I.
The Employer-Employee Relationship as the matrix or basis for a
labor court's jurisdiction to hear and decide labor disputes
A. The Four-Fold Test
i. Viana v. Al-lagadan - In determining the existence of employer-
employee relationship, the following elements are generally
considered, namely: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal;
and (4) the power to control the employees’ conduct — although
the latter is the most important element.
ii. Vda. De Cruz v. Manila Hotel - What pieces the orchestra shall
play, and how the music shall be arranged or directed, the
intervals and other details — such are left to the leader's
discretion. The music instruments, the music papers and other
paraphernalia are not furnished by the Hotel, they belong to the
orchestra, which in turn belongs to Tirso Cruz — not to the Hotel.
The individual musicians, and the instruments they have not been
selected by the Hotel. It reserved no power to discharge any
musician. How much salary is given to the individual members is
left entirely to "the orchestra" or the leader. Payment of such
salary is not made by the Hotel to the individual musicians, but
only a lump-sum compensation is given weekly to Tirso Cruz.
Considering the above features of the relationship, in connection
with the tests indicated by numerous authorities, it is our opinion
that Tirso Cruz was not an employee of the Manila Hotel, but one
engaged to furnish music to said hotel for the price of P250.00
daily, in other words, an independent contractor within the
meaning of the law of master and servant.
iii. LVN Pictures v. Philippine Musicians Guild - It is well settled that
"an employer-employee relationship exists . . .where the person
for whom the services are performed reserves a right to control
not only the end to be achieved but also the means to be used in
reaching such end . . . ." By reason of said control, the employer-
employee relationship was held to exist between the
management and the workers, notwithstanding the intervention
of an alleged independent contractor, who had, and exercise, the
power to hire and fire said workers. The aforementioned control
over the means to be used" in reaching the desired end is
possessed and exercised by the film companies over the
musicians in the cases before us.
iv. Torillo v. Leogardo -
v. Legend Hotel v. Realuyo - Relevantly, it is worth remembering
that the employer need not actually supervise the performance of
duties by the employee, for it sufficed that the employer has the
right to wield that power.
vi. Tongko v. Manulife - the only conclusion that can be made is that
the absence of evidence showing Manulife’s control over Tongko’s
contractual duties points to the absence of any employer-
employee relationship between Tongko and Manulife. In the
context of the established evidence, Tongko remained an agent all
along; although his subsequent duties made him a lead agent
with leadership role, he was nevertheless only an agent whose
basic contract yields no evidence of means-and-manner control
vii. Javier v. Fly Ace Corp - the onus probandi falls on petitioner to
establish or substantiate such claim by the requisite quantum of
evidence.
II. General Labor Policy
A. Constitution
i. Art II
 SECTION 2. The Philippines renounces war as an instrument
of national policy, adopts the generally accepted principles
of international law as part of the law of the land and
adheres to the policy of peace, equality, justice, freedom,
cooperation, and amity with all nations.
 SECTION 9. The State shall promote a just and dynamic
social order that will ensure the prosperity and
independence of the nation and free the people from
poverty through policies that provide adequate social
 services, promote full employment, a rising standard of
living, and an improved quality of life for all.
 SECTION 10. The State shall promote social justice in all
phases of national development
 SECTION 11. The State values the dignity of every human
person and guarantees full respect for human rights.
 SECTION 13. The State recognizes the vital role of the youth
in national building and shall promote and protect their
physical, moral, spiritual, intellectual, and social well-being.
It shall inculcate in the youth patriotism and nationalism,
and encourage their involvement in public and civic affairs.
 SECTION 14. The State recognizes the role of women in
nation-building, and shall ensure the fundamental equality
before the law of women and men.
 SECTION 18. The State affirms labor as a primary social
economic force. It shall protect the rights of workers and
promote their welfare.
 SECTION 20. The State recognizes the indispensable role of
the private sector, encourages private enterprise, and
provides incentives to needed investments.
ii. Art. III
 SECTION 1. No person shall be deprived of life, liberty, or
property without due process of law, nor shall any person be
denied the equal protection of the laws.
 SECTION 4. No law shall be passed abridging the freedom of
speech, of expression, or of the press, or the right of the
people peaceably to assemble and petition the Government
for redress of grievances.
 SECTION 8. The right of the people, including those
employed in the public and private sectors, to form unions,
associations, or societies for purposes not contrary to law
shall not be abridged.
 SECTION 10. No law impairing the obligation of contracts
shall be passed.
iii. Art. XII
 SECTION 1. The goals of the national economy are a more
equitable distribution of opportunities, income, and wealth;
a sustained increase in the amount of goods and services
produced by the nation for the benefit of the people; and an
expanding productivity as the key raising the quality of life
for all, especially the underprivileged.
The State shall promote industrialization and full
employment based on sound agricultural development and
agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are
competitive in both domestic and foreign markets. However,
the State shall protect Filipino enterprises against unfair
foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and
all regions of the country shall be given optimum
opportunity to develop. Private enterprises, including
corporations, cooperatives, and similar collective
organizations, shall be encouraged to broaden the base of
their ownership.
iv. Art. XIII
 SECTION 1. The Congress shall give highest priority to the
enactment of measures that protect and enhance the right
of all the people to human dignity, reduce social, economic,
and political inequalities, and remove cultural inequities by
equitably diffusing wealth and political power for the
common good.
To this end, the State shall regulate the acquisition,
ownership, use, and disposition of property and its
increments.
 SECTION 2. The promotion of social justice shall include the
commitment to create economic opportunities based on
freedom of initiative and self-reliance.

