1 1B 09-10

HOLIDAYS

Can a person be forced to work during

a holiday?

The same with instances when required

to work overtime. If you are made to work, you are paid twice of the daily

rate.

Peculiar situation: teaching personnel

paid per hour

Refer to Jose Rizal College

If two holidays fall on two successive

days, he must be paid for both days. BUT you must be present or you must

be on leave of absence with pay on the

first holiday otherwise you cannot

claim the second holiday.

Jose Rizal College v. NLRC

Are hourly paid faculty members

entitled to regular holiday pay?

No. Regular holidays specified as such

by law are known to both school and

faculty members as “no class days,” certainly the latter do not expect

payment for said unworked days and

this was clearly in their minds when

they entered into the teaching contracts.

Are they entitled to be paid for special holidays and shortened class days due

to typhoons and the like?

Yes, they are entitled to their regular

hourly rate on days declared as special holidays or when classes are called off

or shortened.

Producers Bank v. NLRC

The divisor of 314 is arrived at by subtracting all Sundays from the total

number of calendar days in a year.

GR: for a 5-day workweek, if the divisor is 261 and for a 6-day workweek, if the

divisor is 314, then the monthly salary

if the employee already includes payment of the legal holiday. But this

depends on the circumstances of each

case.

San Miguel Corp. v. CA

There should be no distinction between

Muslims and non-Muslims as regards

payment of benefits for Muslim

holidays.

Asian Transmission Corporation v.

CA

Holiday pay is a legislated benefit

enacted as part of the Constitutional imperative that the State shall afford

protection to labor. Unlike a bonus,

which is a management prerogative, holiday pay is a statutory benefit

demandable under the law.

Labadan v. Forest Hills Academy

The provision that a worker is entitled

to twice his regular rate if he is required to work on a holiday implies

that the provision entitling a worker to

his regular rate on holidays applies even if he does not work.

Labor Standards ~o~

Holidays – Termination of Employment

2 1B 09-10

SERVICE INCENTIVE LEAVE AND OTHER LEAVES

If the company is giving an employee a benefit of more than 5 days of SIL, then

the employee will not enjoy the benefit.

Suppose 15 days of sick leave by virtue

of a CBA, would employee be entitled to

SIL?

A: Yes. But if vacation leave, employee will not be entitled because they are of

the same nature. Sick leave is of a

different nature where the employee cannot work as a consequence of

ailment.

Unlike other leaves granted by law, the

SIL is commutable and can be

converted to cash. Other leaves provided by the CBA not provided for

by law may be granted out of the policy

or out of agreement. There is no law

which grants sick and vacation leave.

Service charges: amounts which are

charged by hotels, restaurants and the like which constitutes 10% of the

amount consumed for food.

All service charges are pooled together and paid to rank-and-file employees.

85% goes to them while 15% goes to

managerial employees. It is paid every 15 days.

If the company decides to remove the

10% service charge in order to lessen their prices, dapat ibigay ng employer

yung average na narereceive nung

employee na parte ng service charge dati.

Imbuido v. NLRC

An employee is entitled to service incentive leave after one period 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

than its computation should be up to the date of reinstatement as provided

in Art. 279.

Auto Bus Transport Systems v.

Bautista

What must be ascertained in order to

resolve the issue of propriety of the

grant of service incentive leave to a bus driver-conductor is whether or not he is

a field personnel. According to the

Labor Code, “field personnel” shall refer

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.

The definition of a "field personnel" is

not merely concerned with the location where the employee regularly performs

his duties but also with the fact that

the employee’s performance is

unsupervised by the employer. Field personnel are those who regularly

perform their duties away from the

principal place of business of the employer and whose actual hours of work in the field cannot be determined

with reasonable certainty. Thus, in order to conclude whether an employee

3 1B 09-10

is a field employee, it is also necessary

to ascertain if actual hours of work in the field can be determined with

reasonable certainty by the employer.

A bus driver-conductor, not being a

field personnel but a regular employee

who performs tasks usually necessary and desirable to the usual trade of the

company’s business, is entitled to the

grant of service incentive leave.

If the employee entitled to service

incentive leave does not use or

commute the same, he is entitled upon his resignation or separation from work

to the commutation of his accrued

service incentive leave.

Prescription period: 3 years. It

commences from the time when the employer refuses to pay its monetary

equivalent after demand or

commutation or upon termination of

the employee’s services, as the case may be.

Fernandez v. NLRC

Can the claim for service incentive

leave be limited to a certain number of years?

No. An employee who has served for

more than one year is entitled to service incentive leave. He may use it

as leave days or he may collect its

monetary value. To limit the award is to

unduly restrict such right.

JPL Marketing Promotions v. CA

Service incentive leave is a yearly leave

benefit of 5 days with pay, enjoyed by

an employee who has rendered at least one year of service.

The difference between the minimum wage and the actual salary received by

the employees 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.

Paloma v. PAL

No law provides for commutation of

unused or accrued sick leave credits in

the private sector – commutation is allowed by way of voluntary endowment

by an employer through a company

policy or by a Collective Bargaining Agreement.

Sugue v. Triumph International

In the grant of vacation and sick leave

privileges to an employee, the employer

is given leeway to impose conditions on the entitlement to the same as the

grant of vacation and sick leave is not a

standard of law, but a prerogative of management – it is a mere concession

or act of grace of the employer and not

a matter of right on the part of the employee.

