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Four-Fold Test
Employment relationship under the control test is determined under the same concept as
discussed above, that is, by asking whether the person for whom the services are performed
reserves the right to control not only the end to be achieved but also the manner and means to
be used in reaching such end.3
Under the economic reality test, the proper standard of economic dependence is whether the
worker is dependent on the alleged employer for his continued employment in that line of
business.4
These 2-tiered test applies to cases where there are several parties alleged to be employers of
one individual. The determinant factor is economic dependency of such individual. In other
words, under the economic reality test, the question to ask is - among the parties alleged to be
the employer, to whom is the individual economically dependent?
Following the broader economic reality test, the Supreme Court found petitioner in
Orozco v. The Fifth Division of the Honorable Court of Appeals, 5 who is a columnist in the
Philippine Daily Inquirer (PDI), not an employee of PDI but an independent contractor. Thus:
Petitioners main occupation is not as a columnist for respondent but as a
womens rights
advocate working in various womens organizations. Likewise, she herself admits
that she also
contributes articles to other publications. Thus, it cannot be said that petitioner was
dependent on respondent PDI for her continued employment in respondents line of
business.
1
G.R. No. 170087, Aug. 31, 2006.
2
Id.
3
Id.
4
Id.
5
G.R. No. 155207, April 29, 2005.
1
The inevitable conclusion is that petitioner was not respondent PDIs
employee but an independent contractor, engaged to do independent work.
Is it necessary to have a written contract of employment in order to establish employer-
employee relationship?
No. It may be an oral or written contract. A written contract is not necessary for the
creation and validity of the relationship.
The only exception is in the case of Kasambahay where, under the Kasambahay
Law, it is required that the contract of employment should be in writing.
JOB CONTRACTING
Is job contracting valid if the contractor-supplied employees are engaged to perform not
merely peripheral but core jobs with the principal?
Yes, per the 2012 case of Digital Telecommunications Philippines, Inc. v. Digitel
EmployeesUnion (DEU), where the Court recognized the management prerogative to farm out
any of its activities, regardless of whether such activity is peripheral or core in nature.
This was issued by the DOLE Secretary to clarify that Department Order No. 18-A,
Series of 2011, is not applicable to Business Processing Outsourcing (BPO)/Knowledge
Process Outsourcing (KPO) and the Construction Industry because:
(1) BPOs and KPOs since these companies may hire employees in accordance with
applicable laws, and maintain these employees based on business requirements, which may or
may not be for different clients of the BPOs at different periods of the employees' employment.
(2) the Construction Industry because the licensing and the exercise of regulatory
powers over the construction industry are lodged with the Philippine Contractors Accreditation
Board (PCAB), which is under the Construction Industry Authority of the Philippines (ClAP),
and not with the DOLE. Thus, the DOLE, through its regional offices, shall not require
contractors licensed by PCAB in the Construction Industry to register under D.O. 18-A, Series of
2011. Moreover, findings of violation/s on labor standards and occupational health and safety
standards shall be coordinated with PCAB for its appropriate action, including the possible
cancellation/suspension of the contractors license.
2
Is there any contractual relationship between principal and the contractors workers
farmed out to it?
There is no contractual relationship of whatsoever nature between the principal and the
contractual workers. Hence, the principal can ask the contractor to remove any
contractual employee assigned or farmed out to it anytime without need to observe due
process.
Yes. Legitimate job contracting may not only be engaged by corporation, partnership or
single proprietorship. Individuals may become legitimate job contractors themselves for as
long as they have SPECIAL SKILLS or TALENTS.
Are individuals engaged as legitimate job contractors required to fulfill the requisites of
legitimate job contracting as afore-described?
NO. They need not be registered as independent contractors with DOLE; they need not have
substantial capital. All that they are required is to have their tools consisting of SPECIAL
SKILL, TALENT or EXPERTISE.
3
1. Sonza v. ABS-CBN Broadcasting Corporation1 - TV and radio talents and others with
special talents and skills are not employees but legitimate independent contractors.
2. Orozco v. The Fifth Division of the Honorable Court of Appeals 2 - A newspaper
columnist is not an employee but an independent contractor of the newspaper publishing
the column.
3. Jose Mel Bernarte v. Philippine Basketball Association 3 - Basketball or soccer referee
or umpire, an independent contractor.
4. Semblante and Pilar v. CA, Gallera de Mandaue, et al.4 - Cockpit masiador and
sentenciador are independent contractors.
5. Escasinas v. Shangri-las Mactan Island Resort 4 - A doctor may be engaged as an
independent contractor.
JUST CAUSES
In addition to the just causes mentioned in the Labor Code, just causes are also found in
prevailing jurisprudence.The following may be cited as just causes in accordance with prevailing
jurisprudence:
1
G.R. No. 138051, June 10, 2004.
2
G.R. No. 155207, Aug. 13, 2008.
3
G.R. No. 192084, Sept.
14, 2011. 4 G.R. No.
196426, Aug. 15, 2011.
4
G.R. No. 178827, March 4, 2009.
4
(1) Violation of Company Rules and Regulations or Company Code of Discipline.
(2) Theft of property owned by a co-employee as distinguished from company-owned
property which is considered serious misconduct.