 SECTION 3. The State shall afford full protection to labor,
local and overseas, organized and unorganized, and promote
full employment and equality of employment opportunities
for all.
It shall guarantee the rights of all workers to self-
organizations, 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.
The State shall promote the principle of shared
responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes,
including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and
employers, recognizing the right of labor to its just share in
the fruits of production and the right of enterprises to
reasonable returns on investments, and to expansion and
growth.
B. Labor Code
 SECTION 16. The right of the people and their organizations
to effective and reasonable participation at all levels of
social, political, and economic decision-making shall not be
abridged. The State shall, by law, facilitate the establishment
of adequate consultation mechanisms.
v. Art. XIV
 SECTION 1. The State shall protect and promote the right of
all citizens to quality education at all levels and shall take
appropriate steps to make such education accessible to all.
 SECTION 2. The State shall :
(1) Establish, maintain, and support a complete, adequate,
and integrated system of education relevant to the needs of
the people and society;
(2) Establish and maintain a system of free public education
in the elementary and high school levels. Without limiting
the natural right of parents to rear their children,
elementary education is compulsory for all children of
school age;
(3) Establish and maintain a system of scholarship grants,
student loan programs, subsidies, and other incentives
which shall be available to deserving students in both public
and private schools, especially to the underprivileged;
(4) Encourage non-formal, informal, and indigenous learning
systems, as well as self-learning, independent, and out-of-
school study programs particularly those that respond to
community needs; and
(5) Provide adult citizens, the disabled, and out-of-school
youth with training in civics, vocational efficiency, and other
skills.
 Article 3. Declaration of basic policy. - The State shall afford
protection to labor, promote full employment, ensure equal
work opportunities regardless of sex, race or creed and
regulate the relations between workers and employers. The
State shall assure the rights of workers to self-organization,
collective bargaining, security of tenure, and just and
humane conditions of work.
 Article 4. Construction in favor of labor. - All doubts in the
implementation and interpretation of the provisions of this
Code, including its implementing rules and regulations, shall
be resolved in favor of labor.
 Article 166. Policy. The State shall promote and develop a
tax-exempt employees' compensation program whereby
employees and their dependents, in the event of work-
connected disability or death, may promptly secure
adequate income benefit, and medical or related benefits.
 Article 211. Declaration of policy. A. It is the policy of the
State:
a. To promote and emphasize the primacy of free collective
bargaining and negotiations, including voluntary arbitration,
mediation and conciliation, as modes of setting labor or
industrial disputes;
b. To promote free trade unionism as an instrument for the
enhancement of democracy and the promotion of social
justice and development;
c. To foster the free and voluntary organization of a strong and
united labor movement;
d. To promote the enlightenment of workers concerning their
rights and obligations as union members and as employees;
e. To provide an adequate administrative machinery for the
expeditious settlement of labor or industrial disputes;
f. To ensure a stable but dynamic and just industrial peace;
and
g. To ensure the participation of workers in decision and
policy-making processes affecting their rights, duties and
welfare.
h. To encourage a truly democratic method of regulating the
relations between the employers and employees by means
of agreements freely entered into through collective
bargaining, no court or administrative agency or official shall
have the power to set or fix wages, rates of pay, hours of
work or other terms and conditions of employment, except
as otherwise provided under this Code.
 Article 221. Technical rules not binding and prior resort to
amicable settlement. In any proceeding before the
Commission or any of the Labor Arbiters, the rules of
evidence prevailing in courts of law or equity shall not be
controlling, and it is the spirit and intention of this Code that
the Commission and its members and the Labor Arbiters
shall use every and all reasonable means to ascertain the
facts in each case speedily and objectively, without regard to
technicalities of law or procedure, all in the interest of due
process. In any proceeding before the Commission or any
Labor Arbiter, the parties may be represented by legal
counsel but it shall be the duty of the Chairman, any
Presiding Commissioner or Commissioner or any Labor
Arbiter to exercise complete control of the proceedings at all
stages.
Any provision of law to the contrary notwithstanding, the
Labor Arbiter shall exert all efforts towards the amicable
settlement of a labor dispute within his jurisdiction on or
before the first hearing. The same rule shall apply to the
Commission in the exercise of its original jurisdiction. (As
amended by RA 6715)
 Article 255. Exclusive bargaining representation and
workers' participation in policy and decision-making. The
labor organization designated or selected by the majority of
the employees in an appropriate collective bargaining unit
shall be the exclusive representative of the employee in
such unit for the purpose of collective bargaining. However,
an individual employee or group of employees shall have
 the right at any time to present grievances to their
employer.
Any provision of law to the contrary notwithstanding,
workers shall have the right, subject to such rules and
regulations as the Secretary of Labor and Employment may
promulgate, to participate in policy and decision-making
processes of the establishment where they are employed
insofar as said processes will directly affect their rights,
benefits and welfare. For this purpose, workers and
employers may form labor-management councils: Provided,
That the representatives of the workers in such labor-
management councils shall be elected by at least the
majority of all employees in said establishment. (As
amended by RA 6715)
 Article 263. Strikes, picketing and lockouts. (a) It is the
policy of the State to encourage free trade unionism and
free collective bargaining.
 Article 275. Tripartism and tripartite conferences. (a)
Tripartism in labor relations is hereby declared a State
policy. Towards this end, workers and employers shall, as far
as practicable, be represented in decision and policy-making
bodies of the government.
C. Civil Code
 Art. 1700. The relations between capital and labor are not
merely contractual. They are so impressed with public
interest that labor contracts must yield to the common
good. Therefore, such contracts are subject to the special
laws on labor unions, collective bargaining, strikes and
lockouts, closed shop, wages, working conditions, hours of
labor and similar subjects.
 Art. 1701. Neither capital nor labor shall act oppressively
against the other, or impair the interest or convenience of
the public.
III. Labor Standards
1. Labor Code
 Article 82. Coverage. The provision of this Title shall apply
to employees in all establishments and undertakings,
whether for profit or not, but not to government
employees, managerial employees, field personnel,
members of the family of the employer who are dependent
on him for support, domestic helpers, persons in the
personal service of another and workers who are paid by
results as determined by the Secretary of Labor and
Employment in appropriate regulations.
As used herein, "managerial employees" refers to those
whose primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereof, and to other officers or
members of the managerial staff.
"Field personnel" refers to non-agricultural employees who
regularly perform their duties away from the principal place
of business or branch office of the employer and whose
actual hours of work in the field cannot be determined with
reasonable certainty.
 Article 83. Normal hours of work. The normal hours of work
of any employee shall not exceed eight in a day.
Health personnel in cities or municipalities with a
population of at least one million or in hospitals or clinics
with a bed capacity of at least one hundred shall hold
regular office hours for eight hours a day, for five days a
 week, or a total of forty hours a week, exclusive of time for
meals, except where the exigencies of the service require
that such personnel work for six days, forty-eight hours, in
which case they shall be entitled to an additional
compensation of at least 30 percent of their regular wage
for work on the sixth day. For purposes of this Article,
"health personnel" shall include: resident physicians, nurses,
nutritionists, dieticians, pharmacists, social workers,
laboratory technicians, paramedical technicians,
psychologists, midwives, attendants and all other hospital or
clinic personnel.
 Article 84. Hours worked. Hours worked shall include (a) all
time during which an employee is required to be on duty or
to be at a prescribed workplace, and (b) all time during
which an employee is suffered or permitted to work.
Rest periods of short duration during working hours shall be
counted as hours worked.
 Article 85. Meal periods. Subject to such regulations as the
Secretary of Labor and Employment may prescribe, it shall
be the duty of every employer to give his employees not less
than sixty minutes time-off for their regular meals.
 Article 86. Night shift differential. Every employee shall be
paid a night shift differential of not less than ten percent of
his regular wage for each hour of work performed between
ten o'clock in the evening and six o'clock in the morning.
 Article 87. Overtime work. Work may be performed beyond
eight hours a day provided that the employee is paid for the
overtime work an additional compensation equivalent to his
regular wage plus at least twenty-five percent thereof. Work
performed beyond eight hours on a holiday or rest day shall
be paid an additional compensation equivalent to the rate
for the first eight hours on a holiday or rest day plus at least
30 percent thereof.
 Article 88. Undertime not offset be overtime. Undertime
work on any particular day shall not be offset by overtime
work on any other day. Permission given to the employee to
go on leave on some other day of the week shall not exempt
the employer from paying the additional compensation
required in this Chapter.
 Article 89. Emergency overtime work. Any employee may
be required by the employer to perform overtime work in
any of the following cases:
(a) When the country is at war or when any other national
or local emergency has been declared by Congress or the
Chief Executive;
(b) When it is necessary to prevent loss of life or property or
in case of imminent danger to public safety due to an actual
or impending emergency in the locality caused by serious
accidents, fire, flood, typhoon, earthquake, epidemic or
other disaster or calamity;
(c) When there is urgent work to be performed on
machines, installation or equipment, in order to avoid
serious loss or damage to the employer or some other cause
of similar nature;
(d) When the work is necessary to prevent loss or damage
to perishable goods;
(e) Where the completion or continuation of the work
started before the 8th hour is necessary to prevent serious
obstruction or prejudice to the business or operations of the
employer.
 Any employee required to render overtime work under this
Article shall be paid the additional compensation required in
this Chapter.
 Article 90. Computation of additional compensation. For
purposes of computing overtime and other additional
remuneration as required by this Chapter, the "regular
wage" of an employee shall include the cash wage only,
without deduction on account of facilities provided by the
employer.
2. Househelpers
i. Apex Mining v. NLRC - The mere fact that the househelper or
domestic servant is working within the premises of the business
of the employer and in relation to or in connection with its
business, as in its staffhouses for its guest or even for its officers
and employees, warrants the conclusion that such househelper
or domestic servant is and should be considered as a regular
employee of the employer and not as a mere family
househelper or domestic servant as contemplated in Rule XIII,
Section l(b), Book 3 of the Labor Code, as amended.
ii. Remington v. Castaneda - In the case at bar, the petitioner itself
admits in its position paper33 that respondent worked at the
company premises and her duty was to cook and prepare its
employees’ lunch and merienda. Clearly, the situs, as well as the
nature of respondent’s work as a cook, who caters not only to
the needs of Mr. Tan and his family but also to that of the
petitioner’s employees, makes her fall squarely within the
definition of a regular employee under the doctrine enunciated
in the Apex Mining case. That she works within company
premises, and that she does not cater exclusively to the
personal comfort of Mr. Tan and his family, is reflective of the
existence of the petitioner’s right of control over her functions,
which is the primary indicator of the existence of an employer-
employee relationship.
iii. Barcenas v. NLRC - Moreover, the work that petitioner
performed in the temple could not be categorized as mere
domestic work. Thus, We find that petitioner, being proficient in
the Chinese language, attended to the visitors, mostly Chinese,
who came to pray or seek advice before Buddha for personal or
business problems; arranged meetings between these visitors
and Su and supervised the preparation of the food for the
temple visitors; acted as tourist guide of foreign visitors; acted
as liaison with some goverment offices; and made the payment
for the temple's Meralco, MWSS and PLDT bills. Indeed, these
tasks may not be deemed activities of a household helper. They
were essential and important to the operation and religious
functions of the temple.
3. Management Prerogatives
i. San Miguel Brewery Sales Force Union v. Ople - So long as a
company's management prerogatives are exercised in good faith
for the advancement of the employer's interest and not for the
purpose of defeating or circumventing the rights of the
employees under special laws or under valid agreements, this
Court will uphold them. San Miguel Corporation's offer to
compensate the members of its sales force who will be
adversely affected by the implementation of the CDS by paying
them a so-called "back adjustment commission" to make up for
the commissions they might lose as a result of the CDS proves
the company's good faith and lack of intention to bust their
union.
ii. Sime Darby Pilipinas v. NLRC - The case before us does not
pertain to any controversy involving discrimination of
employees but only the issue of whether the change of work
schedule, which management deems necessary to increase
production, constitutes unfair labor practice. As shown by the
 records, the change effected by management with regard to
working time is made to apply to all factory employees engaged
in the same line of work whether or not they are members of
private respondent union. Hence, it cannot be said that the
new scheme adopted by management prejudices the right of
private respondent to self-organization.
iii. Interphil v. Interphil - Respondent company could have
withheld these benefits pending the final resolution of this
case. Yet, considering perhaps the financial hardships
experienced by its employees and the economic situation
prevailing, respondent company chose to let its employees avail
of their separation benefits. The Court views the gesture of
respondent company as an act of generosity for which it should
not be punished.
4. Compressed Work Week
i. DOLE D.O. No. 02 Series of 2004
ii. DOLE Department Advisory No. 2 Series of 2009
5. Waiting time
i. Arica v. NLRC - Furthermore, the thirty (30)-minute assembly is
a deeply- rooted, routinary practice of the employees, and the
proceedings attendant thereto are not infected with
complexities as to deprive the workers the time to attend to
other personal pursuits. They are not new employees as to
require the company to deliver long briefings regarding their
respective work assignments. Their houses are situated right on
the area where the farm are located, such that after the roll call,
which does not necessarily require the personal presence, they
can go back to their houses to attend to some chores. In short,
they are not subject to the absolute control of the company
during this period, otherwise, their failure to report in the
assembly time would justify the company to impose disciplinary
measures. The CBA does not contain any provision to this effect;
the record is also bare of any proof on this point. This,
therefore, demonstrates the indubitable fact that the thirty
(30)-minute assembly time was not primarily intended for the
interests of the employer, but ultimately for the employees to
indicate their availability or non-availability for work during
every working day.
6. Travel Time
i. Radav. NLRC - If driving these employees to and from the
project site is not really part of petitioner's job, then there
would have been no need to find a replacement driver to fetch
these employees. But since the assigned task of fetching and
delivering employees is indispensable and consequently
mandatory, then the time required of and used by petitioner in
going from his residence to the field office and back, that is,
from 5:30 a.m. to 7:00 a.m. and from 4:00 p.m. to around 6:00
p.m., which the labor arbiter rounded off as averaging three
hours each working day, should be paid as overtime work.
7. Weekly Rest Periods
i. Labor Code
 Article 91. Right to weekly rest day. (a) It shall be the duty
of every employer, whether operating for profit or not, to
provide each of his employees a rest period of not less than
twenty-four consecutive hours after every six consecutive
normal work days.
The employer shall determine and schedule the weekly rest
day of his employees, subject to collective agreement and to
such rules and regulations as the Secretary of Labor and
Employment may provide. However, the employer shall
respect the preference of employees as to their weekly rest
day when such preference is based on religious grounds.
 Article 92. When employer may require work on a rest day.
The employer may require his employees to work on any
day:

a) In case of actual or impending emergencies caused
by serious accidents, 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 case 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.
 Article 93. Compensation for rest day, Sunday or holiday
work. (a) Where an employee is made or permitted to work
on his scheduled rest day, he shall be paid an additional
compensation of at least 30 percent of his regular wage. An
employee shall be entitled to such additional compensation
for work performed on Sunday only when it is his
established rest day.
When the nature of the work of the employee is such that
he has no regular workdays and no regular rest days can be
scheduled, he shall be paid an additional compensation of at
least 30 percent of his regular wage for work performed on
Sundays and holidays.
Work performed on any special holiday shall be paid an
additional compensation of at least 30 percent of the
regular wage of the employee. Where such holiday work
falls on the employee's scheduled rest day, he shall be
entitled to an additional compensation of at least 50
percent of his regular wage.
Where the collective bargaining agreement or other
applicable employment contract stipulates the payment of a
higher premium pay than that prescribed under this Article,
the employer shall pay such higher rate.
ii. Remerco v. Minister of Labor - It is the duty of every
employer, whether operating for profit or not, to provide each
of his employees a rest period of not less than twenty four (24)
hours after every six (6) consecutive normal work days. 14 Even
if there really existed an urgency to require work on a rest day,
(which is not in the instant case) outright dismissal from
employment is so severe a consequence, more so when
justifiable grounds exist for failure to report for work.
8. Holidays and Service Incentive Leave
i. Labor Code
 Article 94. Right to holiday pay. Every worker shall be paid his
regular daily wage during regular holidays, except in retail and
service establishments regularly employing less than ten (10)
workers;
The employer may require an employee to work on any holiday
but such employee shall be paid a compensation equivalent to
twice his regular rate; and

