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REVIEWER IN LABOR LAW Table of Contents
LABOR STANDARDS
CHAPTER I: INTRODUCTION TO LABOR LAW I. PRELIMINARY MATTERS A. Definition B. Classifications C. Basis D. Sources of LawE. Other Preliminary Matters II. CONSTITUTIONAL RIGHTS AND
LABOR LAW A. Social Justice B. Management and the
Constitution: Management Function/Prerogative C. Other Relevant Matters III. LABOR AND CIVIL CODE
A. Contracts B. Fair Treatment C. Mutual Obligation D. Compliance With Law E. Obedience of Employee
IV. LABOR INTERNATIONAL LAW AND LABOR
V. THE LABOR CODE OF THE PHILIPPINES
A. Policy Declaration B. Applicability C. Rule-Making Power
D. Liberal Interpretation of the Law 5 5 5 5 5 6 6 6 6 7 7 8 8 8 8 8 8 9 9 9 9 10 10 CHAPTER 2: EXISTENCE OF EMPLOYMENT RELATIONSHIP I. DEFINITION A. Person B. Employee C. Employer D. Managerial Employee II. EMPLOYER-EMPLOYEE RELATIONSHIP A. Factors B. Tests C. Other Factors
III. INDEPENDENT CONTRACTOR AND LABOR-ONLY CONTRACTOR A. Statutory Bases B. Independent Contractor C. Labor-Only Contractor D. Liability 12 12 12 12 12 12 12 12 13 14 15 15 15 16 17 CHAPTER 3: EMPLOYEE CLASSIFICATION I. STATUTORY BASIS/OVERVIEW OF CLASSIFICATION A. Coverage B. Regular Employment C. Casual Employment D. Probationary Employment E. Project Employment F. Seasonal Employment II. REGULAR EMPLOYEES III. PROJECT EMPLOYEES IV. CASUAL EMPLOYEES
V. CONTRACTS FOR FIXED PERIODS VI. SEASONAL EMPLOYEES
VII. PROBATIONARY EMPLOYEES
19 19 19 19 19 19 19 20 20 21 23 23 23 24 CHAPTER 4: EMPLOYMENT,
RECRUITMENT, AND PLACEMENT OF WORKERS
I. STATUTORY BASIS A. Substantive B. Procedural
II. RECRUITMENT AND PLACEMENT DEFINED
A. Local Employment B. Overseas Employment III. PARTIES INVOLVED
A. Workers
B. Allowed Entities For Recruitment C. Prohibited Entities
IV. GOVERNMENT TECHNIQUES OF REGULATION A. Licensing B. Worker’s Fees C. Reports/Submission D. Suspension E. Enforcement Powers F. Sanctions V. PROHIBITED PRACTICES VI. ILLEGAL RECRUITMENT
A. Local Employment B. Overseas Employment C. Cases
VII. JURISDICTION
A. Regional Trial Court B. Labor Arbiter
C. POEA over administrative cases VIII. ALIEN EMPLOYMENT
A. Coverage
B. Techniques of Regulation
C. DOLE Guidelines For Issuance of Alien Employment Permit
IX. DEVELOPMENT OF HUMAN RESOURCES
A. Human Resources Development B. Training and Development of
Special Workers 26 26 26 26 26 26 27 27 27 27 27 28 28 28 28 29 29 29 30 31 31 31 32 33 33 33 33 33 33 33 34 34 34 35 CHAPTER 5: CONDITIONS OF LABOR
I. COVERAGE A. General rule B. Not covered II. HOURS OF WORK
A. Normal hours of work
B. Compensable hours of work--in general
C. General principles in
determining if time is considered as hours worked
D. Specific rules determining hours of work and compensability E. Overtime work
F. Night Work III. WEEKLY REST DAYS
A. Coverage
B. Scheduling rest day C. Compulsory work D. Premium pay IV. HOLIDAYS
A. Coverage and exclusion B. Holidays covered 38 38 38 38 39 39 40 40 40 42 43 43 43 43 43 44 44 44 44
REVIEWER IN LABOR LAW Table of Contents C. Holiday pay computation
D. Absences
E. Non-working/scheduled rest day V. SERVICE INCENTIVE LEAVE
A. Coverage and exemption B. Entitlement
VI. PATERNAL LEAVE VII. PARENTAL LEAVE VIII. VICTIM’S LEAVE
45 46 46 46 46 47 47 47 47 CHAPERT 6: WAGES
I. WAGES – GENERAL CONCEPT A. Definition of Wage
B. Coverage C. No work No Pay
D. Equal Pay for Equal Work / Non Discrimination
E. Facilities and supplements F. Commission
G. Wages and Salary H. Gratuity
I. Payment by results
II. MINIMUM WAGES AND WAGE FIXING MACHINERY
A. Constitutional Basis B. Agencies for Wage-Fixing
Machinery
C. Minimum Wages and Criteria D. Non-Diminution Rule
E. Wage Distortion F. Special Cases
G. Summary of Effects on Wages III. PAYMENT OF WAGES
A. Form of Payment B. Time of Payment C. Place of Payment D. Direct Payment
E. Contractor – Subcontractor F. Prohibition Regarding Wages IV. OTHER FORMS OF
REMUNERATION A. Service Charges B. 13thMonth Pay C. Bonus
D. Productivity Incentives
V. WAGE RECOVERY, LIABILITIES, AND WORKER PREFERENCE A. Worker Preference in Case of
Bankruptcy B. Attorney’s Fees 48 48 48 48 48 48 48 49 49 49 49 50 50 50 51 51 51 52 52 53 53 53 53 54 54 54 56 56 56 58 59 59 59 60 CHAPTER 7: WORKING CONDITIONS
FOR SPECIAL GROUPS I. WOMEN WORKERS
A. Women Under the Constitution B. Coverage
C. Prohibited Acts D. Facilities
E. Family Planning Services F. Classification of Certain Women
Workers G. Maternity Leave H. Sexual Harassment II. MINORS
A. Constitutional Basis B. Minimum Employable Age C. Prohibition of Certain Kinds of
61 61 61 61 61 62 63 63 63 63 65 65 65 Work
D. Employment of Children from 15 to 18
E. Hours of Work of a Working Child
III. HOUSEHELPERS A. Definition
B. Conditions of employment and other rights of the househelper IV. HOMEWORKERS
A. Coverage
B. Payment for Homework C. Prohibitions for Homework
66 66 66 67 67 67 67 67 68 68 CHAPTER 8: TERMINATION OF EMPLOYMENT I. SECURITY OF TENURE IN GENERAL A. Definition B. Nature C. Coverage
D. Conflict with Management Prerogatives
II. TERMINATION BY EMPLOYEE A. Termination by Employee with
Just Cause
B. Termination by Employee without Just Cause C. Resignation
D. No Termination
III. TERMINATION BY EMPLOYER A. Just Causes (Substantive Due
Process)
1. Serious misconduct 2. Willful disobedience
3. Gross or habitual neglect of duties
4. Fraud or willful breach of trust 5. Commission of a crime or offense 6. Analogous Causes 7. Constructive Discharge/Dismissal 8. Preventive Suspension B. Authorized Causes (Substantive
Due Process)
1. Installation of labor saving devices 2. Redundancy 3. Retrenchment to prevent losses 4. Closing or cessation of operation 5. Disease
C. Procedural Due Process 1. General Concepts 2. Consequences of Non-Compliance 3. Right to Counsel 4. Notice 5. Hearing 6. Burden of Proof 7. Degree of Proof 8. Prescription Period
D. Consequences and Remedies in Illegal Dismissal 69 69 69 69 69 70 71 71 71 71 72 72 72 74 81 82
REVIEWER IN LABOR LAW Table of Contents 1. Reinstatement
2. Backwages 3. Separation Pay 4. Financial Assistance 5. Damages and Other
Indemnity
6. Liability of Corporate Officers
7. Guidelines on Imposition of Dismissal and Other Penalties
CHAPTER 9: WELFARE LEGISLATION I. COMPARISON: SSS AND GSIS II. BENEFITS UNDER THE SSS
A. Computation of Pension B. Retirement C. Death D. Permanent Disability E. Funeral benefit F. Sickness G. Maternity H. Loan
