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LABOR LAW

FUNDAMENTAL PRINCIPLES AND CONCEPTS

Q1: Do alien employees have the right to self- organization and join or assist labor unions for
purposes of collective bargaining?
A1: Yes. The following requisites must be present:
1. The alien employee must have a valid working permit issued by DOLE; and
2. The alien employee must be a national of a country which grants the same or similar rights to
Filipino workers, as certified by DFA or which has ratified either ILO Convention No. 87 or ILO
Convention No. 98. (Labor Code, Art. 284)

Q2: What is the principle of co-determination?

A2: This refers to the right of workers to participate in the policy and decision making processes directly
affecting their rights and benefits, without intruding into matters pertaining to management prerogative.
(PAL v. NLRC, 1993)

Q3: Who has the burden of proof in determining the employee’s entitlement to monetary claims?
A3: The burden of evidence shifts between the employer and the employee, depending on the money claim
involved or being sought.

In general, for money claims that are incurred in the normal course of business (i.e. minimum wage, SIL,
holiday pay for unworked regular holidays, 13th month pay), the burden rests on the employer to prove
payment. However, for claims that are not incurred in the normal course of business (i.e. OT, NSD,
premium pay for work on rest days, etc.), the burden starts with the employee, who must first prove
entitlement to the benefit. Once entitlement has been established, the burden shifts to the employer to
prove payment. (Zonio v. 1st Quantum Leap Security Agency, Inc., G.R. No. 224944, 5 May 2021)

Note: Informal/personal logs or records can serve as prima facie evidence of the employee's claim, and
would be sufficient to establish entitlement if these are not disputed by the employer or rebutted by more
official records. (Zonio v. 1st Quantum Leap Security Agency, Inc., G.R. No. 224944, 5 May 2021)

RECRUITMENT AND PLACEMENT OF WORKERS

Q4: What is the definition of recruitment and placement of local and migrant workers?
A4: Art. 13(b) of the Labor Code defines “recruitment and placement” activity as referring to any act of:
1. Canvassing;
2. Enlisting;
3. Contracting;
4. Transporting;
5. Utilizing; or
6. Hiring or procuring workers.

It also includes:
1. Referrals;
2. Contract services;
3. Promising; or
4. Advertising for employment, locally or abroad, whether for profit or not.

Q5: Who is the regulatory authority for the recruitment and placement of migrant workers?
A5: The Department of Migrant Workers shall absorb all the powers, functions and mandate of the POEA
and all the entities enumerated in Section 19 hereof, and shall be the primary agency under the

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Executive Branch of the government tasked to protect the rights and promote the welfare of OFWs,
regardless of status and of the means of entry into the country of destination. (R.A. 11641, § 5)

Q6: Who has the power to regulate recruitment and placement activities of local workers?
A6: The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement
activities of all agencies within the coverage of this Title and is hereby authorized to issue orders and
promulgate rules and regulations to carry out the objectives and implement the provisions of this Title.
(Art. 36, Labor Code)

Q7: What are the prohibited practices under Article 34 of the Labor Code?
A7: It shall be unlawful for any individual, entity, licensee, or holder of authority:
1. To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of
allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater
than that actually received by him as a loan or advance;
2. To furnish or publish any false notice or information or document in relation to recruitment or
employment;
3. To give any false notice, testimony, information or document or commit any act of misrepresentation
for the purpose of securing a license or authority under this Code.
4. To induce or attempt to induce a worker already employed to quit his employment in order to offer
him to another unless the transfer is designed to liberate the worker from oppressive terms and
conditions of employment;
5. To influence or to attempt to influence any person or entity not to employ any worker who has not
applied for employment through his agency;
6. To engage in the recruitment or placement of workers in jobs harmful to public health or morality or
to the dignity of the Republic of the Philippines;
7. To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized
representatives;
8. To fail to file reports on the status of employment, placement vacancies, remittance of foreign
exchange earnings, separation from jobs, departures and such other matters or information as may
be required by the Secretary of Labor.
9. To substitute or alter employment contracts approved and verified by the Department of Labor from
the time of actual signing thereof by the parties up to and including the periods of expiration of the
same without the approval of the Secretary of Labor;
10. To become an officer or member of the Board of any corporation engaged in travel agency or to be
engaged directly or indirectly in the management of a travel agency; and
11. To withhold or deny travel documents from applicant workers before departure for monetary or
financial considerations other than those authorized under this Code and its implementing rules and
regulations. (Article 34, Labor Code)

Q8: What is illegal recruitment under the Migrant Workers Act?

A8: Any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and
includes referring, contract services, promising or advertising for employment abroad, whether for profit
or not, when undertaken by non-licensee or non-holder of authority contemplated under the Labor
Code. (R.A. No. 8042, Sec. 6)

Q9: What are the kinds of illegal recruitment?

A9:
1. Simple Illegal Recruitment - committed by a person who is neither a licensee nor a holder of
authority;
2. Illegal Recruitment as Economic Sabotage - committed by a syndicate; or in large scale, shall be
considered an offense involving economic sabotage. (R.A. No. 10022, Sec. 5[m])

Q10: What are the elements of illegal recruitment in large scale?

A10: To constitute illegal recruitment in large scale, three elements must concur:

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1. The offender has no valid license or authority required by law to enable him to lawfully engage
in recruitment and placement of workers;
2. The offender undertakes any of the activities within the meaning of "recruitment and placement"
under Article 13(b) of the Labor Code, or any of the prohibited practices enumerated under
Article 34 of the same Code (now Section 6 of Republic Act No. 8042); and
3. The offender committed the same against three (3) or more persons, individually or as a group
(People v. Cagalingan, G.R. No. 198664, November 23, 2016).

Note: Under the Migrant Workers’ Act, a recruiter with a license can also commit illegal
recruitment in large scale.

Q11: What are the elements of illegal recruitment by a syndicate?

A11: To constitute illegal recruitment by a syndicate, the following must concur:
1. The offender undertakes either any activity within the meaning of “recruitment and placement”
defined under Art. 13(b), or any of the prohibited practices enumerated under Art. 34 of the
Labor Code;
2. He has no valid license or authority required by law to enable one to lawfully engage in
recruitment and placement of workers; and
3. The illegal recruitment is committed by a group of three (3) or more persons conspiring or
confederating with one another. (People v. Gallo, G.R. No. 187730, 29 June 2010)

Note: Under the Migrant Workers’ Act, a recruiter with a license can also commit illegal
recruitment by a syndicate.

Q12: Q: Who are illegal recruiters?

A12:
1. Non Licensee or Non-Holder of Authority. The offender commits:
a. Any of the acts defined in Art. 13(b) of the Labor Code as recruitment and placement
b. Illegal recruitment as defined in ¶ 1, Sec. 6 of R.A. No. 8042, or amended; or
c. Any of the 14 acts enumerated in Sec. 6 of R.A. No. 8042, as amended
2. Licensed Recruiter or Holder of Authority. The offender commits any of the 14 wrongful acts
enumerated in Sec. 6 of R.A. No. 8042, as amended. (Sto. Tomas v. Salac, G.R. No. 152642,
13 November 2012)

Note: Under the Labor Code, for local employment and local recruitment for domestic employment,
only non licensees can be held guilty of illegal recruitment. On the other hand, the Migrant Workers
Act (R.A. No. 8042) provides that even licensed recruitment agencies can be guilty of illegal
recruitment.

