeding sixteen (16) days in proportion to the amount of work completed. Final settlement shall be made immediately upon completion of the work. FREQUENCY OF PAYMENT HOW OFTEN? Wages shall be paid at least once every 2 weeks or twice a month at intervals not exceeding 16 days. It translates into twice a month! EXCEPTION In case of force majeure or in circumstances beyond the employers control, wherein the payment of wages on or within the time herein provided cannot be made, the employer shall pay the wages immediately after such force majeure or circumstances have ceased.

(a)

In cases of force majeure rendering such payment impossible; or (b) Under special circumstances to be determined by the SOLE in appropriate regulations; or (c) Where the worker has died. Rule VIII, Book III, Sec 5 Sec. 5. Payment of wages.- Payment of wages shall be made direct to the employee entitled thereto except in the following cases: (a) Where the employer is authorized in writing by the employee to pay his wages to a member of his family;

(b)

Where payment to another person of any part of the employees wages is authorized by existing law, including payments for the insurance premiums of the employee and union dues where the right to check-off has been recognized by the employer in accordance with a collective agreement or authorized in writing by the individual employees concerned; or

(c) In case of death of the employee as provided to the succeeding section. In cases of payment of deceased workers wages to his heirs, they do not need a court order, because there is no need for an intestate proceeding. What they need is an AFFIDAVIT OF HEIRSHIP. [Rule VIII, Book III, Sec 6] Also a valid payment: when the payment of the employees wage through any of the authorized deductions, such as by virtue of a check-off provision, then that is also a valid form of payment. So if there is a CBA where there is a

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IX. CONDITIONS OF EMPLOYMENT


HOURS OF WORK 1. ART. 83. Normal hours of work. - The normal hours of work of any employee shall not exceed eight (8) hours a day. Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. For purposes of this Article, "health personnel" shall include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel. 2. RA 9231 CHILD LABOR Sec. 3. The same Act, as amended, is hereby further amended by adding new sections to be denominated as Sections 12-A, 12-B, 12-C, and 12D to read as follows: Sec. 12-A. Hours of Work of a Working Child. - Under the exceptions provided in Section 12 of this Act, as amended: (1) A child below fifteen (15) years of age may be allowed to work for not more than twenty (20) hours a week: Provided, That the work shall not be more than four (4) hours at any given day; (2) A child fifteen (15) years of age but below eighteen (18) shall not be allowed to work for more than eight (8) hours a day, and in no case beyond forty (40) hours a week; (3) No child below fifteen (15) years of age shall be allowed to work between eight o'clock in the evening and six o'clock in the morning of the following day and no child fifteen (15) years of age but below eighteen (18) shall be allowed to work between ten o'clock in the evening and six o'clock in the morning of the following day." 3. DO No. 65-04 series of 2004 Chapter 5 Hours of Work SECTION 15. Hours of Work of a Working Child The following hours of work shall be observed for any child allowed to work under Republic Act No. 9231 and these Rules:

(a) For a child below 15 years of age, the hours of work shall not be more than twenty 20 hours a week, provided that the work shall not be more than four hours at any given day; (b) For a child 15 years of age but below 18, the hours of work shall not be more than eight hours a day, and in no case beyond 40 hours a week; and (c) No child below 15 years of age shall be allowed to work between eight o clock in the evening and six oclock in the morning of the following day and no child 15 years of age but below 18 shall be allowed to work between ten oclock in the evening and six o clock in the morning of the following day. Sleeping time as well as travel time of a child engaged in public entertainment or information from his/her residence to his/her workplace shall not be included as hours worked without prejudice to the application of existing rules on employees compensation. NORMAL HOURS OF WORK OF TEACHING OR ACADEMIC PERSONNEL --------------------------------------DOLE-DECS-CHED-TESDA ORDER NO. 2 SERIES OF 1996 (BASED ON NORMAL OR REGULAR TEACHING LOADS) ---------------------------HOURS WORKED; MEANING ART. 84. Hours worked. - Hours worked shall include (a) all time during which an employee is required to be on duty or to be at a prescribed workplace; and (b) all time during which an employee is suffered or permitted to work. Rest periods of short duration during working hours shall be counted as hours worked. The implementing rules in Book III, Rule I provide the guidelines to determine time worked (therefore should be paid) or unworked. Waiting time spent by an employee is considered working time if waiting time is an integral part of his work or if the employee is required or engaged by an employer to wait. Whether waiting time constitutes working time depends upon the circumstances of each particular case and is a question of fact.

REST PERIODS; MEAL PERIOD; SHORTENED MEAL PERIOD; COFFEE BREAK ART. 85. Meal periods. - Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of every employer to give his employees not less than sixty (60) minutes time-off for their regular meals. Under this article the meal period should not be less than 60 minutes, in which case it is time-off or noncompensable time. The implementing rules Book

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III, Rule I, Sec 7, allows the meal time to be less than 60 minutes, under specified cases. But such shortened meal time (say 30 minutes) should be with full pay, and of course, the time when the employee cannot eat, because he is still working, should also be paid. The employer is required to give his employees not less than 60 minutes or 1 hour for their regular meals everyday. The LC does not specify as to what specific hour of the day the meal period are to be given. The 60-minute meal period is not compensable because during this time, the worker does not work. To shorten meal time to less than 20 minutes is not allowed, if the so called meal time is less than 20 minutes, it becomes only a rest period, and under the same section 7, is considered work time. Note that the employer is not obliged by law to give this coffee break. The employer can lessen the 60-minute meal period into 30 minutes. And this is compensable. Note that the employer shall pay the Overtime Pay whenever proper. Note that meal periods can be reduced to less than 60 minutes but not less than 20 minutes, and it is compensable. For example, if the meal period is reduced to 59 minutes it is compensable. The employer cannot prohibit employees from leaving the premises during the meal period of employees. The law in fact does not require that the 60 minutes to be spent in the employers premises. There is no labor code provision to this effect.

WORKWEEK NORMAL & COMPRESSED DOLE Department Advisory No. 02-2004 IMPLEMENTATION OF COMPRESSED WORKWEEK SCHEMES HEALTH PERSONNEL ART. 83. Normal hours of work. - The normal hours of work of any employee shall not exceed eight (8) hours a day. Health personnel in cities and municipalities with a population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day. For purposes of this Article, "health personnel" shall include resident physicians, nurses, nutritionists, dietitians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel. Exception to ARTICLE 91 on Weekly Rest Day Article 83 does not say that the normal hours of work is or should be eight hours but that it shall not exceed eight. Therefore part-time work or a days work of less than eighty hours is not prohibited. The eight hour labor law was enacted not only to safeguard the health and welfare of the laborer or employee, but in a way to minimize unemployment by forcing employers, in cases where more than 8hour operation in necessary, to utilize different shifts of laborers or employees working only for 8 hours each. The second paragraph applies to health workers in organizations covered by the Code. Health personnel in government service are excluded from

Q: Is it possible to reduce the meal period to less than 60 minutes? If so, under what instances? A: YES, under Section 7, Rule I, Book III. Rule I, Book III Sec 7. Meal and Rest Periods.- Every employer shall give his employees, regardless of sex, not less than one (1) hour time-off for regular meals, except in the following cases when a meal period of not less than 20 minutes may be given by the employer provided that such shortened meal period is credited as compensable hours worked of the employee; (a) Where the work is non-manual work in nature or does not involve strenuous physical exertion; (b) Where the establishment regularly operates not less than 16 hours a day; (c) In cases of actual or impending emergencies or there is urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer should otherwise suffer; and (d) Where the work is necessary to prevent serious loss of perishable goods. Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable working time. Shortcoffee breaks of 520 minutes is compensable. So if the employer gives the employees break in the morning and in the afternoon, this time is considered compensable.

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coverage of Articles 82 to 96. Their work hours, night shift differential, and other employment benefits are defined in RA 7305. The customary service requiring resident physician to work for 24 hours a day violates the limitations prescribed by Article 83 and would not be permissible even if the resident physicians were paid additional compensation. It cannot override the purpose of the limitation which is to safeguard the health and interest of hospital workers. However, the forty-hour week will not apply if there is a training agreement between the resident physician and the hospital, and the training program is duly accredited or approved by appropriate government agency. In such case there is no employer-employee relationship on the account of the approved training program. (Book III, Rule X, Sec 15) Where, however, the choice of the employees as to their rest day based on religious grounds will inevitably result in serious prejudice or obstruction to the operations of the undertaking and the employer cannot normally be expected to resort to other remedial measures, the employer may so schedule the weekly rest day of their choice for at least two (2) days in a month. Q: What happens on the seventh day? A: It becomes the rest day. It is mandatory on the part of the employer because it is provided for under Article 91. That is how we arrive on a 48-hour work week. Q: Will the seventh day be considered always and at all times the rest day? A: YES. Q: Does the LC tell us what specific day of the week will the employees rest day be? A: NO. Of course, under the BLUE SUNDAY LAW, the employees rest day was imposed every Sunday. But when the Labor Code took effect in 1974, it gave more flexibility on the part of the employer to determine what rest day will be best for his business. There are certain types of establishments that derive more money during Sundays and Saturdays. And on the other hand, there may be some establishments that are not productive during Sundays. Example: Malls, Department Stores. In those establishments, it will be possible to schedule the employees rest day on days other than Sunday. The employer has the prerogative to determine the employees rest day. When it does, the employer can change the employees rest day only after giving a NOTICE, and the change will take effect 1 week after such notice. (a) The employer has to notify the employees of any change in the rest day. (b) The change will have to take effect at least 7 days after the change of schedule. This is so as not to cause inconvenience on the part of the employees who may expect to be enjoying their rest day on a particular day. If the employer decides to change it because that is his prerogative, he still has to inform his employees of the change in advance. Q: The choice of rest day rests upon the employer, is there an instance when the employer will have to give some deference to the employees choice of their rest day? A: YES. Under Article 91 (b), based on religious grounds. The employer has to respect such employees preference. (b) The employer shall determine and schedule the weekly rest day of his employees subject to

WEEKLY REST DAY ART. 91. Right to weekly rest day. - (a) It shall be the duty of every employer, whether operating for profit or not, to provide each of his employees a rest period of not less than twenty-four (24) consecutive hours after every six (6) consecutive normal work days. (b) The employer shall determine and schedule the weekly rest day of his employees subject to collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide. However, the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds. Rule III, Book III Section 2. Business on Sundays/Holidays.-All establishments and enterprises may operate or open for business on Sundays and Holidays provided that the employees are given the weekly rest day and the benefits due them under the law. The rest day need not be a Sunday, because the Blue Sunday Law no longer finds application in the present.