III. SSS: Effect of Non-reporting and Non-remittance of Contributions A. To the Employee
B. To the Employer C. To the Self-employed D. To the Self-employed and
Voluntary Member
E. Change of Membership Category IV. BENEFITS UNDER THE GSIS
A. Monthly Pension B. Separation Benefits C. Unemployment Benefits D. Retirement Benefits
E. Permanent Disability Benefits F. Temporary Disability Benefits G. Survivorship Benefits
H. Death Benefits I. Funeral Benefits J. Life Insurance K. Loan
V. LIMITED PORTABILITY SCHEME UNDER RA 7699
A. Who is covered? B. What happens? C. Why?
D. Overlapping periods
VI. NATIONAL HEALTH INSURANCE ACT
A. Who is covered? B. Who are dependents C. Benefits 86 86 88 88 88 88 88 89 89 89 89 89 89 89 89 89 89 90 90 90 90 90 90 91 91 91 91 91 91 91 91 91 92 92 92 92 92 92
REVIEWER IN LABOR LAW Table of Contents
LABOR RELATIONS
Chapter 1: STATE POLICY
I. Methods of Dispute Settlement II. Trade Unionism
III. Work Enlightenment
IV. Machinery for Dispute Settlement A. National Labor Relations
Commission (NLRC) B. National Conciliation and
Mediation Board (NCMB) C. Bureau of Labor Relations D. Voluntary Arbitration Advisory
Council (VAAC)
E. Administrative Intervention for Dispute Avoidance
V. Industrial Peace
VI. Worker Participation in Decision and Policy Making Processes Affecting Rights, Duties, and Welfare
Chapter 2: RIGHT TO SELF ORGANIZATION
I. Basis of Right to Self-Organization A. 1987 Constitution
B. Labor Code
II. Extent and Scope of Right III. Worker Qualification
IV. Covered Employees/Workers A. All Employees B. Government Corporate Employees C. Supervisory Employees D. Aliens E. Security Guards V. Excluded Employees/Workers A. Managerial Employees and
Confidential Employees
B. Worker/Member of Cooperative C. Employees of International
Organizations D. Non-Employees VI. Party Protected
VII. Non-Abridgment of Right and Sanctions for Violation of Right Chapter 3: LABOR ORGANIZATION I. Policy
II. Definition of Labor Organizations and Unions
A. Labor Organization 1. Union
2. Workers Association B. Legitimate Labor Organization
1. Legitimate Workers’ Association
C. Company Union
III. Union Function and Rationale IV. Government Regulation
A. Union Registration: Procedure 1. Requirements and Rationale 2. Action on Application; Denial
of Registration
3. Effect of Registration; Non-registration
4. Rights of Legitimate Labor 95 95 96 96 96 96 98 98 99 101 103 103 105 105 105 105 105 106 107 107 107 107 107 108 108 108 110 110 110 111 111 112 112 112 112 112 112 113 113 113 113 113 113 113 114 115 Organization
B. Cancellation of Union Certificate of Registration
V. International Activities of Union: Prohibition and Regulation
VI. Union-Member Relations A. Nature of Relationship B. Issues and Concerns
1. Admission and Discipline of Members
2. Election of Officers; Qualifications; Manner of Election; Tenure and Compensation
3. Compensation 4. Major Policy Matter
5. Union Funds: Payment of Attorney’s Fees and Special Assessment
6. Mandatory Activity 7. Union Information
8. Enforcement and Remedies; Procedure and Sanctions VII. Union Affiliation: Local and Parent
Union Relations
A. Affiliation: Purpose and Nature of Relations 1. Independent Union/Local Union 2. Chartered Local (local/chapter) 3. Affiliate
4. National Union or Federation B. Supervisor/Rank and File Union
Affiliation
C. Local Union Disaffiliation/Mass Disaffiliation
D. Period VIII. Union Security
A. Statutory Basis and Rationale B. Validity Agreement and Effect on
Freedom of Choice; Types of Union Security Provisions
C. Coverage: Worker Inclusion and Exclusion
D. Implementation: Obligation and Liabilities
E. Financial Security: Agency Shop and Check-Off
Chapter 4: THE APPROPRIATE BARGAINING UNIT
I. Definition and Role of Law
II. Determination of Appropriate Bargaining Unit
A. Factors in Unit Determination 1. Community and Mutuality of
Interests 2. History
3. Geography – Location
B. Unit Severance and Globe Doctrine
C. Effect of Prior Agreement
III. Determining Agency, Arts. 226, 232 115 116 116 117 117 117 117 117 117 118 118 119 119 119 119 119 120 120 120 120 120 120 121 121 121 121 122 122 122 123 123 123 123 123 123 123 124 125 125
REVIEWER IN LABOR LAW Table of Contents Chapter 5: UNION REPRESENTATION
I. Pre-Condition: Employer-Employee Relationship
II. Methods of Establishing Majority Status
III. Certification Election
A. Employee as initiating party—in organized and unorganized establishments
B. Employer as initiating party C. Responsible agency
D. Requisite for validity of election E. Nature of proceeding/ effect of
private agreement
F. Election process and procedure 1. Petition for Certification
Election
a. Who may file b. Where to file c. When to file d. Forced Intervenor e. Motion for Intervention f. Preliminary Conference; hearing g. Order 2. Certification Election Mechanics a. Posting of Notice b. Voting List and Voters c. Voting Day
d. Protest
e. Appeal from Certification Election
f. Annulment
G. Certification of designated majority union
H. Bars to certification election 1. One-Year Bar Rule 2. Negotiation Bar Rule 3. Contract Bar Rule 4. Deadlock Bar Rule
I. Suspension of certification election
J. Effect of petition for cancellation of union registration
Chapter 6: COLLECTIVE BARGAINING: CONCEPT, PROCEDURES AND ISSUES I. General Concepts
A. Policy declaration B. Nature and Purpose C. Waiver
II. Duty to Bargain A. Meaning of duty B. Deadlock
III. Bargaining Procedure A. Private Procedure B. Labor Code Procedure C. Conciliation/Preventive