Q13: Discuss the employment permit requirement of a non-resident alien in relation to seeking
redress from Philippine courts.
A13: Considering that McBurnie, an Australian, alleged illegal dismissal and sought to claim under our
labor laws, it was necessary for him to establish that he was qualified and duly authorized to obtain
employment within our jurisdiction. His failure to obtain an employment permit, by itself, necessitates
the dismissal of his labor complaint. (McBurnie v. Ganzon, G.R. Nos. 178034, 178117 & 186984-85
(Resolution), October 17, 2013)

Compare with: The Supreme Court held that WPP Marketing Communications and McBurnie were
inapplicable to this case. In the interest of justice, this Court finds that the negligence of French
Chamber of Commerce in the Philippines’ counsel, resulting in the failure to secure Rouche’s work
visa and work permit, cannot be used as basis to deny Rouche of protection under the Labor Code.
(Rouche v. French Chamber of Commerce in the Philippines, G.R. No. 238581, December 7, 2022)

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EMPLOYER-EMPLOYEE RELATIONSHIP

Q14: What is the four-fold test?

A14: In discerning the existence of an employment contract, the following elements are considered: (1)
the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal;
and (4) the (existence of the) employer's power to control the employee's conduct.

The most important element is the employer's control of the employee's conduct, not only as to the result
of the work to be done, but also as to the means and methods to accomplish it. However, the power of
control refers merely to the existence of the power, and not to the actual exercise thereof. (Dusol v. Lazo,
G.R. No. 200555, 20 January 2021)

Q15: What is the two-tiered test?

A15: In cases where the control test is insufficient to determine the relationship between the parties, the
Francisco doctrine adds another test, applied in conjunction with the control test, called the economic
dependence test.

1. FIRST TIER: CONTROL TEST

The putative employer’s power to control the employee with respect to the means and methods by
which the work is to be accomplished.

2. SECOND TIER: ECONOMIC REALITY TEST (ALSO, ECONOMIC DEPENDENCE TEST)

Under this test, the economic realities prevailing within the activity or between the parties are
examined, taking into consideration the totality of circumstances surrounding the true nature of the
relationship between the parties. This is resorted to when there is serious doubt or genuine confusion
as to the relationship of the employee with the employer. In the Philippines, the primary consideration
is whether the worker is dependent on the alleged employer for continued employment in that line of
business. (Francisco v. NLRC, G.R. No. 170087, 31 August 2006)

Q16: What are the ways of attaining regular employment?

A16:
The employment is deemed regular when the employee has been engaged to
perform activities which are usually necessary or desirable in the usual
Nature of work
business or trade of the employer. (Art. 295, Labor Code; Paguio v. NLRC, 9
May 2003)

The casual employee is reckoned as regular when the employee has rendered
at least one (1) year of service, whether such service is continuous or broken,
Length of service
with respect to the activity in which he is employed and his employment shall
continue while such activity exists. (Art. 295, Labor Code; Conti v. NLRC, 1997)
Work beyond the
The employment is considered regular when the employee is allowed to work
probationary
after a probationary period. (Art. 296, Labor Code)
employment
An “Apprenticeable Occupation" means any trade, form of employment or
occupation which requires more than three (3) months of practical training on
Work beyond the
the job supplemented by related theoretical instruction. The period of
apprenticeship /
apprenticeship shall not exceed six months. (Art. 58 & 61, Labor Code)
learnership period or
when the agreement is
A “Learner" is a person hired as a trainee in industrial occupations which are
invalid
non- apprenticeable and which may be learned through practical training on the
job for a period not exceeding three (3) months, whether or not such practical

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training is supplemented by theoretical instructions. (Omnibus Rules: Book II,

Rules VII, Sec 1)

When a Project Employee Becomes a Regular Employee

1. There is continuous re-hiring of project employees even after the cessation
of a project for the same tasks or nature of tasks (the employee must be
Repeated hiring of
continuously rehired without gaps and intervals); and
project employee
2. The tasks performed by the alleged project employee are vital, necessary,
and indispensable to the usual business or trade of the employer
(Maraguinot v. NLRC, 22 January 1998)

The source of the regularization is contractual in nature. The Labor Code only
Earlier regularization provides for the minimum standards so if there are better benefits that are given
provided by the CBA by contracts such as the CBA then that is bound to be respected. (PASSI v.
Boclot, 8 September 2007)

Q17: Discuss the ruling in Ditiangkin v. Lazada E-Services (2022) regarding the employment status
of the delivery riders hired by Lazada.
A17: The Supreme Court ruled that the delivery riders hired by Lazada were regular employees (not
independent contractors) since they were performing tasks that were integral to the core business of
Lazada. Lazada’s business model includes the supervision and management of the delivery of
products from the sellers to the buyers.

The Supreme Court disagreed with Lazada’s contention that the delivery of items is only incidental
to their business as they are mainly an online platform where sellers and buyers transact. Ultimately,
the delivery of items is clearly integrated in the services offered by Lazada. That Lazada could have
left the delivery of the goods to the sellers and buyers is of no moment because this is evidently not
the business model they are implementing. In carrying out their business, they are not merely a
platform where parties can transact; they also offer the delivery of the items from the sellers to the
buyers. The delivery eases the transaction between the sellers and buyers and is an integral part of
respondent Lazada's business. (Chrisden Ditiangkin et. al v. Lazada E-Services Philippines, Inc.,
G.R. No. 246892, 21 September 2022)

Q18: Should control attributed to a government requirement or regulation be considered in

determining the existence of an employer-employee relationship?
A18: No. Any control attributed to a government requirement or regulation should NOT be counted as
control on the hands of the purported employer which would give rise to the existence of an EER.

The fact that private respondent was required to solicit business exclusively for petitioner could hardly
be considered as control in labor jurisprudence. Under Memo Circulars No. 2-81 and 2-85 issued by
the Insurance Commissioner, insurance agents are barred from serving more than one insurance
company, in order to protect the public and to enable insurance companies to exercise exclusive
supervision over their agents in their solicitation work. Thus, the exclusivity restriction springs from a
regulation issued by the Insurance Commission, and not from an intention by petitioner to establish
control over the method and manner by which private respondent shall accomplish his work. This is
not meant to change the nature of the relationship between the parties, nor does it necessarily imbue
such relationship with the quality of control envisioned by the law. (AFP Mutual Benefit Association
v. NLRC, G.R. No. 102199, 1997)

Q19: How do you calculate the duration of the Probationary Employment Period?
A19: Probationary employment shall not exceed 6 months from the date the employee started working.
(Labor Code, Art. 296)

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The latest jurisprudence provides that the computation of the 6-month probationary period is
reckoned from the date of appointment up to the same calendar date of the 6th month following.
(Jaso v. Metrobank, G.R. No. 235794, 2021)

Q20: What are the elements of a valid fixed-term employment?

A20:
1. The fixed period of employment was knowingly and voluntarily agreed upon by the parties
without any force, duress, or improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent.
2. It satisfactorily appears that the employer and the employee dealt with each other on more or less
equal terms with no moral dominance exercised by the former or the latter. (Brent v. Zamora, 1990)

Q21: What are the elements of labor-only contracting?