Section 3. Weekly Rest Day.-Every employer shall give his employees a rest period of not less than 24 hours after every 6 consecutive normal work days. Sec. 4. Preference of employee. The preference of the employee as to his weekly day of rest shall be respected by the employer if the same is based on religious grounds. The employee shall make known his preference to the employer in writing at least seven (7) days before the desired effectivity of the initial rest day so preferred.

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collective bargaining agreement and to such rules and regulations the SOLE may provide. However, the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds. EXCEPTION TO THE EXCEPTION Under the implementing rules, when it will cause serious obstruction or prejudice to the operations or undertaking of the employer, the employer shall schedule the rest day of their choice for at least 2 days in a month. But of course, customarily in the Philippines, the employer gives respect to the employees choice of rest day if the same is based on religious grounds. Policy Instruction No. 54 [issued by Franklin Drilon] It says in effect that those health personnel will have to be considered paid 7 days a week. Is this valid? NO, this was held to be void in the case of San Juan de Dios Hospital Employees Association vs. NLRC, GR 126383 (November, 28, 1997). This is because it contravenes the LC because the LC does not say that these 2 days off shall be paid, but rather, it only says that there will be 30% which will be added to the regular wage if they work on the rest day. The LC does not give them a full 7 days with pay but rather, only additional compensation. San Juan de Dios Hospital Employees Association vs. NLRC G.R. No. 126383 November, 28, 1997 A cursory reading of Article 83 of the Labor Code betrays petitioners position that hospital employees are entitled to a full weekly salary with paid 2 days off if they have completed the 40-hour/5day workweek. What Article 83 merely provides are: (1) The regular office hour of 8 hours a day, 5 days a week for health personnel; and (2) Where the exigencies of service require that health personnel work for 6 days or 48 hours, then such health personnel shall be entitled to an additional compensation of at least 30% of their regular wage for work on the sixth day. There is nothing in the law that supports then SOLEs assertion that personnel in subject hospitals and clinics are entitled to a full weekly wage for 7 days if they have completed the 40-hour/5-day workweek in any given workweek. Needless to say, the SOLE exceeded his authority by including a 2 days off with pay in contravention of the clear mandate of the statute. Such an act the Court shall not countenance. Administrative interpretation of the law, we reiterate, is at best merely advisory, and the Court will not hesitate to strike down an administrative interpretation that deviates from the provision of the statute. Policy Instruction 54 to our mind unduly extended the statute. It being inconsistent with and repugnant to the provision of Article 83, as well as to RA 5901, PI 54 is declared VOID. Q: Can the employees be compelled to work during rest day? A: Article 92. The general rule is that under normal circumstances, the employer cannot require to compel his employee to work on the latters scheduled rest day against his will.

DOES THE 6 CONSECUTIVE DAYS WORKWEEK APPLY TO ALL EMPLOYERS OR EMPLOYEES? NO, it does not apply to: (a) Health personnel in cities or municipalities with a population of 1 million or (b) Hospitals with a bed capacity of at least 100. The population requirement and the bed capacity need not go together. They are to be taken separately. Remember that the bed capacity is not required to be occupied as long as the requirement of at least a hundred is met OR you belong in a municipality or city with at least 1 million in population. In this case, the normal workweek consists of 5 consecutive workdays. In effect, the rest day consists of 2 days. The law does not tell us the specific days when the rest days will fall. They have 40-hour workweek and they will enjoy 2 rest days. This is due to the nature of their job or activities involving more strenuous type of work compared to other establishments. PERSONNEL shall include: Resident physicians, Nurses, Nutritionists, Dietitians, Pharmacists, Social workers, Laboratory technicians, Paramedical technicians, Psychologists, Midwives, Attendants, and All other hospital or clinic personnel.

HEALTH (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l)

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The general rule however admits of certain exceptions, and these are found in Article 92 of the Labor Code and Section 6 Rule III of the Omnibus Rules. Section 6. When work on rest day authorized.An employer may require any of his employees to work on his scheduled rest day for the duration of the following emergencies and exceptional conditions: employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor and Employment, of board, lodging, or other facilities customarily furnished by the employer to the employee. "Fair and reasonable value" shall not include any profit to the employer, or to any person affiliated with the employer. 1999 WORKERS STATUTORY MONETARY BENEFITS See on page 527 FOZ 2004 DOLE BWC MANUAL ON LABOR STANDARDS

1.

2.

3.

4. 5.

6.

In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic, or other disaster or calamity, to prevent loss of life or property, or in case of force majeure or imminent danger to public safety; In case of urgent work to be performed on machineries, equipment or installations to avoid serious loss which the employer would otherwise suffer; In the event of abnormal pressure or work due to special circumstances, where the employer cannot be ordinarily be expected to resort to other measures; To prevent serious loss of perishable goods; Where the nature of the work is such that the employees have to work continuously for 7 days in a week or more, as in the case of the crew members of a vessel to complete a voyage and in other similar cases; When the work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon.

X. MINIMUM LABOR STANDARD BENEFITS


EMPLOYEES EXEMPTED ART. 82. Coverage. - The provisions of this Title shall apply to employees in all establishments and undertakings whether for profit or not, but not to government employees, managerial employees, field personnel, members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. As used herein, "managerial employees" refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff. "Field personnel" shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Labor Standards Benefits covered under Art. 82: (a) Night Shift Differential; (b) Overtime pay; (c) Holiday pay; (d) Service Incentive Leave; and (e) Service Charges Rule I, Book III, Section 2 Employees not covered by this provision [Art 82] 1. Government Employees Whether employed by the national government or any of its political subdivisions, including those employed in government-owned and controlled corporations. REASON: They are governed by different set of laws, which are the Civil Service Law, the Administrative Code, and by their respective charters. If a government-owned or controlled corporation has been incorporated, they are governed by the Corporation

No employee shall be required against his will to work on his scheduled rest day except under the circumstances provided. Provided, however, that where an employee volunteers to work on his rest day under other circumstances, he shall express such desire in writing.

If the employee works on his rest day, he is entitled to additional compensation and this is called PREMIUM PAY. This is not the same as overtime pay. This is additional compensation for the work of the employee for not more than 8 hours during his rest day. METHODS OF FIXING COMPENSATION

ART. 97. Definitions. - As used in this Title: (f) "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money, whether fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of

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Code and are consequently covered by the Labor Code. 2. Managerial Employees and members of the Managerial Staffs Managerial employees following conditions: if they meet all of the provide a fixed hourly rate of pay or maximum hours of work like managerial employees as previously mentioned. 3. Field Personnel

1.

Their primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof; [formulate policies]

If they: (a) Regularly perform their duties away from the principal or branch office or place of business of the employer; and (b) Whose actual hours of work in the field cannot be determined with reasonable certainty. REASON: These workers perform their jobs away from the employers place of business, and therefore not subject to the personal supervision of their employer. His employer has no way of knowing the exact number of hours he is working in a day, like medical representatives and field salesmen. Their hours of work cannot be determined with reasonable certainty. 4. Members of the family who are dependent upon him for support REASON: The employer has already taken care of the sustenance, clothing, medical attendance or education of the particular members of his family. Note that this category refers to husband and wife, parents and children, other descendants and ascendants, brothers and sisters whether in the full or half blood. It does not include in-laws because they do not pertain to the same family. Also keep in mind that the family must be dependent upon the employer for support. 5. Household helpers 6. Persons in the personal service of another. Domestic servants and persons in the personal service of another if they perform such services in the employers home which are usually necessary and desirable for the maintenance and enjoyment thereof, or minister to the personal comfort, convenience or safety of the employer as well as the members of the employers household. REASON: They are already provided with living quarters, food, and extra clothing such that all in all, it would exceed the statutory minimum wage. Also, because the nature of the work plus the fact that they are not employed in a business undertaking. 7. Workers paid by results Including those who are paid by piece-work, takay, pakiao, or task basis, and other non-time work if their output rates are in accordance with the standards under Section 8 Rule VII Book III of these Regulations, or where such rates have been fixed by the SOLE in accordance with the aforesaid section. REASON: They are not paid on an hourly basis but in their output. Their pay is dependent upon the work done regardless of the time spent or employed in

2. 3.