Mediation IV. Bargainable Issues
V. Collective Bargaining Agreement A. Definition B. Contents 1. Effect of sub-standard contract C. Registration 127 127 127 128 129 129 129 129 130 130 130 130 130 131 131 131 131 131 132 132 132 132 132 133 133 133 133 133 133 134 134 134 135 136 136 136 136 136 136 136 137 137 137 138 138 140 140 140 140 140 140 D. Beneficiaries E. Interpretation, administration and enforcement
1. Nature of contract and contract interpretation 2. Grievances a) Contract infirmity b) Contract ambiguity 3. Grievance procedure/ voluntary arbitration F. Contract duration and renewal G. Substitutionary Doctrine H. Arbitrated CBA
I. CBA and 3rd party applicability Chapter 7: UNION CONCERTED ACTIVITIES
I. Basis of Right to Engage in Concerted Activities
A. Constitution B. Statutory C. Limitations
II. Types of Concerted Activities A. Strike
1. Definition, nature, purpose 2. Effect on work relationship 3. Types and conversion 4. Grounds
5. Striking party
6. Procedural requirements 7. Test of legality
B. Picketing
1. Definition, nature, purpose of picket line
2. Picketing and libel laws 3. Curtailment
4. Regulation/restrictions, innocent third party rule and liabilities
5. Prohibited activities; peaceful picketing
C. Slowdown
III. Role of Peace Officers During Strikes and Picketing
A. Escorting
B. Arrest and detention of law violators
Chapter 8: EMPLOYER LOCKOUT I. Basis, definition, limitation II. Ground for lockout
III. Prohibited lockout IV. Procedural requirements V. Effect of illegal lockout Chapter 9: LABOR INJUNCTION I. Definition and Nature II. General Rule and Exception
III. Issuing Agency; Procedural Requirements
A. NLRC; Labor Arbiter
B. Procedural requirements and rules for issuance of labor injunctions
C. TRO
Chapter 10: LABOR RELATIONS IN PUBLIC SECTOR 141 141 141 141 141 141 141 142 143 143 143 144 144 144 144 144 144 144 145 145 146 146 147 148 149 153 153 153 154 154 155 155 155 155 155 156 156 156 156 156 156 157 157 157 158 158 158 159 160
REVIEWER IN LABOR LAW Table of Contents L A B O R S T A N D A R D S
LABOR STANDARDS
CHAPTER I: INTRODUCTION TO LABOR LAW I. PRELIMINARY MATTERS A. Definition B. Classifications C. Basis D. Sources of LawE. Other Preliminary Matters II. CONSTITUTIONAL RIGHTS AND
LABOR LAW A. Social Justice B. Management and the
Constitution: Management Function/Prerogative C. Other Relevant Matters III. LABOR AND CIVIL CODE
A. Contracts B. Fair Treatment C. Mutual Obligation D. Compliance With Law E. Obedience of Employee
IV. LABOR INTERNATIONAL LAW AND LABOR
V. THE LABOR CODE OF THE PHILIPPINES
A. Policy Declaration B. Applicability C. Rule-Making Power
D. Liberal Interpretation of the Law 5 5 5 5 5 6 6 6 6 7 7 8 8 8 8 8 8 9 9 9 9 10 10 CHAPTER 2: EXISTENCE OF EMPLOYMENT RELATIONSHIP I. DEFINITION A. Person B. Employee C. Employer D. Managerial Employee II. EMPLOYER-EMPLOYEE RELATIONSHIP A. Factors B. Tests C. Other Factors
III. INDEPENDENT CONTRACTOR AND LABOR-ONLY CONTRACTOR A. Statutory Bases B. Independent Contractor C. Labor-Only Contractor D. Liability 12 12 12 12 12 12 12 12 13 14 15 15 15 16 17 CHAPTER 3: EMPLOYEE CLASSIFICATION I. STATUTORY BASIS/OVERVIEW OF CLASSIFICATION A. Coverage B. Regular Employment C. Casual Employment D. Probationary Employment E. Project Employment F. Seasonal Employment II. REGULAR EMPLOYEES III. PROJECT EMPLOYEES IV. CASUAL EMPLOYEES
V. CONTRACTS FOR FIXED PERIODS VI. SEASONAL EMPLOYEES
VII. PROBATIONARY EMPLOYEES
19 19 19 19 19 19 19 20 20 21 23 23 23 24 CHAPTER 4: EMPLOYMENT,
RECRUITMENT, AND PLACEMENT OF WORKERS
I. STATUTORY BASIS A. Substantive B. Procedural
II. RECRUITMENT AND PLACEMENT DEFINED
A. Local Employment B. Overseas Employment III. PARTIES INVOLVED
A. Workers
B. Allowed Entities For Recruitment C. Prohibited Entities
IV. GOVERNMENT TECHNIQUES OF REGULATION A. Licensing B. Worker’s Fees C. Reports/Submission D. Suspension E. Enforcement Powers F. Sanctions V. PROHIBITED PRACTICES VI. ILLEGAL RECRUITMENT
A. Local Employment B. Overseas Employment C. Cases
VII. JURISDICTION
A. Regional Trial Court B. Labor Arbiter
C. POEA over administrative cases VIII. ALIEN EMPLOYMENT
A. Coverage
B. Techniques of Regulation
C. DOLE Guidelines For Issuance of Alien Employment Permit
IX. DEVELOPMENT OF HUMAN RESOURCES
A. Human Resources Development B. Training and Development of
Special Workers 26 26 26 26 26 26 27 27 27 27 27 28 28 28 28 29 29 29 30 31 31 31 32 33 33 33 33 33 33 33 34 34 34 35 CHAPTER 5: CONDITIONS OF LABOR
I. COVERAGE A. General rule B. Not covered II. HOURS OF WORK
A. Normal hours of work
B. Compensable hours of work--in general
C. General principles in
determining if time is considered as hours worked
D. Specific rules determining hours of work and compensability E. Overtime work
F. Night Work III. WEEKLY REST DAYS
A. Coverage
B. Scheduling rest day C. Compulsory work D. Premium pay IV. HOLIDAYS
A. Coverage and exclusion B. Holidays covered 38 38 38 38 39 39 40 40 40 42 43 43 43 43 43 44 44 44 44
REVIEWER IN LABOR LAW Table of Contents L A B O R S T A N D A R D S
C. Holiday pay computation D. Absences
E. Non-working/scheduled rest day V. SERVICE INCENTIVE LEAVE
A. Coverage and exemption B. Entitlement
VI. PATERNAL LEAVE VII. PARENTAL LEAVE VIII. VICTIM’S LEAVE
45 46 46 46 46 47 47 47 47 CHAPERT 6: WAGES
I. WAGES – GENERAL CONCEPT A. Definition of Wage
B. Coverage C. No work No Pay
D. Equal Pay for Equal Work / Non Discrimination
E. Facilities and supplements F. Commission
G. Wages and Salary H. Gratuity
I. Payment by results
II. MINIMUM WAGES AND WAGE FIXING MACHINERY
