SECTION 1

Constitutional Policies and Scope of Labor Laws

Constitution:
The basic State policy on labor is enunciated in Art. II, Sec. 18 (Declaration of Principles and
State Policies) of the 1987 Constitution:

Section 18. The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.

The specific constitutional guarantees to labor are found in Art. XIII, Sec. 3 (Social Justice and
Human Rights):
LABOR
Section 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.

Civil Code (1950) long ago expressed the well-known principles that:
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 lock outs. Closed shop, wage, working conditions, hour 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.

These ideas are also expressed in Art. 3 of the Labor Code (1974), the language of which was
closely adopted by the 1987 Constitution.
 Section 3. The State shall afford full protection to labor, promote full employment, ensure
equal work opportunities regardless of sex, race, or creed and regulate the relations
between workers and employers. The State shall assure the rights of all workers to
self-organization, collective bargaining, security of tenure, and just and humane
conditions of work.

The idea of balancing the interests of labor and capital is also expressed in the 1987
Constitution, which states in Art. XIII, Sec. 2 that:

Section 2. 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.

The constitutional bias for labor is reflected in the provisions of the Labor Code (Art. 4) and the
Civil Code (Art 1702) which mandate liberal interpretation of labor laws in favor of workers. And
this bias extends not only to interpretation of the law but also to employment contracts and
evidence in labor cases.

The Labor Code defines "worker" as "any member of the labor force, whether employed
or unemployed" (Art 13 [a), Labor Code).

Government workers are not allowed by law to strike and to demand collective
bargaining (Manila Public School Teachers Association vs. Laguio, G.R. No. 955445, 06 April
1991), despite the seeming broad coverage accorded by the 1987 Constitution. Nonetheless,
the Supreme Court has also declared that:

"As defined in Section 5 of CSC Resolution No. 02-1316 which serves to regulate the
political rights of those in the government service, the concerted activity or mass action
 proscribed must be coupled with the "intent of effecting work stoppage or service
disruption in order to realize their demands of force concession."

Precisely, the limitations or qualifications found in Section 5 of CSC Resolution No. 02-1316 are
there to temper and focus the application of such prohibition. Not all collective activity or mass
undertaking of government employees is prohibited. Civil Service does not deprive them of their
freedom of expression. This freedom can be reasonably regulated only but can never be taken
away"

Article 110 of the Labor Code which provides "worker preference in case of bankruptcy" has
been interpreted to mean that a declaration of bankruptcy or judicial liquidation must be present
before the workers preference may be enforced.

SECTION 2

Labor Protection

CIVIL CODE

Article 6. "rights may be waived, except when the waiver is contrary to law, public order, public
policy, morals, or good customs, or prejudicial to a third party with a right recognized by law"

Art. 22. Under the principle of unjust enrichment, no person may unjustly enrich oneself at the
expense of another.

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

LABOR CODE

Art. 4. Construction in favor of Labor. - All doubts in the implementation and interpretation of
the provisions of this Code, including its impending rules and regulations, shall be resolved in
favor of labor.
Art. 97 (b). The Social Security System does not exempt religious and charitable organizations
(Roman Catholic Archbishop of Manila vs. Social Security Commission, G.R. No. L-15045, 20
January 1961). All employees are covered, unless specifically exempted by the statute (Chua
vs. Court of Appeals, G.R. No. 125837, 06 October 2004).

Art. 100. Prohibition Against Elimination or Diminution of Benefits. – Nothing in this Book
shall be construed to eliminate or in any way diminish supplements, or other employee benefits
being enjoyed at the time of promulgation of this Code. (Monetary benefits like salaries, and
those with monetary equivalent like leave credits)

ART. 128. Visitorial and enforcement power. — (a) The Secretary of Labor and Employment
or his duly authorized representatives, including labor regulation officers, shall have access to
employer’s records and premises at any time of the day or night whenever work is being
undertaken therein, and the right to copy therefrom, to question any employee and investigate
any fact, condition or matter which may be necessary to determine violations or which may aid
in the enforcement of this Code and of any labor law, wage order or rules and regulations issued
pursuant thereto.

ART. 228. [222] Appearances and Fees. – (a) Non-lawyers (Representatives of Labor Unions
and law students undergoing legal aid clinic practice) may appear before the Commission or
any Labor Arbiter only:

1. If they represent themselves; or

2. If they represent their organization or members thereof.

(b) No attorney’s fees, negotiation fees or similar charges of any kind arising from any
collective bargaining agreement shall be imposed on any individual member of the
contracting union: Provided, However, that attorney’s fees may be charged against union
funds in an amount to be agreed upon by the parties. Any contract, agreement or
arrangement of any sort to the contrary shall be null and void.

ART. 229. [223] Appeal. Decisions, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both parties within ten (10) calendar
days from receipt of such decisions, awards, or orders. Such appeal may be entertained only on
any of the following grounds:

(a) If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
 (b) If the decision, order or award was secured through fraud or coercion, including graft
and corruption;

(c) If made purely on questions of law; and

(d) If serious errors in the findings of facts are raised which would cause grave or
irreparable damage or injury to the appellant.

In case of a judgment involving a monetary award, an appeal by the employer may be

perfected only upon the posting of a cash or surety bond issued by a reputable bonding
company duly accredited by the Commission in the amount equivalent to the monetary
award in the judgment appealed from.

ART. 253. [243] Coverage and Employees’ Right to Self-Organization. All persons employed
in commercial, industrial and agricultural enterprises and in religious, charitable, medical, or
educational institutions, whether operating for profit or not, shall have the right to self
-organization and to form, join, or assist labor organizations of their own choosing for purposes
of collective bargaining. Ambulant, intermittent and itinerant workers, self -employed people,
rural workers and those without any definite employers may form labor organizations for their
mutual aid and protection.

ART. 257. [246] Non-Abridgment of Right to Self -Organization. It shall be unlawful for any
person to restrain, coerce, discriminate against or unduly interfere with employees and workers
in their exercise of the right to self -organization. Such right shall include the right to form, join,
or assist labor organizations for the purpose of collective bargaining through representatives of
their own choosing and to engage in lawful concerted activities for the same purpose for their
mutual aid and protection, subject to the provisions of Article 264 of this Code.

ART. 294. [279] Security of Tenure. - In cases of regular employment, the employer shall not
terminate the services of an employee except for a just cause or when authorized by this Title.
An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss
of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to
his other benefits or their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.

ART. 297. [282] Termination by Employer. (Just Causes) - An employer may terminate an
employment for any of the following causes:
 (a) Serious misconduct or willful disobedience by the employee of the lawful orders of his
employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or
duly authorized representative;

(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized representatives;
and

(e) Other causes analogous to the foregoing.

(There needs to be a twin notice rule. Show cause notice/order. Then a hearing)

ART. 298. [283] Closure of Establishment and Reduction of Personnel. (Authorized Causes)
- The employer may also terminate the employment of any employee due to the installation of
labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless the closing is for the purpose of
circumventing the provisions of this Title, by serving a written notice on the workers and the
Ministry of Labor and Employment at least one (1) month before the intended date thereof. In
case of termination due to the installation of labor-saving devices or redundancy, the worker
affected thereby shall be entitled to a separation pay equivalent to at least his one (1) month pay
or to at least one (1) month pay for every year of service, whichever is higher. In case of
retrenchment to prevent losses and in cases of closures or cessation of operations of
establishment or undertaking not due to serious business losses or financial reverses, the
separation pay shall be equivalent to one (1) month pay or atleast one-half (½) month pay for
every year of service, whichever is higher. A fraction of at least six (6) months shall be
considered one (1) whole year..

ART. 299. [284] Disease as Ground for Termination. - An employer may terminate the
services of an employee who has been found to be suffering from any disease and whose
continued employment is prohibited by law or is prejudicial to his health as well as to the health
of his co-employees: Provided, That he is paid separation pay equivalent to at least one (1)
month salary or to one-half (1/2) month salary for every year of service, whichever is greater, a
fraction of at least six (6) months being considered as one (1) whole year.
ART. 300. [285] Termination by Employee. - (a) An employee may terminate without just
cause the employee-employer relationship by serving a written notice on the employer at least
one (1) month in advance. The employer upon whom no such notice was served may hold the
employee liable for damages.

(b) An employee may put an end to the relationship without serving any notice on the
employer for any of the following just causes:

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.

(No person may be compelled to work against his will, this is called Involuntary
Servitude. A resignation can be withdrawn unless already accepted by the employer.)