A21: Labor-only contracting refers to an agreement where: (a) The contractor does not have substantial
capital; or the contractor or subcontractor does not have investments in the form of tools, equipment,
machineries; and the contractor’s or subcontractor’s employees recruited and placed are performing
activities which are directly related to the main business operation of the principal; or (b) The
contractor or subcontractor does not exercise the right of control over the work of the employee (Sec.
5, D.O. No. 174-17)

Proof of substantial capital does not make an entity immune to a finding of labor-only contracting
when there is showing that control over the employees resides in the principal and not in the
contractor. Furthermore, the workers perform functions necessary and directly related to the main
business of the company as they are involved in the core operations for the manufacturing and export
of the company’s rope products. (Manila Cordage Company-Employees Labor Union-Organized
Labor Union in Line Industries and Agriculture v. Manila Cordage Co., 2020)

Q22: Employees of company X filed a Complaint for Inspection against company X and contractor
Y for alleged violation of labor laws. According to the employees, contractor Y was a mere
labor-only contractor and that company X was their true employer. Contractor Y, to assert
that it is a legitimate job contractor, submitted its Certificates of Registration and its audited
financial statement showing that it met the required substantial capitalization of
P5,000,000.00.

The DOLE Regional Director dismissed the Complaint for Inspection and found company X
and contractor Y compliant with the labor laws. This decision was affirmed by the DOLE
Secretary. However, the CA reversed and set aside this decision. According to the CA,
contractor Y is a mere labor-only contractor. While contractor Y is a duly registered
independent service contractor with a substantial capital of more than P5,000,000.00, it
nonetheless ruled that the functions outsourced to it by company X were necessary and
desirable in the latter's line of business. Is the CA correct in ruling that contractor Y is a labor-
only contractor?
A22: There are two (2) views on when a contractor is deemed as a labor-only contractor:

First view (Quintanar v. Coca-Cola Bottlers, 2016 [En Banc]): Labor-only contracting exists when
any of the two elements, namely: (1) performing activities directly related to the principal business of
the employer; and (2) lack of substantial capital or investment, is present. If evaluated under this
view, contractor Y is considered as a labor-only contractor. The fact that company X is outsourcing
functions which are necessary and desirable in the X’s line of business is enough ground to consider
contractor Y as a labor- only contractor despite contractor Y having substantial capital in accordance
with DO 174-17.

Second view (Conqueror Industrial Peace Management Cooperative v. Balingbing, 2022): To be

considered as a labor-only contractor, the lack of substantial capital of the contractor must concur

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with the fact that the employees' work directly relates to the main business of the principal. If
evaluated under this view, contractor Y is not considered as a labor-only contractor. Having
substantial capital contractor Y cannot be considered as a labor-only contractor by the alleged fact
that the employees performed activities directly related to the main business of company X. To be
considered a labor-only contractor, the lack of substantial capital or investment must concur with the
fact that the work of the employees is directly related to the main business of the principal, which is
not the case herein.

LABOR STANDARDS

Q23: Q: Who is excluded from the provisions on Working Conditions and Rest Periods? (Go Ma-
FiFa-DoPeR)
A23: There are seven (7) classifications of employees excluded from the provisions:
1. Governmental employees
2. Managerial employees
3. Field personnel
4. Members of the Family of the employer who is dependent on him for support
5. Domestic helpers
6. Persons in the personal service of another
7. Workers who are paid by result. (Labor Code, Art. 82)

Q24: What are the rules on Overtime Pay Rates?

A24:
SCENARIO RATE
OT ON A REGULAR DAY Regular Wage + at least 25% thereof
OT ON A HOLIDAY / SPECIAL DAY/ Regular Holiday wage rate (200%) + 30%
EMPLOYEES REST DAY
Rest day or special holiday wage rate
(130%) + 30% thereof
OT ON A SPECIAL DAY WHICH FALLS Rest day & special day wage rate (150%) +
ON A REST DAY 30% thereof

Q25: What are the rules on Emergency OT Work?

A25: General Rule: Employees cannot be compelled to render overtime work against their will
Exceptions:
1. When the country is at war or when any other national or local emergency has been declared
by Congress or the Chief Executive;
2. When overtime work is necessary to prevent loss of life or property, or in case of imminent
danger to public safety due to actual or impending emergency in the locality caused by serious
accident, fire, floods, typhoons, earthquake, epidemic or other disaster or calamities;
3. When there is urgent work to be performed on machines, installations, or equipment, in order
to avoid serious loss or damage to the employer or some other causes of similar nature;
4. When the work is necessary to prevent loss or damage to perishable goods;
5. When the completion or continuation of work started before the 8th hour is necessary to prevent
serious obstruction or prejudice to the business or operations of the employer; or
6. When overtime work is necessary to avail of favorable weather or environmental conditions
where performance or quality of work is dependent thereon (IRR Labor Code, Book III, Rule I,
§ 10)

Note: This is an exclusive list. (IRR Labor Code, Book III, Rule I, § 10)

Q26: What are the conditions for the implementation of the Compressed Work Week?

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A26:
1. The scheme is expressly and voluntarily supported by majority of employees affected;
2. In firms using substances, or operating in conditions that are hazardous to health, a certification
is needed from an accredited safety organization or the firm’s safety committee that work
beyond eight (8) hours is within the limits or levels of exposure set by DOLE’s occupational
safety and health standards; and
3. The DOLE Regional Office is duly notified. (DOLE Department Advisory No. 02 Series of 2004)

Q27: What is the Telecommuting Program?

A27: An employer in private sector may offer a telecommuting program to its employees on a voluntary
basis, and upon such terms and conditions as they may mutually agreed upon.

The employer shall provide the telecommuting employee with relevant written information in order to
adequately apprise the individual of the terms and conditions of the telecommuting program, and the
responsibilities of the employee. (R.A. 11165, § 4)

Requirements for the terms and conditions:

1. It shall not be less than the minimum labor standards set by law; and
2. It shall include:
a. compensable work hours,
b. minimum number of work hours,
c. overtime,
d. rest days, and
e. entitlement to leave benefits. (Id.)

Q28: When are pregnant women allowed to work at night?

A28: Only if a competent physician other than the company physician shall certify their fitness to render
night work, and specify the period of the pregnancy that they can safely work. (Labor Code, Art. 158,
as amended by R.A. No. 10151)

Q29: What are non-compensable hours?

A29: Lectures, meetings, training programs. Attendance at lectures, meetings, training programs, and
other similar activities shall not be counted as working time if all of the following conditions are met:
1. Attendance is outside of the employee's regular working hours;
2. Attendance is in fact voluntary; and
3. The employee does not perform any productive work during such attendance (Omnibus Rules
Implementing the Labor Code, Book III, Rule I, § 6)

Waiting Time. An employee who is not required to leave word at his home or with company officials
where he may be reached is not working while on call. (Omnibus Rules Implementing the Labor
Code, Book III, Rule I, § 5)

Q30: What are the Rules on Payment of Holiday Pay?

A30:

REGULAR HOLIDAYS
Falling on a regular workday
Unworked 100% (EXCEPT: in retail and service establishments employing less than 10
workers)
Worked First 8 hours 200%

Excess of 8 hours + 30% of hourly rate on said date

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Falling on a rest day

Unworked 100%

Worked First 8 hours + 30% of 200%

Excess of 8 hours + 30%of hourly rate on said day

SPECIAL DAYS
Unworked NO PAY, unless there is a favorable company policy, practice or CBA
granting payment of wages on special days even if unworked

Worked First 8 hours + 30% of the daily rate (100%)

Excess of 8 hours + 30% of hourly rate on said day
Worked & Falling On a First 8 hours + 50% of daily rate
Rest Day
Excess of 8 hours + 30% of hourly rate
SPECIAL WORKING HOLIDAYS – only the basic rate

Q31: What is a bonus? When does it become demandable?