A. Constitutional Basis B. Agencies for Wage-Fixing
Machinery
C. Minimum Wages and Criteria D. Non-Diminution Rule
E. Wage Distortion F. Special Cases
G. Summary of Effects on Wages III. PAYMENT OF WAGES
A. Form of Payment B. Time of Payment C. Place of Payment D. Direct Payment
E. Contractor – Subcontractor F. Prohibition Regarding Wages IV. OTHER FORMS OF
REMUNERATION A. Service Charges B. 13thMonth Pay C. Bonus
D. Productivity Incentives
V. WAGE RECOVERY, LIABILITIES, AND WORKER PREFERENCE A. Worker Preference in Case of
Bankruptcy B. Attorney’s Fees 48 48 48 48 48 48 48 49 49 49 49 50 50 50 51 51 51 52 52 53 53 53 53 54 54 54 56 56 56 58 59 59 59 60 CHAPTER 7: WORKING CONDITIONS
FOR SPECIAL GROUPS I. WOMEN WORKERS
A. Women Under the Constitution B. Coverage
C. Prohibited Acts D. Facilities
E. Family Planning Services F. Classification of Certain Women
Workers G. Maternity Leave H. Sexual Harassment II. MINORS
A. Constitutional Basis B. Minimum Employable Age C. Prohibition of Certain Kinds of
61 61 61 61 61 62 63 63 63 63 65 65 65 Work
D. Employment of Children from 15 to 18
E. Hours of Work of a Working Child
III. HOUSEHELPERS A. Definition
B. Conditions of employment and other rights of the househelper IV. HOMEWORKERS
A. Coverage
B. Payment for Homework C. Prohibitions for Homework
66 66 66 67 67 67 67 67 68 68 CHAPTER 8: TERMINATION OF EMPLOYMENT I. SECURITY OF TENURE IN GENERAL A. Definition B. Nature C. Coverage
D. Conflict with Management Prerogatives
II. TERMINATION BY EMPLOYEE A. Termination by Employee with
Just Cause
B. Termination by Employee without Just Cause C. Resignation
D. No Termination
III. TERMINATION BY EMPLOYER A. Just Causes (Substantive Due
Process)
1. Serious misconduct 2. Willful disobedience
3. Gross or habitual neglect of duties
4. Fraud or willful breach of trust 5. Commission of a crime or offense 6. Analogous Causes 7. Constructive Discharge/Dismissal 8. Preventive Suspension B. Authorized Causes (Substantive
Due Process)
1. Installation of labor saving devices 2. Redundancy 3. Retrenchment to prevent losses 4. Closing or cessation of operation 5. Disease
C. Procedural Due Process 1. General Concepts 2. Consequences of Non-Compliance 3. Right to Counsel 4. Notice 5. Hearing 6. Burden of Proof 7. Degree of Proof 8. Prescription Period
D. Consequences and Remedies in Illegal Dismissal 69 69 69 69 69 70 71 71 71 71 72 72 72 74 81 82
REVIEWER IN LABOR LAW Table of Contents L A B O R S T A N D A R D S 1. Reinstatement 2. Backwages 3. Separation Pay 4. Financial Assistance 5. Damages and Other
Indemnity
6. Liability of Corporate Officers
7. Guidelines on Imposition of Dismissal and Other Penalties
CHAPTER 9: WELFARE LEGISLATION I. COMPARISON: SSS AND GSIS II. BENEFITS UNDER THE SSS
A. Computation of Pension B. Retirement C. Death D. Permanent Disability E. Funeral benefit F. Sickness G. Maternity H. Loan
III. SSS: Effect of Non-reporting and Non-remittance of Contributions A. To the Employee
B. To the Employer C. To the Self-employed D. To the Self-employed and
Voluntary Member
E. Change of Membership Category IV. BENEFITS UNDER THE GSIS
A. Monthly Pension B. Separation Benefits C. Unemployment Benefits D. Retirement Benefits
E. Permanent Disability Benefits F. Temporary Disability Benefits G. Survivorship Benefits
H. Death Benefits I. Funeral Benefits J. Life Insurance K. Loan
V. LIMITED PORTABILITY SCHEME UNDER RA 7699
A. Who is covered? B. What happens? C. Why?
D. Overlapping periods
VI. NATIONAL HEALTH INSURANCE ACT
A. Who is covered? B. Who are dependents C. Benefits 86 86 88 88 88 88 88 89 89 89 89 89 89 89 89 89 89 90 90 90 90 90 90 91 91 91 91 91 91 91 91 91 92 92 92 92 92 92
REVIEWER IN LABOR LAW Chapter 1. Introduction to Labor Law L A B O R S T A N D A R D S
Labor Standards
We would like to thank and acknowledge Prof. Domingo P. Disini, Jr., Prof. Patricia R.P. Salvador-Daway, Prof. E. (Leo) Battad and Atty. Francis Sobreviñas for allowing the UP Professional Enhancement Program Writers and Editors as well as the Bar Operations Commission Academics Committee to use and consult their respective Labor Law outlines.
FACULTY-STUDENT EDITORIAL BOARD AND LECTURES COMMITTEE Prof. E. (Leo) Battad
FACULTYEDITOR ACADEMICS COMMITTEE
Samantha Poblacion DIRECTOR FORACADEMICS
EDITOR-IN-CHIEF Rania Joya
DEPUTYDIRECTOR FORACADEMICS LAYOUTHEAD
---Kae Guerrero PRINTING ANDDISTRIBUTION
LABOR & SOCIAL LEGISLATION Fame Cruz SUBJECTEDITORS LABOR STANDARDS Patrich Leccio LEADWRITER Niner Guiao Jake del Puerto
Sopfia Guira WRITER LECTURES Edel Cruz HEAD Jason Mendoza DEPUTYHEAD Malds Menzon LOGISTICS, HR ---Leo Zulueta
LOGO, COVER ANDTEMPLATEDESIGN
Chapter 1. Introduction to
Labor Law
I. PRELIMINARY MATTERS A. Definition B. Classifications C. Basis D. Sources of LawE. Other Preliminary Matters
II. CONSTITUTIONAL RIGHTS AND LABOR LAW
A. Social Justice
B. Management and the Constitution: Management Function/Prerogative C. Other Relevant Matters
III. LABOR AND CIVIL CODE A. Contracts
B. Fair Treatment C. Mutual Obligation D. Compliance With Law E. Obedience of Employee
IV. LABOR INTERNATIONAL LAW AND LABOR
V. THE LABOR CODE OF THE PHILIPPINES
A. Policy Declaration B. Applicability C. Rule-Making Power
D. Liberal Interpretation of the Law
I. PRELIMINARY MATTERS
A. DEFINITION Labor Law – the law governing the
rights and duties of the employer and employees:
with respect to the terms and
conditions of employment, and
th respect to labor disputes arising
from collective bargaining respecting terms and conditions.