13th MONTH PAY

Christmas bonus: provided equal to

13th month

13th month is in the nature of wages

therefore no deductions without the

consent of the employee

Are commissions to be included? In the

case of salesmen, salary + commissions, are commissions

4 1B 09-10

included in the computation of 13th

month pay?

Duplicators case: stencils

Minimum wage + commissions Q: Can commissions be included?

A: Yes because it is acquired by actual

market transactions

Boie Takeda: Medical Representatives

Q: Can commissions be considered to

be part of basic wage? A: No because it is not acquired by

actual market transaction. They are

gratuities.

House of Sarah Lee: they are only given

to rank-and-file employees. Piece rate workers are also entitled. In the case of

sea-farers, it would depend in the

contract.

Honda Phil Inc v. Samahan ng

Malayang Manggagawa sa Honda

Payments for sick, vacation and

maternity leaves, night differentials,

regular holiday pay and premiums for work done on rest days and special

holidays are excluded from the

computation of basic salary.

Pro-rating an employee’s 13th month

pay is to undermine the wisdom behind such grant.

House of Sarah Lee v. Rey

Only rank-and-file employees are

entitled to 13th month pay.

Phil. Agricultural Commercial &

Industrial Workers Union v. NLRC

Every employee receiving a commission

in addition to a fixed or guaranteed wage or salary is entitled to 13th month

pay.

NOTE: Drivers and Conductors are

entitled to 13th month pay. The drivers

and conductors are not paid purely by what they receive as commission. They

are automatically entitled to basic

minimum pay mandated by law in case

the commissions they earned be less than their basic minimum for eight

hours of work. While commissions may

be in the form of incentives or encouragement to inspire drivers and

conductors to put more zeal and

industry in their jobs, it is safe to say that the same are direct renumerations

for services rendered which is the

reason why Vallacar Transit allowed the drivers and conductors a

guaranteed minimum wage.

Phil. Duplicators, Inc v. NLRC

The salesmen’s commission,

comprising a pre-determined percent of the selling price of the goods sold by

each salesman, were properly included

in the term “basic salary” for purposes of computing their 13th month pay.

Boie-Takeda Chemicals Inc v. Dela

Serna

In remunerative schemes consisting of a fixed or guaranteed wage plus

commission, the fixed or guaranteed

wage is patently the "basic salary" for this is what the employee receives for a

standard work period. Commissions

are given for extra efforts exerted in consummating sales or other related

5 1B 09-10

transactions. They are, as such,

additional pay, which this Court has made clear do not form part of the

"basic salary." Hence, in determining

13th month pay, such commissions should be excluded in the computation.

CASE DIGESTS:

Honda Phils., Inc. v. Samahan ng

Malayang Manggagawa ng Honda

FACTS: The issue stems from certain

provisions of the CBA between Honda

Phils and its labor union. The CBA provided that the company shall

maintain the present practice in the

implementation of the 13th month pay, the company shall grant a 14th month

pay computed on the same basis as the

computation of the 13th month pay and the company agrees to continue the

practice of granting, in its discretion,

financial assistance to covered

employees in December in each year of not less than 100% of basic pay. The

CBA is effective until 2000.

In lieu of the strikes and bargaining

deadlocks, the company issued a

memorandum announcing the new formula for the computation of the 13th

and 14th month pay and the 31 day

long strike shall be considered as unworked days for purposes of

computing said benefits. According to

the new formula, the amount

equivalent to 1/12 of the employee’s basic salary shall be deducted from

these bonuses with a commitment

however that in the event that the strike is declared legal, Honda shall

pay the amount deducted. Respondent

union opposed the pro-rated computation of the bonuses.

The Labor Arbiter ruled that the computation was invalid. The petition

by Honda was also dismissed by the

Court of Appeals.

ISSUE: W/N Honda’s implementation

of pro-rated 13th month pay, 14th month pay and financial assistance is

invalid

HELD: Petition lacks merit

Honda wanted to implement a pro-

rated computation of the benefits based on the "no work, no pay" rule.

According to the company, the phrase

"present practice" as mentioned in the CBA refers to the manner and

requisites with respect to the payment

of the bonuses, i.e., 50% to be given in May and the other 50% in December of

each year. Respondent union, however,

insists that the CBA provisions relating

to the implementation of the 13th month pay necessarily relate to the

computation of the same.

A cursory reading of the provisions of

the CBA shows that they did not state

categorically whether the computation of the 13th month pay, 14th month pay

and the financial assistance would be

based on one full month’s basic salary of the employees, or pro-rated based on

the compensation actually received.

The arbitrator thus properly resolved

the ambiguity in favor of labor. The Court of Appeals affirmed the

arbitrator’s finding and added that the

computation of the 13th month pay should be based on the length of

service and not on the actual wage

earned by the worker.

6 1B 09-10

Under the Revised Guidelines on the

Implementation of the 13th month pay provided that the minimum 13th month

pay required by law shall not be less

than one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year. The revised

guidelines also provided for a pro-

ration of this benefit only in cases of resignation or separation from work. As

the rules state, under these

circumstances, an employee is entitled to a pay in proportion to the length of

time he worked during the year,

reckoned from the time he started working during the calendar year. The

Court of Appeals correctly held that

there being no gap in the service of the workers during the calendar year in

question, the computation of the 13th

month pay should not be pro-rated but

should be given in full.