(3) Incompetence, inefficiency or ineptitude.
(4) Failure to attain work quota.
(5) Failure to comply with weight standards of employer.
(6) Attitude problem.
1. the employee concerned must be one holding a position of trust and confidence, thus, one who
is either: (1) a managerial employee; or (2) a fiduciary rank-and-file employee, who, in the
normal exercise of his or her functions, regularly handles significant amounts of money or
property of the employer.
2. The loss of confidence must be based on a willful breach of trust and founded on clearly
established facts.
ABANDONMENT OF WORK
1. CONCEPT.
Abandonment is a form of neglect of duty; hence, a just cause for termination of
employment under Article 282 [b] of the Labor Code.
2. REQUISITES.
To constitute abandonment, two (2) elements must concur, namely:
1. The employee must have failed to report for work or must have been absent without
valid orjustifiable reason; and
2. There must have been a clear intention on the part of the employee to sever the
employeremployee relationship manifested by some overt act.
3. SOME PRINCIPLES ON ABANDONMENT.
Mere absence is not enough to constitute abandonment.
Clear intention to sever employment relationship is necessary.
Due process in abandonment cases consists only of the service of 2 notices to the employee,
viz.:
a. First notice directing the employee to explain why he should not be declared as having
abandoned his job; and
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b. Second notice to inform him of the employers decision to dismiss him on the ground of
abandonment.
No hearing is required to validly dismiss an employee for abandonment.
Notices in abandonment cases must be sent to employees last known address per record
of the company. The employer need not look for the employees current whereabouts.
Immediate filing of a complaint for illegal dismissal praying for reinstatement negates
abandonment.
Lapse of time between dismissal and filing of a case is not a material indication of
abandonment. Hence, lapse of 2 years and 5 months or 20 months or 9 months or 8 months
before filing the complaint for illegal dismissal is not an indication of abandonment. Under
the law, the employee has a 4-year prescriptive period within which to institute his action for
illegal dismissal.
Filing of a case to pre-empt investigation of the administrative case is tantamount to
abandonment.
When what is prayed for in the complaint is separation pay and not reinstatement, the
filing of complaint does not negate abandonment.
It is abandonment when what is prayed for in the complaint is separation pay and it was only
in the position paper that reinstatement was prayed for.
An employee may be absolved from the charge of abandonment of work but adjudged guilty
of AWOL. These two grounds are separate and distinct from each other.
Employment in another firm coinciding with the filing of complaint does not indicate
abandonment.
Offer of reinstatement by employer during proceedings before Labor Arbiter and refusal by
employee does not indicate abandonment but more of a symptom of strained relations
between the parties
An employee who failed to report for work after the expiration of the duly approved leave of
absence is considered to have abandoned his job.
An employee who failed to comply with the order for his reinstatement is deemed to have
abandoned his work.
An employee who, after being transferred to a new assignment, did not report for work
anymore is deemed to have abandoned his job.
An employee who deliberately absented from work without leave or permission from his
employer for the purpose of looking for a job elsewhere is deemed to have abandoned his
work.
Imprisonment or detention by military does not constitute abandonment.
Absence to evade arrest is not a valid justification. To do so would be to place an imprimatur
on the employees attempt to derail the normal course of the administration of justice.
CONSTRUCTIVE DISMISSAL
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Denying to the workers entry to their work area and placing them on shifts not by weeks
but almost by month by reducing their workweek to three days.
Barring the employees from entering the premises whenever they would report for work in
the morning without any justifiable reason, and they were made to wait for a certain
employee who would arrive in the office at around noon, after they had waited for a long
time and had left.
Sending to an employee a notice of indefinite suspension which is tantamount to
dismissal.
Imposing indefinite preventive suspension without actually conducting any investigation.
Changing the employees status from regular to casual constitutes constructive dismissal.
Preventing the employee from reporting for work by ordering the guards not to let her in.
This is clear notice of dismissal.
In contrast, in constructive dismissal, the employer will never indicate that he is terminating
the employee. He will even allow the employee to report to his work every day. But he will
do any of the three (3) acts mentioned above that indicates his intention to get rid of the
services of the employee. This is the reason why it is called dismissal in disguise.
RETRENCHMENT
The phrase retrenchment to prevent losses means that retrenchment must be undertaken
by the employer before the losses anticipated are actually sustained or realized. The
employer need not keep all his employees until after his losses shall have materialized.
Otherwise, the law could be vulnerable to attack as undue taking of property for the benefit
of another.
1
Balasabas v. NLRC, G.R. No. 85286, August 24,1992; Central Azucarerra dela Carlota v. NLRC, G.R. No. 100092, December 29,
1995.
7
Profitable operations in the past do not affect the validity of retrenchment.
Retrenchment due to liquidity problem is not valid.
Sharp drop in income is not a ground to justify retrenchment. A mere decline in gross
income cannot in any manner be considered as serious business losses. It should be
substantial, sustained and real.
Litany of woes, in the absence of any solid evidence that they translated into specific and
substantial losses that would necessitate retrenchment, will not suffice to justify retrenchment.
Rehiring of retrenched employees does not necessarily indicate illegality of retrenchment.