B. CLASSIFICATIONS
1. Labor Standards – Maternity Children’s Hospital vs. Sec. of Labor
(1989): minimum requirements
prescribed by existing laws, rules and regulations relating to wages, hours of
work, cost-of-living allowance, and
other monetary and welfare benefits,
including occupational safety and
health standards.
2. Labor Relations – regulates the institutional relationship between the workers organized into a union and the employers.
3. Welfare Laws – designed to take care of
contingencies that may arise and affect the workers.
C. BASIS
1987 Constitution
Art. II Sec. 5: The maintenance of peace and order, the protection of life, liberty, and property, and promotion of the general welfare are essential for the enjoyment by all the people of the blessings of democracy.
Art. II Sec. 18: The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare. Art. XIII Sec.1: The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good.
To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.
REVIEWER IN LABOR LAW Chapter 1. Introduction to Labor Law L A B O R S T A N D A R D S D. SOURCES OF LAW
1. Labor Code and related special legislation
2. Contracts
a. (Art.1305, Civil Code): meeting of the minds
b. (Art.1306, CC): stipulations deemed convenient, provided not contrary to law, morals, public order, public policy
3. DOLE Philippines vs. Pawis ng Makabayang Obrero (2003): Collective
Bargaining Agreements
4. Mcleod vs. NLRC (2007): That at one
time PMI reimbursed McLeod for his
and his wife’s plane tickets in a vacation to London could not be eemed as an established practice…. To be considered a "regular practice," the giving of the benefits should have been done over a long period, and must be shown to have been consistent and deliberate.
5. Suico vs. NLRC (2007): Company
policies or practices are binding on the
parties. Some can ripen into an
obligation on the part of the employer, such as those which confer benefits on employees, or regulate the procedures and requirements for their termination.
E. OTHER PRELIMINARY MATTERS 1. Law and Worker - Cebu Royal Plant
vs. Deputy Minister of Labor (1989):
SC reaffirmed its concern for the lowly worker who, often at the mercy of his employer must look up to the law for his protection.
2. Labor Case - Lapanday Agricultural
Dev’t vs. CA (2001): Not every relation
between management and labor is a
labor case. Definition is strict. It is
only a labor case if it deals with the Labor Code, CBA, and its associated
laws/legislation.
3. Case Decision - Villarama vs. CA (2006): It should faithfully comply with
Section 14, Article VIII of the
Constitution which provides that no decision shall be rendered by any court
(or quasi-judicial body) without
expressing therein clearly and distinctly the facts of the case and the law on which it is based.
4. Compromise and Waiver Labor Code
Art. 227 : 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.
SEE ALSO: Civil Code Arts. 2028, 2036 Soriano Jr. vs. NLRC (07):
Generally, deeds of release, waiver or quitclaims cannot bar employees from demanding benefits to which they are legally entitled or from contesting the
legality of their dismissal since
quitclaims are looked upon with
disfavor and are frowned upon as contrary to public policy.
Where, however, the person making the waiver has done so voluntarily, with a full understanding thereof, and the
consideration for the quitclaim is
credible and reasonable, the transaction must be recognized as being a valid and binding undertaking.
The requisites for a valid quitclaim are:
there was no fraud or deceit on the
part of any of the parties;
the consideration for the quitclaim
is credible and reasonable; and
the contract is not contrary to law,
public order, public policy, morals or good customs or prejudicial to a third person with a right recognized by law.
II. CONSTITUTION
AND
LABOR
LAW
A. SOCIAL JUSTICE 1987 Constitution
Art. II Sec. 10: The State shall promote social justice in all phases of national development. SEE: Art XIII Sec. 1 and 2, PAGE 1 and 2 1. General Definition- Calalang vs.
Williams (1940): Social Justice is
neither communism, nor despotism, nor
atomism, nor anarchy, but the
humanization of laws and the
REVIEWER IN LABOR LAW Chapter 1. Introduction to Labor Law L A B O R S T A N D A R D S
forces by the State so that justice in its
rational and objectively secular
conception may at least be
approximated.
1987 Constitution
LABOR FORCE-Art. II Sec. 18: The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote
their welfare.
PROTECTION TO LABOR-Art. XIII Sec. 1: SEE PAGE 1
Sec. 2: The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance.
Sec. 3: The State shall afford full protection to
labor, local and overseas, organized and unorganized, and promote full employment and
equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure,
humane conditions of work, and a living wage.
They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law.
The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth.
2. Limits of Social Justice - Agabon vs. NLRC (2004): Social justice should be
used only to correct an injustice. It
must be founded on the recognition of the necessity of interdependence among
diverse units of a society, and of
the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life. As partners in nation-building, labor and management need each other to foster productivity and economic growth; hence, the need to weigh and balance the rights and welfare of both the employee and employer.
B. MANAGEMENT AND THE CONSTITUTION; MANAGEMENT FUNCTION/PREROGATIVE
1. Phil. Geothermal Inc. vs. NLRC (1994): The law in protecting the rights
of the employees authorizes neither oppression nor self-destruction of the employer. It should be made clear that when the law tilts the scale of justice in
favor of labor, it is but a recognition
of the inherent economic inequality
between labor and management.
Never should the scale be so tilted if the result is an injustice to the employer.
2. Torreda vs. Toshiba (2007): This
Court held that the employer’s right to
conduct the affairs of his business, According to its own discretion and
judgment, is well-recognized. An
employer has a free reign and enjoys wide latitude of discretion to regulate all aspects of employment. This is a management prerogative, where the free will of management to conduct its own affairs to achieve its purpose takes form.
3. Tinio vs. CA (2007): But, like other
rights, there are limits thereto. The
managerial prerogative to transfer
personnel must be exercised without
grave abuse of discretion, bearing in
mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which the right is exercised.
C. OTHER RELEVANT MATTERS
1. Due Process - Salaw vs. NLRC (1991):
Due process requirements are two-fold – substantive (dismissal should be for a valid and authorized cause as provided by law) and procedural (due notice and hearing).
2. Labor As Property Right - Sibal vs. Notre Dame of Greater Manila (1990):
One’s employment is a property right, and the wrongful interference therewith is an actionable wrong.
3. Liberty of Contract/Laissez Faire
- Leyte Land Transportation Co. v Leyte
Farmers & Workers Union (1948): The
prohibition to impair the obligation of
contracts is not absolute and
unqualified. In spite of the
constitutional prohibition and the fact that both parties are of full age and competent to contract, it does not necessarily deprive the State of the
REVIEWER IN LABOR LAW Chapter 1. Introduction to Labor Law L A B O R S T A N D A R D S
power to interfere where the parties do not stand upon an equality, or where the public health demands that one party to the contract shall be protected against himself.
Employees Confederation of the
Philippines vs. NWPC (1991): The Constitution is primarily a document of social justice, and although it has recognized the importance of the private sector, it has not embraced fully the concept of laissez-faire or relied on pure
market forces to govern the
economy.
4. Welfare State - Alalayan vs. National Power Corporation (1968): The
welfare state concept is found in the
constitutional clause on the promotion of social justice to ensure the well-being and economic security of all the people, and in the pledge of protection to labor with specific authority to regulate the
relations between landowners and
tenants and between labor and capital.
