Father Saturnino Urios University

College of Law
Labor Law I
First Semester S.Y. 2014-2015
COURSE OUTLINE
Instructor: Atty. Dendo G. Udarbe
I.

GENERAL PRINCIPLES
A. APPLICABLE LAWS
i.
ii.
iii.
iv.

The 1987 Constitution

PD 442, as amended by RA 6715
Decisions of the Supreme Court (Article 8, NCC)
Omnibus Rules and Regulations

B. THREE FIELDS OF LABOR LAW

i.
ii.
iii.

Labor Standards
Labor Relations
Social Legislation

C. CONCEPT OF LABOR; OBJECTIVE OF LABOR; LABOR IN ITS TECHNICAL

SENSE
D. FOUR SYSTEMS OF LABOR
i.
ii.
iii.
iv.

Slavery
Serfdom
Free Artisanship
Wage System

E. BASES FOR THE ENACTMENT OF LABOR LAWS

i.

Police Power; SEE: Art 263 (g), LCP

ii.

Social Justice
CASES: Garcia v. Philippine Airlines, G.R. No. 164856, 01.20.09
Capitol Medical Center v. Meris, G.R. No. 155098, 09.16.05
Tirazona v. Philippine Eds Techno-Service G.R. No. 169712, 01.20.09
Fuentes, et.al. v. NLRC, et.al., 226 SCRA 24
Capili v. NLRC, 270 SCRA 488

iii.

Doctine of Incorporation (Section 2, Article II, 1987 Constitution)

iv.

Full protection of Labor (Section 3, Article XIII, 1987 Contitution; Article 1700,
NCC)
CASES:
Brewmaster Intl, Inc. v. National Federation of Labor Unions, 271
SCRA 275
Mabeza v. NLRC, 271 SCRA 670
International School Alliance of Educators v. Quisumbing, et. al., 333
SCRA 13
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F. LIMITATIONS IN THE ENACTMENT OF LABOR LAWS

i.
ii.
iii.

Non-impairment Clause [Sec. 10, Article III, 1987 Constitution]

Equal Protection Clause [Sec. 1, Article III, 1987 Constitution]
Prohibition against involuntary servitude [Sec 18(2), Article III 1987
Constitution]

iv.

Due Process Clause [Sec.1, Article III, 1987 Constitution]

G. EFFECTIVITY OF LABOR LAWS, RULES AND REGULATIONS

SEE: Article 2, NCC & Article 5, LCP
H. RULE/S ON THE IMPLEMENTATION AND INTERPRETATION OF LABOR
LAWS
i.

Construction in favor of labor (Article 4, LCP)

CASE: G&M Philippines v. Cuambot GR No. 162308, 11.22.06

ii.

Articles 1700 to 1702, NCC

iii.

Tripartism and Tripartite Conferences; Definition (Section 275 LCP as amended

by Section 32, RA No. 6715)

I. CONSTITUTIONAL AND STATUTORY RIGHTS OF WORKERS

i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.

Right to property and due process

Right to organize
Conduct collective bargaining and negotiation with the management
Engage in peaceful concerted activities
Enjoy security of tenure
Work under humane conditions
Receive a living wage; definition
Right to a just share in the fruits of the production
Participate in policy and decision-making processes
SEE: Doctrine of co-determination
CASE: Philippine Airlines, Inc. v. NLRC, 225 SCRA 301

J. SPECIFIC RIGHTS OF WORKERS

i.

Labor Standards
-

ii.

Right to work under humane conditions (i.e. hours of work)

Right to holiday pay, service incentive leaves and service charges
Right to the minimum wage
Right against discrimination
Right to health, safety, and social welfare benefits

Labor Relations
-

Right to form a union

Right to engage in peaceful and concerted activities
Right to security of tenure
Right to collective bargaining and administration of agreement
Right against illegal dismissal
2

K. ASPECTS OF LABOR STANDARDS

i.
ii.
iii.

Meliorative Labor Standards

Protective Labor Standards
Purpose

L. SOURCES OF LABOR STANDARDS

i.
ii.
iii.
iv.
v.
vi.
II.