In an enterprise which has several branches nationwide, profitable operations in some
of them will not affect the validity of the retrenchment if overall, the financial condition
thereof reflects losses.
Constitutional Provisions
Section 10. The State shall promote social justice in all phases of national development
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.cralaw
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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.cralaw
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.
& 14.
Section 14. The State shall protect working women by providing safe and healthful working
conditions, taking into account their maternal functions, and such facilities and opportunities that
will enhance their welfare and enable them to realize their full potential in the service of the
nation
Civil Code:
Art. 1700;
The relations between capital and labor are not merely contractual. They are so impress
with public interest that labor contracts must yield to the common good. Therefore, such contacts
are subject to the special laws on labor unions, baraganing, strikes and lockouts, close stop, wages,
working conditions, hours of labor and similar subjects.
Art. 1702.
In case of doubt, all labor legislation and all labor contracts shall be constructed in favor
of the safety and decent living for the laborer
Labor Standards
Labor standards - refers to that part of labor law which prescribes the minimum terms and
conditions of employment which the employer is required to grant to its employees. Examples:
Books One to Four of the Labor Code as well as Book VI thereof which deal with working
conditions, wages, hours of work, holiday pay and other benefits, conditions of employment of
women, minors, househelpers and homeworkers, medical and dental services, occupational health
and safety, termination of employment and retirement
Labor relations
Labor relations - refers to that part of labor law which regulates the relations between employers
and workers. Example: Book V of the Labor Code which deals with labor organizations,
collective bargaining, grievance machinery, voluntary arbitration, conciliation and mediation,
unfair labor practices, strikes, picketing and lockout.
Social Legistlation
Social Legislation consists of laws that provide particular kinds of protection or benefits to
society or segments thereof in furtherance of social justice.
Conciliation v. Mediation
9
differences or persuading them into adjusting or settling their dispute. The Conciliator or
Mediator normally does not make or render any decision, his role being confined to the functions
afore-described.
3. DISTINCTION BETWEEN CONCILIATION AND MEDIATION.
Generally, there are no marked distinctions between conciliation and mediation. The
reason is that in both cases, a neutral third party (called Conciliator or Mediator) is tasked to
assist two or more opposing parties in finding appropriate resolution to a dispute.
In the NCMB, the hearing officer is called Conciliator-Mediator. There is no separate
classification between conciliators and mediators. When the Conciliator-Mediator performs his
task, he does not make any distinction when he is acting as Conciliator or as Mediator.
In other jurisdictions, the principal distinction between conciliation and mediation
lies on the extent of the power and authority granted to the neutral third party.
In mediation, the Mediator normally facilitates a deliberation or discussion of the issues
between the parties. He may or may not offer any opinions on the strength and weaknesses of
each party's positions and arguments. Thus, mediation may be classified into two, namely:
1. Facilitative Mediation where the Mediator does not make or offer any opinion; or
2. Evaluative Mediation where the Mediator offers an opinion which is not binding on
the parties.
It bears stressing, however, that regardless of which of the 2 methods above is chosen, the
Mediator is not empowered to impose his will on the parties.
In conciliation, the Conciliator is given more power and authority in that he may not only offer
an opinion on the issues at hand but may actually make a binding opinion thereon provided the
parties stipulate in advance to this effect. His opinion is based on the facts and the law involved
in the controversy before him.
It may thus be observed that conciliation is more formal than mediation in the sense that
the Conciliators opinion, unlike the Mediators, may be binding on the parties, although it may
be merely temporary in character.
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
Arbitration
VOLUNTARY ARBITRATION
1. VOLUNTARY ARBITRATION.
Voluntary arbitration refers to the mode of settling labor-management disputes in which the parties select a
competent, trained and impartial third person who is tasked to decide on the merits of the case and whose
decision is final and executory.
2. VOLUNTARY ARBITRATOR.
A Voluntary Arbitrator refers to any person who has been mutually named or designated by the parties to the
CBA the employer and the bargaining agent - to hear and decide the issues between them.
A Voluntary Arbitrator is not an employee, functionary or part of the government or of the Department of Labor
and Employment, but he is authorized to render arbitration services provided under labor laws.
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
k.Members of the family of the employer who are dependent on him for support.
Are unavailed service incentive leaves commutable to cash?
Yes. The service incentive leave is commutable to its money equivalent if not used or exhausted at the end of
the year.
In International Catholic Migration Commission v. NLRC, the Court explained that a probationary employee, as
understood under Article 281 of the Labor Code, is one who is on trial by an employer, during which, the latter
determines whether or not he is qualified for permanent employment. A probationary appointment gives the
employer an opportunity to observe the fitness of a probationer while at work, and to ascertain whether he
would be a proper and efficient employee.
PROBATIONARY EMPLOYMENT
Is the period of 6 months in the law on probationary employment (Article 281, LC) the minimum or
maximum period?
The answer is it is neither the minimum nor the maximum period of probationary employment. The 6-
month period is mentioned in the law for purposes of setting the standard period. Proof that it is not the
maximum is the case of Buiser v. Leogardo where the probationary period of 18 months was considered
reasonable. In other words, probationary period may be for a day, a week, a month or several months,
depending on the reasonable discretion of management.