OTHER LAWS

The law may also forestall non-compliance with minimum standards, by prescribing modification
of contracts such as in the case of increases in minimum wage. Thus, the legal impairment of
service contracts prescribed by the Wage Rationalization Act (R.A. No. 6727).

Section 6. In the case of contracts for construction projects and for security, janitorial and similar
services, the prescribed increases in the wage rates of the workers shall be borne by the
principals or clients of the construction/service contractors and the contract shall be deemed
amended accordingly. In the event, however, that the principal or client fails to pay the
prescribed wage rates, the construction/service contractor shall be jointly and severally liable
with his principal or client

SECTION 3
 Management Prerogatives

LABOR CODE

ART. 83. Normal Hours of Work. – The normal hours of work of any employee shall not exceed
eight (8) hours a day.

Health personnel in cities and municipalities with a population of at least one million (1,000,000)
or in hospitals and clinics with a bed capacity of at least one hundred (100) shall hold regular
office hours for eight (8) hours a day, for five (5) days a week, exclusive of time for meals,
except where the exigencies of the service require that such personnel work for six (6) days or
forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at
least thirty percent (30%) of their regular wage for work on the sixth day. For purposes of this
Article, “health personnel” shall include resident physicians, nurses, nutritionists, dieticians,
pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists,
midwives, attendants and all other hospital or clinic personnel.

ART. 91. Right to Weekly Rest Day. – (a) It shall be the duty of every employer, whether
operating for profit or not, to provide each of his employees a rest period of not less than
twenty-four (24) consecutive hours after every six (6) consecutive normal work days.

(b) The employer shall determine and schedule the weekly rest day of his employees subject to
collective bargaining agreement and to such rules and regulations as the Secretary of Labor
and Employment may provide. However, the employer shall respect the preference of
employees as to their weekly rest day when such preference is based on religious grounds.

Certain Labor Code provisions and DOLE regulations and special laws impose on employers
the obligation to hire (under certain circumstances):

• Medical and dental personnel (Art. 163, Labor Code)

• Occupational health personnel and safety officer (RA No. 11058; D.O. No. 198 Series
of 2018)

• Regular employees for functions related to bank deposits (Section 55.4, General
Banking Act of 2000)

• Data Protection Officer (DPO) for personal information controllers or PICs and personal
information processors or PIPs (Data Privacy Act)
ART. 296. [281] Probationary Employment. Probationary employment shall not exceed six (6)
months from the date the employee started working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services of an employee who has been engaged on
a probationary basis may be terminated for a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.

SECTION 4

Employer-Employee Relationship

CIVIL CODE

An employee enjoys security of tenure. They can only be dismissed for lawful causes and after
due process. The cause of action is illegal dismissal, jurisdiction of which belongs to the
Arbitration Branch of the NLRC (Labor Arbiters).

Art. 1144 (a) of the Civil Code. The prescriptive period for illegal dismissal, characterized by the
Supreme Court as "injury to rights", is four (4) years. It may be asked whether a cause of action
based on a written document (e.g., employment contract or collective bargaining agreement)
could be brought in 10 years.

There are certain legal relationships specifically defined in the Civil Code, like contract for a
piece of work (Art. 1713). partnership (Art. 1767), and agency (Art. 1868) which bear some
similarities to employment.

LABOR CODE

ART. 97. Definitions. -As used in this Title:

(b) “Employer” includes 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.
(This definition of "employer" justifies the inclusion of religious and charitable organizations in
the coverage of minimum wage and other employment standards. It is also the basis for the
statutory liability of government agencies to money claims of employees of private service
contractors whom the latter engage to perform janitorial, security, and other outsourced
services.)

(c) “Employee” includes any individual employed by an employer.

With respect to Book Four (Employee Compensation and Statue Insurance Fund), these
definitions are found:

"Employer" means any person, natural or juridical, employing the services of the
employee (Art. 173 (F), Labor Code ).

This definition, like that stated in Book Three, clarifies that an employer (unlike an employee)
may either be a natural or a juridical person.

"Employee" means any person compulsorily covered by the GSIS........ or any person
compulsorily covered by the SSS... (Art. 173 [g]. Labor Code).

With respect to Book V (Labor Relations), the following definitions are given:

"Employer" includes any person acting in the interest of an employer, directly or

indirectly. The term shall not include any labor organization or any of its officers or
agents except when acting as employer" (Art. 219 [e], Labor Code).

This definition of "employer" explains that a labor organization may itself be an employer. The
implication is that a union may exist within a union, with the latter assuming the role of employer
or management.

Note the qualification that the employer "includes any person acting in the interest of an
employer, directly or indirectly". This clause makes corporate officers and employees assume
the status of "employer" for limited purposes.

Art. 218 [m]. Managerial employees are defined as those employees" vested with powers or
prerogatives to lay down and execute management policies and/or to hire, transfer, suspend,
layoff, recall, discharge, assign or discipline employees"
ART 219 (L). “Labor dispute” includes any controversy or matter concerning terms and
conditions of employment or the association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions of employment, regardless of
whether the disputants stand in the proximate relation of employer and employee.

Art. 136. Classification of Certain Women Workers. Any woman who is permitted or suffered
to work with or without compensation in any nightclub, cocktail lounge, massage clinic, bar, or
similar establishments under the effective control or supervision of the employer for a
substantial period of time as determined by the Secretary of Labor shall be considered as an
employee for purposes of labor and social legislation.

Art. 306. Employees are also protected by labor standards, like minimum wage regulation,
various leaves, and separation and retirement benefits. The prescriptive period for
employment-related money claims is three (3) years.

OTHER LAWS

Sec. 5 of Social Security Law. The Social Security Commission may likewise rule on the issue
under its adjudicatory authority.

Regular courts, in criminal cases like qualified theft under Art. 310 of the RPC, would also have
the authority to determine employer-employee relationship.

SECTION 5

Employee Classification

CIVIL CODE

ART. 1713 INDEPENDENT CONTRACTOR. By the contract for a piece of work the contractor
binds himself to execute a piece of work for the employer, in consideration of a certain price or
compensation. The contractor may either employ only his labor or skill, or also furnish the
material.

Is defined as "one who carries on a distinct and independent business and undertakes to
perform the job, work, or service on its own account and under one's own responsibility
according to one's own manner and method, free from the control and direction of the principal
in all matters connected with the performance of the work except as to the results thereof”
(Orozco vs.CA, G.R. No. 155207, 29 April 2008).

LABOR CODE

ART. 255. [245] Ineligibility of Managerial Employees to Join any Labor Organization;
Right of Supervisory Employees. Managerial employees are not eligible to join, assist or form
any labor organization. Supervisory employees shall not be eligible for membership in the
collective bargaining unit of the rank -and-file employees but may join, assist or form separate
collective bargaining units and/or legitimate labor organizations of their own. The rank and file
union and the Supervisors’ union operating within the same establishment may join the same
federation or national union.

ART. 279. [264] Prohibited activities. (a) No labor organization or employer shall declare a
strike or lockout without first having bargained collectively in accordance with Title VII of this
Book or without first having filed the notice required in the preceding Article or without the
necessary strike or lockout vote first having been obtained and reported to the Ministry .

No strike or lockout shall be declared after assumption of jurisdiction by the President or the
Minister or after certification or submission of the dispute to compulsory or voluntary arbitration
or during the pendency of cases involving the same grounds for the strike or lockout.

Any worker whose employment has been terminated as a consequence of any unlawful lockout
shall be entitled to reinstatement with full backwages. Any union officer who knowingly
participates in an illegal strike and any worker or union officer who knowingly participates in the
commission of illegal acts during a strike may be declared to have lost his employment status:
Provided, That mere participation of a worker in a lawful strike shall not constitute sufficient
ground for termination of his employment, even if a replacement had been hired by the
employer during such lawful strike.

(b) No person shall obstruct, impede, or interfere with by force, violence, coercion,
threats or intimidation, any peaceful picketing by employees during any labor controversy or in
the exercise of the right to self -organization or collective bargaining, or shall aid or abet such
obstruction or interference.

(c) No employer shall use or employ any strike-breaker, nor shall any person be
employed as a strike-breaker.
 (d) No public official or employee, including officers and personnel of the New Armed
Forces of the Philippines or the Integrated National Police, or armed person, shall bring in,
introduce or escort in any manner, any individual who seeks to replace strikers in entering or
leaving the premises of a strike area, or work in place of the strikers. The police force shall keep
out of the picket lines unless actual violence or other criminal acts occur therein: Provided, That
nothing herein shall be interpreted to prevent any public officer from taking any measure
necessary to maintain peace and order, protect life and property, and/or enforce the law and
legal orders.