Statute
Administrative Orders
Employment Contracts
Company Policies and Practices
Compulsory or Voluntary Arbitration
Collective Bargaining Agreements or CBA

EMPLOYER-EMPLOYEE RELATIONSHIP
A. CONCEPT (Article 1700 NCC)
B. THE TWO-TIERED TEST IN DETERMINING EMPLOYMENT RELATIONSHIP
i.
ii.

The Four-fold test (Control Test)

The Economic Reality Test

CASES:
The Manila Hotel Corp. v. NLRC, 434 SCRA 1
Jo v. NLRC, 324 SCRA 437
Republic of the Phils. v. Asiapro Cooperative, G.R. No. 172101, 11.23.07
Insular life Assurance Co., Ltd. V. NLRC and Melecio Basiao, G.R. No. 88484,
179 SCRA 459
Tongko v. Manufacturers Life Insurance Company Inc., G.R. No. 167622,
06.29.10
Manila Golf & Country Club, Inc. v. IAC, 237 SCRA 207
Jardin et.al. v. NLRC, 326 SCRA 299
R. Transport Corporation v. Rogelio Ejandra, G.R. No. 148508, 05.20.04
UERMMMC-RDU v. The Hon.Undersecretary of Labor, Bienvenido Laguesma,
et.al. G.R. Nos. 125425-26, 11.24.93
Calamba Medical Center, Inc. v. NLRC, et.al., G.R. No. 176484, 11.25.08
Tan. V. Lagrama, 387 SCRA 393
Sonza v. ABS-CBN, G.R. No. 138051, 431 SCRA 583, 06.10.04
Farley Fulache et.al., v. ABS-CBN, G.R. No. 183810, 610 SCRA 567, 01.27.2010
Orozco v. Fifth Division of the Court of Appeals, 562 SCRA 36 [2008]
Francisco v. NLRC, G.R. No. 170087, 08.31.06

C. OTHER FORMS OF CONTRACTS OF WORK/SERVICE; RELATIONSHIP OF

PARTIES INVOLVED
i.

INDEPENDENT CONTRACTORSHIP (Principal/Contractor); Definition of

Contractor; CONCEPT: Article 1713, NCC.

ii.

AGENCY (Principal/Agent)
SEE: Article 1868, NCC

D. CHIEF CHARACTERISTICS OF AN EMPLOYEE

i.
ii.
III.

Subordination
Economic Dependence

RIGHT TO HIRE
A. MANAGEMENT PREROGATIVE; definition; nature
B. LEGAL LIMITATIONS/PROHIBITIONS PRIOR TO HIRING
i.

Under the Labor Code

a. Article 136 on stipulations against marriage

Cases: Zialcita, et. al. vs. PAL, February 20, 1977
PT&T vs. NLRC, GR No. 118978, May 23, 1997
Duncan Association of Detailman - PTGWO vs. Glaxo Wellcome
Philippines, GR No. 162994, 17 September 2004
b. Article 139 on minimum employable age
SEE: DOLE Memorandum Circular No. 2-1998 on technical guidelines for
classifying hazardous and non-hazardous establishments, workplaces and work
processes
c. Article 248 (b) on unfair labor practices
ii.

Under Special Laws

a. Sections 12 & 14 of RA 7610 (Child Abuse Law), as amended by R.A. 7658 &
R.A. 9231on worst forms of child labor; SEE: Department Order No. 65-04
(Implementing Rules and Regulations of RA 9231)
b. Section 3 (a) of RA 7877 (Anti-Sexual Harassment Act)
c. Section 35, RA 8504 (Philippine Aids Prevention and Control Act of 1998)
d. Section 3, RA 9208 (Anti-Trafficking in Persons Act of 2003)
e. Section 32, Title 3, Chapter 1, RA 7277 (Magna Carta for Disabled Persons)
f. Section 55.4, RA 8791 (General Banking Act of 2000)
iii.

Under the New Civil Code

Article 1703
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iv.

Under the Revised Penal Code

IV.

Article 272 274 and Article 278

WAGES
A. WAGES; definition; Article 97(f) LC
B. WAGES AND SALARY; Concept
CASE: Gaa vs. Court of Appeals, G.R. No. L-44169, December 3, 1985
C. PRINCIPLES
i.

Fair days wage for a fair days labor

CASE: Philippine Airlines, June 22, 1989

ii.