If there is no written contract, the employee is considered a regular employee from day one of his
employment.And even if there is one, he is deemed regular if there is no stipulation on probationary period.
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
3. When the probationary employee fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the start of the
employment.
No, generally, in the case of No. 3 above. The probationary employment is terminated by merely serving a
notice of termination setting forth the results of the performance evaluation conducted on the employee which
forms as the basis for deciding to terminate the probationary employment.
When should termination of probationary employment be made?
Termination to be valid must be done prior to lapse of probationary period. Termination a few days
after lapse of probationary period cannot be done without due process as he has already become a regular
employee by that time.
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
Where the continued relationship between the employer and the employee is no longer viable due to the strained
relations and antagonism between them (Doctrine of Strained Relations).
LABOR ARBITER
JURISDICTION
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
4. In cases submitted for voluntary arbitration. - When the parties agree to submit the case to
voluntary arbitration before a Voluntary Arbitrator or panel of Voluntary Arbitrators who, under
Articles 261 and 262 of the Labor Code, are also possessed of original and exclusive jurisdiction to
hear and decide cases mutually submitted to them by the parties for arbitration and adjudication.
3. RUNDOWN OF ALL CASES FALLING UNDER THE JURISDICTION OF THE LABOR
ARBITERS.
More particularly, Labor Arbiters shall have original and exclusive jurisdiction to hear and decide the
following cases involving all workers, whether agricultural or non-agricultural:
1. Under Article 217 of the Labor Code:
(a) Unfair labor practice cases;
(b) Termination disputes (Illegal dismissal cases); (c) Money claims exceeding
P5,000.00.
(d) Claims for actual, moral, exemplary and other forms of damages arising from employeremployee
relations; and
(e) Cases involving the legality of strikes and lockouts.
NOTE: Claims for employees compensation, SSS, PhilHealth (Medicare) and maternity benefits do
not fall under the jurisdiction of the Labor Arbiter because these fall under the jurisdiction of other government
agencies.
2. Under Article 124 of the Labor Code, as amended by R.A. No. 6727:
Disputes involving legislated wage increases and wage distortion in unorganizedestablishments not
voluntarily settled by the parties pursuant to R.A. No. 6727.
3. Under Article 128(b) of the Labor Code, as amended by R.A. No. 7730:
Contested cases under the exception clause in Article 128(b) of the Labor Code.
4. Under Article 227 of the Labor Code:
Enforcement of compromise agreements when there is non-compliance by any of the parties
thereto, pursuant to Article 227 of the Labor Code.
5. Under Article 262-Aof the Labor Code:
Issuance of writ of execution to enforce decisions of Voluntary Arbitrators or panel of
Voluntary Arbitrators, in case of their absence or incapacity, for any reason.
6. Under Section 10 of R.A. No. 8042, as amended by R.A. No. 10022:
Money claims of OFWs arising out of employer-employee relationship or by virtue of any law or
contract, including claims death and disability benefits and for actual, moral, exemplary and other
forms of damages.
7. Other cases as may be provided by law.
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
The Labor Arbiter has jurisdiction only over the civil aspect of ULP, the criminal aspect being lodged with
the regular courts.
LABOR-ONLY CONTRACTING.
When is there labor-only contracting?
(a) The contractor does not have substantial capital or investments in the form of tools, equipment, machineries,
work premises, among others, and the employees recruited and placed are performing activities which are
usually necessary or desirable to the operation of the company, or directly related to the main business of
the principal within a definite or predetermined period, regardless of whether such job, work or service is to
be performed or completed within or outside the premises of the principal; OR
(b) The contractor does not exercise the right of control over the performance of the work of the employee.
NOTE: Even if only one of the two (2) elements above is present, there is labor-only contracting.
-only contracting?
1. The labor-only contractor will be treated as the agent or intermediary of the principal. Since the act of an
agent is the act of the principal, representations made by the labor-only contractor to the employees will bind
the principal.
2. The principal will become the employer as if it directly employed the workers supplied by the labor-only
contractor to undertake the subcontracted job or service. It will be responsible to them for all their entitlements
and benefits under labor laws.
3. The principal and the labor-only contractor will be solidarily treated as the direct employer.
4. The employees will become employees of the principal, subject to the classifications of employees under
Article 280 of the Labor Code.
The chief distinctions between legitimate job contracting, on the one hand, and the prohibited labor-only
contracting, on the other, may be summed up as follows:
1. In the former, no employer-employee relationship exists between the contractual employees of the job
contractor and the principal; while in the latter, an employer-employee relationship is created by law between
the principal and the contractual employees supplied by the labor-only contractor.
2. In the former, the principal is considered only an indirect employer, as this term is understood under
Article 107 of the Labor Code; while in the latter, the principal is considered the direct employer of the
contractual employees in accordance with the last paragraph of Article 106 of the Labor Code.