(e) No person engaged in picketing shall commit any act of violence, coercion or for
lawful purposes, or obstruct public thoroughfares.

ART. 295. [280] Regular and Casual Employment. The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or undertaking the completion or
termination of which has been determined at the time of the engagement of the employee or
where the work or service to be performed is seasonal in nature and the employment is for the
duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph:

Provided, That any employee who has rendered at least one year of service, whether such
service is continuous or broken, shall be considered a regular employee with respect to the
activity in which he is employed and his employment shall continue while such activity exists.

FIXED TERM EMPLOYMENT. The Labor Code does not prohibit fixed term employment, nor
does it regulate the same. The Supreme Court in a leading case recognized the freedom of the
contracting parties to fix a period for the employment subject to the general condition that it
should not be used to circumvent the law on security of tenure (Brent School vs. Zamora,
G.R.No. 48494, 05 February 1990). This case down two (2) general parameters to determine
the validity of fixed term employment:

(i) 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; or,
 (ii) 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.

Fixed term employees also enjoy security of tenure but only during the lifetime of the
employment contract.

If they are illegally dismissed during the lifetime of their contracts, they will be entitled to
reinstatement and payment of back wage but only up to the end of the contracts (New Sunrise
Metal Construction vs. Pia, G.R. No.171131, 10 July 2007).

Upon expiry of the contract, their employment automatically ends. Non-renewal of the contract
would not constitute dismissal.

But when fixed term employees are allowed to work beyond the term without the benefit of a
new contract, they will be deemed regular employees (Viernes vs. NLRC, G.R. No. 108405, 04
April 2003).

PROJECT EMPLOYMENT. is assigned to a specific project which begins and ends at

determined or determinable times. The existence of a project is an element of this type of
employment and must be proved. The project could either be :

(I) A particular job or undertaking that is within the regular or usual business of the
employer company, but which is distinct and separate, and identifiable as such, from the
other undertakings of the company (e.g., a construction company may treat its
condominium projects as separate projects); or,

(il) A particular job or undertaking that is not within the regular business of the
corporation (e.g., a law firm may treat as a project the digitization of its records).

For an employee to be considered project-based, the employer must show compliance with two
(2) requisites, namely that:

(i) The employee is hired in connection with a specific project or undertaking; and,

(ii) The duration and scope of employment are specified at the time they were engaged
for such project.

SEASONAL EMPLOYMENT. is an worker who performs labor or services only during a

particular period of the year, coinciding with certain activities in agricultural production (o.g.,
planting, harvesting, milling, drying and curing) or In commercial/industrial activities (e.g. peak
sale during tourist season in resorts or Christmas season in malls).

ART. 296. [281] Probationary Employment. Probationary employment shall not exceed six (6)
months from the date the employee started working, unless it is covered by an apprenticeship
agreement stipulating a longer period. The services of an employee who has been engaged on
a probationary basis may be terminated for a just cause or when he fails to qualify as a regular
employee in accordance with reasonable standards made known by the employer to the
employee at the time of his engagement. An employee who is allowed to work after a
probationary period shall be considered a regular employee.

SECTION 6

Special Group of Workers

CIVIL CODE

LABOR CODE

ART. 58. Definition of Terms. - As used in this Title:

(a) "Apprenticeship" means practical training on the job supplemented by related

theoretical instruction.

(b) An "apprentice" is a worker who is covered by a written apprenticeship agreement

with an individual employer or any of the entities recognized under this Chapter.

(c) An "apprenticeable occupation" means any trade, form of employment or occupation

which requires more than three (3) months of practical training on the job supplemented
by related theoretical instruction.

(d) "Apprenticeship agreement" is an employment contract wherein the employer binds

himself to train the apprentice and the apprentice in turn accepts the terms of training.

ART. 59. Qualifications of Apprentice. - To qualify as an apprentice, a person shall:

(a) Be at least fourteen (14) years of age;

(b) Possess vocational aptitude and capacity for appropriate tests; and
 (c) Possess the ability to comprehend and follow oral and written instructions.

Trade and industry associations may recommend to the Secretary of Labor appropriate
educational requirements for different occupations.

ART. 60. Employment of Apprentices. - Only employers in the highly technical industries may
employ apprentices and only in apprenticeable occupations approved by the Secretary of Labor
and Employment. (As amended by Sec. 1, Exec. Order No. 111, December 24, 1986).

An apprenticeship agreement must be approved by TESDA; otherwise, the apprentice will be

considered a regular employee (Nitto Enterprises vs. NLRC) 114337, 29 September 1995).

ART. 61. Contents of Apprenticeship Agreements. Apprenticeship agreements, including the

wage rates of apprentices, shall conform to the rules issued by the Secretary of Labor and
Employment. The period of apprenticeship shall not exceed six months. Apprenticeship
agreements providing for wage rates below the legal minimum wage, which in no case shall
start below 75 percent of the applicable minimum wage, may be entered into only in accordance
with apprenticeship programs duly approved by the Secretary of Labor and Employment. The
Department shall develop standard model programs of apprenticeship. (As amended by Sec. 1,
Exec. Order No. 111, December 24, 1986).

ART. 62. Signing of Apprenticeship Agreement. - Every apprenticeship agreement shall be

signed by the employer or his agent, or by an authorized representative of any of the recognized
organizations, associations or groups and by the apprentice.

ART. 73. Learners defined. - Learners are persons hired as trainees in semi-skilled and other
industrial occupations which are non-apprenticeable and which may be learned through
practical training on the job in a relatively short period of time which shall not exceed three (3)
months.

ART. 75. Learnership agreement. - Any employer desiring to employ learners shall enter into a
learnership agreement with them, which agreement shall include:

(a) The names and addresses of the learners;

(b) The duration of the learnership period, which shall not exceed three (3) months;

(c) The wages or salary rates of the learners which shall begin at not less than
seventy-five percent (75%) of the applicable minimum wage; and
 (d) A commitment to employ the learners if they so desire, as regular employees
upon completion of the learnership. All learners who have been allowed or
suffered to work during the first two (2) months shall be deemed regular
employees if training is terminated by the employer before the end of the
stipulated period through no fault of the learners.

The learnership agreement shall be subject to inspection by the Secretary of Labor and
Employment or his duly authorized representative.

ART. 78. Definition. - Handicapped workers are those whose earning capacity is
impaired by age or physical or mental deficiency or injury.

ART. 80. Employment agreement. - Any employer who employs handicapped workers shall
enter into an employment agreement with them, which agreement shall include:

a. The names and addresses of the handicapped workers to be employed;

b. The rate to be paid the handicapped workers which shall not be less than
seventy five (75%) percent of the applicable legal minimum wage;

c. The duration of employment period; and

d. The work to be performed by handicapped workers.

The employment agreement shall be subject to inspection by the Secretary of Labor or

his duly authorized representative.

ART. 81. Eligibility for apprenticeship. - Subject to the appropriate provisions of this Code,
handicapped workers may be hired as apprentices or learners if their handicap is not such as to
effectively impede the performance of job operations in the particular occupations for which they
are hired.

ART. 131. [133] Maternity Leave Benefits. – (a) Every employer shall grant to any pregnant
woman employee who has rendered an aggregate service of at least six (6) months for the last
twelve (12) months, maternity leave of at least two (2) weeks prior to the expected date of
delivery and another four (4) weeks after normal delivery or abortion with full pay based on her
regular or average weekly wages. The employer may require from any woman employee
applying for maternity leave the production of a medical certificate stating that delivery will
probably take place within two weeks.
 (b) The maternity leave shall be extended without pay on account of illness medically
certified to arise out of the pregnancy, delivery, abortion or miscarriage, which renders
the woman unfit for work, unless she has earned unused leave credits from which such
extended leave may be charged.

(c) The maternity leave provided in this Article shall be paid by the employer only for the
first four (4) deliveries by a woman employee after the effectivity of this Code.

ART. 133. [135] Discrimination Prohibited. – It shall be unlawful for any employer to
discriminate against any woman employee with respect to terms and conditions of employment
solely on account of her sex.