They customarily and regularly direct the work of two or more employees therein; [execute management policies] They have the authority to hire and fire employees of lower rank, or their suggestions and recommendations to hiring and firing and as to the promotion or any other change of status of other employees, are given particular weight. [impose disciplinary actions] REASON: Managerial employees are not usually employed and paid by the hour. Their compensation is determined by their special training, experience or knowledge, which requires the exercise of discretion and independent judgment; or perform work related to management policies and general business operations along specialized or technical lines. Officers or members of the managerial staff if they perform the following duties and responsibilities: 1. The primary duty consists of the performance of work directly related to management policies of the employer; 2. Customarily and regularly exercise discretion and independent judgment; 3. They: i. Regularly and directly assist a proprietor or general managerial employee whose primary duty consists of the management of the establishment in which he is employed or a subdivision thereof; ii. Execute, under general supervision, work along specialized or technical lines requiring special training, experience or knowledge; or iii. Execute, under general assignments and tasks. supervision, special

4. They do not devote more than 20% of their hours worked in a workweek to activities, which are not directly and closely related to the performance of the work prescribed in the above-mentioned 1, 2 and 3. REASON: They may be considered managerial employees as well. Thus, it would not be feasible to

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doing the work. Moreover, they are governed by specific contracts. Their output should be fixed in accordance with Section 8 Rule VII Book III of the Omnibus Rules, which provide that they shall receive not less than the applicable statutory wage rates prescribed by law for the normal working hours which shall not exceed 8 hours a day, or a proportion thereof for work less than the normal working hours. Classification of workers paid by result: 1. Piece Rate 2. Job or task base. OVERTIME WORK; RULE & EXECEPTIONS GENERAL RULE Article 87. LC. OVERTIME WORK Work may be performed beyond eight (8) hours a day provided that the employee is paid for the overtime work an additional compensation equivalent to his regular wage plus at least 25% thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least 30% thereof. National Shipyard and Steel Corporation vs. CIR 3 SCRA 890 [1961] DEFINITION Overtime compensation is additional pay for service or work rendered or performed in excess of 8 hours a day by employees or laborers in employment covered by eight hour labor law (now Art 87) and not exempt from its requirements. It is computed by multiplying the overtime hourly rate by the number of hours worked in excess of eight. PNB vs. PEMA and CIR 115 SCRA 507 (1982) RATIONALE Verily, there can be no other reason than that he is made to work longer than what is commensurate with his agreed compensation for the statutorily fixed or voluntarily agreed hours of labor he is supposed to do. When he does spend additional time to his work, the effect upon him is multifaceted, he puts in more effort, physical and/or mental; he is delayed in going home to his family to enjoy the comforts thereof; he might have no time for relaxation, amusement or sports; he might miss important prearranged engagements, etc. It is thus the additional work, labor or service employed and the adverse effects just mentioned of his longer stay in his place or work that justify and are the real reasons for the extra compensation that is called overtime pay. Bisig ng Manggagawa ng Philipine Refining Co. vs. Philippine Refining Co., Inc. GR L-27761 09/30/81 OVERTIME RATE BASED ON REGULAR WAGE The term REGULAR BASE PAY excludes money received by an employee in different concepts , such as Christmas bonus and other fringe benefits. The phrase REGULAR BASE PAY is clear, unequivocal and requires no interpretation. It means regular basic pay and necessarily excludes money received in different concepts such as Christmas bonus and other fringe benefits. Caltex Philippines vs. CIR GR 35239 11/03/86 In the computation of overtime pay, the premium pay for work done on Sundays, holidays and at night and other fringe benefits which are occasionally, not regularly, received and not by all employees, SHOULD NOT BE ADDED TO THE BASIC PAY. Such inclusion into the regular or basic pay militates against the basic rationale of overtime pay, which is simply the extra compensation for the additional work done beyond that contemplated in the employment contract. Hence, when additional pay is given for any other purpose, it is illogical to include the same as the basis for the computation of overtime pay. Manila Railroad Co. vs. CIR No. L-4614 07/31/42 An express instruction from the employer to the employee to render overtime work is not required for the employee to be entitled to overtime pay; it is sufficient that the employee is permitted or suffered to work. Neither is an express approval by superior a prerequisite to make overtime work compensable. If the work performed was necessary or that it benefited the company or that the employee could not abandon his work at the end of this eight hour work because there was no substitute ready to take his place and he performed overtime services upon the order of his immediate superior; notwithstanding the fact that there was a standing circular to the effect that before overtime work may be performed with pay, the approval of the corresponding department head should be secured, such overtime services are compensable in spite of the fact that said overtime services were rendered without the prior approval of the department head EXCEPTIONS Article 89. Emergency Overtime Work. Any employee may be required by the employer to perform overtime work in any of the following cases:

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(a) When the country is at war or when any other national or local emergency has been declared by Congress or the Chief Executive; (b) When it is necessary to prevent loss of life or property or in case of imminent danger to public safety due to an actual or impending emergency in the locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity; (c) When there is urgent work to be performed on machines, installation or equipment, in order to avoid serious loss or damage to the employer or some other cause of similar nature; (d) When the work is necessary to prevent loss or damage to perishable goods; (e) Where the completion or continuation of the work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer. Any employee required to render overtime work under this Article shall be paid additional compensation required in this Chapter. COMPULSORY OVERTIME WORK Article 89 enunciates the situations where the employer can legally compel his workers to render overtime work. The employer should pay his workers who render overtime work the appropriate additional overtime compensation for such work. Aside from the instances mentioned in Art 89, the IRR authorizes compulsory overtime work when it is necessary to avail of favorable weather or environmental conditions where performance or quality or work is dependent thereon (Sec 10, Rule I, Book III). In cases not falling within any of the enumerated cases or instances, no employee may be made t work beyond 8 hours a day against his will (Sec 10, Rule I, Book III). Any work in excess of 8 hours within the 24 hour period is considered as overtime work regardless of whether the work covers two calendar days. The minimum working hours fixed by the act need not be continuous to constitute as legal working day of 8 hours as long as the 8 hours is within a work day. Work in excess of 8 hours within a work day is considered as overtime regardless of whether this is performed in a work shift other than at which the employee regularly works.

UNDERTIME NOT OFFSET BY OVERTIME; ANALOGOUS CASES Article 88. Undertime not offset by overtime. Undertime work on any particular day shall not be offset by overtime work on any other day. Permission given to the employee to go on leave on some other day of the week shall not exempt the employer from paying the additional compensation required in this Chapter. Article 95. Right to service incentive leave. (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay. (b) This provision shall not apply to those who are already enjoying the benefit herein provided, those enjoying vacation leave with pay at least five days and those employed in establishments regularly employing less than ten employees or in establishments exempted from granting this benefit by the Secretary of Labor after considering the viability or financial condition of such establishment. (c) The grant of benefit in excess of that provided herein shall not be made a subject of arbitration or any court or administrative action. Article 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishment regularly employing less than ten workers; (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate; and (c) As used in this Article, "holiday" includes: New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, last Sunday of August, first of November, the thirtieth of November, the twenty-fifth and the thirtieth of December, thirtyfirst of December, and the day designated by law for holding a general election. EO 292 Revised Philippines Administrative Code of the

DAY For purposes of Article 87, a day (or daily) is understood to be THE 24 HOUR PERIOD, WHICH COMMENCES FROM THE TIME THE EMPLOYEE REGULARLY STARTS TO WORK. It is not necessarily the ordinary calendar day from 12 o clock midnight to 12 oclock midnight unless the employee starts working at 12 midnight, which is unlikely in which case the start of the 24-hour period in computing his work day coincides with the start of the calendar day.

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CHAPTER 7 REGULAR HOLIDAYS SPECIAL DAYS Section 26. Regular Special Days. -

AND

NATIONWIDE

Rizal Day

December 30

Holidays

and

Nationwide Nationwide Special Days

Unless otherwise modified by law, order or proclamation, the following regular holidays and special days shall be observed in this country:

All Saints Day (A) Regular Holidays Last Day of the Year New Year's Day January 1

November 1

December 31

Maundy Thursday

Movable date

(2) The terms "legal or regular holiday" and "special holiday", as used in laws, orders, rules and regulations or other issuances shall be referred to as "regular holiday" and "special day", respectively. Republic Act No. 9177

Good Friday

Movable date

Araw ng Kagitingan (Bataan and Corregidor Day)

April 9

Labor Day

May 1

AN ACT DECLARING THE FIRST DAY OF SHAWWAL, THE TENTH MONTH OF THE ISLAMIC CALENDAR, A NATIONAL HOLIDAY FOR THE OBSERVANCE OF EIDUL FITR AND THE TENTH DAY OF ZHULD HIJJA. THE TWELFTH MONTH OF THE ISLAMIC CALENDAR, A REGIONAL HOLIDAY IN THE AUTOMNOMOUS REGION IN MUSLIM MINDANAO (ARMM) FOR THE OBSERVANCE OF EIDUL ADHA, AMENDING FOR THE PURPOSE SECTION 26, CHAPTER 7 OF EXECUTIVE ORDER NO. 292. OTHERWISE KNOWN AS THE ADMINISTRATIVE CODE OF 1987, AND FOR OTHER PURPOSES.