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
3. In the former, the joint and several obligation of the principal and the legitimate job contractor is only for a
limited purpose, that is, to ensure that the employees are paid their wages. Other than this obligation of paying
the wages, the principal is not responsible for any claim made by the contractual employees; while in the latter,
the principal becomes jointly and severally or solidarily liable with the labor-only contractor to the latters
employees in the same manner and extent that the principal is liable to employees directly hired by him/her, as
provided in Article 106 of the Labor Code, as amended.
4. In the former, the legitimate job contractor undertakes to perform a specific job for the principal; while in the
latter, the labor-only contractor merely provides, supplies, recruits and places the personnel to work for the
principal.
Contracting out of jobs, works or services when not done in good faith and not justified by the exigencies of the
business such as the following:
(1) Contracting out of jobs, works or services when the same results in the termination or reduction of regular
employees and reduction of work hours or reduction or splitting of the bargaining unit.
(2) Contracting out of work with a "Cabo." "Cabo" refers to a person or group of persons or to a labor group
which, in the guise of a labor organization, cooperative or any entity, supplies workers to an employer, with or
without any monetary or other consideration, whether in the capacity of an agent of the employer or as an
ostensible independent contractor.
(3) Taking undue advantage of the economic situation or lack of bargaining strength of the contractor's
employees, or undermining their security of tenure or basic rights, or circumventing the provisions of regular
employment, in any of the following instances:
(i) Requiring them to perform functions which are currently being performed by the regular employees of the
principal; and
(5) Contracting out of a job, work or service that is necessary or desirable or directly related to the business or
operation of the principal by reason of a strike or lockout whether actual or imminent.
(6) Contracting out of a job, work or service being performed by union members when such will interfere with,
restrain or coerce employees in the exercise of their rights to self-organization as provided in Art. 248 (c) of the
Labor Code, as amended.
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
(7) Repeated hiring of employees under an employment contract of short duration or under a Service Agreement
of short duration with the same or different contractors, which circumvents the Labor Code provisions on
Security of Tenure.
(8) Requiring employees under a subcontracting arrangement to sign a contract fixing the period of employment
to a term shorter than the term of the Service Agreement, unless the contract is divisible into phases for which
substantially different skills are required and this is made known to the employee at the time of engagement.
(9) Refusal to provide a copy of the Service Agreement and the employment contracts between the contractor
and the employees deployed to work in the bargaining unit of the principal's certified bargaining agent to the
sole and exclusive bargaining agent (SEBA).
(10) Engaging or maintaining by the principal of subcontracted employees in excess of those provided for in the
applicable Collective Bargaining Agreement (CBA) or as set by the Industry Tripartite Council (ITC).
Independent Contractor
Independent Contractor
Employer does not control such means and methods but is only interested in the results thereof, then the
arrangement is called independent job contracting or contractualization, the party controlling the means and
methods is called the independent contractor and the party interested only in the results is called the
principal/client/indirect employer/statutory employer.
PROJECT EMPLOYMENT
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
4. The employee, while not employed and awaiting engagement, is free to offer his services to any
other employer.
5. A report of the termination of employment in the particular project/undertaking is submitted to the
DOLE Regional Office having jurisdiction over the workplace, within thirty (30) days following the
date of his separation from work.
6. An undertaking in the employment contract by the employer to pay completion bonus to the project
employee as practiced by most construction companies.
Is length of service material in determining validity of project employment?
No. Length of service is not a controlling determinant of employment tenure.
What are some principles on project employment?
1. Project employees should be informed of their status as such at inception of the employment
relationship.
2. There must be a written contract of project employment stating the duration of the project
employment as well as the particular work or service to be performed.A written project employment
contract is an indispensable requirement.
3. Intervals in employment contracts indicate project employment.
4. Continuous, as opposed to intermittent, rehiring shows that employee is regular.
5. Project-to-project basis of employment is valid.
On termination of project employment.
1. Project employees enjoy security of tenure only during the term of their project employment.
2. Project employees have presumably become regular employees if they are allowed to work beyond
the completion of the project or any phase thereof to which they were assigned or after the day
certain which they and their employer have mutually agreed for its completion. Having become
regular employees, they can no longer be terminated on the basis of the completion of the project or
any phase thereof to which they were deployed.
REGULAR EMPLOYMENT
Under the Labor Code, regular employment may be attained in either of three (3) ways, namely:
1. By nature of work. - The employment is deemed regular when the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade of the employer.
2. By period of service. - The employment is reckoned as regular when the employee has rendered at least
one (1) year of service, whether such service is continuous or broken, with respect to the activity in which
he is employed and his employment shall continue while such activity exists.
3. By probationary employment. - The employment is considered regular when the employee is allowed to
work after a probationary period.
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
No. The manner and method of payment of wage or salary is immaterial to the issue of whether the
employee is regular or not. So, the fact that an employee is paid on a daily basis or monthly basis is
inconsequential on the regularity issue.
Favorable to Management
McBurnie v. Ganzon, et al
The crucial issue in this case concerns the sufficiency of the appeal bond that was posted by the
respondents. The present rule on the matter is Section 6, Rule VI of the 2011 NLRC Rules of Procedure, which
was substantially the same provision in effect at the time of the respondents appeal to the NLRC, and which
reads: No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of a
bond in a reasonable amount in relation to the monetary award. The filing of the motion to reduce bond without
compliance with the requisites in the preceding paragraph shall not stop the running of the period to perfect an
appeal.