The following are acts of discrimination:

(a) Payment of a lesser compensation, including wage, salary or other form of

remuneration and fringe benefits, to a female employee as against a male employee, for
work of equal value; and

(b) Favoring a male employee over a female employee with respect to promotion,
training opportunities, study and scholarship grants solely on account of their sexes.

Criminal liability for the willful commission of any unlawful act as provided in this article
or any violation of the rules and regulations issued pursuant to Section 2 hereof 104
shall be penalized as provided in Articles 288 and 289 of this Code: Provided, That the
institution of any criminal action under this provision shall not bar the aggrieved
employee from filing an entirely separate and distinct action for money claims, which
may include claims for damages and other affirmative reliefs. The actions here by
authorized shall proceed independently of each other.

ART. 134. [136] Stipulation Against Marriage. – It shall be unlawful for an employer to require
as a condition of employment or continuation of employment that a woman employee shall not
get married, or to stipulate expressly or tacitly that upon getting married, a woman employee
shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely by reason of her marriage.

ART. 135. [137] Prohibited Acts. – It shall be unlawful for any employer:
 (1) To deny any woman employee the benefits provided for in this Chapter or to
discharge any woman employed by him for the purpose of preventing her from enjoying
any of the benefits provided under this Code;

(2) To discharge such woman on account of her pregnancy, or while on leave or in

confinement due to her pregnancy;

(3) To discharge or refuse the admission of such woman upon returning to her work for
fear that she may again be pregnant.

ART. 138. Discrimination against child workers is deemed an unlawful act.

ART. 139. MINIMUM AGE OF EMPLOYMENT. (a) No child below fifteen (15) years of age shall
be employed, except when he works directly under the sole responsibility of his parents or
guardian, and his employment does not in any way interfere with his schooling.

(b) Any person between fifteen (15) and eighteen (18) years of age may be employed for
such number of hours and such periods of the day as determined by the Secretary of
Labor and Employment in appropriate regulations.

(c) The foregoing provisions shall in no case allow the employment of a person beiow
eighteen (18) years of age in an undertaking which is hazardous or deleterious in nature
as determined by the Secretary of Labor and Employment”;

OTHER LAWS

The Magna Carta for Persons with Disability (RA No. 7277, Sec. 5, as amended by RA no.
10754) provides that "no disable person shall be denied access to opportunities for suitable
employment." and "a qualified disabled employee shall be subject to the same terms and
conditions of employment and the same compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able bodied person.

SECTION 7. And subject to the provisions of the Labor Code as amended, disabled persons
shall be eligible as apprentices or learners: Provided, That their handicap is not as much as to
effectively impede the performance of job operations in the particular occupation for which they
are hired; Provided, further, That after the lapse of the period of apprenticeship, If found
satisfactory in the job performance, they shall be eligible for employment
Note that the Kasambahay Law provides:

Section 4 (d) Domestic worker or "Kasambahay" refers to any person engaged in domestic work
within an employment relationship such as, but not limited to, the following: general house help,
nursemaid or "yaya", cook, gardener, or laundry person, but shall exclude any person who
performs domestic work only occasionally or sporadically and not on an occupational basis.

The term household is defined as "immediate members of the family or the occupants of the
house that are directly provided services by the domestic worker."

The Implementing Rules and Regulations exclude family drivers from the definition, but this is a
debatable proposition since driving for a family is clearly "work performed for a household".

The term shall not include children who are under foster family arrangement, and are provided
access to education and given an allowance incidental to education, i.e. "baon", transportation,
school projects and school activities.

XXX

Section 16. Employment Age of Domestic Workers. It shall be unlawful to employ any person
below fifteen (15) years of age as a domestic worker.

Employment of working children, as defined under this Act, shall be subject to the provisions of
Section 10(A), paragraph 2 of Section 12-A, paragraph 4 of Section 12-D, and Section 13 of
Republic Act No. 7610, as amended, otherwise known as the "Special Protection of Children
Against Child Abuse, Exploitation and Discrimination Act".

Kasambahays, while now entitled to five (5) day SIL after one (1) year of service as well as
mandatory SSS coverage, have very limited security of tenure.

The law provides that the employer may terminate the contract before the expiration of the term
except for just causes (basically the same as those under Art. 297 of the Labor Code) but the
remedy is only "compensation already earned plus the equivalent of fifteen (15) days work by
way of indemnity". This makes kasambahay employment virtually at will. They could be
terminated anytime, subject only to 15 days pay compensation. The only possible exemption is
when the contract of the kasambahay is for a fixed period. In one case of fixed period house
help agreement the dismissal effected without just cause resulted in the award of salary for the
unexpired portion of the contract plus the indemnity of 15-day salary (Philippine Integrated
Labor Assistance Corporation vs NLRC, G.R. No. 123354, 19 November 1996). This is similar
to the relief granted to OFWs, who are on fixed term contracts.

WOMEN. By virtue of their sex, female workers are entitled to leaves which are not enjoyed by
male workers. These are:

• Expanded maternity benefits (105-day paid maternity leave benefit for every live
childbirth, regardless of the type of delivery; 60-day paid leave in case of a miscarriage
or an emergency termination of pregnancy (ETP), including stillbirth; and additional
15-day paid leave to a female employee, who qualifies as a solo parent under the Solo
Parents' Welfare Act).

Marital status is not a qualification, and the old 4-delivery limit has been abolished. While
maternity benefits are paid by the SSS (but payment is advanced by the employer), the
difference between the maximum SSS benefits and the employee's salary is shouldered by the
employer.

• VAWC Leave (Sec. 43, VAWC Law)- Paid leave of absence up to ten (10) days in
addition to other paid leaves under the Labor Code "Victims" would refer to

"any woman who is [the offender's] wife, former wife, or against a woman with whom the
person has or had a sexual or dating relationship, or with whom he has a common child"
(Section 3, VAWCI). The period of extension need not be paid, although the absence
would be authorized (and therefore not subject to disciplinary sanction).

The availment of the 10-day leave shall be at the option of the woman employee, which shall
cover the days that she has to attend to medical and legal concerns. Leaves not availed of are
noncumulative and not convertible to cash (IRR of VAWCI).

• Gynecological Disorder Leave (Magna Carta For Women) "Gynecological

disorders" refers to disorders that would require surgical procedures such as, but not
limited to, dilatation and curettage and those involving female reproductive organs such
as the vagina, cervix, uterus, fallopian tubes, ovaries, breast, adnexa and pelvic floor, as
 certified by a competent physician. As clarified by the IRR] gynecological surgeries shall
also include hysterectomy, ovariectomy, and mastectomy;

A woman employee having rendered continuous aggregate employment service of at least six
(6) months for the last twelve (12) months shall be entitled o a special leave benefit of two (2)
months with full pay based on her gross monthly compensation "plus mandatory allowances"
following surgery caused by gynecological disorders.

Special leave benefit is non-cumulative and non-convertible to cash unless otherwise

provided by a CBA.

SECTION 7

Probation

LABOR CODE

Grounds for terminating a probationary employee. The grounds listed in the Labor Code
(just causes, authorized causes, disease), as well as the grounds allowed by jurisprudence, also
apply to probationary employees.

It has been pronounced that the power of the employer to terminate an employee on probation
is thus subject to the following conditions (Cathay Pacific Airways vs. Marin, G.R. No. 148937,
12 September 2006):

(i) It must be exercised in accordance with the specific requirements of the contract (like
prescribed period and frequency of evaluation);

(ii) The dissatisfaction on the part of the employer must be real and in good faith, not
prejudicial so as to violate the contract or the law; and,

(iii) There must be no unlawful discrimination in the dismissal.

Section 2, Rule 1, Book VI of the Rules to Implement the Labor Code which
provides that if the termination is brought about by the completion of a contract or phase
thereof, or by failure of an employee to meet the standards of the employer in the case
of probationary employment, it shall be sufficient that a written notice is served the
employee within a reasonable time from the effective date of termination."

OTHER LAWS

ANTI-AGE DISCRIMINATION IN EMPLOYMENT ACT RA 10911. “Does not confer the

right of preference for senior employees (in hiring).”

SECTION 8

Contracting Out

LABOR CODE

ART. 106. Contractor or Subcontractor. – Whenever an employer enters into a contract with
another person for the performance of the farmer’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.

The Secretary of Labor and Employment may, by appropriate regulations, restrict or

prohibit the contracting-out of labor to protect the rights of workers established under this Code.
In so prohibiting or restricting, he may make appropriate distinctions between labor-only
contracting and job contracting as well as differentiations within these types of contracting and
determine who among the parties involved shall be considered the employer for purposes of this
Code, to prevent any violation or circumvention of any provision of this Code.