Independence Day

June 12

National Heroes Day

Last Sunday of August

Bonifacio Day

November 30

Christmas Day

December 25

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Section 2. Section 26, Chapter 7 of Executive Order No 292, otherwise known as the Revised Administrative Code of 1987 is hereby amended to read as follows: Sec. 26. Regular Holidays and Nationwide Special Days (1) Unless otherwise modified by law, order or proclamation, the following regular holidays and special days shall observed in the country. a) Regular Holidays New Year's Day Maundy Thursday Good Friday Eidul Fitr Araw ng Kagitingan (Bataan and Corregidor Day) Labor Day Independence Day National Heroes Day Bonifacio Day Christmas Day Rizal Day b) Nationwide Special Holidays All Saints Day Last Day of the Year

New years Day

January 1

Maundy Thursday

Movable date

Good Friday - January 1 - Movable Date Eidul Fitr - Movable Date - Movable Date Araw ng Kagitingan - April 9 (Bataaan and Corregidor Day) - May 1 - June 12 Labor Day - Last Sunday of August - November 30 Independence Day - December 25 - December 30 National Heroes Day - November 1 - December 31 Bonifacio Day

Movable date

Movable date

Monday nearest April 9

Monday nearest May 1

Monday nearest June 12

Last Monday of August

Monday nearest November 30

Provided, however That Eidul Adha shall be celebrated as a regional holiday in Autonomous Region in Muslim Mindanao." Christmas Day December 25

Republic Act No. 9492 2007

July 25, Rizal Day Monday nearest December 30

AN ACT RATIONALIZING THE CELEBRATION OF NATIONAL HOLIDAYS AMENDING FOR THE PURPOSE SECTION 26, CHAPTER 7, BOOK I OF EXECUTIVE ORDER NO. 292, AS AMENDED, OTHERWISE KNOWN AS THE ADMINISTRATIVE CODE OF 1987 SECTION 1. Section 26, Chapter 7, Book I of Executive Order No. 292, as amended, otherwise known as the Administrative Code of 1987, is hereby amended to read as follows:

"Sec. 26, Regular Holidays and Nationwide Special Days. ? (1) Unless otherwise modified by law, and or proclamation, the following regular holidays and special days shall be observed in the country: a) Regular Holidays b) Nationwide Special Holidays:

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The waiver rule is not applicable in night shift differential. The additional compensation for nighttime work is founded on public policy, hence the same cannot be waived (Artcle 6, NCC.) [Mercury Drug Co., Inc. vs. Nardo Dayao] Article 96. Service charges. All service charges collected by hotels, restaurants and similar establishments shall be distributed at the rate of 85 percent for all covered employees and 15 percent for management. The share of the employees shall be equally distributed among them. In case the service charge is abolished, the share of the covered employees shall be integrated into their wages. * Service charge applies only to establishments collecting service charges, such as hotels, restaurants, lodging houses, night clubs, cocktail lounges, massage clinics, bars, casinos and gambling houses, and similar enterprises, including those entities operating primarily as private subsidiaries of the government. (Section 1, Rule VI, Book III, Omnibus Rules)

Ninoy Aquino Day

All Saints Day

Last Day of the Year

c) In the event the holiday falls on a Wednesday, the holiday will be observed on the Monday of the week. If the holiday falls on a Sunday, the holiday will be observed on the Monday that follows: Provided, That for movable holidays, the President shall issue a proclamation, at least six months prior to the holiday concerned, the specific date that shall be declared as a nonworking day: Provided, however, The Eidul Adha shall be celebrated as a regional holiday in the Autonomous Region in Muslim Mindanao."

XI. OTHER SPECIAL BENEFITS


PRESIDENTIAL DECREE 851 13TH MONTH PAY Sec.1 All employers are hereby required to pay all their rank-file employees a 13th month pay not later than December 24 of every year. With the removal of the ceiling P1, 000.00 all rank-and-file employees are now entitled to a 13th month pay regardless of the amount of basic salary that they received in a month, such employees as entitled to the benefit regardless of their designation or employment status and irrespective of method by which their wages are paid provided that they have worked for at least 1 month during the calendar year.

Article 86. Night shift differential. Every employee shall be paid a night shift differential of not less than ten percent of his regular wage for each hour of work performed between ten o'clock in the evening and six o'clock in the morning. Rationale: Night work cannot be regarded as desirable, either from the point of view of the ER or the wage earner. It is uneconomical unless overhead costs are unusually heavy. Frequently the scale of wages is higher an inducement to employment on the night shift, and the rate of production is generally lower (Shell Co. vs. NLU) * Night shift differential not waivable.

EXEMPTED EMPLOYER a. government and any of subdivisions including GOCC its political

b.
c. d.

employers already paying their employees a 13th month pay or its equivalent employers of household helpers and persons in the personal service of another in relation to such workers 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

* The term its equivalent shall include Christmas bonus, mid-year bonus, cash bonuses and other payments amounting to not less than 1/12 of the basic salary.

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Sec. 4 The minimum of the 13th month pay required by law shall not be less than 1/12 of the total basic salary earned by an employee within a calendar year. Earned because it is possible that the employee has used his vacation leave, leave without pay which should not be counted. The employer can provide for more if he so desire. cohabiting. The male employee shall notify his employer of the pregnancy of his spouse within reasonable time and the expected date of delivery. Paternity leave refers to the benefit granted to a married male employee allowing him not to report for work for seven days but continues to earn compensation therefor, on the condition that his spouse delivered a child or suffered miscarriage for purposes of enabling him to effectively lend support to his wife in the period of recovery and/or nursing of a newly born child.

Time of payment: The required 13th month [pay shall be paid not later than December 24 of every year. An employer, however may give to his employee of the required 13th month pay before the opening of the regular school year and the other half on or before the 24 th of December of every year. 13th month pay of resigned or separated employee: An employee who has resigned or whose services were terminated at anytime before the time for payment of the 13th month pay is entitled to this monetary benefit on proportion to the length of time he worked during the year, up to the time of his resignation or termination from the service, the payment maybe demanded by the employee upon the cessation of ER-EE relationship. The benefits granted shall not be credited as part of the employees and other benefits. Workers paid by result are not entitled to this benefit only those who are paid on apiece rate basis are specifically mentioned by express provisions of the law.

CONDITIONS FOR ENTITLEMENT OF PATERNITY LEAVE 1. 2. 3. he is employed at the time of delivery of the child he has notified his employer of the pregnancy of his wife and her expected date of delivery his wife has given birth suffers miscarriage or abortion

The employee shall accomplish a Paternity Notification Form to be provided for by the employer and submit the same to the latter together with a copy of his marriage contract or if not any proof of marriage contract who has availed of the paternity leave benefits shall with in reasonable period of time submit a copy of birth certificate of the newly-born child, death or medical certificate in case of miscarriage or abortion. In case such paternity leave benefit is not availed, said leave shall not convertible to cash. If the employer does not comply with what is mandated in R.A. 8187 under section 5 the employer maybe subject to a fine not exceeding P25, 000.00 or imprisonment of not less than 30 days nor more than 60m days.

Basic salary shall include all remuneration or earnings paid by an employer to an employee for services rendered but does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, overtime premium, night shift differential and holiday pay and cost-of-living- allowance. However these salary related benefits should be included as part of the basic salary related benefits should be included as part of the basic salary in the computation of the 13th month pay if by individual or collective agreement, company practice or policy, the same are treated as part of the basic salary of the employees. The law provides that the only requirement is that the employee must have at least rendered 1 month of service during the calendar year. The does not forfeit or there is no forfeiture provision under the law.

DOMESTIC ADOPTION ACT OF 1998 R.A. 8552 SEC. 12 Supervised Trial Court

No person for adoption shall be finally granted until the adopter(s) has been given by the court supervised trail custody period for at least 6 months within which parties are expected to adjust psychologically and emotionally to each other and establish a bonding relationship. During said period, temporary parental authority shall be vested in the adopter(s). The court may motu propio or upon motion of any party reduce the trial period if it finds the same to be in the best interest of the adoptee, stating the reasons for the reduction of the period. However for alien adopters he/she must complete the six month trial custody. If the child is below seven years of age and is placed with the prospective adopter(s) through a pre-adoption placement authority issued by the department the prospective adopter shall enjoy all the benefits to which

PATERNITY LEAVE ACT OF 1996-R.A 8187 Sec. 2 every married male employee in the private and public sector shall be entitled to a paternity leave of 7 days with full pay for the first four deliveries of the legitimate spouse with whom he is

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biological parents is entitled from the date the adoptee is placed with the prospective adopters. and/or mental incapacity of a spouse as certified by a public medical practitioner 5) parent left solo or alone with the responsibility of parenthood due to legal separation or de facto separation form spouse fro at least 1 year, as long as she/he is entrusted with the custody of the children 6) parent left solo or alone with the responsibility of parenthood due to declaration of nullity or annulment of marriage as decreed by a court or by a church as long as he/she is entrusted with the custody of the children 7) parent left solo or alone with the responsibility of parenthood due to abandonment of a spouse for at least 1 year 8) unmarried father/mother who has preferred keep and rear her/his child/ children instead of having others care for them or give them up to a written welfare institution; 9) any other person who solely provides parental care and support to am child or children; 10) any family member who assumes the responsibility of head of family as result of the death, abandonment, disappearance or prolonged absence of the parents or solo parent * A change in the status or circumstance of the parent claiming benefits under this Act, such that he/she is no longer left alone with the responsibility of parenthood shall terminate his/her eligibility for these benefits Parental Leave shall mean leave benefits granted to solo parent to enable him/her to perform parental duties and responsibilities where physical presence is required Flexible Work Schedule is the right granted to a solo parent employee to vary his/her arrival and departure time without affecting the core work hours as defined by the employer Sec. 6 The employer shall provide for flexible working schedule for solo parents: Provided that the same shall not affect individual and company productivity; provided further that any employer may request exemption from the above requirements from the DOLE on certain meritorious grounds. Sec. 8 in addition to leave privileges under existing laws, parental leave of not more than 7 working days every year shall be granted to any solo parent employee who has rendered service of at least 1 year. ANTI-VIOLENCE AGAINST WOMEN & THEIR CHILDREN ACT OF 2004- R.A 9262 Sec.2 Declaration of policy- it is hereby declared that the state values the dignity of women and children and guarantees full respect for human rights. The state recognizes the need to protect the family and its members particularly women and children form

(Please insert new retirement law, RA 7641 and RA 8588-CANT FIND THIS ONE. SORI) LABOR ADVISORY ON RETIREMENT PAY LAW Coverage: The Retirement Pay Law shall apply to all employees in the private sector, regardless of their position, designation or status, and irrespective of the method by which their wages are paid. They shall include part-time employees, employees of service and other job contractors and domestic helpers or persons in the [personal service and agricultural establishment or operations employing not more than 10 employees or workers and employees of the National Government and its political subdivisions including government-owned and controlled corporations, if they are covered by the Civil Service Law and regulations. ART.132 FACILITIES FOR WOMEN The Secretary of labor shall establish standards that will insure the safety and health of women employees in appropriate cases, he shall by regulations, require employers to: 1. provide seats proper for women and permit them to use such seat when they are free from work and during working g hours, provided they can perform their duties ion this position without detriment to efficiency to establish separate toilet and lavatories for men and women and provide at least dressing room for women to establish a nursery in a workplace for the benefit of the women employees therein to determine appropriate minimum age and other standards for retirement or termination in special occupations such as those of flight attendants and the like

2. 3. 4.