A31: The granting of a bonus is a management prerogative, something given in addition to what is
ordinarily received by or strictly due to the recipient. (Producers Bank of the Philippines v. NLRC,
G.R. No. 100701, 2001)

It becomes demandable when it was promised by the employer and expressly agreed upon by
the parties (as in a CBA). (Lepanto Ceramics v. Lepanto Ceramics Employees Association, G.R.
No. 180866, March 2, 2010)

It is also demandable when it is made part of the wage or salary or compensation of the
employee. (Eastern Telecoms v. Eastern Telecoms Employees Union, G.R. No. 185665, 2012)

SEXUAL HARASSMENT IN THE WORK ENVIRONMENT (R.A. NO. 7877

Q32: How do you determine if a work related sexual-harassment is present?

A32: In Domingo v. Rayala (G.R. 155831, 2008), it was emphasized that the employee's liability for an
administrative offense of sexual harassment should not be determined solely based on Section 3 of RA
No. 7877. Substantial evidence to support, the administrative charge is sufficient. Thus, the "demand,
request, or requirement of a sexual favor" requirement in Section 3 is not essential before an act can be
qualified as sexual harassment in an administrative charge. It is enough that the respondent's actions
created an intimidating, hostile, or offensive environment for the employee. (PAL vs Yañez, G.R.
No.214662, 2022).

Q33: Does sexual harassment always result in dismissal?

A33: No. In PAL v. Yañez (2022), the Supreme Court clarified that sexual harassment doesn't always
result in dismissal. The employer can choose to impose a lesser penalty (in this case, a 3-month
suspension) as a valid exercise of management prerogative, provided that it is done in good faith and
complies with due process. The essence of due process is the opportunity to defend oneself, and
Yañez was given ample opportunity to explain his actions but chose not to participate. Moreover,
PAL had complied with the requirements of R.A. No. 7877 in creating a committee for the
investigation of sexual harassment cases. (PAL v. Yañez, G.R. No. 214662, 2 March 2022)

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SOCIAL WELFARE BENEFITS

Q34: Section 3 of the limited portability law (R.A. 7699) provides that: “Provisions of any general
or special law or rules and regulations to the contrary notwithstanding, a covered worker who
transfers employment from one sector to another or is employed in both sectors shall have
his credible services or contributions in both Systems credited to his service or contribution
record in each of the Systems and shall be totalized for purposes of old-age, disability,
survivorship and other benefits in case the covered member does not qualify for such benefits
in either or both Systems without totalization: Provided, however, That overlapping periods
of membership shall be credited only once for purposes of totalization.” Explain the
application of the overlapping credit.
A34: An employee may start with private sector and eventually move to work in a government agency.
Following the shift from private to public employment, the membership of such employee will from
SSS to GSIS. Some employees, however, will continue their SSS contribution even if they’re already
with the gov’t and contributing to the GSIS. This is the situation wherein there is an overlap.

If an employee shifts from private to public, their SSS contributions will then be carried over, but this
time to the GSIS (because the GSIS is now the system of coverage). If the employee later returns to
the private sector, for example, then the same portability will happen: their contributions at that point
as a GSIS member will be transferred to the SSS.

The reasonable interpretation of Section 3 is that the overlapping periods refer to how you count the
number of years of service. For example: if you have continued your SSS contribution for one year,
even if you’re already with the government, then you won’t have an additional year of service; you
will just have actual years of service under SSS and actual years of service under GSIS; the overlap
will not be counted twice.

As far as the contribution is concerned, whenever an employee retires is the controlling computation.
If an employee retired as gov’t employee, then follow the GSIS because their benefits will be coming
from GSIS. Ultimately, the overlapping provision pertains more to the periods insofar as counting of
benefits is concerned, not to which contributions should be counted.

Q35: When is an employee entitled to disability benefits due to temporary total disability?
A35: As a result of injury or sickness, the employee is unable to perform any gainful occupation for a
continuous period not exceeding 120 days. (Barko International v. Alcayno, G.R. No. 188190, 2014)

Q36: Q: What is the test to determine whether an employee suffers from permanent total disability?
A36: The test of whether an employee suffers from “permanent total disability” is a showing of the capacity
of the employee to continue performing his work notwithstanding the disability he incurred. (Vicente
v. ECC, G.R. No. 85024, 1991)

Q37: What are instances of Permanent Total Disability?

A37:
1. Temporary total disability lasting continuously for more than one hundred twenty days, except
as otherwise provided for in the Rules;
2. Complete loss of sight of both eyes;
3. Loss of two limbs at or above the ankle or wrist;
4. Permanent complete paralysis of two limbs;
5. Brain injury resulting in incurable imbecility or insanity; and
6. Such cases as determined by the Medical Director of the System and approved by the
Commission. (Labor Code, Art. 198[c])

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Q38: When does temporary total disability becomes permanent total disability?
A38:
1. Declared by the company-designated physician within 120 or 240 day treatment period; or
2. In case of absence of such a declaration either of fitness or permanent total disability, upon the
lapse of the 120 or 240 day treatment period, while the employee’s disability continues and he
is unable to engage in gainful employment during such period, and the company physician fails
to arrive at a definite assessment of the employee’s fitness or disability (Alpha Ship
Management v. Calo, G.R. No. 192034, 2014)

Q39: What happens in cases wherein the company-designated physician and employee-designated
physician disagree?
A39: If a doctor appointed by the seafarer disagrees with the assessment of the company-designated
doctor, a 3rd doctor may be agreed jointly between the employer and the seafarer, and the 3rd
doctors’ decision shall be final and binding on both parties.

Guidelines: (Bunayog v. Foscon Shipmanagement, Inc., G.R. 253480, April 25, 2023 En Banc)
1. A seafarer who receives a contrary medical finding from his/her doctor must send to the
employer, within a reasonable period, a written request to refer the conflicting medical findings
to a third doctor, to be mutually agreed upon by the parties, and whose findings shall be final
and binding between the parties.
2. The written request must be accompanied by or must indicate the contents of the medical report
from his/her doctor. Otherwise, the written request shall be considered invalid and as if none
had been requested.
3. In case there was no valid request for a third doctor referral from the seafarer, the employer
may opt to ignore the request or to refuse to assent, either verbal or written, to such request
without violating the pertinent provision of the Philippine Overseas Employment Administration
– Standard Employment Contract (POEA-SEC).

Accordingly, if a complaint is subsequently filed by the seafarer against the employer before the
labor tribunal, and the parties, after a directive from the LA pursuant to NLRC En Banc
Resolution No. 008-14, fail to secure the services of a third doctor, the labor tribunals shall hold
the findings of the company-designated physician final and binding, unless the same is found
to be biased, i.e., lacking in scientific basis or unsupported by the medical records of the
seafarer. In such a case, the inherent merits of the respective medical findings shall be
considered by the tribunals or court.

If, however, the parties were able to secure the services of a third doctor during mandatory
conference, the latter’s assessment of the seafarer’s medical condition should be considered
final and binding.

4. In case of a valid written request from the seafarer for a third doctor referral, the employer must,
within 10 days from receipt, send a written reply stating that the procedure shall be initiated by
the employer. After a positive response from the employer, the parties are given a period of 15
days to secure the services of a third doctor and an additional period of 30 days for the third
doctor to submit his/her assessment. The assessment of the third doctor shall be final and
binding.