There is “labor-only” contracting where the person supplying workers to an employer

does not have substantial capital or investment in the form of tools, equipment, machineries,
work premises, among others, and the workers recruited and placed by such person are
performing activities which are directly related to the principal business of such employer. In
such cases, the person or intermediary shall be considered merely as an agent of the employer
who shall be responsible to the workers in the same manner and extent as if the latter were
directly employed by him.

The main indicators used in determining labor-only contracting are:

●​ Substantial capital - Substantial capital refers to capitalization used in the performance

or completion of the job, work or service contracted out. (Aliviado vs Procter and
Gamble)
●​ Investment in tools and equipment - The tools, equipment, machineries, and supplies
must refer lo those actually and directly used by the contractor In the performance or
completion of the identifiable Service or job (e.g. trucks for a logistics company), and
does not refer merely the usual office equipment and supplies (like tables, chairs, and
computers) necessary for administrative and other support functions (San Miguel
Corporation vs. Semillano, G.R. No. 16425, 05 July 2010).
●​ Specified job, task, or service - The contracting out arrangement should involve the
farm out of an Identifiable job, work, or service for the principal (e.g., security or janitorial
job), and not merely the enumeration of certain kinds of personnel like extra/temporary/
casual employees or production operators, helpers, etc. (Coca Cola Bottlers vs. Agito)
●​ Control - This is essentially the same concept of control as element of the four-fold test
used to determine employer-employee relationship.The principal/client may set the
kinds, standards, and parameters of the output of the contracted service but the
contractor must retain the power to control the means and methods by which the job is to
be accomplished. (Vinoya Vs. NLRC, G.R. No. 126586, 02 February 2000). The
contractor must undertake the contract work on its account, under Its own responsibility,
according to its own manner and method, free from the control and direction of its
principal in all matters connected with the performance of the work except as to the
results thereof (Daguinod vs. Southgate Foods, G.R. No. 227795, 20 February 2019).

Other indicators of LOC or job contracting include:

●​ DOLE Registration - The DOLE certificate having been issued by a public officer, it
carries with it the presumption that it was issued in the regular performance of official
duty. But it is not a conclusive presumption. It could be disregarded if the facts indicate
LOC (Coca Cola Bottlers vs Agito)
●​ Service contracts - The character of the business, whether as labor-only contractor or
as manpower (SMC a job contractor, is determined by the criteria set by statute and the
 parties cannot dictate by the mere expedience of a unilateral declaration in a contract
the character of their business (Petron vs. Caberte, G.R. No. 182255, 15 June 2015).
●​ Existence of roster of clients - The existence of a roster of clients may help prove the
status of an independent contractor, since this indicates an independent business.
(Alaska Milk vs. Paez, G.R. No. 237277, 27 November 2019). But the absence of other
clients will strongly indicate labor-only contracting (San Miguel Corporation vs.
Semillano, G.R. No. 16425, 05 July 2010)
●​ Size of manpower complement. It is not unusual that the number of outsourced
personnel, sometimes deployed from several "contractors", outnumber the regular
employees of the principal.

Contracting out in labor law involves three parties;

(i) The principal (client)

(ii) The service contractor; and

(iii) The contractor’s personnel deployed to the principal.

ART. 107. Indirect Employer. – 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. 108. Posting of Bond. – An employer or indirect employer may require the contractor or
subcontractor to furnish a bond equal to the cost of labor under contract, on condition that the
bond will answer for the wages due the employees should the contractor or subcontractor, as
the case may be, fail to pay the same.

ART. 109. Solidary Liability. – 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.

OTHER LAWS

Section 3 of DO No. 174 (s. 2017), which attempts to clarify this thorny issue, defines it this
way:
 a) "Contracting" or "Subcontracting" - refers to an arrangement whereby a principal
agrees to farm out to a contractor the performance or completion of a specific job or
work within a definite or predetermined period, regardless of whether such job or work is
to be performed or completed within or outside the premises of the principal.

Section 5. Absolute Prohibition against Labor-only Contracting. Labor only

contracting, which is totally prohibited, refers to an arrangement where:

i. The contractor or subcontractor does not have substantial capital (paid up capital of
P5M for corporations, partnerships, and coops and "net worth" of P5 for solo proprietors,
OR

ii. The contractor or subcontractor does not have investments in the form of tools,
equipment, machineries supervision, work premises, among others,

AND

iii. 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

The contractor or subcontractor does not exercise the right to control over the
performance of the work of the employee.

Exclusions from D.O. No. 174 (S. 2017) On 13 June 2017, the Department of Labor and
Employment (DOLE) issued Department Circular No. 01 (Series of 2017) issued on 13 June
207 clarified the scope and application of "D.O. No. 174 and effectively superseded D.O. No.
18-A." Perhaps as a result of lobbying, Dept. Circular No. 1 stated that D.O. No. 174 does not
apply to business entities engaged in Business Process Outsourcing ("BPO"), Legal Process
Outsourcing ("LPO"), and Knowledge Process Outsourcing ("KPO"). The DOLE clarified that
D.O. No. 174 does not contemplate information-technology services which involve an entire
business process.

Dept. Circular. No. 1 also clarified that D.O. No. 174 does not apply and govern on
contracting or subcontracting arrangements in the construction industry which shall continue to
be governed by the following:
 • D.O. No 19, Series of 1993 (Guidelines Governing the Employment of Workers in the
Construction Industry).

• D.O. No. 13, Series of 1998 (Guidelines Governing the Occupational Safety and
Health in the Construction Industry); and,

• DOLE-DPWH-DILG-DTI and PCAB Memorandum of Agreement-Joint

Administrative Order Series of 2011 dealing with coordination and harmonization of
policies concerning occupational safety and health in the said industry.

Dept. Circular No. 1 declared that D.O. No. 174 is only applicable and relevant to the private
security industry Insofar as it requires these private security agencies to comply with the
registration requirements under D.O: No. 174. The contracting or subcontracting arrangements
in the private security industry shall be governed by Department Order No. 150, Series of 2016
(Revised Guidelines Governing the Employment and Working Conditions of Security Guards
and other Private Security Personnel in the Private Security Industry).

D.C. No. 1 also stated that D.O. No. 174 does not cover contractual relationships which
do not bear the "trilateral relationship" distinct in contracting and subcontracting arrangements.
Thus, D.O. No. 174 does not contemplate applicability over contracts of sale or purchase,
contract of lease, contract of carriage, contract growing/growership agreement, toll
manufacturing, contract of management, operation and maintenance and such other contracts
governed by the Civil Code of the Philippines and other special laws.

Finally, D.C. No. 1 declared that D.O. 174 does not cover contracting out of work to
professionals or individuals with distinctive skills/talents provided that they perform the job or
work for the principal.

SECTION 9

OVERSEAS EMPLOYMENT

CIVIL CODE

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and good faith.
Art. 21. Any person who wilfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.

Art. 24. In all contractual, property or other relations, when one of the parties is at a
disadvantage on account of his moral dependence, ignorance, indigence, mental weakness,
tender age or other handicap, the courts must be vigilant for his protection.

Art. 2199. Except as provided by law or by stipulation, one is entitled to an adequate

compensation only for such pecuniary loss suffered by him as he has duly proved. Such
compensation is referred to as actual or compensatory damages.

LABOR CODE

ART. 21. Foreign service role and participation. - To provide ample protection to Filipino
workers abroad, the labor attaches, the labor reporting officers duly designated by the Secretary
of Labor and the Philippine diplomatic or consular officials concerned shall, even without prior
instruction or advice from the home office, exercise the power and duty:

(a) To provide all Filipino workers within their jurisdiction assistance on all matters arising
out of employment;

(b) To insure that Filipino workers are not exploited or discriminated against;

(c) To verify and certify as requisite to authentication that the terms and conditions of
employment in contracts involving Filipino workers are in accordance with the Labor
Code and rules and regulations of the Overseas Employment Development Board and
National Seamen Board;

(d) To make continuing studies or researches and recommendations on the various

aspects of the employment market within their jurisdiction;

(e) To gather and analyze information on the employment situation and its probable
trends, and to make such information available; and

(f) To perform such other duties as may be required of them from time to time.