SOLO PARENT WELFARE ACT-R.A.9872 Definition of terms: Solo Parent- any individual who falls under any of the following categories: 1) 2) 3) a woman who gives birth as a result of rape final conviction of the offender: provided that the mother keeps and raises the child; parent left solo or alone with the responsibility of parenthood due to death or spouse; parent left solo or alone with the responsibility of parenthood while the spouse is detained or is serving sentence for a criminal conviction for at least 1 year parent left solo or alone with the responsibility of parenthood due to physical

4)

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violence and threats to their personal safety and security. Towards this end, the state shall exert efforts to address violence committed against women and children in keeping with the fundamental freedoms guaranteed under the Constitution and the Provisions of the Universal declaration of Human rights, the Convention on the Elimination of all forms of discrimination against women, Convention on the rights of the Child and the other international human rights instruments of which the Philippines is a party. Sec.8 Protection Order A [protection order is an order issued under this act for the purpose of preventing further acts of violence against a women or her child specified in section 5 of these Act5 and granting other necessary relief. The relief granted under a protection order serve the purpose of safeguarding the victim from further harm, minimizing any disruption in the victims daily life, and facilitating the opportunity and ability of the victim to independently regain control over her life. The provisions of the protection order shall enforced by law enforcement agencies. The protection orders that may be issued under this Act are the barangay protection order (BPO), temporary protection order (TPO), and permanent protection order. SEC. 42 Training of Persons Involved in the Responding to Violence Against Women and their Children Cases- All agencies involved in responding to violence against women and their children cases shall be required to undergo education and training to acquaint them with: the nature, extend and causes of violence against women and their children ; a. the legal rights of, and remedies available to, victims of violence against women and their children b. the services and facilities available to victims or survivors c. the legal duties imposed on police officers to make arrest and to offer protection and assistance, and d. techniques for handling incidents of violence against women and their children that minimize the likelihood of injury to the offender and promote the safety of the victim or survivor. The PNP, in coordination with LGUs shall establish an education and training program for police officers and barangay officials to enable them to properly handle cases of violence against women and their children

XII. RIGHT TO SECURITY OF TENURE


SECURITY OF TENURE ARTICLE 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and to his backwages computed from the time his compensation was withheld from him up to time of his actual reinstatement. (As amended by RA 6715) SECURITY OF TENURE is the right of the employee to continue work until terminated for a just or authorized cause (as provided by law). CONSTITUTIONAL BASIS (Art. 13, Constitution) Sec. 3, 1987

The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to selforganizations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns on investments, and to expansion and growth. STATUTORY BASIS (Art. 279, Labor Code *shown above) MARQUEZ: Although Art. 279 starts with In cases of regular employment xxx, jurisprudence will show that security of tenure is guaranteed not only to regular

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employees, non-regular employees also enjoy security of tenure, but only to a limited sense. CLASSIFICATION OF EMPLOYMENT AND KINDS OF EMPLOYEES ARTICLE 280. Regular and casual employment. The provisions of written agreement to the contrary notwithstanding and regardless of the oral agreements of the parties, an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer except where the employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided, That any employee who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. MARQUEZ: Do not forget that Art. 280 is NOT the yardstick in determining employer-employee relationship. What is controlling is the four-fold test and (now) the economic reality test. Art. 280 applies only when the existence of employer-employee relationship is not in dispute. KINDS OF EMPLOYMENT: UNDER THE LABOR CODE

2.

Casual Employment - An employment shall be deemed to be casual if it is not covered by the preceding paragraph (regular employment) - does not have security of tenure before reaching the one-year period, however, if he has rendered at least one year of service, whether such service is continuous or broken, he shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.

3.

.Project Employment is one where the employment has been fixed for a specific project or undertaking, the completion or termination of which has been determined at the time of the engagement of the employee

4.

Seasonal Employment - is one where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. - Court decisions consider seasonal employees as regular employees, as their employment relationship is never severed but only suspended. (Manila Hotel, September 30, 1963; Phil. Tobacco Flue-curing, December 10, 1998) ARTICLE 281. Probationary employment. Probationary employment shall not exceed six months from the date the employee started working, unless it is covered by an apprenticeship agreement stipulating a longer period. The services of an employee who has been engaged on a probationary basis may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee.

1.

Regular Employment - an employment shall be deemed to be regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. -A Regular Employee may either be: a. Permanent one who has an indefinite employment, whether passing the probationary stage or not b. Probationary one who is placed in a trial period whose performance is assessed whether satisfactory or not. If performance is satisfactory, it is followed by a regular employment, if not, the employment is terminated. * An employer has the prerogative whether to subject the employee with probationary employment or not. Thus, an employee may be considered as a permanent employee on his first day of work.

5.

Probationary Employment is one who is on tentative employment during which the employer determines whether he (employee) is qualified for permanent employment. - LC provides that the duration of probation is 6 months. The exceptions are the following: (a) xxx unless it is covered by an apprenticeship agreement stipulating a longer period; and (b) the Manual of Regulations for Private School provides a longer probationary period. Rationale: MARQUEZ: Education is the grass root of all profession. - Security of tenure is still available to probationary employees, but only for a limited period. OTHER CLASSIFICATION (Special Laws) Construction Industry (Department Order No. 19, Series of 1993) Project Non-Project b.1. probationary b.2. regular b.3. casual

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employer AND employee, provided that it is not used to circumvent the right of security of tenure.

2.

Broadcast Industry (DOLE Policy Instruction No. 40) *Same classification as in the Labor Code. Policy Instruction No. 40 has been declared to be of NO effect in the case of Sonza vs. ABS-CBN (G.R. 138051, June 10, 2004) In Private Educational Institutions (Manual of Regulations for Private School) * as simply classified by Marquez Academic Personnel a.1. Academic teaching a.2. Academic non-teaching (ex. The librarian) b. Non-Academic Personnel those staff who perform administrative functions but are not involved in academic work * Their employment is NOT covered by the MRPS or by the TVET Manual but by the Labor Code. In Hospitals Q: Are Resident Physicians considered employees of hospitals? A: MARQUEZ: It depends. If undergoing training, he is NOT an employee of the hospital. If not undergoing training, he is an employee, but only on a term basis. BASIS: Omnibus Rules, Book III, Rule X-A, Sec.15 RESIDENTS IN TRAINING. There is employeremployee relationship between resident physicians and the training hospitals, UNLESS: (1) there is a training agreement between them; and (2) the training program is duly accredited or approved by the appropriate government agency. Xxx EXCEPTIONS EMPLOYMENT IN THE 1. 2. 3. TO REGULAR

XIII. MANAGEMENT PREROGATIVE


CONCEPT

3.
a.

The right of an employer to regulate, generally without restraint, according to its own discretion and judgment, every aspect of its business, subject to limitations of the law. It should be exercised in good faith. This privilege is inherent in the right of employers to control and manage their enterprise effectively.

4.

SCOPE Extent of Management Prerogative to Prescribe Working Methods, Time, Place, Manner and Other Aspects of Work Employers have the freedom and prerogative, according to their discretion and best judgment, to regulate and control all aspects of employment in their business organizations. Such aspects of employment include hiring, work assignments, working methods, time, place and manner of work, tools to be used, processes to be followed, supervision of workers, working regulations, transfer of employees, work supervision, lay-off of workers and the discipline, dismissal and recall of workers. (Philippine Airlines, Inc. vs. NLRC, G. R. No. 115785, Aug. 4, 2000). Thus, as held in one case, management retains the prerogative, whenever exigencies of the service so require, to change the working hours of its employees.

LABOR CODE Seasonal Employment Project Employment Casual Employment

LIMITATIONS ON THE EXERCISE OF MANAGEMENT PREROGATIVES The exercise of management prerogative is not absolute but subject to the limitations imposed by law or by CBA, employment contract, employer policy or practice and general principles of fair play and justice. 1. Right to Hire -This is inherently a management right because it is not found in the Labor Code. Hence, it is not a statutory right. Right to Promote - Promotion is the "advancement from one position to another with an increase in duties and responsibilities as authorized by law, and usually accompanied by an increase in salary."

JURISPRUDENCE (Brent School vs. Zamora, February 9, 1990) 4. Fixed Term/Period Employment an employment that will last only for a definite period, as agreed by the parties. -This kind of employment is not per se illegal or against public policy, even if this kind of employment is not mentioned in Art. 280 of the Code. Such kind of employment contract may be justified in the Civil Code. - MARQUEZ: Art. 280 does not prohibit agreements voluntarily agreed upon by the

2.

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c. d. Voluntary resignation program Job evaluation program

Consent here is required. 3. Right to Demote - Demotion means the movement from one position to another with a diminution in duties and/or status or rank, not necessarily with a reduction in salary. Demotion necessitates the issuance of a notification for demotion for cause.