In case, however, the parties fail to mutually agree as to the third doctor, a complaint for
disability benefits may be filed by the seafarer against the employer. The labor tribunals shall
then consider and peruse the inherent merits of the respective medical findings of the parties’
doctors before making a conclusion as to the condition of the seafarer.

5. If, however, the employer ignores the written request of the seafarer, or sends a written reply to
the seafarer refusing to initiate the referral to a third doctor procedure, or sends a written reply

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giving its assent to the request beyond 10 days from receipt of the written request of the
seafarer, the employer is considered in violation of the POEA-SEC. The seafarer may now
institute a complaint against his or her employer.
6. Upon the filing of the complaint and during the mandatory conference, the LA shall give the
parties a period of 15 days to secure the services of a third doctor and an additional period of
30 days for the third doctor to submit his/her reassessment.
7. If the services of a third doctor were not secured on account of the employer’s refusal to give
heed to the LA’s request or due to the failure of the parties to mutually agree as to the third
doctor, the labor tribunals should make conclusive between the parties the findings of the
seafarer’s physician of choice, unless the same is clearly biased, i.e., lacking in scientific basis
or unsupported by the medical records of the seafarer. In such a case, the inherent merits of
the respective medical findings and the totality of evidence shall be considered by the labor
tribunals or courts.

If, however, the failure to refer the seafarer’s condition to a third doctor after directive from the
LA was due to the fault of the seafarer, then the labor tribunals and the courts should make
conclusive between the parties the findings of the company-designated physician, except when
the company-designated physician’s medical conclusion is found to have been issued with a
clear bias in favor of the employer, i.e., lacking in scientific basis, or unsupported by the medical
records of the seafarer, as held in Dionio v. Trans-Global Maritime Agency. Inc. When such
exception applies, the inherent merits of the respective medical findings shall be considered by
the tribunals or court.

8. If, despite the employer’s failure to respond to the seafarer’s valid request for a third doctor, the
parties, during mandatory conference, were able to secure the services of a third doctor, and
the latter was able to make a reassessment on the seafarer’s condition, the third doctor’s
findings should be final and binding between the parties. In such a case, the employer’s refusal
to respond to the seafarer’s valid request for a third doctor referral should be considered
immaterial.

Q40: When should a seafarer submit himself to post-employment medical examination?

A40: In our jurisdiction, a seafarer may claim disability benefits arising from (1) an injury or illness that
manifests or is discovered during the term of the seafarer's contract, which is usually while the
seafarer is still on board the vessel or (2) an illness that manifests or is discovered after the contract,
which is when the seafarer has disembarked from the vessel. If the illness or injury falls under the
first scenario, the procedure on how the seafarer can legally demand and claim disability benefits
from the employer/manning agency is found in Section 20 (A) of the 2010 POEA-Stanadard
Employment Contract (POEA-SEC) – which is deemed incorporated in every seafarer's contract of
employment.

Under Section 20 (A) of the 2010 POEA-SEC, the seafarer shall submit himself to a post-employment
medical examination by a company-designated physician within three (3) working days upon his
return except when he is physically incapacitated to do so, in which case, a written notice to the
agency within the same period is deemed as compliance.

Whenever confronted by a positive assertion from the seafarer that he was able to comply with the
three (3)-day obligation to report to the manning agency but was not referred to a company-
designated physician and a plain denial of the manning agency, the seafarer's position is entitled
more weight. (Junio V. Pacific Ocean Manning, Inc., G.R. No. 220657; March 16, 2022).

MANAGEMENT PREROGATIVE

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Q41: Bank X implemented an “Exogamy Policy.” It provides that when two employees, both
working for Bank X, are subsequently married through Church or Civil Court rites, one must
terminate employment immediately after marriage. Employees A and B got married after this
policy was implemented. Thus, Bank X terminated Employee A’s employment. Was this a valid
dismissal?
A41: No, this was an illegal dismissal. To justify a bona fide occupational qualification, the employer must
prove two factors: (1) that the employment qualification is reasonably related to the essential
operation of the job involved; and (2) that there is a factual basis for believing that all or substantially
all persons meeting the qualification would be unable to properly perform the duties of the job.

First, the no-spouse qualification is not reasonably related to the bank’s essential operation of its business.
Second, there is no factual basis to conclude that all of their employees who marry each other would be
unable to perform their duties, entailing one’s dismissal. While a bank must observe high standards of
diligence, enforcing an arbitrary no-spouse employment rule that directs the immediate dismissal of an
employee who marries a co-worker cannot be justified. (Dela Cruz-Cagampan v. One Network Bank, 2022)

Q42: What is a bona fide occupational qualification?

A42: Employment in particular jobs may not be limited to persons of a particular sex, religion, or national
origin UNLESS, the employer can show that sex, religion, or national origin is an actual qualification
for performing the job. The qualification is called a bona fide occupational qualification (BFOQ).

BFOQ is valid "provided it reflects an inherent quality reasonably necessary for satisfactory job
performance."

TERMINATION OF EMPLOYMENT

Q43: What are the elements for just causes of termination?

A43:
JUST CAUSES
GROUND ELEMENTS
1. The misconduct must be serious;
2. It must relate to the performance of the employee’s duties showing that
the employee has become unfit to continue working for the employer;
and
Serious Misconduct
3. It must have been performed with wrongful intent.
4. There must be a showing that the employee becomes unfit to continue
working for the employer. (Cebu People’s Multi-Purpose Cooperative v.
Carbonilla, Jr., G.R. No. 212070, 2016)
1. The disobedience or insubordination must be willful or intentional
characterized by a wrongful and perverse attitude;
2. The order violated must be reasonable and lawful
Willful Disobedience
3. The order violated must be made known to the employee; and
4. The order must pertain to the duties which he has been engaged to
discharge. (D.O. 147-15)
1. The neglect of duty must be gross, meaning there is a want of care in the
performance of one’s duties; and
Gross and habitual neglect
2. It must be habitual, meaning there is repeated failure to perform one’s
of duties
duties for a period of time, depending on the circumstances. (Cavite
Apparel, Inc. v. Marquez, G.R. No. 172044, 2013)
Fraud or Willful Breach of 1. The employee concerned must be one holding a position of trust and
Trust confidence; and

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2. There must be an act that would justify the loss of trust and confidence.
(Prudential Guarantee & Assurance Employee Labor Union v. NLRC,
G.R. No. 185335, 2012)
1. that there be a commission of a crime or offense; and
Commission of a crime or 2. That it be against the immediate family members of the employer,
offense by the employee meaning the spouse, ascendants, descendants, legitimate, natural, or
against his employer or any adopted brothers or sisters by affinity, and those by consanguinity within
member of his family the fourth civil degree. NOTE: Conviction is not required. (Starlite Plastic
Industrial Corporation v. NLRC, G.R. No. 78491, 1989)
1. The requisites of the above-mentioned causes must not be satisfied;
and
Other analogous cases 2. It must be due to the voluntary and/or willful act or omission of the
employer. (Nadura v. Benguet Consolidated Inc., G.R. No. L- 17780,
1962)

Q44: What are the factors to be considered in determining whether the imposed penalty is
commensurate to the misconduct committed by the employee?
A44: The following factors should be considered in determining whether theft of company property by an
employee warrants the penalty of dismissal:
(a) period of employment and existence of a derogatory record;
(b) value of the property involved;
(c) cost of damage to the employer;
(d) effect on the viability of employer's operation or company's interest; and
(e) employee's position.