ART. 22. Mandatory remittance of foreign exchange earnings. - It shall be mandatory for all
Filipino workers abroad to remit a portion of their foreign exchange earnings to their families,
dependents, and/or beneficiaries in the country in accordance with rules and regulations
prescribed by the Secretary of Labor.

ART. 25. Private sector participation in the recruitment and placement of workers. -
Pursuant to national development objectives and in order to harness and maximize the use of
private sector resources and initiative in the development and implementation of a
comprehensive employment program, the private employment sector shall participate in the
recruitment and placement of workers, locally and overseas, under such guidelines, rules and
regulations as may be issued by the Secretary of Labor.

ART. 26. Travel agencies prohibited to recruit. - Travel agencies and sales agencies of airline
companies are prohibited from engaging in the business of recruitment and placement of
workers for overseas employment whether for profit or not.

ART. 27. Citizenship requirement. - Only Filipino citizens or corporations, partnerships or

entities at least seventy-five percent (75%) of the authorized and voting capital stock of which is
owned and controlled by Filipino citizens shall be permitted to participate in the recruitment and
placement of workers, locally or overseas.

Article 161. Assistance of employer. It shall be the duty of any employer to provide all the
necessary assistance to ensure the adequate and immediate medical and dental attendance
and treatment to an injured or sick employee in case of emergency.

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

Except as otherwise provided under this Code, the Labor Arbiters shall have original and
exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the submission of
the case by the parties for decision without extension, even in the absence of stenographic
notes, the following cases involving all workers, whether agricultural or non-agricultural:

●​ Unfair labor practice cases;

●​ Termination disputes;
●​ If accompanied with a claim for reinstatement, those cases that workers may file
involving wages, rates of pay, hours of work and other terms and conditions of
employment;
●​ Claims for actual, moral, exemplary and other forms of damages arising from the
employer-employee relations;
 ●​ Cases arising from any violation of Article 264 of this Code, including questions involving
the legality of strikes and lockouts; and
●​ Except claims for Employees Compensation, Social Security, Medicare and maternity
benefits, all other claims arising from employer-employee relations, including those of
persons in domestic or household service, involving an amount exceeding five thousand
pesos (P5,000.00) regardless of whether accompanied with a claim for reinstatement.

The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor
Arbiters.

Cases arising from the interpretation or implementation of collective bargaining agreements and
those arising from the interpretation or enforcement of company personnel policies shall be
disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary
arbitration as may be provided in said agreements. (As amended by Section 9, Republic Act No.
6715, March 21, 1989)

OTHER LAWS

RA.8042 (Migrant Workers and Overseas Filipinos Act of 1995) The State shall provide
adequate and timely social, economic and legal services to Filipino migrant workers (Sec.2 [b]).
While recognizing the significant contribution of Filipino migrant workers to the national
economy through their foreign exchange remittances, the State does not promote overseas
employment as a means to sustain economic growth and achieve national development (Sec. 2
(c)). xxx Nonetheless, the deployment of Filipino overseas workers, whether land-based or
sea-based by local service contractors and manning agencies employing them, shall be
encouraged.

SEC 3 (A) "Migrant worker" refers to a person who is to be engaged, is engaged or has been
engaged in a renumerated activity in a state of which he or she is not a legal resident to be used
interchangeably with overseas Filipino worker.

Deployment Policy

SEC. 4. Deployment of Migrant Workers - The State shall deploy overseas Filipino workers
only in countries where the rights of Filipino migrant workers are protected.

While the right to work and the right to travel abroad may well be constitutional rights, the
State maintains a leavy hand in regulating overseas employment. The law specifically allows the
government to impose a ban on deployment of OFWs if necessary (ibid., Sec. 5). The exercise
of this right by the Secretary of DOLE, as delegated by Congress, was upheld when assailed by
recruitment and placement agencies (Philippine Association of Service Exporters VS Drilon,
G.R. No. 81950, 30 June 1988):

The consequence the deployment ban has on the right to travel does not impair the
right. The right to travel is subject, among other things, to the requirements of "public
safety," "as may be provided by law." Department Order No. 1 is a valid implementation
of the Labor Code, in particular, its basic policy to

"afford protection to labor," pursuant to the respondent Department of Labor's

rule-making authority vested in it by the Labor Code.

XXX

The non-impairment clause of the Constitution, invoked by the petitioner, must yield to
the loftier purposes targeted by the Government. Freedom of contract and enterprise,
like all other freedoms, is not free from restrictions, more so in this jurisdiction, where
laissez faire has never been fully accepted as a controlling economic way of life.

Sec. 5. Termination or Ban on Deployment. Notwithstanding the provision of Section 4 hereof,

the government, in pursuit of national interest or when public welfare so requires, may, at any
time, terminate or impose a ban on the deployment of migrant workers"

The exceptions to the ban on direct hiring are hiring by:

a) Members of the diplomatic corps

b) International organizations (e.g., UN)

c) Heads of state and government officials with at least the rank of deputy minister

d) Other employers as may be allowed by the Secretary of DOLE including:

I) Those provided in (a), (b), and (c) who bear a lesser rank, if endorsed by the
POLO

ii) Professionals and skilled workers with authenticated contracts

containing terms superior to the minimum standards set by the POEA.
 iii) Workers hired by a relative/family member who is a permanent resident of the
host country.

An overseas employment contract is perfected upon its execution and approval by the POEA.
The commencement of employer-employee relationship, however, takes place only upon
deployment from point of hire. When departure is prevented, for whatever reason, no employer-
employee relationship is created. Nonetheless, the recruited person has a cause of action for
breach of contract which he could file with the Labor Arbiter as provided by Section 10 of the
Migrant Workers Act.

Thus, even if by the [POEA] standard contract employment commences only "upon
actual departure of the seafarer', this does not mean that the seafarer has no remedy in case of
non-deployment without any valid reason. Xxxx

We rule that distinction must be made between the perfection of the employment
contract and the commencement of the employer-employee relationship.

Sec. 6. defines "illegal recruitment" The main offense is: 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.

SEC. 10. MONEY CLAIMS. - Notwithstanding any provision of law to the contrary, the Labor
Arbiters of the National Labor Relations Commission (NLRC) shall have the original and
exclusive jurisdiction to hear and decide, within ninety (90) calendar days after filing of the
complaint, the claims arising out of an employer-employee relationship or by virtue of any law or
contract involving Filipino workers for overseas deployment including claims for actual, moral,
exemplary and other forms of damages. (Allowances, overtime pay, and unearned leave credits
are excluded.)

The liability of the principal/ employer and the recruitment/placement agency for any and
all claims under this section shall be joint and several. This provisions shall be incorporated in
the contract for overseas employment and shall be a condition precedent for its approval. The
performance bond to be filed by the recruitment/placement agency, as provided by law, shall be
answerable for all money claims or damages that may be awarded to the workers. If the
recruitment/placement agency is a juridical being, the corporate officers and directors and
partners as the case may be, shall themselves be jointly and solidarily liable with the corporation
or partnership for the aforesaid claims and damages.

Such liabilities shall continue during the entire period or duration of the employment contract
and shall not be affected by any substitution, amendment or modification made locally or in a
foreign country of the said contract.

In case of unauthorized deductions from the overseas workers' salaries, they shall be
entitled to the full reimbursement of the deductions made with interest at twelve percent (12%)
per annum. This is in addition to the full reimbursement of their placement fee with the same
interest of 12% per annum plus his salaries for the unexpired portion of his employment contract
if the is termination without just, valid or authorized cause as defined by law or contract (Sec. 10
RA No. 8042, see also: Sameer Overseas Placement Agency, Inc. v. Cabiles, G.R. No. 170139,
05 August 2014).

In case of termination of overseas employment without just, valid or authorized cause as

defined by law or contract, the workers shall be entitled to the full reimbursement of their
placement fee with interest of twelve percent (12%) per annum, plus their salaries for the
unexpired portion of the employment contract with 6% interest (Powerhouse Staffbuilders vs
Rey, G.R. No. 190203, 07 November 2016)

Overseas workers are not entitled to overtime pay if they failto present any evidence to prove
that they rendered service in excess of the regular eight (8) working hours a day.

Termination

The Supreme Court has also invalided a "no prior notice termination" clause in the
substituted contract, as it contravenes Book VI, Title I of the Labor Code (Dagasdas vs. Grand
Placement & Services Agency, G.R. No. 205727, 18 January 2017).

