LABOR LAW FINALS REVIEWER
PRELIMINARY TITLE 3. Do the Philippines labor laws meet international
SOLICITUDE FOR LABOR, Pope Leo XIII’s Rerum
Novarum
- It is only by the labor of the working man that
states grow.
- Justice demands that the interest of the poorer
population be carefully watched over, so that
they who contribute so largely to the advantage
of the community may themselves share in the
benefits they create.
EQUITY DEMANDS WORKERS’ SHARE, Adam Smith’s
The Wealth of Nations
No society can surely be flourishing and happy, of
which the far greater part of the members are poor
and miserable.
Answers to Azucena’s Labor Standards Box
Questions
Preliminary Title
Chapter 1 – General Provisions
1. What is Labor law and what does it aim to
achieve? Labor legislation consists of statutes,
regulations and jurisprudence governing the
relations between capital and labor by providing for
certain employment standards and a legal
framework for negotiating, adjusting and
administering those standards and other incidents of
employment.
The aim and the reason and, therefore, the
justification of labor laws is social justice.
2. What are the Constitutional mandates pertaining
to labor and labor-management relations? The
basic rights guaranteed by the Constitution are: the
right to organize themselves; to conduct collective
bargaining or negotiation with management; to
engage in peaceful concerted activities, including to
strike in accordance with law; to enjoy security of
tenure; to work under humane conditions; to receive
a living wage; and to participate in policy and
decision-making processes affecting their rights and
benefits as may be provided by law.
labor standards? Yes. The Philippines is a
member of the International Labor Organization
(ILO) of the UN, a specialized agency which seeks
the promotion of social justice and internationally
recognized human and labor rights. The Philippine
Senate on March 19, 1948 passed Resolution No.
44 concurring to the country’s acceptance of
obligations under the ILO’s Constitution and By-
laws.
4. Are Philippine labor laws pro-labor? Yes, the
Labor Code states that “all doubts in the
implementation and interpretation of the Labor Code
including its implementing rules and regulation shall
be resolved in favor of labor”. The policy is to extend
the decree’s applicability to a greater number of
employees to enable them to avail of the benefits
under the law, in consonance with the State’s
avowed policy to give maximum aid and protection
to labor.
Title 1 – Recruitment and Placement of Workers
Chapter I – General Provisions
1. What government agencies are created to
promote employment opportunities? DOLE –
carries out programs for local and overseas
employment. BLE- effective allocation of manpower
resources in local employment. POEA- for overseas
employment.
2. How does the POEA protect and assist the
OFWs? Among the principal functions of the POEA
are the formulation, implementation, and monitoring
of the overseas employment of Filipino workers and
the protection of their rights to fair and equitable
employment practices. POEA also participates in
the deployment of Filipino workers through
government-to-government hiring. It has extended
its services nationally through its regional extension
units. They process vacationing workers, register
sea-based workers, and participate in government
hiring through manpower pooling.
3. Who has adjudicatory jurisdiction over claims
by OFWs? NLRC has adjudicatory jurisdiction over
claims by OFWs. It is provided under RA 8042, that
the jurisdiction of NLRC covers not only claims
involving Filipino workers for overseas employment
but also money claims involving Filipino workers for
overseas deployment.
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4. What significant amendments to the Labor Code
are introduced by RA 8042? Article 17 of the
Labor Code has been amended by RA 8042 known
as the “Migrant Workers and Overseas Filipinos Act
of 1995.” The law institutes the policies on overseas
employment and establishes a higher standard of
protection and promotion of the welfare of migrant
workers, their families and of overseas Filipinos in
distress. It applies to recruitment for overseas
employment. The OEDB, NSB and the overseas
employment program of the Bureau of Employment
Services were united in a single structure-POEA.
However, adjudicatory jurisdiction of the POEA has
been moved on the NLRC by RA 8042.
5. Are POEA-approved employment contracts
immutable? NO. While the POEA Standard
Contract must be recognized and respected, neither
the manning agent nor the employer can simply
prevent a seafarer from being deployed without a
valid reason. Thus, with valid reason POEA-
approved employment contracts may be immutable.
Chapter II – Regulations of Recruitment and
Placement Activities
1. What are the requirements and restrictions for
the private sector's participation in recruitment
and placement of workers, local and overseas?
Requirements: Article 27. Citizenship
requirement. Only Filipino citizens or corporations,
partnerships or entities at least 75 percent 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
28. Capitalization. All applicants for authority to hire
or renewal of license to recruit are required to have
such substantial capitalization as determined by the
Secretary of Labor and Employment.
Restrictions: Article 29. Non-transferability of
license or authority. No license or authority shall
be used directly or indirectly by any person other
than the one in whose favor it was issued at any
place other than that stated in the license or
authority, nor may such license or authority be
transferred, conveyed or assigned to any other
person or entity. Any transfer of business address,
appointment or designation of any agent or
representative including the establishment of
additional offices anywhere shall be subject to the
prior approval of the Department of Labor and
Employment.
2. What acts or practices are prohibited in
recruitment and placement activities of licensed
recruiters? Article 34. Prohibited practices. It shall
be unlawful for any individual, entity, 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
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 or misrepresentation
for the purpose of securing a license or authority
under this Code;
(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;
(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;
(g) To obstruct or attempt to obstruct inspection by
the Secretary of Labor and Employment or by his
duly authorized representatives;
(h) To fail to file reports on the status of employment,
placement vacancies, remittance of foreign
exchange earnings, separation from jobs,
departures and such other matters or information as
may be required by the Secretary of Labor and
Employment;
(i) To substitute or alter 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 expiration of the same without the approval of the
Department of Labor and Employment.
(j) To become officer or member of the Board of any
corporation engaged in travel agency or to be
engaged directly or indirectly in the management of
a travel agency;
(k) To withhold or deny travel documents from
applicant workers before departure for monetary or
financial considerations other than those authorized
under this Code and its implementing rules and
regulations.
3. On what grounds and by which office may an
employment license or recruitment permit be
cancelled? Article 35. Suspension and/or
cancellation of license or authority. The Secretary of
Labor and Employment shall have the power to
suspend or cancel any license or authority to recruit
employees for overseas employment for violation of
rules and regulations issued by the Secretary of
Labor and Employment, the Overseas Employment
Development Board, and the National Seamen
Board, or for violations of the provisions of this and
other applicable laws, General Orders and Letters of
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 Instructions.