It has not been refuted that Honda has

not implemented any pro-rating of the 13th month pay before the instant case.

Honda did not adduce evidence to show

that the 13th month, 14th month and financial assistance benefits were

previously subject to deductions or pro-

rating or that these were dependent upon the company’s financial standing.

It was also the company’s practice to

give the bonuses in its full amount.

Phil. Agricultural Commercial and

Industrial Workers Union v. National

Labor Relations Commission

FACTS: Phil. Agricultural Commercial

and Industrial Workers Union is the bargaining agent of the rank and file

employees of Vallacar Transit. They

instituted a complaint with the NLRC for the payment of 13th month pay in

behalf of the drivers and conductors of

Vallacar Transit on the ground that although the drivers and conductors

are compensated on a “purely

commission” basis as described in the CBA, they are automatically entitled to

the basic minimum pay mandated by

law should the commission be less than the basic minimum for eight

hours work.

In Vallacar Transit’s position paper, they contend that since the drivers and

conductors are compensated on a

purely commission basis, they are not entitled to 13th month pay pursuant to

the exempting provisions enumerated

in par. 2 of the Revised Guidelines on the Implementation of the 13th Month

Pay Law. They further contended that

Sec. 2 of Art. XIV of the CBA expressly provided that drivers and conductors

paid on a purely commission are not

legally entitled to 13th month pay.

The Labor Arbiter dismissed the

complaint. The appeal of the petitioner

to the NLRC was also dismissed.

ISSUE: W/N bus drivers and

conductors are entitled to 13th month pay

HELD: Yes, they are entitled to 13th month pay.

RATIONALE:

13th Month Pay Law (PD 851)

Sec. 1 of the 13th Month Pay law provides that all employers are required

to pay all their employees receiving

basic salary of not more than 1,000/month, regardless of the nature

7 1B 09-10

of the employment, a 13th month pay

not later than Dec. 24 of every year.

Rules and Regulations of PD 851

The Rules and Regulations of PD 851

provided that the basic salary shall

include renumerations or earning paid by an employer to an employee for

services rendered.

Memorandum Order 28

Memorandum Order 28 issued by Pres.

Aquino modified to the extent that all employers are required to pay all their

rank and file employees a 13th month

pay not later than Dec. 24 of every year. In connection with the order, the

Minister of Labor and Employment

issued an Explanatory Bulletin which provides that employees who are paid a

fixed or guaranteed wage plus

commission are also entitled to 13th

month pay.

Drivers and Conductors are entitled to 13th month pay

From the cited provisions, it is clear

that every employee receiving a commission in addition to a fixed or

guaranteed wage or salary is entitled to

a 13th month pay. It is immaterial whether the employees concerned are

paid a guaranteed wage plus

commission or a commission with

guaranteed wage.

The drivers and conductors are not

paid purely by what they receive as commission. They are automatically

entitled to basic minimum pay

mandated by law in case the commissions they earned be less than

their basic minimum for eight hours of

work. While commissions may be in the form of incentives or encouragement to

inspire drivers and conductors to put

more zeal and industry in their jobs, it is safe to say that the same are direct

renumerations for services rendered

which is the reason why Vallacar Transit allowed the drivers and

conductors a guaranteed minimum

wage.

Philippine Duplicators v. NLRC

FACTS: The Third Division of the Supreme Court rendered a decision

dismissing the Petition for

Certiorari filed by Philippine Duplicators or the Duplicators case

wherein the Court upheld the decision

of NLRC, which affirmed the order of the Labor Arbiter directing petitioner to

pay 13th month pay to private

respondent employees computed on the

basis of their fixed wages plus sales commissions. It also denied the Motion

for Reconsideration.

Phil. Duplicators filed a Second Motion

for Reconsideration. Petitioner invoked

the Court’s decision in the consolidated cases of Boie-Takeda and Fuji Xerox

Corp. In the said decision, the Second

Division of the Court declared null and void the second paragraph of Sec.5(a)

of the Revised Guidelines issued by the

Secretary of Labor. The said paragraph

provides that employees who are paid a fixed or guaranteed wage plus

commission are also entitled to the

mandated 13th month pay, based on their total earnings during the calendar

year on both their fixed or guaranteed

wage and commission. Petitioner contends that the decision in the

8 1B 09-10

Duplicators case should now be

considered as abandoned by the Boie-Takeda decision. Petitioner prays that

the decision rendered in Duplicators be

set aside and another be entered directing the dismissal of the money

claims of Phil. Duplicator’s Employees’

Union. The case was then referred to the Supreme Court en banc.

ISSUE: W/N the Duplicators case be

set aside

HELD: No

Doctrine of Stare Decisis

The decision rendered in Boie-Takeda cannot serve as a precedent under the

doctrine of stare decisis because it was

decided a month after the Court rendered the decision on the

Duplicators case. The petitioner’s

Motion for Reconsideration of the

decision was also denied with finality. The petitioners did not allege the

validity of the Revised Guidelines on

the Implementation of the 13th Month Pay Law either in its Petition for

Certiorari or in its Motion for

Reconsideration. In fact, the petitioner’s counsel relied on these

guidelines and asserted their validity in

opposing the decision rendered by the NLRC.