The Supreme Court has summarized the matter:

Based on the foregoing, the general rule is that Philippine laws apply even to
overseas employment contracts. XXXx

As an exception, the parties may agree that a foreign law shall govern the employment
contract. A synthesis of the existing laws and jurisprudence reveals that this exception is
subject to the following requisites:
 1) That it is expressly stipulated in the overseas employment contract that a
specific foreign law shall govern;

2) That the foreign law invoked must be proven before the courts pursuant to the
Philippine rules on evidence;

3) That the foreign law stipulated in the overseas employment contract must not
be contrary to law, morals, good customs, public order, or public policy of the
Philippines; and,

4) That the overseas employment contract must be processed through the POEA.

The Court is of the view that these four (4) requisites must be complied with before the
employer could invoke the applicability of a foreign law to an overseas employment
contract. xxxx

Remittance

POEA STANDARD EMPLOYMENT CONTRACT (SEC). SECTION 8 (A).The seafarer is

required to make an allotment which shall be payable once a month to his designated allottee in
the Philippines through any authorized Philippine bank. The principal/employer/master/company
shall provide the seafarer with facilities to do so at no expense to the seafarer. The allotment
shall be at least eighty percent (80%) of the seafarer’s monthly basic salary.

SECTION 20, A-3. The company-designated physician has either 120 or 240 days,
depending on the circumstances, within which to complete the medical assessment of
the seafarer; otherwise, the disability claim shall be granted (ibid).

The seafarer has the option to secure the opinion of a physician of his own choosing. If a
doctor appointed by the seafarer disagrees with the assessment, a third doctor may be
agreed jointly between the employer and the seafarer. The third doctor's decision shall
be final and binding on both parties (ibid).

The referral to a third doctor is a mandatory procedure, and renders the finding of the
company designated physician as final and binding.

For this purpose, the seafarer shall submit himself to a post-employment medical
examination by a company-designated physician within three 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. In the course of the treatment,
the seafarer shall also report regularly to the company-designated physician specifically on the
dates as prescribed by the company-designated physician and agreed to by the seafarer.
Failure of the seafarer to comply with the mandatory reporting requirement shall result in
his forfeiture of the right to claim the above benefits. (It is the burden of the employer to
prove that the seafarer was referred to a company-designated doctor)

SECTION 20. B-1. In case of work-related death of the seafarer, during the term of his contract,
the employer shall pay his beneficiaries the Philippine currency equivalent to the amount of
Fifty Thousand US dollars (US$50,000) and an additional amount of Seven Thousand US
dollars (US$7,000) to each child under the age of twenty one (21) but not exceeding four (4)
children, at the exchange rate prevailing during the time of payment. (Exemptions: non-work
relation and willful act on his own life by notorious negligence)

Disciplinary actions

POEA regulations allow the filing of a complaint in writing and under oath for disciplinary action
against: (a) a principal/ employer; (b) local agency; and (c) OFWs.

The POEA may also, on its own initiative, conduct proceedings against
principals/employers, local agencies, and OFWs. The grounds and the corresponding
sanctions are provided by POEA regulations.

For foreign principals/employers, the grounds include:

i. Default on its contractual obligations to the migrant worker and/or to its Philippine
agent;

Il. Gross violation of laws, rules and regulations on overseas employment;

III. Gross negligence leading to serious injury or illness or death of the worker;

For local agencies, the grounds include:

i. Knowingly deploying a minor;

ii. Engaging in acts of gross misrepresentation for the purpose of securing a license or
renewal thereof, such as violation of the Anti-Dummy Law; or
 Ill. Giving false information or fictitious documents in relation to a matter that is material
for the approval of the license application or renewal

For OFWs, the grounds are divided into:

Pre-Employment Offenses, like:

I. Using, providing, or submitting false information or documents for purposes of job

application or employment.

Ii. Unjustified refusal to depart for the worksite after all employment and travel
documents have been duly approved by the appropriate government agency/ies.

Offenses during Employment, like:

I. Commission of a felony or crime punishable by Philippine Laws or by the laws of the

host country;

Ii. Unjustified breach of employment contract;

Ii. Embezzlement of company funds or monies and/ or properties of a fellow worker

entrusted for delivery to kin or relatives in the Philippines; and Violation of the sacred
practices of the host country.

Iv. Violation of the sacred practices of the host country

The following considerations shall be legitimate reasons for the refusal of a worker to depart for
the worksite, or to abandon or withdraw from employment:

(i) Exposure to hazardous, demeaning working and living conditions;

(ii) Refusal of the employer or principal to grant, release or remit wages and other
benefits due the worker;

(iii) War, plague or other calamities at the worksite; and

(iv) Violation of labor laws of the Philippines, the host country or international labor laws;

Illegal Recruitment

There are several other prohibited acts, including:

 (a)​ 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 and
Employment, or to make a worker pay or acknowledge any amount greater than
that actually received by him as a loan or advance;
(b)​To substitute or alter to the prejudice of the worker, employment contracts
approved and verified by the Department of Labor and Employment from the time
of actual signing thereof by the parties up to and including the period of the
expiration of the same without the approval of the Department of Labor and
Employment;
(c)​ To withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations, or for any other reasons, other than those
authorized under the Labor Code and its implementing rules and regulations;
(d)​Failure to actually deploy a contracted worker without valid reason as determined
by the Department of Labor and Employment;
(e)​ Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker's fault. Illegal
recruitment when committed by a syndicate or in large scale shall be considered
an offense involving economic sabotage; and

Illegal recruitment is considered as economic sabotage if:

(i) it is carried out by a group of three (3) or more persons conspiring or confederating
with one m another, or

(i) it is committed against three (3) or more persons individually or as a group.

Illegal recruitment has two (2) essential elements:

(i) That the offender has no valid license or authority required by law to enable him to
lawfully engage in the recruitment and placement of workers; and,

(ii) That the offender undertakes any activity within the meaning of recruitment and
placement defined under Article 13(b), or any prohibited practices enumerated under
Article 34 of the Labor Code (Ramos v. People, G.R. No. 178337, 25 June 2009).
Illegal recruitment cases prescribe in five (5) years, but illegal recruitment cases
involving economic sabotage prescribe in twenty (20) years.

AMENDMENTS TO POEA SEC

Section 23. Republic Act No. 10002, amending R.A. No. 8042 or the Migrant Workers Act).
now provides "in addition to the performance bond to be filed by the recruitment/manning
agency under Section 10, each migrant worker deployed by a recruitment/manning agency shall
be covered by a compulsory insurance policy which shall be secured at no cost to the said
worker. Such insurance policy shall be effective for the duration of the migrant worker's
employment and shall cover, among others, "accidental death, with at least US$10,000.00
survivor's benefit payable to the migrant worker's beneficiaries" and "permanent total
disablement, with at least US$7,500.00 disability benefit payable to the migrant worker

The following disabilities shall be deemed permanent:

●​ total, complete loss of sight of both eyes; loss of two (2) limbs at or above the ankles or
wrists; permanent complete paralysis of two (2) limbs;
●​ brain injury resulting to incurable imbecility or insanity.

The implementing rules of RA 10002 interprets this mandatory insurance as setting a "no fault,
no contest rule". Up to the stipulated amount of coverage, no contest of the claim can be made
based on the seaman's fault or negligence. This has been incorporated in the 2010 POEA SEC
(Sec. 20 [G]) which provides that the amount paid to the seafarer under RA 10002 "shall form
part and shall be deducted from the total amount that the seafarer is determined to be finally
entitled to under this Contract".

The 2010 POEA SEC finally provides that payment of benefits under it and RA 10002 shall
cover all other claims including tort (Sec. 20 I).

Government agencies

The Migrant Workers Act lists the role of particular government agencies:

SEC. 23. ROLE OF GOVERNMENT AGENCIES. - The following government agencies shall
perform the following to promote the welfare and protect the rights of migrant workers
and, as far as applicable, all overseas Filipinos:
(a) Department of Foreign Affairs. - The Department, through its home office or foreign posts,
shall take priority action its home office or foreign posts, shall take priority action or make
representation with the foreign authority concerned to protect the rights of migrant workers and
other overseas Filipinos and extend immediate assistance including the repatriation of
distressed or beleaguered migrant workers and other overseas Filipinos;

(b) Department of Labor and Employment - The Department of Labor and Employment shall
see to it that labor and social welfare laws in the foreign countries are fairly applied to migrant
workers and whenever applicable, to other overseas Filipinos including the grant of legal
assistance and the referral to proper medical centers or hospitals:

(b.1) Philippine Overseas Employment Administration - Subject to deregulation and

phase out as provided under Sections 29 and 30 herein, the Administration shall
regulate private sector participation in the recruitment and overseas placement of
workers by setting up a licensing and registration system. It shall also formulate and
implement, in coordination with appropriate entities concerned, when necessary
employment of Filipino workers taking into consideration their welfare and the domestic
manpower requirements.