Chapter III – Miscellaneous Provisions
1. With the amendments made by the “Migrant
Workers and Overseas Filipino act” ( R.A. 8042),
what acts constitute illegal recruitment and who
are the persons that can be held liable? The
following acts constitute illegal recruitments,
whether committed by any persons, whether a non-
licensee, non-holder, licensee or holder of authority.
(a) To charge or accept directly or indirectly any
amount greater than the specified in the schedule of
allowable fees prescribed by the Secretary of Labor
and Employment, or to make a worker pay 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;
(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 persons
or entity not to employ any worker who has not
applied for employment through his agency;
(f) To engage in the recruitment of placement of
workers in jobs harmful to public health or morality
or to dignity of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct inspection by
the Secretary of Labor and Employment or by his
duly authorized representative;
(h) To fail to submit reports on the status of
employment, placement vacancies, remittances of
foreign exchange earnings, separations from jobs,
departures and such other matters or information as
may be required by the Secretary of Labor and
Employment;
(i) 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;
(j) 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 on indirectly in the
management of a travel agency;
(k) To withhold or deny travel documents from
applicant workers before departure for monetary or
financial considerations other than those authorized
under the Labor Code and its implementing rules
and regulations;
(l) Failure to actually deploy without valid reasons as
determined by the Department of Labor and
Employment; and
(m) Failure to reimburse expenses incurred by the
workers 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 as offense involving economic
sabotage.
Persons liable are: The persons criminally liable for
illegal recruitment are the principals, accomplices
and accessories. In case of Juridical persons, the
officers having control, management or direction of
their business shall be liable.
2. Under what circumstances is illegal recruitment
an offense involving economic sabotage? Illegal
recruitment when committed by a syndicate or in
large scale shall be considered as offense involving
economic sabotage. Illegal recruitment is deemed
committed by a syndicate carried out by a group of
three (3) or more persons conspiring or
confederating with one another. It is deemed
committed in large scale if committed against three
(3) or more persons individually or as a group.
3. Is the secretary of labor legally authorized to
order the arrest of an illegal recruiter? No, under
article III, section 2 of the 1987 Constitution, it is only
the judges, no other, who may issue warrants of
arrest and search. However, the secretary of labor
or his duly authorized representatives may cause
the lawful arrest of illegal recruiters either:
a.) By virtue of a judicial warrant issued by the RTC,
MTC or MCTC judge, as the case may be, or
b.) Without judicial warrant, under the provisions of
Section 5, Rule 113 of the 1985 rules on criminal
procedure, as amended by A.M. no. 00-5-03-SC
4. May he order the closure of an illegal
recruitment office? Yes, the Secretary of Labor or
his duly authorized representative may order the
closure of illegal recruitment establishment.
Title II – Employment of Non-resident Aliens
1. Who are the foreign nationals that cannot work
in the Philippines without an employment
permit? Art. 40 requires only non-resident aliens to
secure employment permit.
2. Who are exempt from such requirement?
a. All members of the diplomatic service and
foreign government officials accredited by and
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 with the reciprocity arrangement with the
Philippine government;
b. Officers and staff of the international
organizations of which the Philippine
government is a member, and their legitimate
spouses desiring to work in the Philippines;
c. Foreign nationals elected as members of the
governing board who do not occupy any other
position, but have only voting rights in the
corporation;
d. All foreign nationals granted exemption by the
law;
e. Owners and representatives of foreign
principals whose companies are accredited by
the POEA, who come to the Philippines for a
limited period and solely for the purpose of
interviewing Filipino applicants for employment
abroad;
f. Foreign nationals who come to the Philippines
to teach, present and/or conduct research
studies in universities and colleges visiting,
exchange or adjunct professors under formal
agreements between the universities or
colleges in the Philippines and foreign
universities or colleges; or between the
Philippine government and foreign government;
provided that the exemption is on a reciprocal
basis; and
g. Resident foreign nationals.
Book Two – Human Resources Development
Title I – National Manpower Development Program
Chapter I – National Policies and Administrative
Machinery for their Implementation
1. What is TESDA and what are its
responsibilities? Technical Education and Skills
Development Authority.
2. How may the success or failure of TESDA be
measured? The success of the TESDA training
programs will be gauged by how they connect skills
training to jobs.
Book Three – Conditions of Employment
Title I – Working Conditions and Rest Periods
Chapter I – Hours of Work
1. Obviously, the law on conditions of employment
cannot apply if employer-employee relationship
does not exist between the parties. In law who is
considered an employee? An employer?
Employer includes any person acting in the interest
of an employer in relation to an employee.
Employee includes any individual employed by an
employer Under SSS law Employer — Any person,
natural or juridical, domestic or foreign, who carries
on in the Philippines any trade, business, industry,
undertaking, or activity of any kind and uses the
services of another person who is under his orders
as regards the employment. Employee — Any
person who performs services for an employer in
which either or both mental and physical efforts are
used and who receives compensation for such
services, where there is an employer-employee
relationship
2. What are the implications or consequences of
the existence of the employment relationship?
Who are employees excluded from the coverage
of the law on employment conditions? To protect
workers/employee against businessman trying to
avoid the bringing about of an employer-employee
relationship in their enterprises because that
juridical relations spawn obligations connected with
workmen’s compensation, social security,
medicare, termination pay, unionism. Excluded
employees are the following:
a. Govt. employee
b. Managerial employees, including other officers
or members of the managerial staff.
c. Field personnel
d. Employers family member who depend on him
for support
e. Domestic helpers
f. Persons in the personal service of another
g. Workers who are paid by results as determined
under DOLE regulations
3. What are the rights and responsibilities of the
employer and the employees as regards
determination and observance of work hours?
1. All hours which the Ee is required to give to his Er
regardless of whether or not such hours are spent in
productive labor or involve physical or mental
exertion.