Equal pay for equal work

CASE: International School Alliance of Educators v. Hon. Leonardo Quisumbing, et.

al., June 1, 2000
iii.

Right to a living wage

D. FACILITIES AND SUPPLEMENTS; Concept; Distinctions

CASES:
Atok Big Wedge Case, G.R. No. L-7349 July 19, 1955
Mabeza v. NLRC, G.R. No. 118506, April 18, 1997
ALSO SEE: Section 5, Book III, Rule VII, Implementing Rules, Labor Code
E. CIVIL CODE PROVISIONS ON WAGES
SEE: Articles 1707-1709
F. METHODS OF FIXING COMPENSATION
SEE: Article 97(f), LC
G. WAGE RATIONALIZATION ACT (RA 6727)
a. STATE POLICIES (Section 2, RA 6727)
b. GOVERNMENT AGENCIES INVOLVED
i.

The National Wages and Productivity Commission (Art. 120, LC);

Composition (Art. 121, LC)

ii.

The Regional Tripartite Wages and Productivity Boards; Composition

(Art. 122, LC)

ALSO SEE: Article 126, LC on Prohibition against injunction

c. PROCEDURE ON MINIMUM WAGE FIXING
5

SEE: NWPC GUIDELINES NO. 01, Series of 2007 on the AMENDED RULES
OF PROCEDURE ON MINIMUM WAGE FIXING
H. CONCEPTS; define
a.

Basic Wage

b.

Statutory Minimum Wage

c.

Wage Order

I. PURPOSE OF MINIMUM WAGE; ADVANTAGES AND DISADVANTAGES

J. POWER TO ISSUE WAGE ORDERS
SEE: Article 99, LC as amended by Section 3, RA 6727
K. APPEAL PROCEDURE IN THE RTWPB
SEE: RA 6727
L. WAGE ORDERS APPLICABLE IN BUTUAN CITY/CARAGA REGION
M. EXEMPTION FROM WAGE ORDERS
a. Under NWPC GUIDELINES NO. 02, Series of 2007
b. Under the Labor Code (Art. 98)
c. Under RA 9178 (Barangay Micro Business Enterprises Act 0f 2002)
d. Power to issue rules on exemption and power to grant exemptions; procedure
SEE: NWPC GUIDELINES NO. 02, Series of 2007
N. WAGE DISTORTION; Definition; Concept (Article 124, LC)
CASES:
Prubankers Association v. Prudential Bank and Trust Company, 302 SCRA 74
BANKARD EMPLOYEES UNION-WORKERS ALLIANCE TRADE UNIONS,
vs. NLRC and BANKARD, INC., G.R. No. 140689, February 17, 2004
Metrobank vs. NLRC, G.R. No. 102636 September 10, 1993
Ilaw at Buklod ng Manggagawa (IBM) vs. NLRC et. al., G.R. No. 91980 June 27,
1991
i.
ii.
iii.
V.

Two methods of determining wages

Methods of resolving wage distortion in unorganized and organized
establishments (Article 124)
Jurisdiction over wage distortion disputes; Compulsory Arbitration; Voluntary
Arbitration and Appeal procedure

VIOLATION OF WAGE ORDERS

i.
ii.

Double Indemnity and Imprisonment (Sec. 12, RA 6727 as amended by RA 8188)

Jurisdiction: Regular Courts (RA 7691), Regional Director (Art 128), Labor
Arbiter (Article 217)

VI.

WAGE ENFORCEMENT AND RECOVERY

A. ENFORCEMENT TOOLS FOR RECOVERY OF WAGES UNDER THE LABOR

CODE
a. Visitorial and enforcement power of the SOLE (Article 128)
i.
ii.

Enforcement process
On health and safety of workers (Art. 128 c) and
Bona Fide suspension of operations (Art.286)

iii.

Anti-Injunction (Art. 128 d)

iv.

Maintenance of employment records (Art. 128 f)

v.

Appeal Procedure

SEE: Revised Rules on Disposition of Labor Standards Cases Series of 1987 and
Department Order No. 7-A, Series of 1995; Dole Memo Circ. 02-A, Series of 1992
b. Simple Money Claims; Jurisdiction (Article 129);
i.