(b.2) Overseas Workers Welfare Administration - The Welfare Officer or in his absence,
the coordinating officer shall provide the Filipino migrant worker and his family all the
assistance they may need in the enforcement of contractual obligations by agencies or
entities and/or by their principals. In the performance of this functions, he shall make
representation and may call on the agencies or entities concerned to conferences or
conciliation meetings for the purpose of settling the complaints or problems brought to
his attention.

Most cases nonetheless would involve the Regional Arbitration Branches of the NLRC, since
jurisdiction over OFW employment claims (illegal dismissal, money claims, damages) were
lodged into it by the Migrant Workers Act.

SECTION 10

Hours of Work
LABOR CODE

ART. 82. Coverage. The provisions of this Title shall apply to employees in all establishments
and undertakings whether for profit or not, but not to government employees, managerial
employees, field personnel, members of the family of the employer who are dependent on him
for support, domestic helpers, persons in the personal service of another, and workers who are
paid by results as determined by the Secretary of Labor in appropriate regulations.

The implementing regulations then proceed with the definitions:

"Managerial employees" - are those whose (1) Primary duty consists of the management of
the establishment in which they are employed or of a department or sub-division thereof.

(2) Customarily and regularly direct the work of two or more employees.

(3) Have the authority to hire or fire employees of lower rank, or their suggestions and
recommendations as to hiring and firing and as to the promotion or any other change of
status of other employees, are given particular weight.

Officers or members of a managerial staff- if they perform the following duties and
responsibilities:

(1) The primary duty consists of the performance of work directly related to management
policies of their employer;

(2) Customarily and regularly exercise discretion and independent judgment; and

(3) (i) Regularly and directly assist a proprietor or a managerial employee whose
primary duty consists of the management of the establishment in which he is
employed or subdivision therefore;

iI) execute under general supervision work along specialized or technical lines
requiring special training, experience, or knowledge; or

(ili) execute, under general supervision, special assignments and tasks; and

(4) Who do not devote more than 20 percent of their hours worked in a work week to
activities which are not directly and closely related to the performance of the work
described in paragraphs (1), (2) and (3) above.
ART. 84. Hours Worked. – Hours worked shall include (a) all time during which an employee is
required to be on duty or to be at a prescribed workplace; and (b) all time during which an
employee is suffered or permitted to work.

Rest periods of short duration during working hours shall be counted as hours worked.

ART. 85. Meal Periods. – Subject to such regulations as the Secretary of Labor may prescribe,
it shall be the duty of every employer to give his employees not less than sixty (60) minutes
time-off for their regular meals.

ART. 94. Right to Holiday Pay. – (a) Every worker shall be paid his regular daily wage during
regular holidays, except in retail and service establishments regularly employing less than ten
(10) workers;

ART. 212 (m) “Managerial employee” is one who is vested with the powers or prerogatives to
lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees.

The Implementing Rules (Book III, Rule I, Sec. 4) provide:

SECTION 4. Principles in determining hours worked. - The following general principles shall
govern in determining whether the time spent by an employee is considered hours worked for
purposes of this Rule:

(a) All hours are hours worked which the employee is required to give his employer,
regardless of whether or not such hours are spent in productive labor or involve physical
or mental exertion.

(b) An employee need not leave the premises of the work place in order that his rest
period shall not be counted, it being enough that he stops working, may rest completely
and may leave his work place, to go elsewhere, whether within or outside the premises
of his work place.

(c) If the work performed was necessary, or it benefited the employer, or the employee
could not abandon his work at the end of his normal working hours because he had no
replacement, all time spent for such work shall be considered as hours worked, if the
work was with the knowledge of his employer or immediate supervisor.
 (d) The time during which an employee is inactive by reason of interruptions in his work
beyond his control shall be considered working time either if the imminence of the
resumption of work requires the employee's presence at the place of work or if the
interval is too brief to be utilized effectively and gainfully in the employees own interest.

SECTION 5. Waiting time.— (a) Waiting time spent by an employee shall be considered as
working time if waiting is an integral part of his work or the employee is required or engaged by
the employer to wait.

(b) An employee who is required to remain on call in the employer's premises or so

close thereto that he cannot use the time effectively and gainfully for hisown purpose
shall be considered as working while on call. An employee who is not required to leave
word at his home or with company officials where he maybe reached is not working while
on call.

SECTION 6. 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:

(a) Attendance is outside of the employee's regular working hours;

(b) Attendance is in fact voluntary; and

(c) The employee does not perform any productive work during such attendance

ART. 86. Night-Shift Differential. – Every employee shall be paid a night shift differential of not
less than ten percent (10%) of his regular wage for each hour of work performed between ten
o’clock in the evening and six o’clock in the morning.

ART. 87. Overtime Work. – Work may be performed beyond eight (8) hours a day provided that
the employee is paid for the overtime work, an additional compensation equivalent to his regular
wage plus at least twenty-five percent (25%) thereof. Work performed beyond eight hours on a
holiday or rest day shall be paid an additional compensation equivalent to the rate of the first
eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.

ART. 88. Undertime Not Offset by Overtime. – Undertime work on any particular day shall not
be offset by overtime work on any other day. Permission given to the employee to go on leave
on some other day of the week shall not exempt the employer from paying the additional
compensation required in this Chapter.

ART. 89. Emergency Overtime Work. – Any employee may be required by the employer to
perform overtime work in any of the following cases:

(a) When the country is at war or when any other national or local emergency has been
declared by the National Assembly or the Chief Executive;

(b) When it is necessary to prevent loss of life or property or in case of imminent danger
to public safety due to an actual or impending emergency in the locality caused by
serious accidents, fire, flood, typhoon, earthquake, epidemic, or other disaster or
calamity;

(c) When there is urgent work to be performed on machines, installations, or equipment,

in order to avoid serious loss or damage to the employer or some other cause of similar
nature;

(d) When the work is necessary to prevent loss or damage to perishable goods; and

(e) Where the completion or continuation of the work started before the eighth hour is
necessary to prevent serious obstruction or prejudice to the business or operations of
the employer.

Any employee required to render overtime work under this Article shall be paid the additional
compensation required in this Chapter.

The implementing regulations (Book II, Rule II, Sec.1) also excludes from the coverage of night
shift differential "those working in retail and service establishments regularly employing less
than 5 workers".

Book III, Rule I, Sec. 5 [b], Such restriction, including being "on call" for emergency work that
would not allow the employee to make full use of the meal period, would make the same
compensable.

Implementing Rules (Book II, Rule I): Section 7. Meal and Rest Periods. Rest periods or
coffee breaks running from five (5) to twenty (20) minutes shall be considered as compensable
working time.
Book III, Rule X, Rules to Implement the Labor Code. Every employer is required to keep
individual time and payroll records of its employees, to be kept in the main or branch office of
the establishment

SECTION 12. The employer is required to preserve time and payroll records for at least three
(3) years from the date of the last entry in the records. This timeline is aligned with the 3-year
prescriptive period for employment-related money claims.

OTHER LAWS

The Rules Implementing R.A. No. 6727 (Wage Rationalization Act) states that "retail
establishment" is one principally engaged in the sale of goods to end-users for personal or
household use".

g) "Service Establishment" is one principally engaged in the sale of service to individuals for
their own or household use and is generally recognized as such;

The "Retail Trade Liberalization Act of 2000 (RA. No. 8762) defines "retail trade" as any act,
occupation or calling of habitually selling direct to the general public merchandise, commodities
or good for consumption,but the restriction of this law shall not apply to the following:

(a) Sales by manufacturer, processor, laborer, or worker, to the general public the
products manufactured, processed or products by him if his capital does not exceed One
hundred thousand pesos (100,000.00);

(b) Sales by a farmer or agriculturist selling the products of his farm;

(c) Sales in restaurant operations by a hotel owner or inn-keeper irrespective of the

amount capital: provided, that the restaurant is incidental to the hotel business; and

(d) Sales which are limited only to products manufactured, processed or assembled by a
manufactured, processed or assembled by a manufacturer though a single outlet,
irrespective of capitalization.