It may be exercised by an employer when the interests of the employer reasonably demand subject to the following limitations: a.) It must not be exercised arbitrarily, capriciously or whimsically. b.) It must be for a cause c.) It must pass the test of reasonableness, equity and good faith.

EMPLOYMENT POLICIES and STIPULATIONS a. Restrictive covenant clauses b. Non-competing clause and competitive employment ban c. No spouse employment policy to avoid conflict of interest

XIV. TERMINATION OF EMPLOYMENT


EMPLOYERS RIGHT TO DISCIPLINE Right to Discipline.

Failure on these requirements may amount to illegal or constructive dismissal, as the case may be. It is even more so if the demotion is not part of the company policy. 4. Right to Transfer - Transfer is a "movement from one position to another which is of equivalent rank, level or salary, without break in service. This right can be challenged if it is exercised arbitrarily or capriciously or in the absence of good faith. Consent here on the part of the employee is not required since this can only be exercised by the management in accordance with best interest of the company by trying to see where a particular employee can be best maximized. Transfer is reasonable if there is a need to augment work force because of a work assignment. Requisites for a Valid Transfer: a.) Reasonable or it must have a sound purpose. b.) Convenience or welfare of the employee. c.) Not prejudicial to the employee d.) Not involve a demotion of rank or status or a diminution of the employees salary, benefits and other benefits. 5. Violation of the above requirements amounts to constructive dismissal.

The employers right to conduct the affairs of his business, according to its own discretion and judgment, includes the prerogative to instill discipline in its employees and to impose penalties, including dismissal, upon erring employees. This is a management prerogative where the free will of management to conduct its own affairs to achieve its purpose takes form. The only criterion to guide the exercise of its 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. (St. Michaels Institute vs. Santos, G. R. No. 145280, Dec. 4, 2001; Consolidated Food Corporation vs. NRLC, 315 SCRA 129, 139 [1999]). Instilling discipline among its employees is a basic management right and prerogative. Management may lawfully impose reasonable penalties such as dismissal upon an employee who transgresses the company rules and regulations. (Deles, Jr. vs. NLRC, G. R. No. 121348, March 9, 2000). The employer cannot be compelled to maintain in his employ the undeserving, if not undesirable, employees. (Shoemart, Inc. vs. NLRC, G. R. No. 74229, Aug. 11, 1989). DISMISSAL A.) Actual Dismissal B.) Constructive Dismissal - act of quitting because continued employment is rendered impossible, unreasonable or unlikely as in the case of an offer involving a demotion in rank and a diminution in pay. GROUNDS FOR TERMINATION OF EMPLOYMENT A.) JUST CAUSES (Art. 282)

Right to Dismiss It is a right to on the management as a measure of self-protection on the part of the employer against all acts inimical to its interest. It is not simply a prerogative but a right because it is found in the Labor Code.

a. b.

OTHERS: Reorganization and abolition of positions Early retirement program

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1. 2. 3. 4. 5. Serious Misconduct Willful disobedience / Gross and habitual neglect of duties Fraud and Willful breach or offense Commission of a crime or offense Other analogous causes Serious Misconduct The act complained of must be related to the performance of the duties of the employee such as would show that the employee concerned is unfit to continue working with the employer. Must be committed against the employer or representative and in connection with the employees work. The position imposed must be imposed with trust and confidence. The breach committed by an employee against third persons not in connection with his work and which does not involve his employer is not a ground for the dismissal. It implies willfulness or wrongful intent, an innocent nondisclosure of facts by the employee done to the employee will not constitute just cause for the dismissal.

The important element is that the act must be committed in relation to the employees work. Elements: a. an improper act b. willful in nature c. of a grave and aggravated character d. work related Willful Disobedience To constitute disobedience, the employees conduct must be willful or intentional.

Elements: a. the breach must be work-related; and b. the position must be impressed with trust and confidence (employee has custody over the funds, money or other property of the company) Important: Management has wider discretion in terminating employees holding position impressed with trust and confidence. Breach is said to be willful if intentional, if done knowingly, deliberately and without justifiable excuse. Commission of a Crime or an Offense Conviction is not necessary to effect termination on this ground. The quantum of evidence is merely substantial evidence. Other Analogous Causes These are causes that are in one or more respects similar to the above-mentioned causes, and have been delivered by the SC. The following were held to be just causes.

It is characterized by a wrongful and perverse mental attitude rendering the employees act inconsistent with the proper subordination. The orders, regulation or instruction of the employer against which the employee willfully disobeys must be: a. reasonable and lawful b. refers both to the kinds and character of the direction and commands and the manner in which they are made of given c. sufficiently known to the employee d. in connection with the duties which the employee has been engaged to discharge Gross Neglect means an absence of that diligence which an ordinary man would use in his own affairs. It must be both and habitual but in Fuentes vs. nlrc, the SC held that gross negligence suffices. Fraud and Willful Breach of Trust

1. Abandonment - prolonged absence is not alone a sufficient basis to say that an employee has abandoned his work. Absences must also fall under gross and habitual neglect. The immediate filing of a complaint for illegal dismissal against an employer, with a prayer for reinstatement negates the employees intent to abandon his job. Requisites: a. Failure to report for work or absence without any valid or justifiable reason; and b. Clear intention to sever the employeeemployer relationship. 2. 3. 4. 5. 6. 7. Sexual Harassment Gross Inefficiency or Poor Performance Drug Use or Abuse (RA 9165) Attitude Problem Conflict of Interest Lack of Common Sense

Fraud - any act or omission or concealment which involves a breach of legal duty, trust and confidence justly reposed, and is injurious to another.

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Retrenchment to Prevent Losses

B.) AUTHORIZED CAUSES (Art. 283) 1. 2. 3. 4. Installation of Labor-Saving Devices Redundancy Retrenchment to Prevent Losses Closing or Cessation of Operation of the Establishment or Undertaking UNLESS the closing is for the purpose of circumventing the provisions of law.

Requisites for a Valid Retrenchment: a. The retrenchment is necessary to prevent losses and such losses are proven; b. Written notice to the employees and to the Department of Labor and Employment at least one moth prior to the intended date of retrenchment; and c. Payment of separation pay equivalent to one moth pay or at least month pay for every year of service, whichever is higher. Four Standards of Retrenchment: a. b. The losses expected should be substantial and not merely de minimis in extent. The substantial loss apprehended must be reasonably imminent, as such imminence can be perceived objectively and in good faith by the employer. Retrenchment must be reasonably necessary and likely to effectively prevent the expected losses. Alleged losses, if already realized, and the expected imminent losses sought to be forestalled, must be proven by sufficient and convincing evidence. Closure of Business Closure of business is allowed whether or not the business is losing. If the business is not losing but its owner, for reasons of his own, wants to get out of the business, he in good faith can lawfully do so anytime. Just as no law forces anyone to go into business, no law compels anybody to stay in business. The prevailing rule now is that in case of closure due to serious business losses, then the employer is not under any obligation to give its employees separation pay. Ailment or Disease

OTHER AUTHORIZED CAUSES: 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. Total and Permanent Disability of An Employee Disease Not Curable in Six Months Valid Application of a Union Security Clause Expiration of Period in Term Employment Completion of Project in Project Employment Failure in Probation Sale Amounting to Closure of Business Relocation of Business to a Distant Place Defiance of Return-to-Work Order Commission of Illegal Acts in a Strike Non-feasible Reinstatement Floating Status or Off-Detail Beyond Six Months Resignation Violation of a Contractual Commitment e.g. being a consultant to a competitor Retirement Death of employee

c. d.

Installation of Labor-Saving Devices Reduction of the number of workers in a companys factory made necessary by the introduction of machinery in the manufacture of its products is justified. There can be no question as to the right of the manufacturer to use new labor-saving devices with a view to effecting more economy and efficiency in its method of production. Redundancy Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirement of the enterprise. The following are the causes of redundancy: o Over-hiring of workers o Decreased volume of business o Dropping of a particular product line o Streamlining of operations o Lack of demand for products

Requisites: a. The employee suffers from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees. There is a certification by a competent public health authority that the disease is of such nature or at such a stage that is cannot be cured within a period of six months even with proper medical treatment.

b.

TERMINATION OF ACADEMIC PERSONNEL (Manual of Regulation of Private Schools shall govern and suppletorily by the Labor Code)

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1. Section 94 (2) of the Manual of Regulation of Private Schools: Disgraceful or Immoral Conduct Immoral Conduct - any act that is inimical to the public welfare and policy as expressed in law. Disgraceful Conduct - that which shameful, scandalous, or dishonorable. 2. 3. is

1.

AUTHORIZED CAUSES Serve a written notice upon the worker at least one month before the intended date of the termination. D.O. No. 9 states 30 days.

Gross Inefficiency and Incompetence in the Performance of Duties Negligence in Keeping School and Student Records or Tampering with or Falsification of These Records Being Notoriously Undesirable. Selling of Tickets or Collection of Any Contribution in Any Form or for Any Purpose or Projects Whatsoever, whether voluntary or otherwise EXCEPT Girl or Boy Scout Membership Fees among others

This is to inform the employee of the impending loss of his employment, thus enable him to look for a fallback position at the earliest opportunity. 2. Serve a written notice upon the Department of Labor and Employment at least one month or 30 days before the intended date thereof. This is in order for the DOLE to: a. Determine the validity of the dismissal; and b. To intervene for a possible conciliation or mediation To give Separation Pay where warranted or applicable. PREVENTIVE SUSPENSION The right to impose preventive suspension is a management prerogative although it is not found in the LC. It is found in its implementing and regulations. 3.

4. 5.

REQUISITES FOR VALID TERMINATION 1. 2. Procedural Requirements; AND Substantial Requirements such as existence of a just or authorized cause the

1.