5. Participation In Decision-Making Process - Phil. Airlines Inc. vs. NLRC (1993): Verily, a line must be drawn
between management prerogatives
regarding business operations per se and those which affect the rights of the
employees. In treating the latter,
management should see to it that its
employees are at least properly
informed of its decisions or modes action. Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights.
III.
LABOR AND CIVIL CODE
Civil Code
Art. 1700: The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects
Art. 1701: Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public.
A. CONTRACTS - Pal Employees Savings And Loan Assn., Inc. Vs. NLRC (1996):
Under the civil code, contracts of labor are explicitly subject to the police power of the state because they are not ordinary contracts but are impressed
with public interest. Inasmuch as in this particular instance the contract in question would have been deemed in violation of pertinent labor laws, the provisions of said laws would prevail over the terms of the contract, and
private respondent would still be
entitled to overtime pay.
B. FAIR TREATMENT - General Bank and Trust Co. Vs. Ca (1985): the right
of an employer to dismiss an employee differs from and should not be confused with the manner in which such right is exercised. It must not be oppressive and abusive since it affects one's person and property.
C. MUTUAL OBLIGATION - Firestone Tire And Rubber Co. Vs. Lariosa (1987): the employer's obligation to give
him workers just compensation and treatment carries with it the corollary
right to expect from the workers
adequate work, diligence and good conduct.
D. COMPLIANCE WITH LAW - Sarmiento vs. Tuico (1988): it is also important
to emphasize that the return-to-work order not so much confers a right as it imposes a duty; and while as a right it may be waived, it must be discharged as a duty even against the worker's will.
E. EE’S COMPLIANCE AND OBEDIENCE TO ER’S ORDERS - Pcib vs. Jacinto (1991): the lack of a written or formal
designation should not be an excuse to disclaim any responsibility for any damage suffered by the employer due to his negligence. The measure of the responsibility of an employee is that if
he performed his assigned task
efficiently and according to the usual standards, then he may not be held personally liable for any damage arising therefrom. Failing in this, the mployee must suffer the consequences of his negligence if not lack of due care in the performance of his duties.
REVIEWER IN LABOR LAW Chapter 1. Introduction to Labor Law L A B O R S T A N D A R D S
IV.LABOR INTERNATIONAL LAW
AND LABOR
Universal Declaration of Human Rights Arts: 3, 7, 17, 22, 23, 24, 25
International Covenant on Economic, Social and Cultural Rights: Part III Arts. 6, 7, 9, 11
International Covenant on Civil and Political Rights: Part II Art. 8
Conventions and Recommendations of the International Labor Organization (ILO)
International School Alliance of Educators vs. Quisumbing (2000): International law, which springs from general principles of law, likewise proscribes discrimination.
General principles of law include principles of equity, i.e., the general principles of fairness and justice, based on the test of what is reasonable.
Numerous treaties embody the general principle against discrimination, the very antithesis of fairness and justice. The Philippines, through its Constitution, has incorporated this principle as part of its national laws.
V. THE LABOR CODE OF THE
PHILIPPINES
A. POLICY DECLARATION- (SEE ART. XIII, SEC. 3, PAR. 2)
B. APPLICABILITY 1. General Rule Labor Code
Art. 6: All rights and benefits granted to
workers under this Code shall, except as may otherwise be provided herein, apply alike to all workers, whether agricultural or non-agricultural.
Art. 276: The terms and conditions of
employment of all government employees, including employees of government-owned and controlled corporations, shall be governed by the Civil Service Law, rules and regulations. Their salaries shall be standardized by the National Assembly as provided for in the New Constitution. However, there shall be no reduction of existing wages, benefits and other terms
and conditions of employment being
enjoyed by them at the time of the adoption of this Code.
2. Examples of Entities Included
a. Government Owned and Controlled Corporations (GOCCS) –
Cabrera vs. NLRC (1991): The rule is
that only government-owned or
controlled corporations with original charters come under the Civil Service. Since NASECO is organized under the Corporation Law and not by virtue of a special legislative charter, its relations
with its personnel are governed by
the Labor Code and come under the jurisdiction of the NLRC.
Labor Code
Art 5: 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.
b. Religious Corporations –
Austria vs. NLRC (1998): The Labor
Code does not cover ecclesiastical
affairs, defined as one which involves the relationship between the church and its members and relate to matters
of faith, religious doctrines, worship
and governance of the congregation.
However, the Labor Code is
comprehensive enough to include
religious corporations on its secular affairs, as provided by Article 278 of the
Labor Code which states that “the
provisions of this Title shall apply to all
establishments or undertakings,
whether for profit or not.” Obviously, the cited article does not make any
exception in favor of a religious
corporation.
3. Examples of Exceptions: a. International Agencies –
Ebro III vs. NLRC (1996): In order to
assure independence, they are immune from suit, thus, Phil. Laws do not apply to them. ... “The grant of immunity is by
virtue of the Convention on the
Privileges and Immunities of Specialized Agencies of the U.N., which has become part of the law of the land under the Constitution.”
REVIEWER IN LABOR LAW Chapter 1. Introduction to Labor Law L A B O R S T A N D A R D S b. School Teachers –
National Mines and Allied Workers’
Union vs. NLRC (1998): [SCHOOL
TEACHERS] on issues where the
manual expressly provides for the rules, such as probationary employment, the labor code does not apply. On issues where the manual is silent, such as termination of school teachers, the labor code applies.
Applicability
Not of universal application. only applies to: All workers – agricultural and
non-agricultural
GOCCs – organized under general laws e.g. Corporation Code
All branches of government, and GOCCs, profit or non – profit organizations ONLY with regard to wages
All private and government employees ONLY with regard to Employee’s Compensation and State Insurance Fund
Not Applicable to the ff.:
Government employees – should be Civil Service Law and EO 180
GOCC with original charter – Art. 9 – B, Sec. 2(1) of the Constitution
International Agencies and specialized agencies or UN – treaty or international conventions
grant of immunity from suit (ex. IRRI, ICMC)
by specific treaty – grant of immunity, but such treaty must include provisions for resolution of disputes
if injustice is created due to exemption from suit the REMEDY is to ask the Philippine Government to withdraw the
grant of immunity from suit.
c. Managerial Employees –
Penaranda vs. Baganga Plywood (2004):
Petitioner was not a managerial
employee. However, he was a member of the managerial staff, which also takes him out of the coverage of labor standards. Like managerial employees, officers and members of the managerial staff are not entitled to the provisions of law on labor standards.
C. RULE-MAKING POWER 1. Limitations
a. must be issued under authority of law
b. must not be contrary to law and the constitution (stated differently, must not, in effect, amend the Labor Code, Constitution or other laws in promulgating such rules and regulations)
D. LIBERAL INTERPRETATION OF THE LAW
1. Rationale –
Asian Transmission Corporation vs. CA
(2004): Art. 4 of the Labor Code
provides that all doubts in the
implementation and interpretation of its provisions, including its implementing rules and regulations, shall be resolved in favor of labor. For the working
man’s welfare should be the primordial and paramount consideration.