Decision in Boie-Takeda is not directly opposite or contrary to the Duplicators case

In the Duplicators case, the sales commissions received for every

duplicating machine sold constituted

part of the basic compensation or renumeration of the salesmen of Phil.

Duplicators for doing their job. The

Third Division correctly held that the sales commissions were an integral

part of the basic salary structure of

Phil. Duplicators’ employees-salesmen. These commissions are not overtime

payments, profit-sharing payments nor

any other fringe benefit. Thus, the salesmen’s commissions, comprising of

a pre-determined percent of the selling

price of the goods sold by each

salesman, were properly included in the term “basic salary” for purposes of

computing their 13th month pay.

In Boie-Takeda the commissions "paid to or received by medical representatives of Boie-Takeda Chemicals or by the rank and file employees of Philippine Fuji Xerox Co.," were excluded from the term "basic salary" because these were paid to the

medical representatives and rank-and-

file employees as "productivity

bonuses." The Second Division characterized these payments as

additional monetary benefits not

properly included in the term “basic salary” in computing their 13th month

pay.

The "commissions" paid by the Boie-

Takeda Company to its medical

representatives could not have been

"sales commissions" in the same sense that Philippine Duplicators paid its

salesmen sales commissions. Medical

representatives are not salesmen; they do not effect any sale of any article at

all. In common commercial practice,

medical representatives are employees engaged in the promotion of

pharmaceutical products or medical

devices manufactured by their employer. They promote such products

9 1B 09-10

by visiting identified physicians and

inform them of the existence and chemical composition and virtues of

particular products of their company.

They commonly leave medical samples with each physician visited; but those

samples are not "sold" to the physician

and the physician is, as a matter of professional ethics, prohibited from

selling such samples to their patients.

Thus, the additional payments made to

Boie-Takeda's medical representatives were not in fact sales commissions but

rather partook of the nature of profit-

sharing bonuses.

The doctrine in Boie-Takeda is that

additional payments made to employees to the extent they partake of

the nature of profit-sharing payments

are properly excluded from the term basic salary“ for purposes of computing

the 13th month pay due to employees.

Such additional payments are not

commissions within the meaning of the second paragraph of Sec. 5(a) of the

Revised Guidelines Implementing 13th

Month Pay.

The Supplementary Rules and

Regulations Implementing PD 851 subsequently issued by Labor Minister

Ople clarified the scope of items

excluded in the computation of the 13th month pay. Overtime pay, earnings and

other renumerations which are not part

of the basic salary shall not be included

in the computation of the 13th month pay. The particular types of earnings

and renumeration are or are not

properly included or integrated in the basic salary are questions to be

resolved on a case to case basis. In

principle, where these earnings and remuneration are closely akin to fringe

benefits, overtime pay or profit-sharing

payments, they are properly excluded in computing the 13th month pay.

However, sales commissions which are

effectively an integral portion of the basic salary structure of an employee

shall be included in determining his

13th month pay.

Productivity bonuses and sales

commissions may have an incentive

effect. Productivity bonuses are generally tied to the productivity or

profit generation of the employer

corporation. Productivity bonuses are not directly dependent on the extent an

individual employee exerts himself. A

productivity bonus is something extra for which no specific additional services

are rendered by any particular

employee and hence not legally

demandable, absent a contractual undertaking to pay it.

Sales commissions, on the other hand, such as those paid in Duplicators, are

intimately related to or directly

proportional to the extent or energy of an employee's endeavors. Commissions

are paid upon the specific results

achieved by a salesman-employee. It is

a percentage of the sales closed by a salesman and operates as an integral

part of such salesman's basic pay.

Boie-Takeda Chemicals, Inc. v. De la

Serna

FACTS:

In Boie-Takeda

A routine inspection was conducted in

Boie-Takeda Chemicals by Labor and Development Officer Reynaldo Ramos

10 1B 09-10

under Inspection Authority. Finding

that Boie-Takeda had not been including the commissions earned by

its medical representatives in the

computation of the 13th month pay, Ramos served a Notice of Inspection

Results on Boie-Takeda requiring to

effect restitution or correction of the underpayment of 13th month pay

within ten (10) calendar days from

notice.

Boie-Takeda wrote the Labor

Department contesting the Notice of

Inspection Results, and expressing the view "that the commission paid to our

medical representatives are not to be

included in the computation of the 13th month pay since the law and its

implementing rules speak of REGULAR

or BASIC salary and therefore exclude all other remunerations which are not

part of the REGULAR salary." It pointed

out that, "if no sales is made under the

effort of a particular representative, there is no commission during the

period when no sale was transacted, so

that commissions are not and cannot be legally defined as regular in nature.

Regional Director Luna Piezas directed Boie-Takeda to appear before his office

but no one appeared from Boie-Takeda.

The matter was resolved on the basis of the evidence at hand. Director Piezas

ordered Boie-Takeda to pay its medical

representatives the underpayment of

their 13th month pay. Boie-Takeda appealed the order to Acting Labor

Secretary Dionisio de la Serna who

affirmed the order with modifications.

In Fuji Xerox

A similar routine inspection was

conducted in Phil. Fuji Xerox Corp. The Notice of Inspection Results noted that

there was an underpayment of the 13th

month pay. Director Piezas issued an order directing the Senior Labor

Employment Officer to compute the

deficiency. Fuji appealed the order to the Office of the Secretary of Labor.