When an employee has been employed for 18 years, it is the first time that he had been involved in
taking company property, the taking was only minimal, and the item stolen was retrieved by the employer
dismissal is not proportional to the misconduct. (URC v. Roberto Guzman, G.R. No. 255864, 2022).

Q45: What are the elements for authorized causes of termination?

A45:
AUTHORIZED CAUSES
GROUND ELEMENTS
1. There must be superfluous positions or services of employees;
2. The positions or services are in excess of what is reasonably demanded
by the actual requirements of the enterprise to operate in an economical
and efficient manner;
3. There must be good faith in abolishing redundant positions;
Redundancy 4. There must be fair and reasonable criteria in selecting the employees to
be terminated; and
5. There must be an adequate proof of redundancy such as but not limited
to the new staffing pattern, feasibility studies/ proposal, on the viability of
the newly created positions, job description and the approval by the
management of the restructuring. (D.O. No. 147-15)
1. The retrenchment must be reasonably necessary and likely to prevent
business losses;
2. The losses, if already incurred, are not merely de minimis, but substantial,
serious, actual and real, or if only expected, are reasonably imminent.
Retrenchment
3. The expected or actual losses must be proved sufficient and convincing
evidence such as financial statements (audited by an independent firm)
over a span of several years OR some reasonable period of time, and not
merely the actual year of business loss;

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4. The retrenchment must be in good faith for the advancement of its interest
and not to defeat or circumvent the employees’ right to security of tenure;
and
5. There must be fair and reasonable criteria in ascertaining who would be
dismissed and who would be retained among the employees, such as
status, efficiency, seniority, physical fitness, age, and financial hardship
for certain workers. (D.O. No. 147-15)
1. There must be introduction of machinery, equipment or other devices;
2. The introduction must be done in good faith;
3. The purpose for such introduction must be valid such as to save on cost,
enhance efficiency and other justifiable economic reasons;
Introduction of Labor-
4. There is no other option available to the employer than the introduction of
Saving Devices
machinery, equipment or device and the consequent termination of
employment of those affected thereby; and
5. There must be fair and reasonable criteria in selecting employees to be
terminated. (D.O. No. 147-15)
1. There must be a decision to close or cease operation of the enterprise by
Cessation or Closure of
the management;
Operation of the
2. The decision was made in good faith; and
Establishment or
3. There is no other opinion available to the employer except to close or
Undertaking
cease operations. (D.O. No. 147-15)
1. An employee has been found to be suffering from any disease, whether
contagious or not;
2. His continued employment is prohibited by law or prejudicial to his health,
or to the health of his co-employees;
3. A competent public health authority certifies that the disease is of such
Disease
nature or at such a stage that it cannot be cured within a period of six
months even with proper medical treatment; and
4. Payment of separation pay equivalent to at least one month salary or to
one-half month salary for every year of service, whichever is greater, a
fraction of at least six months being considered as one whole year.

Q46: Is an employee who resigns required to serve notice?

A46: General Rule: An employee must serve notice at least one (1) month in advance. The employer may
hold the employee liable for failure to comply with this requirement. Exceptions: (SICO)
1. Serious insult by the employer or his representative on the honor and person of the employee;
2. Inhuman and unbearable treatment accorded the employee by the employer or his
representative;
3. Commission of a crime or offense by the employer or his representative against the person of
the employee or any of the immediate members of his family; and
4. Other causes analogous to any of the foregoing. (Labor Code, Art. 300)

Q47: What are the substantive requirements for termination due to disease? A: For a dismissal on
the ground of disease to be considered valid, two requisites must concur:
A47:
1. The employee must be suffering from a disease which cannot be cured within six months and
his continued employment is prohibited by law or prejudicial to his health or to the health of his
co- employees; and
2. A certification to that effect must be issued by a competent public health authority. (Crayons
Processing v. Pula, G.R. No. 167727, 2007)

Q48: What is the effect if the dismissal of an employee is based on a just or authorized cause but
procedural due process requirements were not satisfied?

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A48: Although an employer may legally dismiss an employee for a just cause, the non-observance of the
requirements of due process before effecting the dismissal leaves the employer liable for nominal
damages. (Samar-Med v. NLRC, G.R. No. 162385, 2013)

In Agabon v. NLRC (G.R. No. 158693, 2004), the Court awarded nominal damages amounting
to P30K without distinguishing between just and authorized causes.

In Jaka Food v. Pacot (G.R. No. 151378, 2005), the Court distinguished between just and
authorized causes. It stated that if a just cause for dismissal exists, the nominal damages for
non-compliance with procedural due process requirements must be tempered (since it is caused
by the conduct of the employee) as compared to an authorized cause.

Industrial Timber v. Ababon (G.R. No. 164518, 2006), further refined Jaka. For authorized
causes, if the dismissal was due to business losses, the damages to be awarded should be less
compared to a dismissal not due to business losses.

LABOR RELATIONS

Q49: Who may or may not exercise the right to self- organization?
A49: Generally, all employees. Except:
1. Managerial and confidential employees; managerial employees are those who have powers or
prerogatives to lay down and execute management policies and/or to hire, transfer, suspend,
lay off, recall, discharge, assign or discipline employees.
2. Employee-members of cooperatives
3. Religious objectors
4. Employees of foreign embassies, consulates, and international organizations

Q50: What is the Doctrine of Necessary Implication

A50: While Art. 255 of the Labor Code singles out managerial employees as ineligible to join, assist or
form any labor organization, under the doctrine of necessary implication, confidential employees are
similarly disqualified. This doctrine states that what is implied in a statute is as much a part thereof
as that which is expressed. (NATU v. Republic Planters Bank, G.R. No. 93468; United Pepsi Cola v.
Laguesma, G.R. No. 9663)

Note: Confidentiality may attach to a managerial or non-managerial position. Confidentiality is not

determined by rank, but by the nature of the job.

Note: Confidential employees are excluded from joining labor organization under the doctrine of
necessary implication. If confidential employees could unionize in order to bargain for advantages for
themselves, then they could be governed by their own motives rather than the interest of the
employers. They may become the source of undue advantage. Said employees may act as spy or
spies of either party to a collective bargaining agreement. (Pepsi-Cola Products, Inc. v. Secretary of
Labor, G.R. No. 96663)

Q51: Is the right not to join a union included in the freedom of association?
A51: Yes. However, there is an exception. If there is a Union Security Clause in the CBA, an employee
has no option but to join the union. (Labor Code, Article 259[e])

Exception to the Exception: When the employee is a religious objector or s/he is part of another
union. In which case, even if there is a Union Security Clause, s/he will not be compelled to join one.
(Kapatiran sa Meat and Canning Division v. Ferrer- Calleja, G.R. No. 82914 (Resolution), 1988)

Q52: What are the modes of determining an exclusive bargaining agent and their requisites?
A52: The following are the modes of determining the exclusive bargaining agent:

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1. Sole and Executive Bargaining Agent (SEBA) Certification - it is applicable when there is
only one legitimate labor organization, whether it is an independent union or a chartered local,
in a given bargaining unit. Otherwise, the same shall be referred directly to the election officer
for the conduct of the certification election. (D.O. 40-1-15)
2. Consent Election - when two or more contending unions voluntarily and mutually agree to hold
the certification election among themselves, with or without the participation and supervision of
the DOLE, to determine the issue of majority representation of all the workers in the appropriate
collective bargaining unit. (IRR of LC, Sec. 1[b], Rule 1, Book V)
3. Certification Election - refers to the process of determining through secret ballot the sole and
exclusive representative of the employees in an appropriate bargaining unit for purposes of
collective bargaining or negotiations (IRR of LC, Sec. 1[h], Rule I, Book V).
4. Run-off Elections - when the majority of the bargaining unit voted in the election where at least
3 choices are involved including "no union. However, not one of the choices obtained a majority
of the valid votes cast. A run-off election may thus be held when the total number of votes for
all contending unions is at least 50% of the number of votes cast. (D.O. No. 40-03, Sec. 1 (ss),
Rule 1)
5. Re-run Elections - may be held in two instances: a) when breaking a tie between contending
unions, including "no union" and one of the unions, and b) when a failure of election has been
declared by the Med-Arbiter. (D.O. No. 40-1-15)

Q53: What are the bars to a petition for certification election?