As used in this Article, "holiday" includes: New Year’s Day,
Maundy Thursday, Good Friday, the ninth of April, the first of
May, the twelfth of June, the fourth of July, the thirtieth of
November, the twenty-fifth and thirtieth of December and the
day designated by law for holding a general election.
 Article 95. Right to service incentive leave. Every employee
who has rendered at least one year of service shall be entitled
to a yearly service incentive leave of five days with pay.
This provision shall not apply to those who are already enjoying
the benefit herein provided, those enjoying vacation leave with
pay of at least five days and those employed in establishments
regularly employing less than ten employees or in
establishments exempted from granting this benefit by the
Secretary of Labor and Employment after considering the
viability or financial condition of such establishment.
The grant of benefit in excess of that provided herein shall not
be made a subject of arbitration or any court or administrative
action.
 Article 96. Service charges. All service charges collected by
hotels, restaurants and similar establishments shall be
distributed at the rate of eighty-five percent (85%) for all
covered employees and fifteen percent (15%) for management.
The share of the employees shall be equally distributed among
them. In case the service charge is abolished, the share of the
covered employees shall be considered integrated in their
wages.
ii. San Miguel v. CA - Considering that all private corporations,
offices, agencies, and entities or establishments operating within the
designated Muslim provinces and cities are required to observe Muslim
holidays, both Muslim and Christians working within the Muslim
areas may not report for work on the days designated by law as
Muslim holidays.
iii. Jose Rizal College v. NLRC - It is readily apparent that the
declared purpose of the holiday pay which is the prevention of
diminution of the monthly income of the employees on account of
work interruptions is defeated when a regular class day is cancelled on
account of a special public holiday and class hours are held on another
working day to make up for time lost in the school calendar. Otherwise
stated, the faculty member, although forced to take a rest, does not
earn what he should earn on that day. Be it noted that when a special
public holiday is declared, the faculty member paid by the hour is
deprived of expected income, and it does not matter that the school
calendar is extended in view of the days or hours lost, for their income
that could be earned from other sources is lost during the extended
days. Similarly, when classes are called off or shortened on account of
typhoons, floods, rallies, and the like, these faculty members must
likewise be paid, whether or not extensions are ordered.
iv. Union of Filipro Employees v. Vivar - In San Miguel Brewery,
Inc. v. Democratic Labor Organization (8 SCRA 613 [1963]), the Court had
occasion to discuss the nature of the job of a salesman. Citing the case
of Jewel Tea Co. v. Williams, C.C.A. Okla., 118 F. 2d 202, the Court stated:
The reasons for excluding an outside salesman are fairly
apparent. Such a salesman, to a greater extent, works
individually. There are no restrictions respecting the
time he shall work and he can earn as much or as little,
within the range of his ability, as his ambition dictates.
In lieu of overtime he ordinarily receives commissions as
extra compeInsation. He works away from his
employer's place of business, is not subject to the
personal supervision of his employer, and his employer
has no way of knowing the number of hours he works
per day.
 While in that case the issue was whether or not salesmen were
entitled to overtime pay, the same rationale for their exclusion as
field personnel from holiday pay benefits also applies.
v. Imbuido v. NLRC - Having already worked for more than
three (3) years at the time of her unwarranted dismissal,
petitioner is undoubtedly entitled to service incentive leave
benefits, computed from 1989 until the date of her actual
reinstatement. As we ruled in the recent case of Fernandez
vs. NLRC,[40] "[s]ince a service incentive leave is clearly
demandable after one year of service — whether
continuous or broken — or its equivalent period, and it is
one of the "benefits" which would have accrued if an
employee was not otherwise illegally dismissed, it is fair and
legal that its computation should be up to the date of
reinstatement as provided under Section [Article] 279 of the
Labor Code, as amended, which reads:
"ART. 279. Security of Tenure. — An employee who is
unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances,
and to his other benefits or their monetary equivalent
computed from the time his compensation is withheld from
him up to the time of his actual reinstatement."
vi. Fernandez v. NLRC - Since a service incentive leave is clearly
demandable after one year of service — whether
continuous or broken — or its equivalent period, and it is
one of the "benefits" which would have accrued if an
employee was not otherwise illegally dismissed, it is fair and
legal that its computation should be up to the date of
reinstatement as provided under Section 279 of the Labor
Code, as amended, which reads:
Art. 279. Security of Tenure. — An employee who
is unjustly dismissed from work shall be entitled to
reinstatement without loss of seniority rights and
other privileges and to his full backwages, inclusive
of allowances, and to his other benefits or their
monetary equivalent computed from the time his
compensation is withheld from him up to the time
of his actual reinstatement. (emphasis supplied).
However, the Implementing Rules clearly state that
entitlement to "benefit provided under this Rule shall start
December 16, 1975, the date the amendatory provision of
the [Labor] Code took effect." 43 Hence, petitioners, except
Lim and Canonigo, should be entitled to service incentive
leave pay from December 16, 1975 up to their actual
reinstatement.
vii. JPL Marketing v. CA - Admittedly, private respondents were
not given their 13th month pay and service incentive leave
pay while they were under the employ of JPL. Instead, JPL
provided salaries which were over and above the minimum
wage. The Court rules that the difference between the
minimum wage and the actual salary received by private
respondents cannot be deemed as their 13th month pay
and service incentive leave pay as such difference is not
equivalent to or of the same import as the said benefits
contemplated by law. Thus, as properly held by the Court of
Appeals and by the NLRC, private respondents are entitled
to the 13th month pay and service incentive leave pay.
viii. Sugue v. Triumph International – quoting J.B. Heibron n.
National Labor Union:
When the case of strikes, and according to the CIR even if
the strike is legal, strikers may not collect their wages during
the days they did not go to work, for the same reasons if not
 more, laborers who voluntarily absent themselves from
work to attend the hearing of a case in which they seek to
prove and establish their demands against the company, the
legality and propriety of which demands is not yet known,
should lose their pay during the period of such absence
from work. The age-old rule governing the relation between
labor and capital or management and employee is that a
"fair day's wage for a fair day's labor." If there is no work
performed by the employee there can be no wage or pay,
unless of course, the laborer was able, willing and ready to
work but was illegally locked out, dismissed or suspended. It
is hardly fair or just for an employee or laborer to fight or
litigate against his employer on the employer's time.
In a case where a laborer absents himself from work
because of a strike or to attend a conference or hearing in a
case or incident between him and his employer, he might
seek reimbursement of his wages from his union which had
declared the strike or filed the case in the industrial court.
Or, in the present case, he might have his absence from his
work charged against his vacation leave.
9. Other Leaves:
i. Maternity Leave – Labor Code. Article 133. Maternity leave
benefits.
Every employer shall grant to any pregnant woman employee who
has rendered an aggregate service of at least six (6) months for the
last twelve (12) months, maternity leave of at least two (2) weeks
prior to the expected date of delivery and another four (4) weeks
after normal delivery or abortion with full pay based on her regular
or average weekly wages. The employer may require from any
woman employee applying for maternity leave the production of a
medical certificate stating that delivery will probably take place
within two weeks.
The maternity leave shall be extended without pay on account of
illness medically certified to arise out of the pregnancy, delivery,
abortion or miscarriage, which renders the woman unfit for work,
unless she has earned unused leave credits from which such
extended leave may be charged.
The maternity leave provided in this Article shall be paid by the
employer only for the first four (4) deliveries by a woman employee
after the effectivity of this Code.
ii. Paternity Leave – See RA 8187
iii. Parental Leave – See RA 8972
10. Service Charge
i. Labor Code
 Article 96. Service charges. All service charges collected by
hotels, restaurants and similar establishments shall be
distributed at the rate of eighty-five percent (85%) for all
covered employees and fifteen percent (15%) for
management. The share of the employees shall be equally
distributed among them. In case the service charge is
abolished, the share of the covered employees shall be
considered integrated in their wages.
ii. Mayon Hotel v. Adana - While complainants, who were employed
in the hotel, receive[d] various amounts as profit share, the same
cannot be considered as part of their wages in determining their
claims for violation of labor standard benefits. Although called
profit share[,] such is in the nature of share from service charges
charged by the hotel. This is more explained by [respondents] when
they testified that what they received are not fixed amounts and
the same are paid not on a monthly basis (pp. 55, 93, 94, 103, 104;
vol. II, rollo). Also, [petitioners] failed to submit evidence that the
amounts received by [respondents] as profit share are to be
considered part of their wages and had been agreed by them prior
 to their employment. Further, how can the amounts receive[d] by
[respondents] be considered as profit share when the same [are]
based on the gross receipt of the hotel[?] No profit can as yet be
determined out of the gross receipt of an enterprise. Profits are
realized after expenses are deducted from the gross income.
As stated in Mabeza v. NLRC,87 the employer simply cannot deduct
the value from the employee's wages without satisfying the
following: (a) proof that such facilities are customarily furnished by
the trade; (b) the provision of deductible facilities is voluntarily
accepted in writing by the employee; and (c) the facilities are
charged at fair and reasonable value.
As ruled in Mabeza, food or snacks or other convenience provided
by the employers are deemed as supplements if they are granted
for the convenience of the employer. The criterion in making a
distinction between a supplement and a facility does not so much
lie in the kind (food, lodging) but the purpose.91 Considering,
therefore, that hotel workers are required to work different shifts
and are expected to be available at various odd hours, their ready
availability is a necessary matter in the operations of a small hotel,
such as petitioners' business.92 The deduction of the cost of meals
from respondents' wages, therefore, should be removed.
11. Wages
i. Labor Code
WAGES
Chapter I
PRELIMINARY MATTERS
 Article 97. Definitions. As used in this Title:
"Person" means an individual, partnership, association,
corporation, business trust, legal representatives, or any
organized group of persons.
"Employer" includes any person acting directly or indirectly
in the interest of an employer in relation to an employee
and shall include the government and all its branches,
subdivisions and instrumentalities, all government-owned or
controlled corporations and institutions, as well as non-
profit private institutions, or organizations.
"Employee" includes any individual employed by an
employer.
"Agriculture" includes farming in all its branches and, among
other things, includes cultivation and tillage of soil, dairying,
the production, cultivation, growing and harvesting of any
agricultural and horticultural commodities, the raising of
livestock or poultry, and any practices performed by a
farmer on a farm as an incident to or in conjunction with
such farming operations, but does not include the
manufacturing or processing of sugar, coconuts, abaca,
tobacco, pineapples or other farm products.
"Employ" includes to suffer or permit to work.
"Wage" paid to any employee shall mean the remuneration
or earnings, however designated, capable of being
expressed in terms of money, whether fixed or ascertained
on a time, task, 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 work 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
 and Employment, of board, lodging, or other facilities
customarily furnished by the employer to the employee.
"Fair and reasonable value" shall not include any profit to
the employer, or to any person affiliated with the employer.
 Article 98. Application of Title. This Title shall not apply to
farm tenancy or leasehold, domestic service and persons
working in their respective homes in needle work or in any
cottage industry duly registered in accordance with law.
Chapter II
MINIMUM WAGE RATES
 Article 99. Regional minimum wages. 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. (As amended by Section 3, Republic Act
No. 6727, June 9, 1989).
 Article 100. Prohibition against elimination or diminution
of benefits. Nothing in this Book shall be construed to
eliminate or in any way diminish supplements, or other
employee benefits being enjoyed at the time of
promulgation of this Code.
 Article 101. Payment by results.
The Secretary of Labor and Employment shall regulate the
payment of wages by results, including pakyao, piecework,
and other non-time work, in order to ensure the payment of
fair and reasonable wage rates, preferably through time and
motion studies or in consultation with representatives of
workers’ and employers’ organizations.
Chapter III
PAYMENT OF WAGES
 Article 102. Forms of payment. 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.
Payment of wages by check or money order shall be allowed
when such manner of payment is customary on the date of
effectivity of this Code, or is necessary because of special
circumstances as specified in appropriate regulations to be
issued by the Secretary of Labor and Employment or as
stipulated in a collective bargaining agreement.
 Article 103. Time of payment. Wages shall be paid 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.
The payment of wages of employees engaged to perform a
task which cannot be completed in two (2) weeks shall be
subject to the following conditions, in the absence of a
collective bargaining agreement or arbitration award:
That payments are made at intervals not exceeding sixteen
(16) days, in proportion to the amount of work completed;
That final settlement is made upon completion of the work.