JUST CAUSES (D.O. No. 9 Issued June 21, 1997) Written notice served on the employee specifying the ground for termination, and giving to such employee reasonable opportunity within which to explain his side. [rule XXIII, section 1 (a) ] Written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. [rule XXIII, section 2 (1) (b)]

2.

Valid Suspension: If the employees continued employment poses a serious and imminent threat to the life and or property of the employer or of his co-workers. (section 3, rule XIV, book V) It is not a form of penalty; it is more of a protective measure undertaken by the employer. One cannot impose a penalty because the employee cannot be punished without due process. In practice, preventive suspension notice should be in writing. Maximum Period: 30 days The employer shall thereafter a) Reinstate the worker in his former or in a substantially equivalent position; or b) The employer may extend the period of suspension, provided that during the period of extension, he pays the wages and other benefits due to the worker concerned. In such a case, the worker shall not be bound to reimburse the amount paid to him during the extension if the employer decides, after completion of the hearing, to dismiss the worker.

There must be a hearing or conference during which the employment concerned, with the assistance of counsel if the employee so desires, so that he may be given an opportunity to respond to the charge, present his evidence or rebut the evidence presented against him. As long as the substantive requirements are complied with, the termination is valid, but defective. The employer may be held liable for indemnity in the form damages, for not having complied with the procedural aspect of due process. If only the procedural requirements and not the substantial requirements are complied with, the dismissal is invalid and illegal. It is a deprivation of an employee of his right to due process.

DUE PROCESS 1. Article 277 (b)

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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 workers 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 layoff. 2. Section 1, Article III, 1987 Constitution No person shall be deprived of life, liberty and property without due process of law. EFFECT OR DISMISSAL CONSEQUENCES OF VALID JUST CAUSE - Separation pay, in lieu of reinstatement, shall include the amount equivalent at least to one (1) month salary or to one (1) month salary for every year of service, whichever is higher, a fraction of at least six (6) months being considered as one (1) whole year including regular allowances. If not regular, not included. AUTHORIZED CAUSE Separation pay is as follows: a) In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a separation pay equivalent to at least one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher. b) 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. c) In cases of closures or cessation of operations of establishment or undertaking due to serious business losses or financial reverses, there shall be no separation pay. CONSEQUENCES OF ILLEGAL

General Rule: When an employee is dismissed and the dismissal complies with both substantive and procedural due process, separation pay is not given. Exception: If one is dismissed based on a just cause, and such cause does not constitute serious misconduct nor reflect the employees moral character, Separation pay may be validly awarded to the employee concern. This is called the DISCERNING COMPASSION DOCTRINE. The award of Separation Pay is called a FINANCIAL ASSISTANCE and is awarded based on equity. It is a measure of social justice where the employee is validly dismissed for causes not constituting serious misconduct or those reflecting on his moral character. In most cases, the Supreme Court awarded financial assistance equivalent to one-half month pay for every year of service.

EFFECT OR DISMISSAL

Article 279, LC: In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits to their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. In a host of cases, the court has upheld the employees right to security of tenure in the face of oppressive management behavior and management prerogative. Security of tenure is a right which may not be denied on mere speculation of any unclear and nebulous basis.

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guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors or trustees shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons. General Rule: Officers of a corporation are not personally liable for their official acts unless it is shown that they have exceeded their authority. Exceptions: a) "Where the incorporators and directors belong to a single family, the corporation and its members can be considered as one in order to avoid its being used as an instrument to commit injustice," or to further an end subversive of justice. b) In the case of Claparols vs. CIR involving almost similar facts as in this case, it was also held that the shield of corporate fiction should be pierced when it is deliberately and maliciously designed to evade financial obligations to employees. Unless they have exceeded their authority, corporate officers are, as a general rule, not personally liable for their official acts, because a corporation, by legal fiction, has a personality separate and distinct from its officers, stockholders and members. However, this fictional veil may be pierced whenever the corporate personality is used as a means of perpetuating a fraud or an illegal act, evading an existing obligation, or confusing a legitimate issue. In cases of illegal dismissal, corporate directors and officers are solidarily liable with the corporation, where terminations of employment are done with malice or in bad faith. (Bogo-Medellin Sugarcane Planters Association v. NLRC, G.R. No. 97846 September 25, 1998)

RIGHTS EMPLOYEE 1.

OF

AN

ILLEGALLY

DISMISSED

Backwages - the salary that the employee would have earned had he no been illegally dismissed. It is computed from the date of the illegal dismissal up to the date of the illegal dismissal up to the date of the employees actual reinstatement. Reinstatement or separation pay incase reinstatement is no longer feasible General Rule: Restoration of the employee to his previous position or to a substantially equivalent position without loss of seniority rights and other privileges. Exceptions: a. strained relationship b. it is legally or physically impossible c. because of supervening events d. when employee voluntarily opts to be awarded separation pay

2.

3.

Damages particularly moral and exemplary where warranted

CORPORATE OFFICERS Three (3) officers which a corporation must have under the statute: president, secretary, and treasurer. However, the law does not limit corporate officers to these three. Section 25 of the Corporation Code gives corporations the widest latitude to provide for such other offices, as they may deem necessary. The by-laws may and usually do provide for such other officers, e.g., vice president, cashier, auditor, and general manager. Consequently, the Supreme Court has held that one who is included in the by-laws of a corporation in its roster of corporate officers is an officer of said corporation and not a mere employee.

XV. SUSPENSION OF BUSINESS OPERATIONS

Persons Liable: Art. 289. Who are liable when committed by other than natural person. - If the offense is committed by a corporation, trust, firm, partnership, association or any other entity, the penalty shall be imposed upon the guilty officer or officers of such corporation, trust, firm, partnership, association or entity. BP 68 (Corporation Code of the Philippines) Sec. 31. Liability of directors, trustees or officers. - Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are BASIS Article 286: Employment is deemed not terminated when there is: 1. Bona-fide suspension by the employer of the operation of his business or undertaking for a period not exceeding six (6) months; 2. Fulfillment by the employee of a military duty; or 3. Fulfillment by the employee of a civic duty. Sec .12, Rule, Book VI:

The employer-employee relationship shall be deemed suspended in case of suspension of

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operation of the business or undertaking of the employer for a period not exceeding six (6) months, unless the suspension is for the purpose of defeating the rights of the employees under the Code, and in case of mandatory fulfillment by the employee of a military or civic duty. The payment of wages of the employee as well as the grant of other benefits and privileges while he is on a military or civic duty shall be subject to special laws and decrees and to the applicable individual or collective bargaining agreement and voluntary employer practice or policy. EFFECT ON EMPLOYMENT STATUS Compensation of Employees during the Six-month Suspension Employees are not entitled to their wages and benefits during the 6-month period. The reason is, within the said period, the employer-employee relationship is deemed suspended. The employment relationship being suspended, both the employer and the employees cease to be bound, at least temporarily, by the basic terms and conditions of their employment contract the employer regarding his obligation to provide salary to his workers; and on the part of the workers, to provide their services to the former. Effect of Suspension of Work Exceeding 6 Months In the 2005 case of Mayon Hotel & Restaurant vs. Adana, [G. R. No. 157634, May 16, 2005], the High Court declared that Article 286 is clear - there is termination of employment when an otherwise bona fide suspension of work exceeds six (6) months. Moreover, even assuming arguendo that the cessation of employment on April 1997 was merely temporary when hotel operations were suspended due to the termination of the lease of the old premises, it became dismissal by operation of law when petitioners failed to reinstate respondents after the lapse of six (6) months, pursuant to Article 286. And even assuming that the closure was due to a reason beyond the control of the employer, it still has to accord its employees some relief in the form of severance pay. Effect of Employment of the Employee in Other Establishments during 6-Month Period In the 2005 case of JPL Marketing Promotions vs. CA, [G. R. No. 151966, July 8, 2005], it was established that private respondent-employees sought employment from other establishments even before the expiration of the six (6)-month period provided by law. They admitted that all three of them applied for and were employed by another establishment after they received the notice from JPL. Consequently, it was held that petitioner JPL cannot be said to have terminated their employment for it was they themselves who severed their relations with JPL. Thus, they are not entitled to separation pay, even on the ground of compassionate justice. Clearly, the principle in the law which grants separation pay applies only when the employee is dismissed by the employer, which is not the case in this instance. In seeking and obtaining employment elsewhere, private respondents effectively terminated their employment with JPL. ANALOGOUS SITUATION There is no law on temporary retrenchment or lay-off, Article 286 applies only by analogy. Suspension of operation may involve only a section or department of the company and not necessarily the entire operations. The burden to prove bona-fide suspension of operation is on the employer. DISTINGUISH from STOPPAGE of WORK OR SUSPENSION of OPERATION Art. 128(c) The Secretary of Labor and Employment may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when there is non-compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace. Within twenty-four hours, a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation. TEMPORARY OR PERIODIC SHUTDOWN and TEMPORARY CESSATION OF WORK Section 7, Rule IV, Book III Temporary or periodic shutdown and temporary cessation of work. (a) In cases of temporary or periodic shutdown and temporary cessation of work of an establishment, as when a yearly inventory or when the repair or cleaning of machineries and equipment is undertaken, the regular holidays falling within the period shall be compensated in accordance with this Rule. (b) The regular holiday during the cessation of operation of an enterprise due to business reverses as authorized by the Secretary of

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Labor and Employment may not be paid by the employer. [For Topics No. 16-18: See addendum] 19. JURISDICTION OF THE LABOR ARBITER may be provided in said agreements. (As amended by RA 6715) Appeal: NLRC, then CA (Special Civil Action under Rule 65), then SC (Certiorari under Rule 45)