2. Exceptions a. Estoppel –
Duncan Association vs. Glaxo Wellcome
(2004): The policy being questioned is
not a policy against marriage. An
employee of the company remains
free to marry anyone of his or her
choosing. However, an employee’s
personal decision does not detract the employer from exercising management prerogatives to ensure maximum profit and business success. … The assailed company
policy which forms part of respondents Employee Code of Conduct and of its contracts with its employees, such as that signed by Tescon, was made known to him prior to his employment. Since
Tecson knowingly and voluntarily entered into a contract of employment with Glaxo, the stipulations therein have the force of law between them and, thus, should
be complied with in good faith. He is therefore estopped from questioning said policy.
b. No Doubt –
Bonifacio vs. GSIS (1986): While we do not dispute that under the law, in case of doubt in the implementation and interpretation of the provisions of the Labor Code, including its implementing rules and regulations, the doubt shall be resolved in favor of the laborer, we find the same has no application in this
case since the pertinent provisions of
the Labor Code leave no room for doubt
either in their interpretation or
application.
c. No Sweeping Interpretations
- Bravo vs. ECC (1986): The SC cannot adopt a sweeping interpretation of the law in favor of labor lest we engage in judicial legislation.
REVIEWER IN LABOR LAW Chapter 1. Introduction to Labor Law L A B O R S T A N D A R D S d. Relevant Facts/Rationality –
PAL vs. NLRC (1991): [The] care and
solicitude [for protection of laborer’s rights] cannot justify disregard of relevant facts or eschewal of rationality in the construction of the text of applicable rules in order to arrive at a disposition in favor of an employee.
e. Equity –
Manning International Corp. vs. NLRC
(1991): The rule embodied in the Labor
Code is that a person dismissed for cause as defined therein is not entitled to separation pay. The cited cases
constitute the exception, based on
equity. Equity has been defined as
justice outside law, being ethical rather than jural and belonging to the sphere of morals than of law. It is
grounded on the precepts of
conscience and not on any sanction of positive law. Hence, it cannot prevail
against the express provision of the labor laws allowing dismissal of employees for cause and without any provision for separation pay.
f. Balancing Conflicting Claims
- Duncan Association vs. Glaxo Wellcome
(2004): No less than the Constitution
recognizes the right of enterprises to
adopt and enforce such a policy to
protect its right to reasonable returns on investments and to expansion and
growth. Indeed, while our laws
endeavor to give life to the
constitutional policy on social justice and the protection of labor, it does not mean that every labor dispute will be decided in favor of the workers. The law also recognizes that
management has rights which are also entitled to respect and enforcement in the interest.
REVIEWER IN LABOR LAW Chapter 2. Existence of Employment Relationship L A B O R S T A N D A R D S
Chapter 2. Existence of
Employment Relationship
I. DEFINITION A. Person B. Employee C. Employer D. Managerial EmployeeII. EMPLOYER-EMPLOYEE RELATIONSHIP A. Factors
B. Tests
C. Other Factors
III. INDEPENDENT CONTRACTOR AND LABOR-ONLY CONTRACTOR A. Statutory Bases B. Independent Contractor C. Labor-Only Contractor D. Liability
I. DEFINITIONS
A. PERSON Labor CodeArt 97(a): an individual, partnership, association, corporation, business trust, legal representatives, or any organized group of persons.
B. EMPLOYER
Art. 97 (b): any person acting directly or indirectly in the interest of an employer in relation to an employee and shall include the government and all its branches, subdivisions and instrumentalities, all government-owned or controlled corporations and institutions, as well as non-profit private institutions, or organizations.
Art. 167 (f): means any person, natural or juridical, employing the services of the employee. Art. 212 (e): 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.
C. EMPLOYEE
Art. 97 (c): includes any individual employed by an employer
Art. 167 (g): any person compulsorily covered by the GSIS under Commonwealth Act Numbered One hundred eighty-six, as amended, including the members of the Armed Forces of the Philippines, and any person employed as casual, emergency, temporary, substitute or contractual, or any person compulsorily covered by the SSS under Republic Act Numbered Eleven hundred sixty-one, as amended.
Art. 212) (f): any person in the employ of an employer. The term shall not be limited to the employees of a particular employer. 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.
D. MANAGERIAL EMPLOYEES –
United Pepsi-Cola Supervisory Union vs.
Laguesma (1998): Those who act in
the interest of the employer in
supervising rank-and-file employees
1. Managers per se – those who have the
authority to devise, implement and
control strategic and operational
policies (top and middle managers)
2. Supervisors – those whose task is to
ensure that such policies are carried out by the rank-and-file employees of an organization (first-level managers/ supervisors)
II. EMPLOYER-EMPLOYEE
RELATIONSHIP
A. FACTORS
1. General Rule – The “four-fold test” is
composed of four elements. This test is the yardstick to determine employer-employee relationship:
a. selection and engagement of the employee;
b. payment of wages; c. power of dismissal; and
d. employer’s power to control the employee’s conduct (AZUCENA, 2007)
2. Factual Test –
Remington Industrial Sales Corp. vs.
Castaneda (2007): It is wrong to say
that if the work is not directly related to
the employer's business, then the
person performing such work could not be considered an employee of the latter. Determination of the existence of an
employer-employee relationship is
defined by law according to the facts of each case, regardless of the nature of the activities involved. In this case, respondent was made to cook meals for the petitioner’s employees, which work ultimately redounded to the benefit of the petitioner. She was not merely a domestic worker of Mr. Tan’s family.
REVIEWER IN LABOR LAW Chapter 2. Existence of Employment Relationship L A B O R S T A N D A R D S 3. Proof Required –
Domasig vs. NLRC (1996): It has long been established that in administrative
and quasi- judicial proceedings,
substantial evidence is sufficient as a
basis for judgment on the existence of
er-ee relationship. No particular form of evidence is required to prove the existence of such relationship. Any competent and relevant evidence to prove the relationship may be admitted.
Substantial evidence has been defined
to be such relevant evidence as a
reasonable mind might accept as
adequate to support a conclusion, and its absence is not shown by stressing that there is contrary evidence on record, direct or circumstantial xxx.
B. TESTS OF EMPLOYMENT 1. Control Test –
Sonza vs. ABS-CBN Broadcasting Corp.
(2004): Applying the control test to the present case, we find that SONZA is not an employee but an independent contractor. The control
test is the most important test our courts apply in distinguishing an employee from an independent contractor. This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well – the less control the hirer exercises, the more likely the worker is considered an independent contractor. Being an
exclusive talent does not by itself mean that SONZA is an employee of ABS-CBN. Even an independent contractor
can validly provide his services
exclusively to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as control.
Insular Life vs. NLRC (1989): Not every form of control that the hiring party reserves to himself over the conduct of the party hired in relation to the
services rendered establishes an
employer-employee relationship. The
line should be drawn between rules that merely serve as guidelines towards the achievement of the mutually-desired result without dictating the means or methods to be employed in attaining it, and those that control or fix the
methodology and bind or restrict the party hired to the use of such means.