Undersecretary Trajano denied the

appeal.

ISSUE: W/N the respondent labor

officials in computing the 13th month

pay committed grave abuse of discretion amounting to lack of

jurisdiction by giving effect to Sec. 5 of

the Revised Guidelines on the Implementation of the 13th month pay

promulgated by Sec. Drilon.

PETITIONER’S CONTENTION

They maintain that under P.D. 851, the

13th month pay is based solely on basic salary. As defined by the law

itself and clarified by the implementing

and Supplementary Rules as well as Supreme Court decisions,

remunerations which do not form part

of the basic or regular salary of an employee, such as commissions,

should not be considered in the

computation of the 13th month pay. This being the case, the Revised

Guidelines on the Implementation of

the 13th Month Pay Law issued by then

Secretary Drilon providing for the inclusion of commissions in the 13th

month pay, were issued in excess of the

statutory authority conferred by P.D. 851. Petitioners further contend that

assuming that Secretary Drilon did not

exceed the statutory authority conferred by P.D. 851, still the Revised

11 1B 09-10

Guidelines are null and void as they

violate the equal protection of the law clause.

RESPONDENT’S CONTENTION

P.D. No. 851, otherwise known as the

13th Month Pay Law has already been amended by Memorandum Order No.

28 issued by President Corazon C.

Aquino so that commissions are now

imputed into the computation of the 13th Month Pay. They add that the

Revised Guidelines issued by then

Labor Secretary Drilon merely clarified a gray area occasioned by the silence of

the law as to the nature of

commissions; and worked no violation of the equal protection clause of the

Constitution, said Guidelines being

based on reasonable classification.

HELD: Petition granted, second

paragraph of Sec.5(a) of the Revised

Guidelines on the Implementation of the 13th Month Pay law is null and void

Memorandum Order no. 28

Memorandum Order no. 28 did not

repeal PD 851. It merely modified Sec. 1 by removing the 1,000 salary ceiling.

The benefit is still to be computed on

the basic salary of the employee-recipient provided under PD 851. The

interpretation given to the term “basic

salary” in PD 851 applies equally to

“basic salary” under Memorandum Order 28.

The term "basic salary" is to be understood in its common, generally-

accepted meaning, i.e., as a rate of pay

for a standard work period exclusive of

such additional payments as bonuses

and overtime.

In remunerative schemes consisting of

a fixed or guaranteed wage plus commission, the fixed or guaranteed

wage is patently the "basic salary" for

this is what the employee receives for a standard work period. Commissions

are given for extra efforts exerted in

consummating sales or other related

transactions. They are, as such, additional pay, which this Court has

made clear do not form part of the

"basic salary."

In including commissions in the

computation of the 13th month pay, the second paragraph of Section 5(a) of

the Revised Guidelines on the

Implementation of the 13th Month Pay Law unduly expanded the concept of

"basic salary" as defined in P.D. 851. It

is a fundamental rule that

implementing rules cannot add to or detract from the provisions of the law it

is designed to implement.

Administrative regulations adopted under legislative authority by a

particular department must be in

harmony with the provisions of the law they are intended to carry into effect.

They cannot widen its scope. An

administrative agency cannot amend an act of Congress.

EMPLOYMENT OF WOMEN

PT&T v. NLRC

The 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

12 1B 09-10

afforded all women workers by our

labor laws and by no less than the Constitution. While it is true that the

parties to a contract may establish any

agreements, terms and conditions that may deem convenient, the same should

not be contrary to law, morals, good

customs, public order or public policy.

Lakpue Drug Inc v. Belga

Failure on the part of the employee to formally inform the employer of her

pregnancy can not be considered as

grave misconduct directly connected to her work as to constitute just cause for

her separation.

EMPLOYMENT OF HOUSEHELPERS

Apex Mining Company, Inc v. NLRC

Laundrywoman not actually serving the

family of the employer but working in

the staffhouses or within the premises of the business of the employer is a

regular employee and not a domestic

helper.

NOTE: The term househelper shall refer

to any person, whether male or female, who renders services in and about the

employer’s home and which services

are usually necessary or desirable for the maintenance and enjoyment

thereof, and ministers exclusively of the

employer’s family.

Barcenas v. NLRC

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.

Cuajao v. Chua Lo Tan

Vacation leave of four days a month

entitled to a family driver is deemed

waived if not demanded at its opportune time and allowed to lapse

over the years in silence. Privilege of

vacation leave can neither be

accumulated nor converted to cash.

APPRENTICES

Nitto Enterprises v. NLRC

In apprenticeship agreements, prior approval by the Department of Labor

and Employment of the proposed

apprenticeship program is a condition sine qua non before an apprenticeship

agreement can be validly entered into.

Where the apprenticeship agreement

has no force and effect, the worker hired as apprentice should be

considered as a regular employee.

Century Canning Corporation v. CA

Prior approval from the Technical Education and Skills Development

13 1B 09-10

Authority (TESDA) is necessary to

ensure that only employers in the highly technical industries may employ

apprentices and only in apprenticeable

occupations.

HANDICAPPED WORKERS

Bernardo v. NLRC

The Magna Carta for Disabled Persons mandates that a qualified disabled

employee should be given the same

terms and conditions of employment as a qualified able-bodied person.