Requisites
CASE: Rajah Humabon Hotel v. Trajano, G.R. Nos. 100222-23 September 14,
1993

ii.

Articles 128 and 129 compared

c. Jurisdiction of the Labor Arbiter on money claims (Article 217); see also Article 223
on Appeal Procedure and Rules 65, 43 and 45 of the Rules of Court on other legal
remedies
B. COMPROMISE OF LABOR STANDARDS CASES
SEE: Article 227 LC and Article 2028 New Civil Code
VII.

WAGE PROTECTION PROVISIONS & PROHIBITIONS REGARDING

WAGES

A. NON-INTERFERENCE IN DISPOSAL OF WAGES (Article 112)

SEE ALSO: Articles 302 [288] of the Labor Code and Article 288 of the Revised Penal
Code on Penalties
B. WAGE DEDUCTIONS (Article 113)
C. DEPOSITS FOR LOSS AND/OR DAMAGE (Articles 114 and 115)
a. Conditions/Elements; SEE: Implementing Rules (Book III, Rule VIII)
CASE: Five J Taxi v. NLRC, G.R. No. 111474 August 22, 1994

D. WITHHOLDING OF WAGES AND KICKBACKS (Article 116); Exceptions: Articles

1705-1709 of the New Civil Code
E. DEDUCTION TO ENSURE EMPLOYMENT (Article 117)
F. RETALIATORY MEASURES (Article 118)
G. FALSE REPORTING (Article 119)
H. PRINCIPLE OF NON-DIMINUTION OF BENEFITS (Articles 100 and 127 of the
Labor Code)
a. Concept
CASE: Arco Metal Products vs. Salvador Uy, G.R. No. 170734, May 14, 2008
b. Requirements
CASES:
MERALCO vs Quisumbing, G.R. No. 127598, January 27, 1999
Sevilla Trading Co vs Semana, G.R. No. 152456, April 28, 2004
Davao Fruits Corporation vs Associated Labor Unions, G.R. No. 85073, August 24, 1993
Davao Integrated Port Stevedoring Services vs. Abarquez G.R. No. 102132, March 19,
1993
Tiangco vs Leogardo, Jr. G.R. No. L-57636, May 16, 1983
Sevilla Trading Company vs Semana, ibid.
c. Exceptions
CASES:
Atok-Big Wedge Mining Co., Inc. v. Atok-Big Wedge Mutual Benefit Assn.,G.R. No. L5276, March 3, 1953
American Wire and Cable Daily Rated Employees Union v. American Wire and Cable
Co., Inc., April 29, 2005
VIII. PAYMENT OF WAGES
A. FORM
a. Legal Tender (Art.102); see also Art. 1705 of the New Civil Code & Art. 288 of the
Revised Penal Code
b. Exceptions; payment by check
CASE: Congson vs. NLRC, G.R. No. 114250 April 5, 1995
B. PLACE OF PAYMENT
a. General Rule; Exceptions (Art. 103)
b. Payment of wages thru Banks; Conditions; see RA 6727
c. Payment thru ATM; Conditions; see DOLE Advisory dated 11.25.96
C. PAYEE; General Rule; Exceptions (Art.105)
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D. TIME & FREQUENCY OF PAYMENT; General Rule ; Exceptions (Art. 103)

IX.

CONDITIONS OF EMPLOYMENT

A. HOURS OF WORK
a.

Normal Hours of Work; Exceptions; Health Personnel (Art. 83)

SEE ALSO: RA 9231 and DO No. 65-04, Series of 2004 on Child Labor and Hours of
Work of Children

b. Hours Worked; Meaning; Reduction of Hours Worked (Art. 84)

c.

Rest Periods; Meal Period; Shortened Meal Period; Coffee Breaks (Art. 85)

d. Workweek: Normal and Compressed (DOLE Dept. Advisory No. 2, Series of 2004)
e.

Weekly Rest Day; Reduction of Workdays (Art. 91)

B. METHODS OF FIXING COMPENSATION (Art. 97 f )

X.

MINIMUM LABOR STANDARDS BENEFITS

a.

Employees Exempted (Art. 82)

b. Overtime Work; General Rule (Art. 87); Exceptions (Art. 89); Meaning of Day and
Actual Work
c.