A53: A petition for certification election may be filed anytime, EXCEPT
1. [CERTIFICATION YEAR BAR] when a SEBA certification has been entered or a valid certification,
consent, run-off, or re-run election has been conducted within the bargaining unit within one (1) year
prior to the filing of the petition for certification election. Where an appeal has been filed from the
Order of the Mediator-Arbiter certifying the results of the election, the running of the one year period
shall be suspended until the decision on the appeal has become final and executory;
2. [NEGOTIATION BAR RULE] when the duly certified union has commenced and sustained
negotiations in good faith with the employer in accordance with Article 261(renumbered) of the Labor
Code within the one year period referred to in the immediately preceding paragraph;
3. [DEADLOCK BAR RULE] when a bargaining deadlock to which an incumbent or certified bargaining
agent is a party had been submitted to conciliation or arbitration or had become the subject of a valid
notice of strike or lockout;
4. [CONTRACT BAR RULE] when a collective bargaining agreement between the employer and a duly
certified bargaining agent has been registered in accordance with Article 237 of the Labor Code.
(Rule VIII, Sec. 3, D.O.40-03)

Q54: What is the extent of the right to self-organization of government employees?

A54: "The right of government employees to self-organization is not as extensive as in the [right] of private
[employees.]" Likewise, the right of government employees to collective bargaining and negotiation is
subject to limitations. Only the terms and conditions of government employment not fixed by law can be
negotiated. (Clark Development Corporation and Governance Commission for GOCCs v Association of
CDC Supervisory Personnel Union, G.R. 207853).

JURISDICTION AND REMEDIES

Q55: What is the jurisdiction of the National Labor Relations Commission (NLRC)?
A55: Original Jurisdiction
1. Injunction in ordinary labor disputes to enjoin or restrain any actual or threatened commission
of any or all prohibited or unlawful acts or to require the performance of a particular act in any
labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable
damage to any party;
2. Injunction in strikes or lockouts under Art. 279;

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3. Certified labor dispute causing or likely to cause a strike or lockout in an industry indispensable
to the national interest, certified to it by the DOLE Secretary for compulsory arbitration;
4. Contempt cases; and
5. Petition to annul or modify the order or resolution of the LA;

Exclusive Appellate Jurisdiction

1. All cases decided by the LAs, including contempt cases;
2. Cases decided by the DOLE Regional Directors or his duly authorized hearing officers involving
recovery of wages, simple money claims and other benefits not exceeding P5,000 and not
accompanied by a claim for reinstatement.

Q56: Distinguish a conciliation case and a preventive mediation case.

A56: A conciliation case refers to actual existing labor dispute subject of a notice of strike or lockout and
cases of actual strike or lockout. (NCMB Manual of Procedures Rule III, Section 1, (3))

On the other hand, a preventive mediation case refers to the potential labor disputes which are
the subject of a formal or informal request for conciliation and mediation assistance sought by
either or both parties or upon the initiative of the NCMB to avoid the occurrence of actual labor
disputes. (NCMB Manual of Procedures Rule III, Section 1, (20))

Q57: A was hired by ABC Employment Corporation as a construction worker to work in Sabah,
Malaysia for ABC’s principal, XYZ Construction. He was promised good working conditions,
including suitable living quarters and free food, as stated in his contract. However, upon
arrival in Malaysia, he experienced poor living conditions, unpaid overtime work, and the
discovery that he only had tourist visa. XYZ hid him from authorities due to lack of work
permits.

When A reported his grievances to his employer, he was ignored. Subsequently, he sent an
email to a newspaper detailing his situation, which led to his termination and eventual
repatriation. He filed a complaint against ABC with the Philippine Overseas Employment
Administration (POEA) for recruitment violations under the 2002 POEA Rules and
Regulations. POEA dismissed the case for lack of substantiating evidence and non-
attendance at hearings. He then filed a complaint with the Labor Arbiter for illegal dismissal
and money claims. ABC questioned the complaint and argued that POEA had primary
jurisdiction and that the Labor Arbiter had no authority to adjudicate the case.

Does the Labor Arbiter have jurisdiction over the case?

A57: Yes, the LA and the NLRC have proper jurisdiction over the illegal dismissal and money claims. The
LA and the NLRC have original and exclusive jurisdiction over claims arising from an employer-
employee relationship involving Filipino workers deployed overseas, including claims for illegal
dismissal, unpaid wages, and other employment-related issues. This jurisdiction is grounded in the
Migrant Workers and Overseas Filipinos Act of 1995, as amended by Republic Act No. 10022.

On the other hand, the POEA has jurisdiction over administrative cases related to pre-employment
or recruitment violations and administrative disciplinary actions against employers, principals, and
overseas Filipino workers. The POEA had jurisdiction over the administrative recruitment violations,
not over disputes involving illegal dismissal and employment conditions. (U R Employed International
Corporation v. Pinmiliw, G.R. No. 225263, March 16, 2022)

–– end ––

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Annex A: Social Welfare Legislation – SSS & GSIS

COVERAGE
SOCIAL SECURITY ACT OF 1997 (R.A. No. GOVERNMENT SERVICE INSURANCE
8282) ACT OF 1997 (R.A. No. 8291)
1. Employer – any person, natural or judicial,
domestic or foreign who carries on in the
Philippines any trade, business, industry
undertaking, or activity of any kind and uses
the services of another person who is under his 1. Employer – the national government, its
orders as regards employment. political subdivisions, branches, agencies or
instrumentalities, including GOCCs, and
financial institutions with original charters,
*EXCEPT: Government and any of its political
the constitutional commissions and the
COVERED subdivisions, branches and instrumentality, judiciary
SCOPE including GOCCs, i.e., those under GSIS.
2. Employee – any person receiving
2. Employee – any person who performs
compensation while in service of an
services for an employer who receives
employer as defined herein, whether by
compensation for such services, where there is
election or appointment
an employer- employee relationship.

3. Self-Employed – considered both employer

and employee.