While the CA, in this case, allowed an appeal bond in the reduced amount of P10,000,000.00 and then
ordered the case remand to the NLRC, this Court Decision dated September 18, 2009 provides otherwise, as it
reads in part: While the bond may be reduced upon motion by the employer, this is subject to the conditions that
(1) the motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in
relation to the monetary award is posted by the appellant, otherwise the filing of the motion to reduce bond shall
not stop the running of the period to perfect an appeal.The qualification effectively requires that unless the
NLRC grants the reduction of the cash bond within the 10-day reglementary period, the employer is still
expected to post the cash or surety bond securing the full amount within the said 10-day period.If the NLRC
does eventually grant the motion for reduction after the reglementary period has elapsed, the correct relief
would be to reduce the cash or surety bond already posted by the employer within the 10-day period.
To begin with, the Court rectifies its prior pronouncement the unqualified statement that even an
appellant who seeks a reduction of an appeal bond before the NLRC is expected to post a cash or surety bond
securing the full amount of the judgment award within the 10-day reglementary period to perfect the appeal.
LABOR LAW: suspension of the period to perfect the appeal upon the filing of a motion to reduce bond
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
To clarify, the prevailing jurisprudence on the matter provides that the filing of a motion to reduce bond,
coupled with compliance with the two conditions emphasized in Garcia v. KJ Commercial for the grant of such
motion, namely, (1) a meritorious ground, and (2) posting of a bond in a reasonable amount, shall suffice to
suspend the running of the period to perfect an appeal from the labor arbiter decision to the NLRC. To require
the full amount of the bond within the 10-day reglementary period would only render nugatory the legal
provisions which allow an appellant to seek a reduction of the bond.
The rule that the filing of a motion to reduce bond shall not stop the running of the period to perfect an
appeal is not absolute. The Court may relax the rule. In Intertranz Container Lines, Inc. v. Bautista, the Court
held: Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary award may be
perfected only upon the posting of cash or surety bond.The Court, however, has relaxed this requirement under
certain exceptional circumstances in order to resolve controversies on their merits.These circumstances include:
(1) fundamental consideration of substantial justice; (2) prevention of miscarriage of justice or of unjust
enrichment; and (3) special circumstances of the case combined with its legal merits, and the amount and the
issue involved.
A serious error of the NLRC was its outright denial of the motion to reduce the bond, without even
considering the respondent's arguments and totally unmindful of the rules and jurisprudence that allow the bond
reduction.Instead of resolving the motion to reduce the bond on its merits, the NLRC insisted on an amount that
was equivalent to the monetary award.
When the respondents sought to reconsider, the NLRC still refused to fully decide on the motion.It
refused to at least make a preliminary determination of the merits of the appeal.
Time and again, the Court has cautioned the NLRC to give Article 223 of the Labor Code, particularly
the provisions requiring bonds in appeals involving monetary awards, a liberal interpretation in line with the
desired objective of resolving controversies on the merits.
Although the general rule provides that an appeal in labor cases from a decision involving a monetary
award may be perfected only upon the posting of a cash or surety bond, the Court has relaxed this requirement
under certain exceptional circumstances in order to resolve controversies on their merits.These circumstances
include: (1) the fundamental consideration of substantial justice; (2) the prevention of miscarriage of justice or
of unjust enrichment; and (3) special circumstances of the case combined with its legal merits, and the amount
and the issue involved. Guidelines that are applicable in the reduction of appeal bonds were also explained in
Nicol v. Footjoy Industrial Corporation. The bond requirement in appeals involving monetary awards has been
and may be relaxed in meritorious cases, including instances in which (1) there was substantial compliance with
the Rules, (2) surrounding facts and circumstances constitute meritorious grounds to reduce the bond, (3) a
liberal interpretation of the requirement of an appeal bond would serve the desired objective of resolving
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
controversies on the merits, or (4) the appellants, at the very least, exhibited their willingness and/or good faith
by posting a partial bond during the reglementary period.
It is in this light that the Court finds it necessary to set a parameter for the litigantsand the NLRC
guidance on the amount of bond that shall hereafter be filed with a motion for a bond reduction.To ensure that
the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give parties the chance to seek a
reduction of the appeal bond are effectively carried out, without however defeating the benefits of the bond
requirement in favor of a winning litigant, all motions to reduce bond that are to be filed with the NLRC shall
be accompanied by the posting of a cash or surety bond equivalent to 10% of the monetary award that is subject
of the appeal, which shall provisionally be deemed the reasonable amount of the bond in the meantime that an
appellant motion is pending resolution by the Commission.In conformity with the NLRC Rules, the monetary
award, for the purpose of computing the necessary appeal bond, shall exclude damages and attorney fees. Only
after the posting of a bond in the required percentage shall an appellant period to perfect an appeal under the
NLRC Rules be deemed suspended.