2. Rest period is excluded from hours worked, even
if Ee does not leave his workplace, it being enough
that:
a. He stops working
b. May rest completely
c. May leave his workplace, to go elsewhere,
whether within or outside the premises of the
workplace
3. All time spent for work is considered hours worked
if: a. The work performed was necessary; b. If it
benefited the Er; c. Or the Ee could not abandon his
work at the end of his normal working hours because
he had no replacement; d. Provided, the work was
with the knowledge of his Er or immediate
supervisor
4. The time during which an Ee is inactive by
reasons of interruptions in his work beyond his
control shall be considered working time: a. If the
imminence of the resumption of the work requires
the Ees presence at the place of work or b. If the
interval is too brief to be utilized effectively and
gainfully in the Ees own interest.
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4. In law what are considered hours worked?
Which ones are “unworked”, hence not
compensable? Is lunch break compensable?
What travel hours should be paid? As rule hours
worked shall include:
(a) All time during which an employee is required to
be on duty or to be at prescribed workplace.
(b) All the 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.
The following are unworked hence not
compensable:
a. Mealtime except when he is required to
perform his duties whether active or inactive
while eating
b. Normal travel from home to work except
emergency call s outside his regular working
hours.
Lunch break is not compensable except when it is
required to perform duties whether active or inactive
Travel should be paid on following cases:
a. Emergency call outside of his regular working
hours and is required to travel to his place of
business or some other work site, all time spent
in such travel is working.
b. Time spent by an employee in travel as part of
his principal activity, such as travel from jobsite
to jobsite during the workday must be counted
as hours worked.
c. Travel away from home is clearly work time
when it cuts across the employees workday
5. Is rendition of overtime work an obligation? No.
Overtime work is voluntary. Except Compulsory
Overtime work in any of the following situations:
a. Urgent work to be performed on machines and
installations in order to avoid serious loss or
damage to the Er or some other cause of similar
nature
b. Work is necessary to prevent loss or damage to
perishable goods
c. In case of imminent danger to the 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
d. Country is at war
e. Completion or continuation of the work started
before the 8th hour is necessary to prevent
serious obstruction or prejudice to the business
operations of the Er
f. Any other national or local emergency has been
declared
g. Necessary to prevent loss of life or property.
Chapter II – Weekly Rest Periods
1. When is an employee's rest day? Every employee
regardless of the nature of his work is entitled to at
least one whole day every week as his rest day. The
rest day or day off shall be determined by the
employer. However, in cases where the employee is
required by his religious belief to rest on certain
days, such belief shall be respected by the employer
2. May an employer require work on rest day? On
non-working day? The employer may require his
employees to work on any day:
(a) In case of actual or impending emergencies
caused by serious accident, fire, flood, typhoon,
earthquake, epidemic or other disaster or
calamity to prevent loss of life and property, or
imminent danger to public safety;
(b) In cases of urgent work to be performed on the
machinery, equipment, or installation, to avoid
serious loss which the employer would
otherwise suffer;
(c) In the event of abnormal pressure of work due
to special circumstances, where the employer
cannot ordinarily be expected to resort to other
measures;
(d) To prevent loss or damage to perishable goods;
(e) Where the nature of the work requires
continuous operations and the stoppage of work
may result in irreparable injury or loss to the
employer; and
(f) Under other circumstances analogous or similar
to the foregoing as determined by the Secretary
of Labor and Employment. [Art. 92, LC
Chapter III – Holidays, Service Incentive Leaves and
Service Charges
1. What is holiday pay & who are the employees
entitled to it? Is a one–day pay given by law to an
employee even if he does not work on a regular
holiday. It is limited to the twelve (12) regular, also
called legal holidays listed by law.
GR: all employees in all establishments whether for
profit or not are entitled to a holiday pay, provided
that, he should not have been absent without pay on
the working day preceding the regular holiday.
EX: Holiday pay does not apply to:
1. Government employees;
2. Managerial employees including members of
managerial staff; 3. Field personnel;
4. Members of the family of the employer who are
dependent on him for support; and
5. Employees of retail & services establishments
regularly employing not more than ten (10)
workers.
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2. What is service incentive leave? Is a part-time
worker entitled to S.I.L to the same extent as a
full-timer? It refers to the to the five (5) days leave
with pay for every employee who has rendered at
least one (1) year of service.
Yes, part-time workers are also entitled to the full
benefit of the yearly 5-day S.I.L. The reason is that
the provisions of article 95 speak of the number of
months in a year for the entitlement to the said
benefit.
3. Aside from S.I.L, what other kinds of leave are
granted by law? The other kinds of leave that are
granted by law are the following: R.A No. 8187 -
Paternity and Maternity Leave; R.A No. 8972 -
Parental (solo parent) Leave; andR.A No. 9262 –
Battered Woman Leave.
Title II – Wages
Chapter I – Preliminary Matters
1. What is wage? What does it include? To
determine whether one’s wage meets the legal
minimum, should non-cash benefits included in the
computation? Wage is the remuneration or
earnings, however designated, capable of being
expressed I in terms of money, whether fixed or
ascertained on a time, piece, or commission basis
or other method of calculating the same, which is
payable by an employer to an employee under a
written or unwritten contract of employment for done
or to be done or for services rendered or to be
rendered and includes the fair and reasonable
value, as determined by the Secretary of Labor, of
board, lodging, or other facilities customarily
furnished by the employer to the employee.
Wage or Salary includes: Commission, Facilities,
Commodities/Supplements.
Yes, non-cash benefits maybe included in the
computation of wages such as board and lodging
customarily furnished by the employer to the
employee.
2. “Facilities” are wage-deductible,
“Supplements” are not. How are they
differentiated? In short, the benefit or privilege
given to the employee, which constitutes an extra
remuneration over and above his basic or ordinary
earning or wage, is “supplement”. When benefit or
privilege is part of the laborers basic wages, it is a
“facility”. The criterion lies not so much on the kind
of the benefit or item given, but its purpose.
3. What establishments may be exempted from
observance of the minimum wage law?
a. Farm tenancy or leasehold;
b. Household or domestic helpers;
c. Homeworkers engaged in needle-work;
d. Workers employed in any establishment duly
registered with the National Cottage Industry
Development Authority (NACIDA);
e. Workers in duly registered cooperatives when
so recommended upon approval by the
Secretary of Labor;
f. Workers of a Barangay Micro Business
enterprise
Chapter II – Minimum Wage Rates
1. Minimum wage rates are regionalized, i.e., they
vary among the regions. How is this justified?