NOTE: In this case, the fact that the employees were qualified disabled

persons necessarily removes the

employment contracts from the ambit of Art. 80. Since the Magna Carta

accords them the rights of qualified

able-bodied persons, they are covered

by Art. 280 of the Labor Code.

Nakpil v. Manila Towers

Development Corporation

Building owners may be compelled to

provide access ramps for disabled persons.

TERMINATION OF EMPLOYMENT

Aurelio v. NLRC

Loss of confidence as a ground for dismissal does not require proof

beyond reasonable doubt.

NOTE: In loss of trust and confidence,

there must be a cause; the employee

must have committed a work-related

offense. The act committed must have

reference to the work.

Managerial: belief that the conduct was

committed is sufficient Rank-and-file: higher degree of proof is

required; proof of actual involvement

Golden Thread Knitting v. NLRC

The characterization of an employee’s

services as no longer necessary or sustainable and therefore properly

terminable is an exercise of business

judgment on the part of the employer. It is not enough for a company to

merely declare that it has become

overmanned – it must produce adequate proof that such is the actual

situation in order to justify the

dismissal of the affected employees for redundancy.

In selecting the employees to be

dismissed, a fair and reasonable criteria must be used, such as but not

limited to:

a. Less preferred status b. Efficiency

c. Seniority

The utterances by an employee of

obscene, insulting or offensive words

against a superior justify his dismissal for gross misconduct, but the dismissal

will not be upheld where it appears

that the employee’s act of disrespect

was provoked by the employer.

The circumstances that an employee

lost no time in filing a complaint for illegal dismissal against the employer is

incompatible with the charge of

abandonment.

14 1B 09-10

NOTE: Abandonment is a difficult

ground to prove. Mere absence does not suffice. It is necessary that by the

employee by some overt act manifested

that there is no intent to go back to work. Complaint of illegal dismissal

negates abandonment for as long as

there is no re-instatement. Serious misconduct is a work-related offense.

Maya Farms Employees Organization

v. NLRC

Last In, First Out (LIFO) Rule: when

there are two or more employees occupying the same position in the

company affected by the retrenchment

program, the last one employed will necessarily be the first to go.

Asian Alcohol Corp. v. NLRC

Retrenchment and redundancy are just

causes for the employer to terminate

the services of workers to preserve the viability of the business.

Requirements for valid retrenchment must be proved by clear and convincing

evidence:

(1) that the retrenchment is reasonably

necessary and likely to prevent

business losses, which, if already incurred, are not merely de minimis,

but substantial, serious, actual and

real, or if only expected, are reasonably

imminent as perceived objectively and in good faith by the

employer;

(2) that the employer served written notice both to the employees and to the

Department of Labor and Employment

at least one month prior to the intend date of retrenchment;

(3) that the employer pays the

retrenched employees separation pay equivalent to one month pay or at least

1/2 month pay for every year of service,

whichever is higher; (4) that the employer exercises its

prerogative to retrench employees in

good faith for the advancement of its interest of its interest and not to defeat

or circumvent the employees' right to

security of tenure; and

(5) that the employer used fair and reasonable

criteria in ascertaining who would be

dismissed and who would be retained among the employees, such as status

(i.e., whether they are temporary,

casual, regular or managerial employees), efficiency,

seniority, physical fitness, age, and

financial hardship for certain workers.

The phrase “retrenchment to prevent

losses” means that retrenchment must

be undertaken by the employer before losses are actually sustained.

NOTE: In the case of succession employer, when a company is bought

by another, is the new employer liable

for money claims? Are they bound by the CBA of the old employer?

The answer depends on how the company was acquired.

If it is acquired through the sale of

shares of stock, the new employer must respect the CBA and others. On the

other hand, if the sale is not by shares

of stock but by deed of sale you enumerate all things to be bought.

Labor (CBA) contracts are contracts in

persona so that when parties acted in

15 1B 09-10

good faith, the new employer is not

liable for money claims.

North Davao Mining Corp. v. NLRC

Art. 283 of the Labor Code do not

obligate an employer to pay separation

benefits when the closure is due to losses.

NOTE: Are companies required to pay

their employees their separation pay due to cessation of business

operations? The answer must be

qualified. Not necessarily required if it is due to serious business losses

wherein the company is already

bankrupt hence there are no more assets to pay employee’s separation

pay. However, in the case of Cheniver

where the company was not suffering serious business losses, the company

must pay the employee’s separation

pay.

Cheniver Deco Print Technics Corp.

v. NLRC

The phrase “closure or cessation of

operation of an establishment or

undertaking not due to serious business losses or reverses” under Art.

283 of the Labor Code includes both

the complete cessation of all business operations and the cessation of only

part of a company’s business.

Even though the transfer of a company plant is due to a reason beyond the

control of the employer, it still has to

accord its employees some relief in the form of severance pay.

Resignation is inconsistent with the filing of a complaint. Resignation must

be voluntary and made with the

intention of relinquishing the office, accompanied with an act of

relinquishment.

Colegio de San Juan de Letran-

Calamba v. Villas

Misconduct is improper or wrongful

conduct. It is the transgression of some

established and definite rule of action,

a forbidden act, a dereliction of duty, willful in character and implies

wrongful intent and not mere error of

judgment.

In the case at bar, assuming arguendo

that the respondent failed to report for work on the agreed date and enroll

during the first semester, the most

respondent could be charged with was simple misconduct.