 Article 104. Place of payment. Payment of wages shall be
made at or near the place of undertaking, except as
otherwise provided by such regulations as the Secretary of
Labor and Employment may prescribe under conditions to
ensure greater protection of wages.
 Article 105. Direct payment of wages. Wages shall be paid
directly to the workers to whom they are due, except:
In cases of force majeure rendering such payment
impossible or under other special circumstances to be
determined by the Secretary of Labor and Employment in
appropriate regulations, in which case, the worker may be
paid through another person under written authority given
by the worker for the purpose; or
Where the worker has died, in which case, the employer
may pay the wages of the deceased worker to the heirs of
the latter without the necessity of intestate proceedings.
The claimants, if they are all of age, shall execute an affidavit
attesting to their relationship to the deceased and the fact
that they are his heirs, to the exclusion of all other persons.
If any of the heirs is a minor, the affidavit shall be executed
on his behalf by his natural guardian or next-of-kin. The
affidavit shall be presented to the employer who shall make
payment through the Secretary of Labor and Employment or
his representative. The representative of the Secretary of
Labor and Employment shall act as referee in dividing the
amount paid among the heirs. The payment of wages under
this Article shall absolve the employer of any further liability
with respect to the amount paid.
ii. Gaa v. CA – Article 1708 used the word "wages" and not "salary" in
relation to "laborer" when it declared what are to be exempted
from attachment and execution. The term "wages" as distinguished
from "salary", applies to the compensation for manual labor, skilled
or unskilled, paid at stated times, and measured by the day, week,
month, or season, while "salary" denotes a higher degree of
employment, or a superior grade of services, and implies a position
of office: by contrast, the term wages " indicates considerable pay
for a lower and less responsible character of employment, while
"salary" is suggestive of a larger and more important service (35
Am. Jur. 496).
The distinction between wages and salary was adverted to in Bell
vs. Indian Livestock Co. (Tex. Sup.), 11 S.W. 344, wherein it was said:
"'Wages' are the compensation given to a hired person for service,
and the same is true of 'salary'. The words seem to be synonymous,
convertible terms, though we believe that use and general
acceptation have given to the word 'salary' a significance somewhat
different from the word 'wages' in this: that the former is
understood to relate to position of office, to be the compensation
given for official or other service, as distinguished from 'wages', the
compensation for labor." Annotation 102 Am. St. Rep. 81, 95.
We do not think that the legislature intended the exemption in
Article 1708 of the New Civil Code to operate in favor of any but
those who are laboring men or women in the sense that their work
is manual. Persons belonging to this class usually look to the reward
of a day's labor for immediate or present support, and such persons
are more in need of the exemption than any others. Petitioner
Rosario A. Gaa is definitely not within that class.
iii. Philex v. Philex Supervisors – Petitioners now contend that the
doctrine of "equal pay for equal work" should not remove
management prerogative to institute difference in salary on the
basis of seniority, skill, experience and the dislocation factor in the
same class of supervisory workers doing the same kind of work.18
 In this case, the Court cannot agree because petitioners failed to
adduce evidence to show that an ex-Padcal supervisor and a locally
hired supervisor of the same rank are initially paid the same basic
salary for doing the same kind of work. They failed to differentiate
this basic salary from any kind of salary increase or additional
benefit which may have been given to the ex-Padcal supervisors
due to their seniority, experience and other factors.
The records only show that an ex-Padcal supervisor is paid a higher
salary than a locally hired supervisor of the same rank. Therefore,
petitioner failed to prove with satisfactory evidence that it has not
discriminated against the locally hired supervisor in view of the
unequal salary.
iv. Sevilla Trading v. Semana – In the light of the clear ruling of this
Court, there is, thus no reason for any mistake in the construction
or application of the law. When petitioner Sevilla Trading still
included over the years non-basic benefits of its employees, such as
maternity leave pay, cash equivalent of unused vacation and sick
leave, among others in the computation of the 13th-month pay, this
may only be construed as a voluntary act on its part. Putting the
blame on the petitioner’s payroll personnel is inexcusable.
v. Nasipit Lumber v. NLRC - The Court wishes to stress that the law
does not automatically grant exemption to all establishments
belonging to an industry which is deemed "distressed." Hence, RX-
O1, Section 3 (4), must not be construed to automatically include all
establishments belonging to a distressed industry. The fact that the
wording of a wage order may contain some ambiguity would not
help petitioners. Basic is the rule in statutory construction that all
doubts in the implementation and the interpretation of the
provisions of the Labor Code, as well as its implementing rules and
regulations, must be resolved in favor of labor.
vi. Aklan Electric Coop v. NLRC – We are accordingly constrained to
overturn public respondent's findings that petitioner is not justified
in its refusal to pay private respondents' wages and other fringe
benefits from June 16, 1992 to March 18, 1993; public respondents
stated that private respondents were paid their salaries from
January to May 1992 and again from March 19, 1993 up to the
present. As cited earlier, petitioner's Board in a Resolution No. 411
dated September 9, 1992 dismissed private respondents who were
on illegal strike and who refused to report for work at Kalibo office
effective January 31, 1992; since no services were rendered by
private respondents they were not paid their salaries. Private
respondents never questioned nor controverted the Resolution
dismissing them and nowhere in their Comment is it stated that
they questioned such dismissal. Private respondents also have not
rebutted petitioner's claim that private respondents illegally
collected fees and charges due petitioner and appropriated the
collections among themselves to satisfy their salaries from January
to May 1992, for which reason, private respondents are merely
claiming salaries only for the period from June 16, 1992 to March
1993.
vii. Five J Taxi v. NLRC – Art. 114. Deposits for loss or damage. — No
employer shall require his worker to make deposits from which
deductions shall be made for the reimbursement of loss of or
damage to tools, materials, or equipment supplied by the employer,
except when the employer is engaged in such trades, occupations
or business where the practice of making deposits is a recognized
one, or is necessary or desirable as determined by the Secretary of
Labor in appropriate rules and regulations.
It can be deduced therefrom that the said article provides the rule
on deposits for loss or damage to tools, materials or equipments
supplied by the employer. Clearly, the same does not apply to or
permit deposits to defray any deficiency which the taxi driver may
incur in the remittance of his "boundary." Also, when private
 respondents stopped working for petitioners, the alleged purpose
for which petitioners required such unauthorized deposits no
longer existed. In other case, any balance due to private
respondents after proper accounting must be returned to them
with legal interest.
viii. Atok Big Wedge Mutual v. Atok Big Wedge - "Supplements",
therefore, constitute extra renumeration or special privileges or
benefits given to or received by the laborers over and above their
ordinary earnings or wages. Facilities, on the other hand, are items
of expense necessary for the laborer's and his family's existence
and subsistence, so that by express provision of the law (sec. 2 [g])
they 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. It is thus clear
that the facilities mentioned in the agreement of October 29, 1952
do not come within the term "supplements" as used in Art. 19 of
the Minimum Wage Law.
ix. Apodaca v. NLRC – Lastly, assuming further that there was a call for
payment of the unpaid subscription, the NLRC cannot validly set it
off against the wages and other benefits due petitioner. Article 113
of the Labor Code allows such a deduction from the wages of the
employees by the employer, only in three instances, to wit:
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 checkoff 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.
x. Jardin v. NLRC – With regard to the amount deducted daily by
private respondent from petitioners for washing of the taxi units,
we view the same as not illegal in the context of the law. We note
that after a tour of duty, it is incumbent upon the driver to restore
the unit he has driven to the same clean condition when he took it
out. Car washing after a tour of duty is indeed a practice in the taxi
industry and is in fact dictated by fair play. Hence, the drivers are
not entitled to reimbursement of washing charges.
xi. Equitable Banking v. Sadac – case where, it was held that a lawyer
and can be considered an employee in as much as the case can be
brought to the jurisdiction of the NLRC.
xii. Songco v. NLRC – The ambiguity between Article 97(f), which
defines the term 'wage' and Article XIV of the Collective Bargaining
Agreement, Article 284 of the Labor Code and Sections 9(b) and 10
of the Implementing Rules, which mention the terms "pay" and
"salary", is more apparent than real. Broadly, the word "salary"
means a recompense or consideration made to a person for his
pains or industry in another man's business. Whether it be derived
from "salarium," or more fancifully from "sal," the pay of the
Roman soldier, it carries with it the fundamental idea of
compensation for services rendered. Indeed, there is eminent
authority for holding that the words "wages" and "salary" are in
essence synonymous (Words and Phrases, Vol. 38 Permanent
Edition, p. 44 citing Hopkins vs. Cromwell, 85 N.Y.S. 839,841,89 App.
Div. 481; 38 Am. Jur. 496). "Salary," the etymology of which is the
Latin word "salarium," is often used interchangeably with "wage",
 the etymology of which is the Middle English word "wagen". Both
words generally refer to one and the same meaning, that is, a
reward or recompense for services performed. Likewise, "pay" is
the synonym of "wages" and "salary" (Black's Law Dictionary, 5th
Ed.). Inasmuch as the words "wages", "pay" and "salary" have the
same meaning, and commission is included in the definition of
"wage", the logical conclusion, therefore, is, in the computation of
the separation pay of petitioners, their salary base should include
also their earned sales commissions.
xiii. Special Steel v. Villareal - "ART. 116. Withholding of wages and
kickbacks prohibited. – It shall be unlawful for any person, directly
or indirectly, to withhold any amount from the wages (and benefits)
of a worker or induce him to give up any part of his wages by force,
stealth, intimidation, threat or by any other means whatsoever
without the worker’s consent."
The above provision is clear and needs no further elucidation.
Indeed, petitioner has no legal authority to withhold respondents’
13th month pay and other benefits. What an employee has worked
for, his employer must pay.7 Thus, an employer cannot simply
refuse to pay the wages or benefits of its employee because he has
either defaulted in paying a loan guaranteed by his employer; or
violated their memorandum of agreement; or failed to render an
accounting of his employer’s property.
12. Women Employees
i. Lakpue Drug v. Belga – In the instant case, the alleged misconduct
of Belga barely falls within the situation contemplated by the law.
Her absence for 16 days was justified considering that she had just
delivered a child, which can hardly be considered a forbidden act, a
dereliction of duty; much less does it imply wrongful intent on the
part of Belga. Tropical harps on the alleged concealment by Belga of