The minimum wage rates were regionalized based
on the following applicable laws:
a. Art. 99 of the Labor Code provides that “the
minimum wage rates for agricultural and non
agricultural employees and workers in each
and every region of the country shall be
those prescribed by the Regional Tripartite
Wages and Productivity Boards.”
b. By virtue of RA 6727 (Wage Rationalization
Act), the regional wage boards or RTWPBs
have issued wage orders fixing the minimum
wages for their respective regions.
2. What is the Rule on Nondiminution of benefits?
Does it apply to benefits negotiated through a
collective bargaining agreement (CBA) or to
conditional benefits such as bonus? The rule on
Nondiminution of Benefits is simply the prohibition
against elimination or diminution of employee
benefits under Article 100 of the Labor Code. So that
the rule against diminution of supplements or
benefits may apply, it must be shown that:
a. The grant of the benefit is founded on a policy
or has ripened into a practice over a long
period;
b. The practice is consistent and deliberate;
c. The practice is not due to error in the
construction or application of a doubtful or
difficult question of law; and
d. The diminution or discontinuance is done
unilaterally by the employer.
No. Benefits initiated through negotiation between
employer and employees, such as those contained
in a collective bargaining agreement, are not within
the prohibition of Article 100 because, as products
of bilateral contract, they can only be eliminated or
diminished bilaterally. What the law forbids is
elimination or modification done unilaterally by the
employer.
Neither does the rule under Art. 100 apply to a
benefit whose grant depends on the existence of
certain conditions, so that the benefit is not
demandable if those preconditions are absent. An
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 example of this is the giving of bonus which is not
part of the employees’ regular compensation. It is
only an act of generosity.
In sum, jurisprudence recognizes exceptions to the
application of Article 100:
a. Correction of error;
b. Negotiated benefits;
c. Wage order compliance;
d. Benefits on reimbursement basis;
e. Reclassification of position;
f. Contingent benefits or conditional bonus; and
g. Productivity incentives.
3. What is the thirteenth-month pay and who are
entitled to it? On what basis is it computed? Are
commissions part of the pay? Thirteenth-month
pay is an additional monetary benefit given to an
employee by creating an imaginary thirteenth month
and obliges employers to pay the employees for that
imaginary month. It is a statutory grant under P.D.
No. 851. All rank-and-file employees, regardless of
salary rate, shall be entitled to 13th-month pay.
Under the implementing rules of P.D.851, the basis
of computation of 13th-month pay shall be the one-
twelfth (1/12) of the basic salary of an employee
within a calendar year.
In the case of Philippine Duplicators vs. NLRC, the
Court ruled, essentially, that commissions are
included or excluded, depending on what kind of
commissions are involved.
If the commissions may properly be considered part
of the basic salary, they should be included in
computing the 13th-month pay. (i.e. wage-or sales-
percentage type)
If the commissions are not integral part of the basic
salary, then they should be excluded. (i.e. profit-
sharing or bonus type)
4. Wages calculated according to work output,
instead of time spent, is lawful. On what
conditions? This is the so-called Payment by
Results under Article 101 of the Labor Code. Under
the law, the wage rates paid to workers paid by
results, including pakyao, piecework and other
noontime work must be fair and reasonable.
5. What statutory benefits are piece-rate workers
entitled to? On the basis of existing labor
regulations and more recent jurisprudence, piece
rate workers are entitled to the benefits, as follows:
a. The applicable statutory minimum daily rate;
b. Yearly service incentive leave of five (5) days
with pay;
c. Night shift differential pay;
d. Holiday pay;
e. Meal and rest periods;
f. Overtime pay (conditional)
g. Premium pay (conditional)
h. 13th-month pay
Other benefits granted by law, by individual or
collective agreement
Chapter III – Payment of Wages
1. Is it lawful to pay the wages only once a month?
May the wages be paid in form of goods such as
phone cards? Under Art. 103 of the Labor
Code; Wages shall be made at least once every two
(2)weeks or twice a month at intervals not
exceeding sixteen (16) days. If on account of Force
majeure or circumstances beyond the employer’s
control, payment of wages on or within the time
herein provided cannot be made, the employer shall
pay the wages immediately after such force majeure
or circumstances have ceased. No employer shall
make payment with less frequency than once a
month.
No employer shall pay the wages of an employee by
means of promissory notes, vouchers, coupons,
tokens, tickets, chits or any object other than legal
tender, even when expressly requested by the
employee.
2. What is independent contracting in contrast to
labor-only contracting? What does the latter
consist of and why does the law prohibit it?
Independent contracting is an arrangement
whereby a principal agrees to put out or farm out
with a contractor or subcontractor the performance
or completion of a specific job work or service within
a definite or predetermined period, regardless of
whether such job, work or service to be performed
or completed within or outside the premises of the
principal as hereinafter qualified. Contracting, as
the, definition shows, refers to the completion or
performance of a job, work, or service within a given
period. Labor-only contracting, on the other hand,
is not really contracting because the arrangement is
merely to recruit or place people to be employed,
supervised and paid by another, who, therefor, is the
employer. The commitment of the so-called
“contractor” is not to do and deliver a job, work or
service but merely to find and supply people. The
“contractor” is a pseudo-contractor; in fact, he
himself might even be an employee of the employer.
Thus, “labor-only contracting” is self-contradictory
because there is no contactor and no contracting in
L.o.C.
It is prohibited because it is an attempt to evade the
obligations of an employer. Section 5 of D.O. No. 18-
02-Prohibition against labor-only contracting –
Labor-only contracting is hereby declared
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 prohibited. For this purpose, labor-only contracting
shall refer to an arrangement where the contractor
or subcontractor merely recruits, supplies or place
workers. To perform a job, work or service for
principal, and any of the following elements are
present:
a. The contractor or subcontractor does not
have substantial capital or investment which
relates to the job, work, or service to be
performed and the employees recruited,
supplied or place by such contractor or
subcontractor are performing activities which
are directly related to the main business of the
principal; or
b. The con tractor does not exercise the right to
control over the performance of the work of
the contractual employee.
3. Other than labor-only contracting, what forms or
acts of labor contracting are disallowed?
Notwithstanding Section 5 of these Rules the
following are hereby declared prohibited for being
contrary to law or public policy.