SCOPE OF JURISDICTION (refer to a 1-6 above) CONCURRENT JURISDICTION of OTHER AGENCIES Art. 128: Visitorial and enforcement powers. (a) The Secretary of Labor and Employment or his duly authorized representatives, including labor regulations 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 to 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. (b) The provisions of Article 217 of this Code to the contrary notwithstanding and in cases where the relationship of employeremployee still exists, the Secretary of Labor and Employment or his duly authorized representatives shall have the power to order and administer, after due notice and hearing, compliance with the labor standards provisions of this Code and other labor legislation based on the findings of labor regulation 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 order, except in cases where the employer contests the findings of the labor regulation officer and raises issues which cannot be resolved without considering evidentiary matters that are not verifiable in the normal course of inspection. (c) The Secretary of Labor and Employment may likewise order stoppage of work or suspension of operations of any unit or department of an establishment when noncompliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace. Within twenty-four hours, a hearing shall be conducted to determine whether an order for the stoppage of work or suspension of operations shall be lifted or not. In case the violation is attributable to the fault of the employer, he shall pay the employees concerned their salaries or wages during the period of such stoppage of work or suspension of operation. (d) It shall be unlawful for any person or entity to obstruct, impede, delay or otherwise

ORIGINAL and EXCLUSIVE JURISDICTION OF LA Art. 217 Jurisdiction of Labor Arbiters and the Commission. (a) Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: 1. Unfair labor practice cases; 2. Termination disputes; 3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rate of pay, hours of work and other terms and conditions of employment; 4. Claims for actual, moral, exemplary and other forms of damages arising from the employeremployee relations; 5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; and 6. Except claims for employees compensation, social security, medicare and maternity benefits, all other claims arising from employer-employee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00), whether or not accompanied with a claim for reinstatement. (b) The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.

(c) Cases arising from the interpretation or implementation of collective bargaining agreements and those arising from the interpretation or enforcement of company personnel policies shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as

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render ineffective the order of the Secretary of Labor and Employment or his duly authorized representatives issued pursuant to the authority granted under this Article, and no inferior court or entity shall issue temporary or permanent injunction or restraining order or otherwise assume jurisdiction over any case involving the enforcement orders issued in accordance with this Article. (e) Any government employee found guilty of violation of, or abuse of authority under this Article shall, after appropriate administrative investigation, be subject to summary dismissal from the service. (f) The Secretary of Labor and Employment may by appropriate regulations require employers to keep and maintain such employment records as may be necessary in aid of his visitorial and enforcement powers under this Code. 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. Any sum thus recovered on behalf of any employee or househelper pursuant to this Article shall be held in a special deposit account, and shall be paid, on order of the Secretary of Labor and Employment or the Regional Director directly to the employee or househelper concerned. Any such sum not paid to the employee or househelper, because he cannot be located after diligent and reasonable effort to locate him within a period of three (3) years, shall be held as a special fund of the Department of Labor and Employment to be used exclusively for the amelioration and benefit of workers. ELEMENTS of ART. 129: 1. The claim is presented by an employee or person employed in domestic/ household service or house helper; 2. Claim arises from employer-employee relations; 3. Claimant does not ask for reinstatement (if there is reinstatement, LA);and 4. The aggregate claim of each employee or house helper does not exceed P5,000. (if it exceeds, LA). Art. 261.Jurisdiction of voluntary arbitrators and panel of voluntary arbitrators. The voluntary arbitrator or panel of voluntary arbitrators shall have original and exclusive jurisdiction to hear and decide all unresolved grievances arising from the interpretation or implementation of the collective bargaining agreement and those arising from the interpretation or enforcement of company personnel policies referred to in the immediately preceding Article. Accordingly, violations of a collective bargaining agreement, except those which are gross in character, shall no longer be treated as unfair labor practice and shall be resolved as grievances under the collective bargaining agreement. For purposes of this Article, gross violations of a collective bargaining agreement shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement. The Commission, its Regional Offices and the Regional Directors of the Department of Labor and Employment shall not entertain disputes, grievances or matters under the exclusive and original jurisdiction of the voluntary arbitrator or panel of voluntary arbitrators and shall immediately dispose and refer the same to the grievance machinery or voluntary arbitration provided in the collective bargaining agreement. (As added by RA 6715) Art. 262.Jurisdiction over other labor disputes. The voluntary arbitrator or panel of voluntary arbitrators, upon agreement of the parties, shall also hear and decide all other labor disputes including unfair labor practices and bargaining deadlocks. (As added by RA 6715) Appeal: CA (Petition for Review under Rule 43), then SC (Certiorari under Rule 45) Art. 263. (g) When, in his opinion, there exists a labor dispute causing or likely to cause a strike or lockout in an industry indispensable to the national interest, the Secretary of Labor and Employment may assume jurisdiction over the dispute and decide it or certify the same to the Commission for compulsory arbitration. Such

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assumption or certification shall have the effect of automatically enjoining the intended or impending strike or lockout as specified in the assumption or certification order. If one has already taken place at the time of assumption or certification, all striking or locked out employees shall immediately return to work and the employer shall immediately resume operations and readmit all workers under the same terms and conditions prevailing before the strike or lockout. The Secretary of Labor and Employment or the Commission may seek the assistance of law enforcement agencies to ensure compliance with this provision as well as with such orders as he may issue to enforce the same. In line with the national concern for and the highest respect accorded to the right of patients to life and health, strikes and lockouts in hospitals, clinics and similar medical institutions shall, to every extent possible, be avoided, and all serious efforts, not only by labor and management but government as well, be exhausted to substantially minimize, if not prevent, their adverse effects on such life and health, through the exercise, however legitimate, by labor of its right to strike and by management to lockout. In labor disputes adversely affecting the continued operation of such hospitals, clinics or medical institutions, it shall be the duty of the striking union or lockingout employer to provide and maintain an effective skeletal workforce of medical and other health personnel, whose movement and services shall be unhampered and unrestricted, as are necessary to insure the proper and adequate protection of the life and health of its patients, most especially emergency cases, for the duration of the strike or lockout. In such cases, therefore, the Secretary of Labor and Employment may immediately assume, within twenty four (24) hours from knowledge of the occurrence of such a strike or lockout, jurisdiction over the same or certify it to the Commission for compulsory arbitration. For this purpose, the contending parties are strictly enjoined to comply with such orders, prohibitions and/or injunctions as are issued by the Secretary of Labor and Employment or the Commission, under pain of immediate disciplinary action, including dismissal or loss of employment status or payment by the lockingout employer of backwages, damages and other affirmative relief, even criminal prosecution against either or both of them. The foregoing notwithstanding, the President of the Philippines shall not be precluded from determining the industries that, in his opinion, are indispensable to the national interest, and from intervening at any time and assuming jurisdiction over any labor dispute in such industries in order to settle or terminate the same. MIGRANT WORKERS AND OVERSEAS FILIPINO ACT (RA 8042) Sec. 10. Money Claims. Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims for actual, moral, exemplary and other forms of damages. CIVIL DISPUTE VS LABOR DISPUTE VS INTRACORPORATE DISPUTE CIVIL DISPUTE (REGULAR COURTS)

It is settled jurisprudence that a cause of action has three elements, to wit: 1. 2. 3. a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; an obligation on the part of the named defendant to respect or not to violate such right; and an act or omission on the part of such defendant violative of the right of the plaintiff or constituting a breach of the obligation of the defendant to the plaintiff.

LABOR DISPUTE (LA) Art. 212 : (l) "Labor dispute" includes any controversy or matter concerning terms or conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee. INTRA-CORPORATE DISPUTE (RTC)

Intra-Corporate Dispute - one which arises between a stockholder or corporate officers and a corporation. Corporate Officer - are the president, vicepresident, secretary, treasurer. o Labor Arbiters have no jurisdiction over termination of corporate officers and stockholders which, under the law, is considered intra-corporate dispute. o It must be emphasized that a corporate officers dismissal is always a corporate act and/or intra-corporate controversy and that nature is not altered

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by the reason or wisdom which the Board of Directors may have in taking such action. o The Regional Trial Courts (not SEC) now have jurisdiction under R. A. 8799 (Securities Regulation Act of 2000). Jurisdiction of RTC includes adjudication of monetary claims of the corporate officer who was dismissed, (such as unpaid salaries, leaves, 13th month pay, bonuses, etc.), damages and attorney's fees. (Lozon vs. NLRC, G. R. No. 107660, Jan. 02, 1995, 240 SCRA 1) Case Law: Article 261 of the Labor Code accordingly provides for exclusive original jurisdiction of such voluntary arbitrator or panel of arbitrators over (1) the interpretation or implementation of the CBA and (2) the interpretation or enforcement of company personnel policies. Article 262 authorizes them, but only upon agreement of the parties, to exercise jurisdiction over other labor disputes. On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction over the following enumerated cases: . . . (a) Except as otherwise provided under this Code the Labor Arbiters shall have original and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the parties for decision without extension, even in the absence of stenographic notes, the following cases involving all workers, whether agricultural or non-agricultural: 1. 2. 3. Unfair labor practice cases; Termination disputes; If accompanied with a claim for reinstatement, those cases that workers may file involving wages, rates of pay, hours of work and other terms and conditions of employment; Claims for actual, moral, exemplary and other forms of damages arising from the employer-employee relations; Cases arising from any violation of Article 264 of this Code, including questions involving the legality of strikes and lockouts; Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all other claims, arising from employeremployee relations, including those of persons in domestic or household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement. A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the Court of Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95, just like those of the quasi-judicial agencies, boards and commissions enumerated therein.

4.

5.

6.

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