The foregoing shall not be misconstrued to unduly hinder the NLRC exercise of its discretion, given that
the percentage of bond that is set by this guideline shall be merely provisional. The NLRC retains its authority
and duty to resolve the motion and determine the final amount of bond that shall be posted by the appellant, still
in accordance with the standards of meritorious grounds and reasonable amount Should the NLRC, after
considering the motion merit, determine that a greater amount or the full amount of the bond needs to be posted
by the appellant, then the party shall comply accordingly.The appellant shall be given a period of 10 days from
notice of the NLRC order within which to perfect the appeal by posting the required appeal bond.
Totality Rule
PREVENTIVE SUSPENSION
worker during said period of extension. In such a case, the worker is not bound to reimburse the amount
paid to him during the extension if the employer decides to dismiss him after the completion of the
investigation.
Extension of period must be justified. During the 30-day period of preventive suspension, the
employer is expected to conduct and finish the investigation of the employees administrative case. The
period of thirty (30) days may only be extended if the employer failed to complete the hearing or
investigation within said period due to justifiable grounds. No extension thereof can be made based on
whimsical, capricious or unreasonable grounds.
Preventive suspension lasting longer than 30 days, without the benefit of valid extension,
amounts to constructive dismissal.
Indefinite preventive suspension amounts to constructive dismissal.
PRESCRIPTION OF ACTIONS
ILLEGAL RECRUITMENT
(Section 5, R.A. No. 10022)
Broadly, illegal recruitment may be committed by any person, regardless of whether such person is a:
1. Non-licensee;
11
G.R. No. 167678, June 22, 2010.
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
2. Non-holder of authority;
3. Licensee; or
4. Holder of authority.
Any person, whether a non-licensee, non-holder, licensee or holder of authority, may be held liable for
illegal recruitment. Under R.A. No, 8042, as amended by R.A. No. 10022, license or authority of the
illegal recruiter is immaterial.
Illegal recruitment, when undertaken by non-licensee or non-holder of authority, shall mean 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,
Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a fee
employment abroad to two or more persons shall be deemed so engaged.
What constitutes illegal recruitment when committed by ANY PERSON, whether a NON-LICENSEE,
NON-HOLDER OF AUTHORITY or even by a LICENSEE or HOLDER OF AUTHORITY?
(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 furnish or publish any false notice or information or document in relation to recruitment or employment;
(c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the
purpose of securing a license or authority under the Labor Code, or for the purpose of documenting hired
workers with the POEA, which include the act of reprocessing workers through a job order that pertains to non-
existent work, work different from the actual overseas work, or work with a different employer whether
registered or not with the POEA;
(d) To induce or attempt to induce a worker already employed to quit his employment in order to offer him
another unless the transfer is designed to liberate a worker from oppressive terms and conditions of
employment;
(e) To influence or attempt to influence any person or entity not to employ any worker who has not applied for
employment through his agency or who has formed, joined or supported, or has contacted or is supported by
any union or workers' organization;
(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the
dignity of the Republic of the Philippines;
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
(g) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign exchange
earnings, separation from jobs, departures and such other matters or information as may be required by the
Secretary of Labor and Employment;
(h) 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;
(i) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board
of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of
travel agency;
(j) 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;
(k) Failure to actually deploy a contracted worker without valid reason as determined by the Department of
Labor and Employment;
(l) 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
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
c. For overtime work performed on a rest day which falls on a special day, the overtime pay
is plus 30% of the basic hourly rate which includes 50% additional compensation asprovided
in Article 93 [c] of the Labor Code.
d. For overtime work performed on a regular holiday, the overtime pay is plus 30% of
thebasic hourly rate which includes 100% additional compensation as provided in Article 94
[b] ofthe Labor Code.
e. For overtime work performed on a rest day which falls on a regular holiday, the overtime
pay is plus 30% of the basic hourly rate which includes 160% additionalcompensation.
May an employee validly refuse to render overtime work under any of the afore-said circumstances?
No. When an employee refuses to render emergency overtime work under any of the foregoing
conditions, he may be dismissed on the ground of insubordination or willful disobedience of the lawful
order of the employer.
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
Holiday Pay
Generally, all employees are entitled to and covered by the law on holiday pay.
a. Those of the government and any of the political subdivisions, including government-owned and
controlled corporations;
b. Those of retail and service establishments regularly employing less than ten (10) workers;
f. Field personnel and other employees whose time and performance is unsupervised by the
employer;
g. Those who are engaged on task or contract basis or purely commission basis;
h. Those who are paid a fixed amount for performing work irrespective of the time consumed in the
performance thereof;
j. Members of the family of the employer who are dependent on him for support.
A. Regular Holidays
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
EDSA Revolution
Not included in the enumeration above on regular holidays are (1) Eidl Fitr and (2) Eidul Adha. The reason is
that proclamations declaring the observance of these national holidays are issued after the approximate dates of
the Islamic holidays have been determined in accordance with the Islamic calendar (Hijra) or the lunar calendar,
or upon Islamic astronomical calculations, whichever is possible or convenient. To this end, the National
Commission on Muslim Filipinos (NCMF) shall inform the Office of the President on which days the holidays
shall respectively fall.
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
The total number of regular holidays is twelve (12) days per year. This is important for purposes of reckoning
certain divisors and computation of employee benefits.