(a) Contracting that terminates the employment
of regular employees, or reduce their work
hours, or reduces or splits a bargaining unit, if
such contracting out is not done in good faith
and not justified by business exigencies.
(b) Contracting with “cabo”
(c) Contracting with in-house agency
(d) Contracting because of a strike or lockout.
(e) Contracting that constitutes ULP under Article
248.
4. May an indirect employer be held liable
answerable for an illegal dismissal done by the
direct employer? 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.
Chapter IV – Prohibition Regarding Wages
1. What wage deductions are legally allowed?
Expressly provided in the Labor Code. Art. 113.
WAGE DEDUCTION No employer, in his own behalf
or in behalf of any person, shall make any deduction
from the wages of his employees, except:
(a) In cases where the worker is insured with his
consent by the employer, and the deduction is
to recompense the employer for the amount
paid by him as premium on the insurance;
(b) For union dues, in cases where the right of the
worker or his union to check-off has been
recognized by the employer or authorized in
writing by the individual worker concerned; and
(c) In cases where the employer is authorized by
law or regulations issued by the Secretary of
Labor.
Deductions authorized by law:
a. Deduction for value of meals and other facilities.
b. In cases where the employee is insured with his
consent by the employer, deductions for the
amount paid by said employer, as premiums on
the insurance.
c. In cases where the right of the employees or his
union to checkoff has been recognized by the
employer or authorized in writing by the
individual employee concerned.
d. In cases where the employee is indebted to the
employer, where such indebtedness has
become due and demandable.
e. In court awards, wages may be the subject of
execution or attachment, but only for debts
incurred for food, shelter, clothing and medical
attendance.
f. Withholding tax
g. Salary deductions of a member of a legally
established cooperative
h. SSS, Medicare and Pag-ibig contributions
2. May an employer deduct from the employee’s
salary the cost of company property lost or
damaged by the employee? According to the
implementing rules, payments for lost or damaged
equipment is deductible from the employee’s salary
if four conditions are met namely:
a. The employee is clearly shown to be
responsible for the loss or damage;
b. The employee is given ample opportunity to
show cause why deduction should not be made;
c. The amount of the deduction is fair and
reasonable and shall not exceed the actual loss
or damage;
d. The deduction from the employee’s wage does
not exceed 20 percent of the employee’s wages
in a week.
3. May labor standards violation justify a strike?
Ans. A wage violation is unlawful and may be
pursued in a money claim, not through a strike. But
a strikeable situation may arise when the employer
retaliates against the complaining employee, and
the retaliation is of the kind considered as ULP
under Art. 248(f). Violation of labor standards,
therefore, may ultimately cause or justify a strike if
Article 248 (f) or Article 261 (gross violation of the
CBA) is applicable.
Chapter V – Wage Studies, Wage Agreements, and
Wage Determination
1. What is the NWPC? The RTWPB? What are their
respective authorities as regards wage
determination? NWPC or National Wages and
8
 Productivity Commission, prescribes rules and
guidelines for determination of appropriate minimum
wage and productivity measures at the regional,
provincial or industry levels. Further the NWPC may
review the wage levels set by the RTWPB. But a
wage-fixing order by RTWPB does not need prior
approval by the NWPC.
RTWPB or Regional Tripartite Wages and
Productivity Boards, are empowered ‘to determine
and fix minimum wage rates applicable in their
regions’ and to issue the corresponding wage
orders, subject to guidelines’ issued by the NWPC.
But the guidelined, like the Labor Code, do not
require NWPC’s approval of a wage order. What it
requires is for the board to conduct a public hearing
over a petition for a wage order, to decide such
petition within 30 days after the last hearing , and to
“furnish the Commission a copy of the decision on
the petition or the wage order.” Furnishing the
NWPC a copy of the Wage Order does not mean
seeking the Commission’s approval.
2. What factors or criteria are considered in
determining a region’s minimum wage
standard? ARTICLE 124. Standards/Criteria for
minimum wage fixing. – The regional minimum
wages to be established by the Regional Board shall
be as nearly adequate as is economically feasible to
maintain the minimum standards of living necessary
for the health, efficiency and general well-being of
the employees within the framework of the national
economic and social development program. In the
determination of such regional minimum wages, the
Regional Board shall, among other relevant factors,
consider the following:
(a) The demand for living wages;
(b) Wage adjustment vis–vis the consumer price
index;
(c) The cost of living and changes or increases
therein;
(d) The needs of workers and their families;
(e) The need to induce industries to invest in the
countryside;
(f) Improvements in standards of living;
(g) The prevailing wage levels;
(h) Fair return of the capital invested and capacity
to pay of employers;
(i) Effects on employment generation and family
income; and
(j) The equitable distribution of income and wealth
along the imperatives of economic and social
development.
The wages prescribed in accordance with the
provisions of this Title shall be the standard
prevailing minimum wages in every region. These
wages shall include wages varying with industries,
provinces or localities if in the judgment of the
Regional Board, conditions make such local
differentiation proper and necessary to effectuate
the purpose of this Title.
3. What obligations, if any, does an employer
have when salaries are distorted by compliance
with a wage order? Where the application of any
prescribed wage increase by virtue of a law or wage
order issued by any Regional Board results in
distortions of the wage structure within an
establishment, the employer and the union shall
negotiate to correct the distortions. Any dispute
arising from wage distortions shall be resolved
through the grievance procedure under their
collective bargaining agreement and, if it remains
unresolved, through voluntary arbitration. Unless
otherwise agreed by the parties in writing, such
dispute shall be decided by the voluntary arbitrators
within ten (10) calendar days from the time said
dispute was referred to voluntary arbitration.
In cases where there are no collective agreements
or recognized labor unions, the employers and
workers shall endeavor to correct such distortions.
Any dispute arising therefrom shall be settled
through the National Conciliation and Mediation
Board and, if it remains unresolved after ten (10)
calendar days of conciliation, shall be referred to the
appropriate branch of the National Labor Relations
Commission (NLRC). It shall be mandatory for the
NLRC to conduct continuous hearings and decide
the dispute within twenty (20) calendar days from
the time said dispute is submitted for compulsory
arbitration.