Jose S. Santos, Jr. v. NLRC

To constitute immorality, the

circumstances of each particular case

must be holistically considered and evaluated in light of prevailing norms of

conduct and applicable laws.

When a teacher engages in extra-

marital relationship, especially when

the parties are both married, such behavior amounts to immorality,

justifying his termination from

employment.

NOTE: The rule before is that even

there is just cause but the employer did

not complied with the twin requirements of due process, the

termination is invalid and the employer

is ordered to reinstate the employee. But this was abandoned in Serrano

16 1B 09-10

and modified in Agabon. In the case of

Santos, there was just cause and due process was observed therefore the

termination is valid.

Viola Cruz v. NLRC

For a disease to be a valid ground for the dismissal of the employee, the

continued employment of such

employee is prohibited by law or

prejudicial to his health or the health of his co-employees, and there must be a

certification by a competent public

health authority that the disease is of such nature or at such a stage that it

cannot be cured within a period of six

(6) months, even with proper medical treatment.

Since the burden of proving the validity of the dismissal of the employee rests

on the employer, the latter should

likewise bear the burden of showing

that the requisites for a valid dismissal due to a disease have been complied

with. In the absence of the required

certification by a competent public health authority, this Court has ruled

against the validity of the employee's

dismissal.

Ferrer v. NLRC

When good standing with the

employee’s union is a condition for

employment and such good standing

was allegedly tainted by an employee, the latter has the right to due process.

In case the union failed to investigate

on such matter, it is the duty of the company to conduct an investigation

on the veracity of such allegations.

NOTE: In this case, since the union

and the company did not comply with the twin requirements of notice, the

employee was illegally dismissed.

Agabon v. NLRC

Minimum penalty for non-compliance with due process but with existence of

valid cause to terminate an employee is

set at 30,000. It is dependent upon the

circumstances of each case.

NOTE: SC relaxed in this ruling. In

Wenphil, the SC said that provided the termination was for a just case but

there was no due process, the

termination is valid but failure to comply with due process, the employer

is penalized PhP1,000 for non-

compliance with due process.

In Serrano, if there was no due process

given but there is just or authorized

cause, the employer will be penalized by backwages from the time of

termination and finality of judgment.

What are the reliefs available to the

employee who was illegally terminated?

Reinstatement without loss of seniority rights, backwages, attorney’s fees, and

damages (nominal, moral, exemplary).

In case of reinstatement, if the position is no longer available and there is no

equivalent position available, the relief

is separation pay in lieu of

reinstatement.

Roguero v. PAL

Serious misconduct is defined as "the transgression of some established and definite rule of action, a forbidden act,

a dereliction of duty, willful in

17 1B 09-10

character, and implies wrongful intent

and not mere error in judgment." For serious misconduct to warrant the

dismissal of an employee, it (1) must be

serious; (2) must relate to the performance of the employee's duty;

and (3) must show that the employee

has become unit to continue working

for the employer.

It is of public knowledge that drugs can

damage the mental faculties of the

user. Roquero was tasked with the

repair and maintenance of PAL's airplanes. He cannot discharge that

duty if he is a drug user. His failure to

do his job can mean great loss of lives and properties. Hence, even if he was

instigated to take drugs he has no right

to be reinstated to his position. He took the drugs fully knowing that he was on

duty and more so that it is prohibited

by company rules. Instigation is only a defense against criminal liability. It

cannot be used as a shield against

dismissal from employment especially

when the position involves the safety of human lives.

The order of reinstatement is immediately executory.

Hyatt Taxi Services, Inc v. Catinoy

After the 30-day period of preventive

suspension, the employee must be reinstated to his former position

because suspension beyond this

maximum period amounts to

constructive dismissal.

Constructive dismissal does not always

involve forthright dismissal or diminution in rank, compensation,

benefit and privileges. There may be

constructive dismissal if an act of clear

discrimination, insensibility, or disdain by an employer becomes so unbearable

on the part of the employee that it

could foreclose any choice by him except to forego his continued

employment.

Alfaro v. Court of Appeals

Voluntary resignation is defined as the

act of an employee, who finds himself in a situation in which he believes that

personal reasons cannot be sacrificed

in favor of the exigency of the service; thus, he has no other choice but to

disassociate himself from his

employment.

The claim of petitioner that he was

illegally dismissed cannot be sustained, considering that his voluntary

resignation has been indubitably

established as a fact by the three

tribunals below. Indeed, illegal dismissal and voluntary resignation are

adversely opposed modes of

terminating employment relations, in that the presence of one precludes that

of the other.

Intertrod Maritime, Inc v. NLRC

Resignation once accepted and being the sole act of the employee may not be

withdrawn without the consent of the

employer. The mere fact that they did

not accept such withdrawal did not constitute illegal dismissal for

acceptance of the withdrawal of the

resignation was the employer’s sole prerogative.

NOTE: There must be acceptance by the employer of the resignation and

18 1B 09-10

there must be the consent of the

employer if the employee (who has resigned) wants to return to work.

San Miguel Corp. v. Del Rosario

An employee who was illegally

dismissed is entitled to reinstatement and backwages.

Association of Integrated Security

Force of Bislig-ALU v. CA

An employer may close or cease his

business operations even if he were not suffering from business losses or

financial reverses.