The first, which aim only to promote
the result, create no employer-employee relationship unlike the second, which address both the result and the means used to achieve it.
Abante vs. Lamadrid (2004): Abante was a commission salesman who received % commission of his gross sales. Yet no quota was imposed on him, such that a dismal performance or dead result will not result in any sanction or dismissal. He was not required to report to the office at any time or submit any periodic written report on his sales performance and activities. He had Mindanao as his base of operation, but he was not
designated to conduct his sales
activities at any particular or specific place. Respondent did not prescribe the manner of selling the merchandise. He
occasionally reported to Manila to
attend conferences on marketing
strategies, not to control the manner and means to be used in reaching the desired end, but to serve as a guide and to upgrade his skills for more efficient
marketing performance. 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, no employer-employee relationship exists.
2. Economic Test –
Francisco vs. NLRC (2006): In Sevilla
v. CA, the Court considered existing economic conditions prevailing between the parties, in addition to the standard of right-of-control, to give a clearer picture in determining the existence of an employer-employee relationship, based on an analysis of the totality of economic circumstances of the worker.
Thus, the determination of the
relationship depends upon the
circumstances of the whole economic activity, such as:
the extent to which the services
performed are an integral part of the employer’s business;
the extent of the worker’s
investment in equipment and
REVIEWER IN LABOR LAW Chapter 2. Existence of Employment Relationship L A B O R S T A N D A R D S
the nature and degree of control
exercised by the employer;
the worker’s opportunity for profit
and loss;
the amount of initiative, skill,
judgment or foresight required for
the success of the claimed
independent enterprise;
the permanency and duration of the
relationship between the worker and the employer; and
the degree of dependency of the
worker upon the employer for his continued employment in that line of business.
C. OTHER FACTORS 1. Agreement
- San Miguel vs. Abella (2005): The contract of services between MAERC and SMC provided that MAERC was an independent contractor and that the workers hired by it "shall not, in any manner and under any circumstances,
be considered employees of the
Company, and that the Company has no control or supervision whatsoever over the conduct of the Contractor or any of its workers in respect to how they accomplish their work or perform the Contractor's obligations under the Contract." In deciding the question of
control, the language of the contract is not determinative of the parties' relationship; rather, it is the totality of the facts and surrounding circumstances of each case. Thus, the existence of an employer-employees relation is a question of law and being such, it cannot be made the subject of agreement. 2. Hours of Work –
Lazaro vs. SSS (2004): Neither does it
follow that a person who does not observe normal hours of work cannot be deemed an employee. In
Cosmopolitan Funeral Homes, Inc. v. Maalat, the employer similarly denied
the existence of an employer-employee relationship, as the claimant according to it, was a “supervisor on commission basis” who did not observe normal hours of work. This Court declared
that there was an employer-employee relationship, noting that “[the] supervisor, although compensated on commission basis, [is] exempt from the observance of normal hours of
work for his compensation is measured by the number of sales he makes.
3. Payment of Wages –
Villuga vs. NLRC (1993):The fact that employees are paid on a piece-rate basis is no argument that they were not employees. The law broadly defines
“wages” as remunerations or earnings, capable of being expressed in terms of money whether fixed or ascertained on a time, task, piece or commission basis.
Lazaro vs SSS (2004): The fact that
employee was paid by way of
commission does not preclude the
existence of an employer-employee
relationship.
4. ID Card
- Lopez vs. Bodega City (2007): Petitioner insists that her ID card is sufficient proof of her employment. In Domasig v.
NLRC this Court held that the
complainant's ID card and the cash vouchers covering his salaries for the
months indicated therein were
substantial evidence that he was an
employee of respondents, especially
since the latter failed to deny said evidence. This is not the situation in the
present case. The only evidence
presented by Lopez as proof of her
alleged employment are her ID card
and one petty cash voucher for a five-day allowance which were disputed by respondents.
5. Dismissal/Denial –
R Transport vs. Ejandra (2004):
Petitioner is barred to negate the
existence of an employer-employee
relationship. In its petition filed before
this Court, petitioner invoked our
rulings on the right of an employer to
dismiss an employee for just cause.
Petitioner maintained that private
respondent was justifiably dismissed due to abandonment of work. By
adopting said rulings, petitioner
impliedly admitted that it was in fact the employer of private respondent.
According to the control test, the power to dismiss an employee is one of the indications of an employer-employee relationship. Petitioner’s claim that private respondent was legally dismissed for abandonment was in fact a negative pregnant: an
REVIEWER IN LABOR LAW Chapter 2. Existence of Employment Relationship L A B O R S T A N D A R D S
acknowledgement that there was no mutual termination of the alleged contract of lease and that private respondent was its employee.
III.INDEPENDENT
CONTRACTOR
AND LABOR-ONLY CONTRACTOR
A. STATUTORY BASES (LABOR CODE: ART 106-109; RULE VIII-A, BOOK III; OMNIBUS RULES.)
NOTE: Department Order No. 10, 1997, which was incorporated in Rule VIII-A (“Contracting and Subconracting”) of the Omnibus Rules, has been revoked by Department Order No. 3, 2001. Hence, the positive characteristics of independent contracting are no longer stated. Rule VIII-A furthermore has been revised by Department Order No. 18, 2002. Department Order No. 3, 2001 however, has stated that it shall continue to prohibit labor-only contracting.
B. INDEPENDENT CONTRACTOR: 1. Requisites
Art. 106 (par. 1 and 2): Whenever an employer enters into a contract with another person for the performance of the former’s work, the employees of the contractor and of the latter’s subcontractor, if any, shall be paid in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him. … Art 107: The provisions of the immediately preceding article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project.
Art. 109: The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or subcontractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under this Chapter, they shall be considered as direct employers.
2. Job Contracting –
Lakas vs. Burlingame Corp (2007): Job contracting is permissible only if the following conditions are met:
the contractor carries on an
independent business and
undertakes the contract work on his
own account under his own
responsibility according to his own manner and method, free from the control and direction of his employer or principal in all matters connected with the performance of the work except as to the results thereof; and
the contractor has substantial
capital or investment in the form of tools, equipment, machineries, work premises, and other materials which are necessary in the conduct of the business.
3. Factors to Determine Existence of Independent Contractor Relationship
Mafinco vs. Ople (1976):
a. Whether the contractor is carrying on an independent business.
b. Whether the work is part of the employer’s general business.
c. The nature and extend of the work. d. The skill required.
e. The terms and duration of the relationship.
f. The right to assign the performance of the work to another.
g. The control and supervision of the work and the employer’s powers with respect to the hiring, firing and payment of salaries.
h. The duty to supply premises, tools, and appliances.
4. Example –
Manila Electric Co. vs Benamira (2005):
Respondents never alleged that
MERALCO was their employer. Under the security service agreement, it was ASDAI which:
a. selected, engaged or hired and discharged the security guards b. assigned them to MERALCO
according to the number agreed upon;
c. provided the uniform, firearms and ammunition, nightsticks, flashlights, raincoats and other paraphernalia of the security guards;
d. paid them salaries or wages; and, e. disciplined and supervised them or