The pendency of a dispute arising from a wage
distortion shall not in any way delay the applicability
of any increase in prescribed wage rates pursuant
to the provisions of law or wage order.
Chapter VI – Administration and Enforcement
1. Labor laws are enforced and administered
largely through DOLE's regional offices. How is
this administrative authority exercised? To carry
out these responsibilities, the DOLE is authorized to
operate and maintain regional offices (including
district offices and provincial extension units) in
each of the country's administrative regions. These
offices serve as the operational arms—the front line
action offices—of the DOLE. This role is described
in Arts. 128 and 129.
Article 128. Visitorial and enforcement powers. (a)
The Secretary of Labor and Employment or his duly
authorized representatives, including labor
regulations 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 to investigate any fact, condition or matter which
9
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.
(b) The provisions of Article 217 of this Code to the
contrary notwithstanding and in cases where the
relationship of employer-employee still exists, the
Secretary of Labor and Employment or his duly
authorized representatives shall have the power to
order and administer, after due notice and hearing,
compliance with the labor standards provisions of
this Code and other labor legislation based on the
findings of labor regulation officers or industrial
safety engineers made in the course of inspection,
and to issue writs of execution to the appropriate
authority for the enforcement of their order, except
in cases where the employer contests the findings
of the labor regulation officer and raises issues
which cannot be resolved without considering
evidentiary matters that are not verifiable in the
normal course of inspection.
(c) The Secretary of Labor and Employment may
likewise order stoppage of work or suspension of
operations of any unit or department of an
establishment when non-compliance with the law or
implementing rules and regulations poses grave and
imminent danger to the health and safety of workers
in the workplace. Within twenty-four hours, a
hearing shall be conducted to determine whether an
order for the stoppage of work or suspension of
operations shall be lifted or not. In case the violation
is attributable to the fault of the employer, he shall
pay the employees concerned their salaries or
wages during the period of such stoppage of work
or suspension of operation.
(d) It shall be unlawful for any person or entity to
obstruct, impede, delay or otherwise render
ineffective the order of the Secretary of Labor and
Employment or his duly authorized representatives
issued pursuant to the authority granted under this
Article, and no inferior court or entity shall issue
temporary or permanent injunction or restraining
order or otherwise assume jurisdiction over any
case involving the enforcement orders issued in
accordance with this Article.
(e) Any government employee found guilty of
violation of, or abuse of authority under this Article
shall, after appropriate administrative investigation,
be subject to summary dismissal from the service.
(f) The Secretary of Labor and Employment may by
appropriate regulations require employers to keep
and maintain such employment records as may be
necessary in aid of his visitorial and enforcement
powers under this Code.
2. Some labor disputes are likewise adjudicated at
the regional level. What are the limits to such
adjudicatory function? Under the provisions of Art
129, the Regional Director is empowered through
summary proceedings and after due notice, to hear
and decide cases involving recovery of wages and
other monetary claims and benefits, including legal
interests, provided the following requisites are
present:
a. the claim is presented by an employee, or a
person employed in domestic or household
service, or househelper;
b. the claim arises from employer-employee
relations;
c. the claimant does not seek reinstatement;
and
d. the aggregate money claim of each
claimant does not exceed P5,000.00
3. Administrative orders or adjudications are
appealable. To whom? When? Art. 129 x x x Any
decision or resolution of the Regional Director or
hearing officer pursuant to this provision may be
appealed on the same grounds provided in Article
223 of this Code, within five (5) calendar days from
receipt of a copy of said decision or resolution, to the
National Labor Relations Commission which shall
resolve the appeal within ten (10) calendar days
from the submission of the last pleading required or
allowed under its rules.
Title III – Working Conditions for Special Groups of
Employees
Chapter 1 – Employment of Women
1. Women, as a rule, are not allowed to engage in
nightwork. What are the exceptions? Art. 131.
Exceptions. The prohibitions prescribed by the
preceding Article shall not apply in any of the
following cases:
a. In cases of actual or impending emergencies
caused by serious accident, fire, flood, typhoon,
earthquake, epidemic or other disasters or
calamity, to prevent loss of life or property, or in
cases of force majeure or imminent danger to
public safety;
b. In case of urgent work to be performed on
machineries, equipment or installation, to avoid
serious loss which the employer would
otherwise suffer;
c. Where the work is necessary to prevent serious
loss of perishable goods;
d. Where the woman employee holds a
responsible position of managerial or technical
nature, or where the woman employee has been
engaged to provide health and welfare
services;
e. Where the nature of the work requires the
manual skill and dexterity of women workers
10
 and the same cannot be performed with equal
efficiency by male workers;
f. Where the women employees are immediate
members of the family operating the
establishment or undertaking; and
g. Under other analogous cases exempted by the
Secretary of Labor and Employment in
appropriate regulations.
2. Sex discrimination at work is basically wrongful.
What acts are considered discriminatory against
women employees? Art. 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 employees 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 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 hereby authorized shall proceed
independently of each other. (As amended by
Republic Act No. 6725, May 12, 1989)
Chapter II – Employment of Minors
1. Childwork is wrongful and generally illegal.
Before a child may be put to work, what are the
legal requirements? It must be a nonhazardous
work- the child is not exposed to any risk which
constitutes an imminent danger to his safety and
health.
The child shall work only for such # of hours and
period of days as determined by the Secretary of
Labor. For below 15yrs old:
a. Must work directly under the sole responsibility
of the parents/legal guardian and where only
members of his family are employed;
b. It does not endanger child’s life, safety, health
nor impair normal development;
c. The parent/legal guardian shall provide for the
child’s primary and/or secondary education.
d. If employed in any form of media-Child’s
participation must be essential;
e. Employment contract is concluded by the child’s
parent or legal guardian with express
agreement of the child concerned, if possible,
and the approval of the DOLE;
f. The ff. are strictly complied with:
a. Er shall ensure the protection, health, safety,
morals and normal development of the child
b. Er shall institute measures to prevent
exploitation or discrimination of the child
(remuneration, working time)
c. Er shall formulate and implement continuing
program for training and skill acquisitions of the
child.
2. What are the employable ages?
a. Between 15 and 18 for non-hazardous work
b. 18 and above for any hazardous work
c. Below 15yrs old-GR: not allowed to work.