Premium pay refers to the additional compensation required by law to be paid for work performed within the
regular eight (8) hours on non-working days, such as rest days, regular and special holidays.
a. Regular Holidays
If
the employee did not work, he/she shall be paid 100 % of his/her salary for that day.
Computation: (Daily rate + Cost of Living Allowance) x 100%. The COLA is included in the
computation of holiday pay.
Ifthe employee worked, he/she shall be paid 200 % of his/her regular salary for that day for the
first eight hours. Computation: (Daily rate + COLA) x 200%. The COLA is also included in
computation of holiday pay.
Ifthe employee worked in excess of eight hours (overtime work), he/she shall be paid an
additional 30 percent of his/her hourly rate on said day. Computation: Hourly rate of the basic
daily wage x 200% x 130% x number of hours worked.
If
the employee worked during a regular holiday that also falls on his/her rest day, he/she shall
be paid an additional 30 % of his/her daily rate of 200 %. Computation: (Daily rate + COLA) x
200%] + (30% [Daily rate x 200%)].
Ifthe employee worked in excess of eight hours (overtime work) during a regular holiday that
also fallson his/her rest day, he/she shall be paid an additional 30 % of his/her hourly rate on said
day. Computation: (Hourly rate of the basic daily wage x 200% x 130% x 130% x number of
hours worked);
If the employee did not work, the no work, no pay principle shall apply, unless there is a
favorable company policy, practice, or CBA granting payment on a special day.
If the employee worked, he/she shall be paid an additional 30 % of his/her daily rate on the first
eight hours of work. Computation: [(Daily rate x 130%) + COLA).
If the employee worked in excess of eight hours (overtime work), he/she shall be paid an
additional 30 % of his/her hourly rate on said day. Computation: (Hourly rate of the basic daily
wage x 130% x 130% x number of hours worked).
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
If the employee worked during a special day that also falls on his/her rest day, he/she shall be
paid an additional 50% of his/her daily rate on the first eight hours of work. Computation: [(Daily
rate x 150%) + COLA].
If the employee worked in excess of eight hours (overtime work) during a special day that also
falls onhis/her rest day, he/she shall be paid an additional 30 % of his/her hourly rate on said day.
Computation: (Hourly rate of the basic daily wage x 150% x 130% x number of hours worked).
On the other hand, employees in private schools, whether academic or administrative personnel,
shall be paid in accordance with the rules for pay on special (non-working) days as stated above.
1.Employees on leave of absence with pay - entitled to holiday pay when they are on leave of
absence with pay.
2.Employees on leave of absence without pay on the day immediately preceding the regular
holiday - may not be paid the required holiday pay if they have not worked on such regular
holiday.
4.When day preceding regular holiday is a non-working day or scheduled rest day - should not
be deemed to be on leave of absence on that day, in which case, employees are entitled to the
regular holiday pay if they worked on the day immediately preceding the nonworking day or rest
day.
"Premium pay" means the additional compensation required by law for work performed within eight (8) hours
on non-working days, such as regular holidays, special holidays and rest days.
Economic Sabotage
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
If it is carried out by a group of three (3) or more persons conspiring or confederating with one another.
The essential elements of the crime of illegal recruitment committed by a syndicate are as follows:
1. There are at least three (3) persons who, conspiring and/or confederating with one another, carried out any
unlawful or illegal recruitment and placement activities as defined under Article 13(b) or committed any
prohibited activities under Article 34 of the Labor Code; and
2. Said persons are not licensed or authorized to do so, either locally or overseas.
The law does not require that the syndicate should recruit more than one (1) person in order to constitute the
crime of illegal recruitment by a syndicate. Recruitment of one (1) person would suffice to qualify the illegal
recruitment act as having been committed by a syndicate.
The elements of illegal recruitment in large scale, as distinguished from simple illegal recruitment, are as
follows:
1. The accused engages in the recruitment and placement of workers as defined under Article 13(b) or
committed any prohibited activities under Article 34 of the Labor Code; and
2. The accused commits the same against three (3) or more persons, individually or as a group.
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
1. From one position to another of equivalent rank, level or salary, without a break in the service; or
another is valid provided there is no demotion in rank or diminution of salary, benefits and other privileges. The
transfer should not be motivated by discrimination or made in bad faith or effected as a form of punishment or
demotion without sufficient cause.
post.
2) When the transfer involves a demotion in rank or diminution of salaries, benefits and other privileges; and
3) When the employer performs a clear act of discrimination, insensibility, or disdain towards the employee,
which forecloses any choice by the latter except to forego his continued employment.
disobedience of a lawful order of an employer under Article 282 of the Labor Code.
t to promotion is valid.
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
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[LABOR REVIEW COMMISIONER DE CASTRO MIDTERMS 2017] JAYVEE LYN JOSE
business operations. Management may choose to close only a branch, a department, a plant, or a shop.
valid.
Facilities
The term facilities includes articles or services for the benefit of the employee or his family but does not
include tools of the trade or articles or services primarily for the benefit of the employer or necessary to the
conduct of the employers business. They are items of expense necessary for the laborers and his familys
existence and subsistence which form part of the wage and when furnished by the employer, are deductible
therefrom, since if they are not so furnished, the laborer would spend and pay for them just the same.
34