DEPENDENTS 1. Legal spouse entitled for support;

2. Child, whether legitimate, legitimated, legally adopted or illegitimate;
3. Parents receiving regular support from the member.
CONDITIONS 1. Unmarried;
FOR CHILD TO Not gainfully employed
BE 2.Not over age of majority; OR
CONSIDERED 2. Has not reached 21 years of age; OR
DEPENDENT
3. Incapable of supporting himself either physically or mentally prior to 21 years of age or
age of majority, as the case may be
BENEFICIARIES a. Legal Dependent Spouse until remarriage
a. Dependent Spouse, until remarriage; AND
;AND
1. PRIMARY b. Dependent Children
b. Dependent Legitimate or Legitimated or
Legally Adopted and Illegitimate Children
2. SECONDARY a. Dependent Parents
a. Dependent Parents AND

b. Absent primary and secondary

b. Legitimate descendants, subject to
beneficiaries, any other person designated
restrictions on dependent children
by member as secondary beneficiary
3. OTHERS As to DEATH BENEFITS, if no beneficiary
qualifies under the Act, benefits shall be paid
to Legal Heirs in accordance with Law of
Succession
BENEFITS 1. Monthly Pension 1. Monthly Pensions

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2. Dependents Pension 2. Separation

3. Retirement 3. Unemployment or Involuntary Separation
4. Death 4. Retirement
5. Permanent Disability 5. Disability
6. Funeral 6. Survivorship
7. Sickness 7. Funeral
8. Maternity (ONLY 1ST FOUR 8. Life Insurance
DELIVERIES OR MISCARRIAGES 9. Loan Grants

*EXCEPT Judiciary and Constitutional

Commissions who shall have life insurance
only

COVERAGE a. All employees not over 60 years of age

1. Compulsory and their employers; (effective date: on the
first day of his operation and that of the
employee on the day of his employment)

b. Self-employed persons, as may be

determined by the Commission under such
rules and regulations as it may prescribe,
including, but not limited to:

i. all self-employed professionals;

ii. partners and single- proprietors of

business;

iii. actors and actresses, directors,

scriptwriters and news correspondents not
employees;

iv. professional athletes, coaches, trainers

and jockeys, and individual farmers and
fishermen; (effective date: on registration
with the SSS)

c. Domestic helpers 60 years of age and

below, provided, that their monthly income is
not less than P1,000; (effective date: upon
rendering at least 1 month of service)
2. VOLUNTARY a. Filipinos recruited by foreign-based
employers for employment abroad;

b. Employee separated from employment to

maintain his right to full benefits;

c. Self-employed who realizes no income for

a certain month;

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d. Spouses who devote full time to

managing household and family affairs,
unless specifically mandatorily covered.

*BY AGREEMENT: Any foreign government,

international organization or wholly owned
instrumentality employing workers in the
Philippines or employing Filipinos outside
the Philippines, may enter agreement with
Philippines for inclusion of such employees
in SSS EXCEPT those already covered by
their respective civil service retirement
system.
EXCLUSIONS 1. Employment purely casual and not for the
FROM purpose of occupation, or business of the
COVERAGE employer 1. Members of the AFP and PNP, subject to
the condition that they must settle first their
2. Service performed on or in connection financial obligation with the GSIS;
with alien vessel, if employed when such
vessel is outside of Philippines 2. Contractual employees, who have no
employer-employee relationship with the
3. Employees of Philippine government or agencies they serve;
instrumentality or agency thereof
3. Uniformed personnel of the Bureau of Fire
4. Service performed in the employ of a Protection (BFP);
foreign government, or international
organizations, or wholly owned 4. Uniformed personnel of the Bureau of Jail
instrumentality employing workers in the Management and Penology (BJMP);
Philippines or employing Filipinos outside of
the Philippines 5. Barangay and Sanggunian Officials who are
not receiving fixed monthly compensation;
5. Services performed by temporary
employees and other employees excluded 6. Employees who do not have monthly
by SSS regulation; employees of bona fide regular hours of work and are not receiving
independent contractors shall not be fixed monthly compensation (IRR of R.A. No.
deemed employees of the employer 8291, Rule II, § 3, Par. 2)
engaging the services of an independent
contractor.
COMPENSATION The basic pay or salary received by an
All actual remuneration for employment, employee, pursuant to his
including the mandated cost-of-living election/appointment, excluding per diems,
allowance, the cash value of any bonuses, overtime pay, honoraria, allowances
remuneration paid in any medium other than and any other emoluments received in
cash EXCEPT that part of the remuneration addition to the basic pay
in excess of the maximum salary credit

BASIS OF CLAIM Non-work connected disability, sickness, Work-connected exempt from liability where
maternity, death and old age and other permanent disability due to his grave
contingencies resulting in loss of income or misconduct, habitual intoxication, or willful
financial burden (§ 2) intention to kill himself or another (§§ 15- 17)

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EFFECTS OF 1. Employer’s contribution on his account

SEPARATION ceases at the end of the month of
FROM separation;
EMPLOYMENT
2. Employee’s obligation to contribute also
ceases at the end of the month of 1. Member shall continue to be a member; and
separation;
2. Member shall be entitled to whatever
3. Employee shall be credited with all benefits he has qualified to in the event of any
contributions paid on his behalf and entitled contingency compensable under this Act.
to benefits;

4. Employee may continue to pay the total

contributions to maintain his right to full
benefits.
REPORTING A. Employer:
REQUIREMENTS Report immediately to SSS the names,
ages, civil status, occupations, salaries and
dependents of all his covered employees. Employer:
Report to GSIS the names, employment
status, positions, salaries of the employee and
B. Self-employed: such other matter as determined by the GSIS.

Report to SSS within 30 days from the first

day of his operation, his name, age, civil
status, occupation, average monthly net
income and his dependents.
FUNDING 1. Employer’s contributions

2. Employee’s/member’s contributions
EXEMPTION Dispute arising from:
FROM TAX/
LEGAL Any dispute arising under this Act and other
1. Coverage laws administered by GSIS
PROCESS/ LIEN 2. Benefits
3. Contributions
4. Penalties Jurisdiction: GSIS
5. Any matters related thereto
When decision made: 30 days from receipt of
Jurisdiction: Social Security Commission the hearing officer’s findings and
recommendations or 30 days after submission
for decision
When decision made: Mandatory period of
20 days from submission of evidence
Appeal:
CA – Rule 43, § 31
Appeal: SC – Rule 45
CA – questions of law and facts
SC – questions of law only
PRESCRIPTIVE 20 years from: 4 years from date of contingency EXCEPT for
PERIOD life and retirement benefits
1. time delinquency is known;

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2. time the assessment is made by the SSS;

or

3. time the benefit accrues.

(as the case may be)

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Annex B: Jurisdiction Table

Note: The BLR and the Regional Office (through the Labor Relations Division) have jurisdiction over the same type of cases (i.e., inter/intra-union disputes).
The difference is in the type of union involved. For inter/intra-union disputes involving company-level unions (independent unions and chapters), the Regional
Office has original jurisdiction. For inter/intra-union disputes involving federations, the BLR has original jurisdiction.

As regards appellate jurisdiction, there is also a difference between cases involving company-level unions and cases involving federations. For company-
level union cases, the decision of the Regional Office is appealable to the BLR. Then, the decision of the BLR can be elevated to the CA (Rule 65), not to
the Secretary of Labor. On the other hand, for federation cases, the BLR's decision (in the exercise of its original jurisdiction) is appealable to the Secretary.
The Secretary's decision, in turn, can be elevated to the CA.

Ultimately, the BLR has both original (federations) and appellate (company-level unions) jurisdiction over inter/intra-union disputes. The BLR decision is
either appealable to the Secretary (if involving federations) or subject of a Rule 65 Petition with the CA (if involving the BLR's appellate jurisdiction over
inter/intra-union disputes involving company-level unions).

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