Exceptions: 1. When a child works directly
under the sole responsibility of the parents and
where only members of his family are employed;
2. child star
Chapter III – Employment of Househelpers
1. What statutory employment benefits do
househelpers have?
a. Standard treatment – any kind of abuse or any
form of physical violence or harassment or any
act tending to degrade the dignity of a domestic
worker is not allowed.
b. Free board, lodging and medical attendance
c. Guarantee of privacy- extends to all forms of
communication and personal effects.
d. Access to outside communication-during free
time. In case of emergency, access to outside
communication shall be at all times.
e. Right to education and training- primary
education; ALS; and higher education, technical
and vocational training, if practicable.
f. Health and safety
g. Daily rest period-8hrs/day
h. Weekly rest period-24hrs
i. Minimum wage-
i. 2,500php/month for those employed in NCR;
ii. 2,000php/month for those employed in
chartered cities and first class municipalities;
and
iii. 1,500php/month for those employed in other
municipalities.
j. Leave benefits- 5 days with pay for those who
have rendered at least 1yr of service.
k. Social and other benefits-must have rendered at
least one month of service
i. SSS
ii. PhilHealth
iii. Pag-ibig
11
 of disability or 10 days of the compensation
2. When a househelper’s employment is from the knowledge, claim
terminated, is he entitled to separation pay? otherwise it is deemed
There is no provision of separation pay under the waived
Kasambahay Law. But it provides that if the Payment of compression Payment of
domestic worker is unjustly dismissed, the domestic is made by employer compensation is made
helper shall be paid the compensation already by the sss/gsis through
earned plus the equivalent of 15 days work by way state insurance fund.
of indemnity. (Sec 32) Employer obligation is to
pay counter contribution
3. Does the SSS law apply to househelpers? Yes. A Litigation, quasi-judicial Judicial administrative
domestic worker who has rendered at least one
month of service shall be covered by the Social 2. Under what circumstances is an injury
Security System and entitled to all the benefits in considered work connected and therefore
accordance with the pertinent provisions of the SSS compensable? Conditions: 1. The employee must
law. (Sec 30) have been injured at the place where the work
required him to be; 2. The employee must have
Chapter IV – Employment of Homeworkers been performing his official functions; 3. If the injury
is sustained elsewhere, the employee must have
1. Are homeworkers entitled to the right to self- been executing an order of the employer; 4. The
organize? Are they SSS covered? Yes, in the new injury was not due to the employee’s intoxication,
rule, it authorizes the formation and registration of willful intention to injure or kill himself or another, or
labor organization of industrial homeworkers. It also notorious negligence Injuries incurred by a health
makes explicit the employers duty to pay and remit worker while doing overtime work shall be
SSS, medicare and ECC Premiums. considered work-connected.
2. Who is their employer? Employers of
homeworkers includes any person, natural or 3. What kind of disease are compensable?
artificial, who for his account or benefit or on behalf Occupational disease listed by the commission
of any person residing outside the country, directly otherwise, proof must be shown that the risk of
or indirectly or through any employee, agent, contracting the disease is increased by the working
contractor, subcontractor or any other person. conditions.

Title II – Employees’ Compensation and State 4. Explain the theory of increased risk? If an ailment
Insurance Fund is not included in the list of occupational disease as
Chapter I – Policy and Definitions drawn up by the commission, the claimant has the
burden of proving that the nature of the work
1. What are the significant changes introduce by increased the risked of contacting the disease. The
labor code to the law that awards compensation claimant must show proof of reasonable work
benefits to employees who sustain work connection, not necessarily direct causal relation.
connected injury? Where an ailment supervened
before the new labor code, the governing law is the 5. What is the dual purpose doctrine? An
Workmen Compensation Act. Thus, the changes employee’s status of acting in the course of his
are as follows: employment is not negated by the fact that He may
be pursuing a dual purpose. Considers as
Workmen Employees compensable an injury that an employee sustains
Compensation Act. Act Compensation Law PD while on a trip undertaken for the benefit of employer
3428 442 amended by LC even if in the course thereof the employee pursues
There is presumption of No presumption of also a personal purpose.
compensability compensability
No need to present proof Causation proof of 6. If the cause of disease is unknown, for example,
of causation causation is needed of cancer, must the claimant prove that it is work
diseases is not listed related so as to obtain benefits under SIF? Yes.
Employer has burden of Claimant Proof is required. As a general rule, cancer is a
proof disease still unknown origin which strikes people in
There is presumption of Aggravation no all walks of life. Unless it be shown that a particular
aggravation presumption form of cancer is caused by specific working
If he so desires, employer Employer is not allowed conditions or environment, one cannot conclude that
had to controvert the claim much less required to it was the employment which increased the risk of
within 14 days from date intervene in the process contracting the disease.

12
Chapter II – Coverage and Liability
1. Who are the employees & employers
compulsorily covered by the employees’
compensation program? The employees’
compensation law applies to all employers, public or
private, & to all employees, public or private,
including casual, emergency, temporary or
substitute employees.
2. What is notorious negligence that can cause
denial of compensation claim? Notorious
negligence is something more than simple or
contributory negligence. It signifies a deliberate act
of the employee to disregard his own personal
safety. Disobedience to the rules and/or prohibition
does not in itself constitute notorious negligence, id
no intention can be attributed to the injured to end
his life.
3. What benefits are claimable under the EC
program & under the SS law because of an injury
or disease? Benefits claimable under the EC
Program are the following:
a. Services
a. Medical services, appliances & supplies;
and
b. Rehabilitation services
b. Cash Income Benefits or Pension due to:
a. Temporary total disability;
b. Permanent total disability;
c. Permanent partial disability; and
d. Death
c. Funeral Benefits
Benefits claimable under the SS Law are the
following:
a. Monthly Pension;
a. Dependents pension
b. Retirement benefits
b. Death Benefits & Permanent Disability Benefits;
c. Funeral Benefits;
d. Sickness Benefits; and
e. Maternity Leave Benefits
NOTE: Simultaneous recovery of benefits under
Employees’ Compensation Program of the Labor
Code & under the Social Security Law is allowed.