Undertime not Offset by Overtime (Art. 88); Analogous Cases

d. Premium Pay; Concept

e.
f.

Overtime Pay; Waiver of Overtime Pay; General Rule; Exceptions

Service Incentive Leave (Art. 95)

g. Holiday Pay (Art. 94)

SEE ALSO: DOLE MEMO CIRC NO. 1, SERIES OF 2004; E.O. 292 as Amended by R.A.
No. 9492 and R.A. No. 9849 on Regular and Special Holidays and Holiday Economics
h. Night Shift Differential Pay (Art. 86)
i. Service Charges (Art. 96)
XI.

OTHER SPECIAL BENEFITS

a.

13th Month Pay (PD 851, as amended)

b. Paternity Leave (RA 8187) & Revised Implementing Rules, Series of 1996
c.

Domestic Adoption Act of 1998 (RA 8552, Sec. 12; IRR, Art. VI, Sec. 34)

d. New Retirement Law (Art. 301 [287], as amended by RA 7641, and further amended by
RA 8588); SEE ALSO: 1996 Labor Advisory on Retirement Pay Law
9

e.

Solo Parents Welfare Act (RA 8972)

XII. OTHER IMPORTANT LABOR PROVISIONS

A. CONTRACTING ARRANGEMENT
a.

b.
c.
d.
e.
f.
g.

Arts. 106-109
Job contracting vs. labor only contracting
Scope and nature of liability of principal & contractor & duties and obligations;
Rights of contractual employees
Individual Independent Contractor
Scope and nature of liability of principal & contractor & duties and obligations; Rights
of Contractual employees
Omnibus Rules, as amended by DO No. 18-02, Series of 2002
Wage increases; Legislated & contractual; Effect on principal & contractors liability (RA
6727)
DO No. 14, series of 2001 (Employment & Working Conditions of Security Guards) &
RA 5498 (Private Security Agency Law)
Hiring of cooperatives & members of cooperatives as owners and not employees

B. WORKERS PREFERENCE
a.
b.
c.
d.
e.

Scope (Art.110); Unpaid wages and other monetary benefits

Preference of credit vs. lien
Bankruptcy or Liquidation proceedings
Effect of corporate rehabilitation o pending actions (RA 8799); Scope of stay order
Workers Lien (Art. 1707, Civil Code)

C. ATTORNEYS FEES & APPEARANCE OF LAWYERS

a.
b.
c.
d.

Unlawful & Lawful withholding of wages; Concept (Art. 111)

Attorneys fees; Two (2) concepts
Appearance and fees (Art.222); See 2011 NLRC Rule of Procedure
Award of attorneys fees: limitations (Art. 2208, Civil Code)

XIII. MISCELLANEOUS PROVISIONS

A. SPECIAL TYPES OF WORKERS
a. Apprentice, learner & handicapped workers (Art. 57-81);
DO No. 68-04, series of 2004 (Apprenticeship & Employment Program) as amended by
DOLE Cir. No. 2
b. Qualifications; Importance; Nature; Qualified employers; Approval of DOLE; Incentives
of employer; Duration; Wage rates; Hours of work/overtime; Enforcement of agreement
c. RA 7796 (TESDA ACT of 1994)
d. RA 7277 (Magna Carta for Disabled Persons; Incentives of Employer)
B. EMPLOYMENT OF WOMEN
a. Sec.14, Art. II, Constitutions & Sec.14, Art. XIII
b. Night Work Prohibition (Arts. 130 &131)
c. Facilities for women (Art.132)
d. Maternity leave benefits (Art. 133), see also Social Security Act of 1997 (RA 8282)
e. Family Planning Services (Art.134)
10

f.
g.
h.
i.
j.
k.