her pregnancy. This argument, however, begs the question as to
how one can conceal a full-term pregnancy. We agree with
respondent’s position that it can hardly escape notice how she
grows bigger each day. While there may be instances where the
pregnancy may be inconspicuous, it has not been sufficiently
proven by Tropical that Belga’s case is such.
Belga’s failure to formally inform Tropical of her pregnancy can not
be considered as grave misconduct directly connected to her work
as to constitute just cause for her separation.
The charge of disobedience for Belga’s failure to comply with the
memoranda must likewise fail. Disobedience, as a just cause for
termination, must be willful or intentional. Willfulness is
characterized by a wrongful and perverse mental attitude rendering
the employee’s act inconsistent with proper subordination.11 In the
instant case, the memoranda were given to Belga two days after
she had given birth. It was thus physically impossible for Belga to
report for work and explain her absence, as ordered.
ii. PT&T v. NLRC – In the case at bar, petitioner's policy of not
accepting or considering as disqualified from work any woman
worker who contracts marriage runs afoul of the test of, and the
right against, discrimination, afforded all women workers by our
labor laws and by no less than the Constitution. Contrary to
petitioner's assertion that it dismissed private respondent from
employment on account of her dishonesty, the record discloses
clearly that her ties with the company were dissolved principally
because of the company's policy that married women are not
qualified for employment in PT & T, and not merely because of her
supposed acts of dishonesty.
13. Handicapped Employees
i. Bernardo v. NLRC – money counters case.
14. Apprentices
 i. Century Canning v. CA – Since Palad is not considered an
apprentice because the apprenticeship agreement was enforced
before the TESDA’s approval of petitioner’s apprenticeship program,
Palad is deemed a regular employee performing the job of a "fish
cleaner." Clearly, the job of a "fish cleaner" is necessary in
petitioner’s business as a tuna and sardines factory. Under Article
28021 of the Labor Code, an employment is deemed regular where
the employee has been engaged to perform activities which are
usually necessary or desirable in the usual business or trade of the
employer.
ii. Nitto Enterprises v. NLRC - Hence, since the apprenticeship
agreement between petitioner and private respondent has no force
and effect in the absence of a valid apprenticeship program duly
approved by the DOLE, private respondent's assertion that he was
hired not as an apprentice but as a delivery boy ("kargador" or
"pahinante") deserves credence. He should rightly be considered as
a regular employee of petitioner as defined by Article 280 of the
Labor Code:
Art. 280. Regular and Casual Employment. — The provisions
of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment
shall be deemed to be regular where the employee has been
engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except
where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been
determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature
and the employment is for the duration of the season.
iii.
iv. An employment shall be deemed to be casual if it is not covered by
the preceding paragraph: Provided, That, any employee who has
rendered at least one year of service, whether such service is
continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment
shall continue while such activity exists.
IV. Job Contracting and Labor-Only Contracting
i. Labor Code:
o Article 106. Contractor or subcontractor. Whenever an
employer enters into a contract with another person for the
performance of the former’s work, the employees of the
contractor and of the latter’s subcontractor, if any, shall be
paid in accordance with the provisions of this Code.
 In the event that the contractor or subcontractor
fails to pay the wages of his employees in
accordance with this Code, the employer shall be
jointly and severally liable with his contractor or
subcontractor to such employees to the extent of the
work performed under the contract, in the same
manner and extent that he is liable to employees
directly employed by him.
 The Secretary of Labor and Employment may, by
appropriate regulations, restrict or prohibit the
contracting-out of labor to protect the rights of
workers established under this Code. In so
prohibiting or restricting, he may make appropriate
distinctions between labor-only contracting and job
contracting as well as differentiations within these
types of contracting and determine who among the
parties involved shall be considered the employer for
purposes of this Code, to prevent any violation or
circumvention of any provision of this Code.
 There is "labor-only" contracting where the person
supplying workers to an employer does not have
 substantial capital or investment in the form of tools,
equipment, machineries, work premises, among
others, and the workers recruited and placed by such
person are performing activities which are directly
related to the principal business of such employer. In
such cases, the person or intermediary shall be
considered merely as an agent of the employer who
shall be responsible to the workers in the same
manner and extent as if the latter were directly
employed by him.
o Article 107. Indirect employer. The provisions of the
immediately preceding article shall likewise apply to any
person, partnership, association or corporation which, not
being an employer, contracts with an independent
contractor for the performance of any work, task, job or
project.
o Article 108. Posting of bond. An employer or indirect
employer may require the contractor or subcontractor to
furnish a bond equal to the cost of labor under contract, on
condition that the bond will answer for the wages due the
employees should the contractor or subcontractor, as the
case may be, fail to pay the same.
o Article 109. Solidary liability. The provisions of existing laws
to the contrary notwithstanding, every employer or indirect
employer shall be held responsible with his contractor or
subcontractor for any violation of any provision of this Code.
For purposes of determining the extent of their civil liability
under this Chapter, they shall be considered as direct
employers.
ii. DOLE DO:
http://www.dole.gov.ph/fndr/bong/files/DO%20No_
%2018-A-11.pdf
iii. (1986) PBCom v. NLRC – T he definition of "labor-only" contracting
in Rule VIII, Book III of the Implementing Rules must be read in
conjunction with the definition of job contracting given in Section 8
of the same Rules. The undertaking given by CESI in favor of the
bank was not the performance of a specific — job for instance, the
carriage and delivery of documents and parcels to the addresses
thereof. There appear to be many companies today which perform
this discrete service, companies with their own personnel who pick
up documents and packages from the offices of a client or
customer, and who deliver such materials utilizing their own
delivery vans or motorcycles to the addresses. In the present case,
the undertaking of (CESI) was to provide its client-thebank-with a
certain number of persons able to carry out the work of
messengers. Such undertaking of CESI was complied with when the
requisite number of persons were assigned or seconded to the
petitioner bank. Orpiada utilized the premises and office equipment
of the bank and not those of (CESI) Messengerial work-the delivery
of documents to designated persons whether within or without the
bank premises — is of course directly related to the day-to-day
operations of the bank. Section 9(2) quoted above does not require
for its applicability that the petitioner must be engaged in the
delivery of items as a distinct and separate line of business.
iv. (1989) Guarin v. NLRC – The jobs assigned to the petitioners as
mechanics, janitors, gardeners, firemen and grasscutters were
directly related to the business of Novelty as a garment
manufacturer. In the case of Philippine Bank of Communications vs.
NLRC, 146 SCRA 347, we ruled that the work of a messenger is
directly related to a bank's operations. In its Comment, Novelty
contends that the services which are directly related to
manufacturing garments are sewing, textile cutting, designs, dying,
quality control, personnel, administration, accounting, finance,
 customs, delivery and similar other activities; and that allegedly,
"[i]t is only by stretching the imagination that one may conclude
that the services of janitors, janitresses, firemen, grasscutters,
mechanics and helpers are directly related to the business of
manufacturing garments" (p. 78, Rollo). Not so, for the work of
gardeners in maintaining clean and well-kept grounds around the
factory, mechanics to keep the machines functioning properly, and
firemen to look out for fires, are directly related to the daily
operations of a garment factory. That fact is confirmed by Novelty's
rehiring the workers or renewing the contract with Lipercon every
year from 1983 to 1986, a period of three (3) years.
v. (2000) Vinoya v. NLRC – From the two aforementioned decisions, it
may be inferred that it is not enough to show substantial
capitalization or investment in the form of tools, equipment,
machineries and work premises, among others, to be considered as
an independent contractor. In fact, jurisprudential holdings are to
the effect that in determining the existence of an independent
contractor relationship, several factors might be considered such as,
but not necessarily confined to, whether the contractor is carrying
on an independent business; the nature and extent of the work; the
skill required; the term and duration of the relationship; the right to
assign the performance of specified pieces of work; the control and
supervision of the workers; the power of the employer with respect
to the hiring, firing and payment of the workers of the contractor;
the control of the premises; the duty to supply premises, tools,
appliances, materials and labor; and the mode, manner and terms
of payment.
vi. (1993) Neri v. NLRC – based on the foregoing, BCC cannot be
considered a "labor-only" contractor because it has substantial
capital. While there may be no evidence that it has investment in
the form of tools, equipment, machineries, work premises, among
others, it is enough that it has substantial capital, as was
established before the Labor Arbiter as well as the NLRC. In other
words, the law does not require both substantial capital and
investment in the form of tools, equipment, machineries, etc. This
is clear from the use of the conjunction "or". If the intention was to
require the contractor to prove that he has both capital and the
requisite investment, then the conjunction "and" should have been
used. But, having established that it has substantial capital, it was
no longer necessary for BCC to further adduce evidence to prove
that it does not fall within the purview of "labor-only" contracting.
There is even no need for it to refute petitioners' contention that
the activities they perform are directly related to the principal
business of respondent bank.
Be that as it may, the Court has already taken judicial notice of the
general practice adopted in several government and private
institutions and industries of hiring independent contractors to
perform special services. 9 These services range from janitorial, 10
security 11 and even technical or other specific services such as
those performed by petitioners Neri and Cabelin. While these
services may be considered directly related to the principal
business of the employer, 12 nevertheless, they are not necessary
in the conduct of the principal business of the employer.
vii. (1989) Tabas v. California Mfg. – It would have been different, we
believe, had Livi been discretely a promotions firm, and that
California had hired it to perform the latter's merchandising
activities. For then, Livi would have been truly the employer of its
employees, and California, its client. The client, in that case, would
have been a mere patron, and not an employer. The employees
would not in that event be unlike waiters, who, although at the
service of customers, are not the latter's employees, but of the
restaurant.
viii. (2000) Escario v. NLRC - Among the circumstances that tend to
establish the status of D.L. Admark as a legitimate job contractor
are:

1) The SEC registration certificate of D.L. Admark states that it is a
firm engaged in promotional, advertising, marketing and
merchandising activities.
2) The service contract between CMC and D.L. Admark clearly
provides that the agreement is for the supply of sales promoting
merchandising services rather than one of manpower placement.11
3) D.L. Admark was actually engaged in several activities, such as
advertising, publication, promotions, marketing and merchandising.
It had several merchandising contracts with companies like
Purefoods, Corona Supply, Nabisco Biscuits, and Licron. It was
likewise engaged in the publication business as evidenced by it
magazine the "Phenomenon."12
4) It had its own capital assets to carry out its promotion business.
It then had current assets amounting to P6 million and is therefore
a highly capitalized venture.13 It had an authorized capital stock of
P500,000.00. It owned several motor vehicles and other tools,
materials and equipment to service its clients. It paid rentals of
P30,020 for the office space it occupied.
ix. (2008) Purefoods v. NLRC - Permissible job contracting or
subcontracting refers to an arrangement whereby a principal agrees
to put out or farm out with the 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 is to be performed or completed within or outside
the premises of the principal.29 In this arrangement, the following
conditions must be met: (a) the contractor carries on a distinct and
independent business and undertakes the contract work on his
account under his own responsibility according to his own manner
and method, free from the control and direction of his employer or
principal in all matters connected with the performance of his work
except as to the results thereof; (b) the contractor has substantial
capital or investment; and (c) the agreement between the principal
and contractor or subcontractor assures the contractual employees'
entitlement to all labor and occupational safety and health
standards, free exercise of the right to self-organization, security of
tenure, and social welfare benefits.
x. (2008) PAL v. Ligan – Respondents having performed tasks which
are usually necessary and desirable in the air transportation
business of petitioner, they should be deemed its regular
employees and Synergy as a labor-only contractor.
xi. (2010) SMC v. MAERC – In comparison, MAERC, as earlier
discussed, displayed the characteristics of a labor-only contractor.
Moreover, while MAERC's investments in the form of buildings,
tools and equipment amounted to more than P4 Million, we cannot
disregard the fact that it was the SMC which required MAERC to
undertake such investments under the understanding that the
business relationship between petitioner and MAERC would be on a
long term basis. Nor do we believe MAERC to have an independent
business. Not only was it set up to specifically meet the pressing
needs of SMC which was then having labor problems in its
segregation division, none of its workers was also ever assigned to
any other establishment, thus convincing us that it was created
solely to service the needs of SMC. Naturally, with the severance of
relationship between MAERC and SMC followed MAERC's cessation
of operations, the loss of jobs for the whole MAERC workforce and
the resulting actions instituted by the workers.
xii. (2009) Coca Bottlers v. Agito – In sum, Interserve did not have
substantial capital or investment in the form of tools, equipment,
machineries, and work premises; and respondents, its supposed
employees, performed work which was directly related to the
principal business of petitioner. It is, thus, evident that Interserve
falls under the definition of a "labor-only" contractor, under Article
 106 of the Labor Code; as well as Section 5(i) of the Rules
Implementing Articles 106-109 of the Labor Code, as amended.
The Court, however, does not stop at this finding. It is also apparent
that Interserve is a labor-only contractor under Section 5(ii)44 of
the Rules Implementing Articles 106-109 of the Labor Code, as
amended, since it did not exercise the right to control the
performance of the work of respondents.
xiii. (2010) Aliviado v. Procte and Gamble – To emphasize, there is
labor-only contracting when the contractor or sub-contractor
merely recruits, supplies or places workers to perform a job, work
or service for a principal25 and any of the following elements are
present:
i) 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 placed by such
contractor or subcontractor are performing activities which are
directly related to the main business of the principal; or
ii) The contractor does not exercise the right to control over the
performance of the work of the contractual employee.
xiv. (1998) Coca-cola Bottlers v. Hingpit – Respondent Commission
grounded its reversal of the Arbiter's adjudgment solely on a 1989
judgment of this Court, Guarin et al. v. Lipercon 23 — in which
LIPERCON had also been involved as a labor contractor of another
company. 24 There, the Court held LIPERCON to be a "labor-only"
contractor; and declared that the NLRC's finding — that it "was not
a mere labor-only contractor because it has substantial capital or
investment in the form of tools, equipment, machineries, work
premises, ** " — was "based on insubstantial evidence, as the NLRC
(had merely) pointed out that 'it (LIPERCON) claims to be possessed
among others, of substantial capital and equipment essential to
carry out its business as a general independent contractor' **." In
other words, in Guarin, LIPERCON was held to have failed to
discharge its burden of proof that "it has substantial capital,
investment, tools, etc."
Not so in the case at bar. Here, there is substantial evidence,
detailed by the Labor Arbiter, to establish LIPERCON's character as
an independent contractor in the real sense of the word, 25 which
makes the Labor Arbiter's ruling more acceptable than respondent
Commission's on the same matter, being founded solely on an
inapplicable precedent. Also more deserving of assent is said Labor
Arbiter's conclusion that the complainants' acceptance of
employment in LIPERCON in December, 1986 — lasting for a period
of some two years — effectively operated as a cessation of the prior
relationship they had with PIONEER and COCA COLA in
consequence of which they became entitled to separation pay from
COCA COLA, PIONEER being merely its hiring agent.
V. Probationary Employment
i. Labor Code –
 Article 281. Probationary employment. Probationary
employment shall not exceed six (6) months from the date
the employee started working, unless it is covered by an
apprenticeship agreement stipulating a longer period. The
services of an employee who has been engaged on a
probationary basis may be terminated for a just cause or
when he fails to qualify as a regular employee in accordance
with reasonable standards made known by the employer to
the employee at the time of his engagement. An employee
who is allowed to work after a probationary period shall be
considered a regular employee.
ii. Mauricio v. NLRC - Anent the first issue, the submission of
clearance from a previous employer is a reasonable requirement to
qualify as a regular employee upon the expiration of the six months
 probationary employment. This reasonable regulation is mandatory
in the sense that it speaks of the employee’s character before he or
she becomes a regular employee. For sure, no employer in his right
mind would engage the regular service of an employee unless he is
certain of the moral character of a probationary employee applying
as regular employee. To say that the requirement is a mere
formality is an oversimplification of the long standing policy in the
bank industry that bank officers must be honest and beyond
reproach.
iii. Holiday Inn Manila v. NLRC - On the issue of illegal dismissal, we
find that Honasan was placed by the petitioner on probation twice,
first during her on-the-job training for three weeks, and next during
another period of six months, ostensibly in accordance with Article
281. Her probation clearly exceeded the period of six months
prescribed by this article.
Probation is the period during which the employer may determine
if the employee is qualified for possible inclusion in the regular
force. In the case at bar, the period was for three weeks, during
Honasan's on-the-job training. When her services were continued
after this training, the petitioners in effect recognized that she had
passed probation and was qualified to be a regular employee.
iv. Mariwasa Mfg. v. Leogardo - By voluntarily agreeing to an
extension of the probationary period, Dequila in effect waived any
benefit attaching to the completion of said period if he still failed to
make the grade during the period of extension. The Court finds
nothing in the law which by any fair interpretation prohibits such a
waiver. And no public policy protecting the employee and the
security of his tenure is served by prescribing voluntary agreements
which, by reasonably extending the period of probation, actually
improve and further a probationary employee's prospects of
demonstrating his fitness for regular employment.
v. Woodridge v. Benito - Initially, it should be clarified that this
controversy revolves only on respondents’ probationary
employment. On March 31, 2001, the effective date of their
dismissal,33 respondents were not regular or permanent
employees; they had not yet completed three (3) years of
satisfactory service as academic personnel which would have
entitled them to tenure as permanent employees in accordance
with the Manual of Regulations for Private Schools.
Probationary employees enjoy security of tenure in the sense that
during their probationary employment, they cannot be dismissed
except for cause or when he fails to qualify as a regular
employee.36 However, upon expiration of their contract of
employment, probationary employees cannot claim security of
tenure and compel their employers to renew their employment
contracts. In fact, the services of an employee hired on
probationary basis may be terminated when he fails to qualify as a
regular employee in accordance with reasonable standards made
known by the employer to the employee at the time of his
engagement. There is nothing that would hinder the employer from
extending a regular or permanent appointment to an employee
once the employer finds that the employee is qualified for regular
employment even before the expiration of the probationary period.
Conversely, if the purpose sought by the employer is neither
attained nor attainable within the said period, the law does not
preclude the employer from terminating the probationary
employment on justifiable ground.
vi. SPCQC v. Ancheta – The common practice is for the employer and
the teacher to enter into a contract, effective for one school year.31
At the end of the school year, the employer has the option not to
renew the contract, particularly considering the teacher's
performance.32 If the contract is not renewed, the employment
relationship terminates.33 If the contract is renewed, usually for
another school year, the probationary employment continues.34
Again, at the end of that period, the parties may opt to renew or
 not to renew the contract.35 If renewed, this second renewal of the
contract for another school year would then be the last year – since
it would be the third school year – of probationary employment.36
At the end of this third year, the employer may now decide whether
to extend a permanent appointment to the employee, primarily on
the basis of the employee having met the reasonable standards of
competence and efficiency set by the employer.37 For the entire
duration of this three-year period, the teacher remains under
probation.38 Upon the expiration of his contract of employment,
being simply on probation, he cannot automatically claim security
of tenure and compel the employer to renew his employment
contract.
vii. Aliling v. Feliciano - (d) In all cases of probationary employment,
the employer shall make known to the employee the standards
under which he will qualify as a regular employee at the time of his
engagement. Where no standards are made known to the
employee at that time, he shall be deemed a regular employee.
viii. Tiamson’s Enterprises v. CA – Private respondents were remiss in
showing that petitioner failed to qualify as a regular employee.
Except for their allegations that she was apprised of her status as
probationary and that she would be accorded regular status once
she meets their standards, no evidence was presented of these
standards and that petitioner had been apprised of them at the