Chapter III – Administration
1. Who administers the State Insurance Fund?
What is the role of the SSS? It is administered by
the government and attached to the Department of
Labor for policy coordination and guidance. Its
chairman is the Secretary of Labor and
Employment. The SSS is the collecting agent of the
employees in the private sector of the State
Insurance Fund.
2. Does the EC Commission decide on
compensation claims? Are their decisions
appealable? Yes, the EC is the policy-making body
of the Employees Compensation Program and also
the appeal body. The decisions of either SSS or
GSIS, if unfavorable to the claimant are appealable
to the ECC. Upon appeal, the system elevates the
record of the case to the ECC for review.
Chapter IV – Contributions
1. Is it the employers or the consumers that
shoulder the contributions to the State
Insurance Fund (SIF)? Employers. Under the law,
contributions shall be paid in their entirety by the
employer and any contract or device for the
deduction of any portion thereof from the wages or
salaries of the employees shall be null and void.
Chapter V Medical Benefits
1. What are the benefits recoverable under the EC
Program? The benefits or “compensation”
extended to the employee (or to beneficiaries) are of
three kinds: services, income benefit, and funeral
benefit.
A. Services
(1) Medical services, appliances and
supplies;
(2) Rehabilitation services;
B. Cash Income Benefit or Pension due to:
(1) Temporary total disability;
(2) Permanent total disability;
(3) Permanent partial disability;
(4) Death.
C. Funeral benefit. chardox
2. Are medical benefits payable even after one’s
retirement? Yes. In the case of Itogon Suyoc
Mines Inc. vs. Dulay, et al, medical attendance is
owing as long as the employee is sick of a
compensable illness, and this duty is not ended
when employment terminates.
Chapter VI – Disability Benefits
1. What are the kinds of disability benefits under
the EC program?
a. Income benefit
i. For temporary total disability
ii. Equivalent to 90% of his average daily
salary credit
iii. Shall be paid to the ee from day 1 of his
disability until the 120th day
b. Full monthly income benefit
i. for permanent total disability
ii. guaranteed for 5yrs
c. Permanent partial disability benefit
i. for Permanent partial disability
13
 ii. same amount with permanent total
iii. monthly/lump sum (Until how many
months will the ee receive the income
benefit under this category? Refer to page
553. Example: loss of one thumb-10
months)
2. When is a disability considered permanent-
total? If the ee is unable to perform any gainful
occupation for a continuous period exceeding 120
days.An incapacity to perform gainful work which is
expected to be permanent. But does not require a
condition of complete helplessness. Nor is it
affected by the performance of occasional odd jobs
(Abaya v. ECC) Example: Article 192
a. Temporary total disability lasting continuously
for more than 120 days, except as otherwise
provided;
b. Complete loss of sight of both eyes;
c. Loss of two limbs at or above the ankle or wrist;
d. Permanent complete paralysis of two limbs;
e. Brain injury resulting in incurable imbecility and
insanity; and
f. Such cases as determined by the System and
approved by the commission.
Chapter VII – Death Benefits
1. In case an SIF covered employee dies, how are
the beneficiaries of the death benefits? As
provided by law, Art 194(a) Under such regulations
as the Commission may approve, the System shall
pay to the primary beneficiaries upon the death of
the covered employee under this Title, an amount
equivalent to his monthly income benefit, plus ten
percent thereof for each dependent child, but not
exceeding five, beginning with the youngest and
without substitution, except as provided for in
paragraph (j) of Article 167 hereof: Provided,
however, That the monthly income benefit shall be
guaranteed for five years: Provided, further, That if
he has no primary beneficiary, the System shall pay
to his secondary beneficiaries the monthly income
benefit but not to exceed sixty months: Provided,
finally, That the minimum death benefit shall not be
less than fifteen thousand pesos.
2. If there are competing claimants who resolves
the disputes? If there competing claimants the
ECC is empowered by law to resolve disputes in
compensation claims.
Chapter VIII – Provisions Common to Income
Benefits
1. What are the liabilities of an employer who is
delinquent in his contributions to the SIF? An
employer who is delinquent in his contributions shall
be liable to the System for the benefits which may
have been paid by the System to his employees or
their dependents, and any benefit and expenses to
which such employer is liable shall constitute a lien
on all his property, real or personal, which is hereby
declared to be preferred to any credit, except taxes.
The payment by the employer of the lump sum
equivalent of such liability shall absolve him from the
payment of the delinquent contribution and penalty
thereon with respect to the employee concerned.
2. What is the prescriptive period of EC claims? As
provided by law, No claim for compensation shall be
given due course unless said claim is filed with the
System within three (3) years from the time the
cause of action accrued. (As amended by Section 5,
Presidential Decree No. 1921). Art 201
Chapter IX – Records, Reports and Penal Provisions
1. What steps need to be observed in filing and
pursuing an EC claim? Under Art. 206 of the
present law on Employees’ Compensation, it is
required that the employee, his dependents or
anybody on his behalf, should give the notice of
sickness, injury or death to the employer within five
(5) days from the occurrence of the contingency.
The purpose is not only to establish the employee’s
right to compensation, as no claim for compensation
shall be given the employer, but also to enable the
employer to comply with its duty under the Rules –
that of entering the contingency in the logbook and
of giving also due notice to the System if the injury,
sickness or death is deemed work-connected.
The same article provides, however, that notice
need not be given if the employer or his agent or
representative is aware of the contingency that
gives rise to the claim for compensation.
2. Under what circumstances may the notice to the
employer be dispensed with? Under ECC
Resolution No. 2127, notice of injury, sickness or
death of the employee need not be given to the
employer in any of the following situations:
a. When the employee suffers the contingency
within the employer’s premises;
b. When the employee officially files an application
for leave of absence by reason of the
contingency from which he suffers;
c. When the employer provides medical services
and/or medical supplies to the employee who
suffers from the contingency; and
d. When the employer can be reasonably
presumed to have knowledge of the employee’s
contingency, in view of the ff. circumstances:
1. The employee was performing an official
function for the employer when the
contingency occurred;
2. The employee’s contingency has been
publicized through mass media outlets; or
14
3. The specific circumstances of the
occurrence of the contingency have been
such that the employer can be reasonably
presumed to have readily known it soon
thereafter; and
4. Any other circumstances that may give
rise to a reasonable presumption that the
employer has been aware of the
contingency.

15