Prohibited Discrimination (Art. 135); also Art.248 (Union membership)

Criminal liability
Prohibited acts (Art.137)
Women working in nightclub, etc. (Art. 138)
Anti-violence against Women & their Childrens Act of 2004 (RA 9262)
Other special laws, RA 6727; RA 6955; RA 7192; RA 7322; RA 7877; RA 8042

C. EMPLOYMENT OF CHILDREN
a. Arts. 139-140 of the Labor Code
b. Special Protection of Children against Child Abuse, Exploitation and Discrimination
Act (RA 9231, amending RA 7601, as amended)
c. Anti-trafficking in Persons Act of 2003 (RA 9208) on forced labor and slavery
d. See also Revised Penal Code: Art. 272 (Slavery); Art. 273 (Exploitation of child labor);
Art. 274 (services rendered under compulsion in payment of debts); Art. 278
(Exploitation of Minors)
D. EMPLOYMENT OF HOUSEHELPER
a. RA 10361 otherwise known as AN ACT INSTITUTING POLICIES FOR THE
PROTECTION AND WELFARE OF DOMESTIC WORKERS expressly
amending Chapter III or Arts. 141-152 of PD 442; Salient Features
b. DO No. 04, series of 1999 (Employment in deleterious jobs of persons below 18)
c. RA 7655 (Compulsory Social Security Coverage of House helper/ Age/Wage Rate)
d. Civil Code provisions (Arts. 1689-1699)
E. EMPLOYMENT OF HOMEWORKERS
a. Arts. 153 to 155; DO No. 5, series of 1992 (Industrial Home Workers)
b. Processing (manufacturing, fabricating, finishing, repairing, altering, packing, wrapping
production of article or material)
c. Exemption from Minimum Wage (Art. 98) if engaged in needlework
d. Right to form organization; Method of payment based on standard output rate or
standard minimum rate (Time & Motion studies)
e. Prohibition: explosive, fireworks; drugs; poison etc.
F. EMPLOYMENT OF NON-RESIDENT ALIENS
a.
b.
c.
d.

Arts. 40 to 42
Trade Union Activities
Regulation of foreign assistance (Art. 270)
DO No. 75-06, series of 2006 Revised Rules for Issuance of Employment Permits to
Foreign Nationals (Omnibus Guidelines for the Issuance of Alien Employment Permits
(DO No. 12, series of 2001, as amended by DO No. 19-02, series of 2002 & DO No. 5904, series of 2004); DO No. 21-02 & 26-02, series of 2002; DO No. 41-03, series of
2003
e. BI Memo Order No. AFF Jr.- No. 05-009 issuance of SWP & 9 (g) visa
G. EMPLOYMENT OF STUDENTS & WORKING SCHOLAR
a. Working scholar under Omnibus Rules; concept
b. RA 7323, series of 1992 (Special Program for Employment of Students during summer
& Christmas)
c. Student trainee (EO No. 139 (Work Appreciation Program/ Youth Trainee)
d. RA 7796 (TESDA Act of 1994)
e. RA 7686 (Dual Training System Act of 1994)
f. EO No. 139 (Work Appreciation Program)
11

H. EMPLOYMENT OF ACADEMIC/NON-ACADEMIC PERSONNEL IN PRIVATE

EDUCATIONAL INSTITUTION
a. 1992 Manual of Regulations for Private Schools; Academic and non-academic personnel
b. DOLE Memo Cir. 2-89, series of 1989 (Computation of Min. Wage for Private School
Teachers)
I. MEDICAL, DENTAL AND OCCUPATIONAL SAFETY (Arts. 156 to 165)
a. Arts. 156-165;Employment of physician/nurse; Full time/part time
b. Employees Compensation Act; Liability of state insurance fund; Rule against double
recovery
c. Civil liability of employer (Arts. 1711-1712, Civil Code)
d. RA 7875 National Health Insurance Act of 1995 (Medicare (Art.209))
e. BWCS Occupational Safety & Health Standards (Arts. 162-165)
J. MIGRANT WORKERS ACT/RECRUITMENT AND PLACEMENT
a. RA 8042 (Migrant Workers and Overseas Filipino Act of 1995); See: RA 9422 amending
Sec. 23 (b.1) and repealing Sec. 29 & 30
b. Policies on overseas employment; Deployment of local service contractor and manning
agencies; Government agencies involved (DFA, DOLE, POEA, OWWA), adjudicatory
power
c. Recruitment and placement; Illegal recruitment, when committed in a large scale and by a
syndicate
d. Ban on direct hiring; travel agencies
e. Definition of terms: Contract worker, Name hire, Manning agency; Placement fee;
Migrant worker; Gender sensitivity; Overseas Filipinos;
f. License v. authority

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