time she was hired as a probationary employee. Neither was it
shown that petitioner failed to meet such standards.
Petitioner should have been informed as to the basis of private
respondents’ decision not to extend her regular or permanent
employment. This case is bereft of any proof like an evaluation or
assessment report which would support private respondents’ claim
that she failed to comply with the standards in order to become a
regular employee.
VI. Security of Tenure and Termination of Employment
 Art 277 (b) - Subject to the constitutional right of workers to
security of tenure and their right to be protected against dismissal
except for a just and authorized cause and without prejudice to the
requirement of notice under Article 283 of this Code, the employer
shall furnish the worker whose employment is sought to be
terminated a written notice containing a statement of the causes
for termination and shall afford the latter ample opportunity to be
heard and to defend himself with the assistance of his
representative if he so desires in accordance with company rules
and regulations promulgated pursuant to guidelines set by the
Department of Labor and Employment. Any decision taken by the
employer shall be without prejudice to the right of the worker to
contest the validity or legality of his dismissal by filing a complaint
with the regional branch of the National Labor Relations
Commission. The burden of proving that the termination was for a
valid or authorized cause shall rest on the employer. The Secretary
of the Department of Labor and Employment may suspend the
effects of the termination pending resolution of the dispute in the
event of a prima facie finding by the appropriate official of the
Department of Labor and Employment before whom such dispute is
pending that the termination may cause a serious labor dispute or
is in implementation of a mass lay-off. (As amended by Section 33,
Republic Act No. 6715, March 21, 1989)
 Art 279 - Article 279. Security of tenure. In cases of regular
employment, the employer shall not terminate the services of an
employee except for a just cause or when authorized by this Title.
An employee who is unjustly dismissed from work shall be entitled
to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to
his other benefits or their monetary equivalent computed from the
time his compensation was withheld from him up to the time of his
actual reinstatement. (As amended by Section 34, Republic Act No.
6715, March 21, 1989)
A. Preventive Suspension
i. IRR - SEC. 2. Standards of due process; requirements of
notice.––In all cases of termination of employment, the
following standards of due process shall be substantially
observed:
I. For termination of employment based on just causes as
defined in Article 282 of the Code:
(a) A written notice served on the employee specifying the
ground or grounds for termination, and giving said
employee reasonable opportunity within which to explain
his side.
(b) A hearing or conference during which the employee
concerned, with the assistance of counsel if he so desires is
given opportunity to respond to the charge, present his
evidence, or rebut the evidence presented against him.
(c) A written notice of termination served on the employee,
indicating that upon due consideration of all the
circumstances, grounds have been established to justify his
termination.
SECTION 1. Security of tenure and due process. — No
workers shall be dismissed except for a just or
authorized cause provided by law and after due process.
SECTION 2. Notice of dismissal. — Any employer who seeks
to dismiss a worker shall furnish him a
written notice stating the particular acts or omission
constituting the grounds for his dismissal. In cases of
abandonment of work, the notice shall be served at the
worker's last known address.
SECTION 3. Preventive suspension. — The employer may
place the worker concerned under preventive
suspension if his continued employment poses a serious and
imminent threat to the life or property of the
employer or of his co-workers.
SECTION 4. Period of suspension. — No preventive
suspension shall last longer than 30 days. The
employer shall thereafter reinstate the worker in his former
or in a substantially equivalent position or the
employer may extend the period of suspension provided
that during the period of extension, he pays the
wages and other benefits due to the worker. In such case,
the worker shall not be bound to reimburse the
amount paid to him during the extension if the employer
decides, after completion of the hearing, to
dismiss the worker.
ii. King of Kings v. Mamac – (1) The first written notice to be
served on the employees should contain the specific causes
or grounds for termination against them, and a directive
that the employees are given the opportunity to submit
their written explanation within a reasonable period.
"Reasonable opportunity" under the Omnibus Rules means
every kind of assistance that management must accord to
the employees to enable them to prepare adequately for
their defense.15 This should be construed as a period of at
least five (5) calendar days from receipt of the notice to give
the employees an opportunity to study the accusation
against them, consult a union official or lawyer, gather data
and evidence, and decide on the defenses they will raise
against the complaint. Moreover, in order to enable the
employees to intelligently prepare their explanation and
defenses, the notice should contain a detailed narration of
the facts and circumstances that will serve as basis for the
charge against the employees. A general description of the
charge will not suffice. Lastly, the notice should specifically
 mention which company rules, if any, are violated and/or
which among the grounds under Art. 282 is being charged
against the employees.
(2) After serving the first notice, the employers should
schedule and conduct a hearing or conference wherein the
employees will be given the opportunity to: (1) explain and
clarify their defenses to the charge against them; (2) present
evidence in support of their defenses; and (3) rebut the
evidence presented against them by the management.
During the hearing or conference, the employees are given
the chance to defend themselves personally, with the
assistance of a representative or counsel of their choice.
Moreover, this conference or hearing could be used by the
parties as an opportunity to come to an amicable
settlement.
(3) After determining that termination of employment is
justified, the employers shall serve the employees a written
notice of termination indicating that: (1) all circumstances
involving the charge against the employees have been
considered; and (2) grounds have been established to justify
the severance of their employment.
iii. PNB v. Velasco – PNB has the right to preventively suspend
Velasco during the pendency of the administrative case
against him. It was obviously done as a measure of self-
protection. It was necessary to secure the vital records of
PNB which, in view of the position of Velasco as internal
auditor, are easily accessible to him.
Velasco was preventively suspended for more than thirty
(30) days as of May 27, 1996, while the records bear that
Velasco was paid his salaries from August 1, 1996 to October
31, 1996.[79] Thus, the NLRC is correct in its holding that he
may recover his salaries from May 27, 1996 to July 31, 1996.
iv. PAL v. NLRC -
v. Jo Cinema v. Abellana – Private respondent was not
demoted nor suffered any diminution of pay, neither was
she prevented from returning for work. As discussed earlier,
private respondent was suspended from work for twenty
(20) days for violating company rules. Petitioners stance to
oblige private respondent to pay the amount of the checks
is just fair and reasonable considering that she indorsed the
subject checks. As an endorser, private respondent
undertook to pay the amount of the dishonored checks.18
The payment of said amount is not discriminatory,
impossible, and unreasonable to foreclose any choice on the
part of the private respondent to forego her continued
employment. It was private respondent who signified her
intention not to report for work when she filed the instant
case.
vi. Valenzuela v. Caltex Phil
B. Just Causes for Termination
i. Labor Code:
i. Article 282. Termination by employer. An employer
may terminate an employment for any of the
following causes:
Serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or
representative in connection with his work;
Gross and habitual neglect by the employee of his
duties;
 Fraud or willful breach by the employee of the trust
reposed in him by his employer or duly authorized
representative;
Commission of a crime or offense by the employee
against the person of his employer or any immediate
member of his family or his duly authorized
representatives; and
Other causes analogous to the foregoing.
ii. Analogous Cases
i. A Marquez v. Leogardo – inutility to perform work
due to one’s own fault
ii. MF Violago v . NLRC – theft
iii. National Union of Restaurant Workers v. CIR – death
threats
iv. John Hancock Life Insurance v. Davis – theft in the
work place
C. Authorized Causes for Termination
i. Labor Code:
i. Article 283. Closure of establishment and reduction
of personnel. The employer may also terminate the
employment of any employee due to the installation
of labor-saving devices, redundancy, retrenchment
to prevent losses or the closing or cessation of
operation of the establishment or undertaking unless
the closing is for the purpose of circumventing the
provisions of this Title, by serving a written notice on
the workers and the Ministry of Labor and
Employment at least one (1) month before the
intended date thereof. In case of termination due to
the installation of labor-saving devices or
redundancy, the worker affected thereby shall be
entitled to a separation pay equivalent to at least his
one (1) month pay or to at least one (1) month pay
for every year of service, whichever is higher. In case
of retrenchment to prevent losses and in cases of
closures or cessation of operations of establishment
or undertaking not due to serious business losses or
financial reverses, the separation pay shall be
equivalent to one (1) month pay or at least one-half
(1/2) month pay for every year of service, whichever
is higher. A fraction of at least six (6) months shall be
considered one (1) whole year.
ii. JAT General Devices v. NLRC
iii. East Ridge Golf Club Inc.
iv. Sebuguero v. NLRC
v. Plastimer Industrial
vi. Banco Filipino
vii. Mindanao Terminal and Borkerage
viii. North Davao Mining
D. Illness as Ground for Termination
i. Article 284. Disease as ground for termination. An
employer may terminate the services of an employee who
has been found to be suffering from any disease and whose
continued employment is prohibited by law or is prejudicial
to his health as well as to the health of his co-employees:
Provided, That he is paid separation pay equivalent to at
least one (1) month salary or to one-half (1/2) month salary
for every year of service, whichever is greater, a fraction of
at least six (6) months being considered as one (1) whole
year.
E. Termination by the employee
i. Article 285. Termination by employee.
 An employee may terminate without just cause the G. Retirement
employee-employer relationship by serving a written notice
on the employer at least one (1) month in advance. The
employer upon whom no such notice was served may hold
the employee liable for damages.

An employee may put an end to the relationship without

serving any notice on the employer for any of the following
just causes:

Serious insult by the employer or his representative on the

honor and person of the employee;

Inhuman and unbearable treatment accorded the employee

by the employer or his representative;

Commission of a crime or offense by the employer or his

representative against the person of the employee or any of
the immediate members of his family; and

Other causes analogous to any of the foregoing.

F. Suspension of Operations
i. Article 286. When employment not deemed terminated.
The bona-fide suspension of the operation of a business or
undertaking for a period not exceeding six (6) months, or
the fulfillment by the employee of a military or civic duty
shall not terminate employment. In all such cases, the
employer shall reinstate the employee to his former position
without loss of seniority rights if he indicates his desire to
resume his work not later than one (1) month from the
resumption of operations of his employer or from his relief
from the military or civic duty.

ii. Industrial Timber Corp v. Ababoni