Heavylift Manila, Inc. v. CA

An employee’s attitude problem is a valid ground for termination. It is a

situation analogous to loss of trust and

confidence that must be duly proved by

the employer.

What is required is substantial

evidence to support the termination on the ground of attitude problems. The

mere mention of negative feedback

from her team members and the letter dated Feb. 23, 1999, are not proof of

her attitude problem. The letter did not

constitute the required notice because it did not inform her of the specific acts

complained of and their corresponding

penalty. The letter never gave the

respondent an opportunity to explain herself thus denying her of due

process.

King of Kings Transport, Inc v.

Mamac

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.

A verbal appraisal of the charges

against an employee does not comply

with the first notice requirement.

NOTE: 24 hours is not ample

opportunity to explain. There must be at least 5 days to consult with a lawyer

and prepare an answer. The complaint

against the employee must include the rules violated and the penalty for its

violation. It must also narrate in

particular detail these charges against the employee and should no longer be

in general statements.

Citibank v. NLRC

Where the notice of charges given to an

employee is inadequate, the charges being too general to enable the

employee to intelligently and

adequately prepare her defense, the dismissal could not be in accordance

with due process.

NOTE: if the employee was only

reinstated in the payroll (payroll

reinstatement), the employee must

reimburse the wages he received if the SC did not decide in his favor. If the

employee was actually reinstated, there

is no need for reimbursement. But this is an empty victory for the employer.

How could you expect the employee to

return his wages?

19 1B 09-10

Payroll reinstatement is an ancilliary

remedy.

Side issue: reinstatement. Is it effective

immediately? When the Labor Arbiter rules that the

employee must be reinstated, the order

is immediately executory. It is the duty of the employer to reinstate the

employee. But he has a choice if the

reinstatement be actual or payroll.

Flight Attendants and Stewards

Assoc. of the Phils v. PAL

The law speaks of serious business

losses or financial reverses – sliding

incomes or decreasing gross revenues are not necessarily losses, much less

serious business losses within the

meaning of the law.

The employer must also exhaust all

other means to avoid further losses

without retrenching its employees. Retrenchment is a means of last resort.

The fact that PAL underwent corporate

rehabilitation does not automatically justify the retrenchment of its cabin

crew personnel.

The hiring of new employees and

subsequent rehiring of “retrenched”

employees constitute bad faith. The failure of the employer to resort to

other less drastic measures than

retrenchment seriously belies its claim

that retrenchment was done in good faith to avoid losses.

By discarding the cabin crew personnel’s previous years of service

and taking into consideration only one

year’s worth of job performance for evaluation, PAL did away with the

concept of seniority, loyalty and past

efficiency and treated all cabin attendants as if they were on equal

footing, with no one more senior than

the other.

Postigo v. Phil. Tuberculosis Society

PTSI is a private corporation thus the

petitioners are employees in the private

sector hence entitled to the benefits of

RA 7641.

Employees of government-owned and

controlled corporations under the Corporation Code are governed by the

provisions of the Labor Code.

Leopard Integrated Services Inc v.

Macalinao

Most contracts for security services

stipulate that the client may request

the replacement of the guards assigned

to it and a relied and transfer order in itself does not sever employment

relationship between a security guard

and his agency.

Yrasuegui v. PAL

The obesity of a cabin crew, when

placed in the context of his work as a

flight attendant, becomes an analogous cause under Art. 282(e) of the Labor

Code that justifies his dismissal from

service.

Bona Fide Occupational Qualification:

employment in particular jobs may not

be limited to persons of a particular sex, religion or national origin unless

the employer can show that sex,

religion or national origin is an actual qualification for performing the job.

20 1B 09-10

BFOQ is valid provided that it reflects an inherent quality reasonably

necessary for satisfactory job

performance

Meiorin Test:

a. The employer must show that it adopted the standard for a

purpose rationally connected to

the performance of the job;

b. The employer must establish that the standard is reasonably

necessary to the accomplishment

of that work-related purpose; and c. The employer must establish that

the standard is reasonably

necessary in order to accomplish the legitimate work-related

purpose

Santos v. Servier Phils

The receipt of retirement benefits does

not bar the retiree from receiving separation pay. Retirement benefits

and separation pay are not mutually

exclusive unless there is no specific prohibition against the payment of both

benefits in the retirement plan and/or

in the CBA.

NOTE: in this case, there being a

provision in the Retirement Plan, the petitioner is entitled only to either the

separation pay under the law or

retirement benefits under the Plan and

not both.

Requirements for valid termination by

reason of ailment: 1. Illness cannot be cured within 6

months

2. Certification by a public health officer

But this case provides an XPN to the second requisite. When the certification

came from the physician of the

employee, the certificate can be relied on.

21 1B 09-10

FINALS COVERAGE

What are “Facilities”?

Facilities include articles or services for

the benefit of the employee or his family.

Difference between wages and salaries

Wages are compensation paid to blue collar workers, i.e., for skilled or

unskilled manual labor paid at stated

daily, weekly, monthly or seasonal

periods

Salaries are paid to white collar

workers and denote a higher grade of employment, a superior grade of

services and a position of office

What is a “Living Wage”?

It is one which is as nearly adequate as

is economically feasible to maintain the minimum standards of living necessary

for the health, efficiency and general

well-being of the employees within the framework of the national economic

and social development program.

Who are excluded from the

coverage of Wages?

a. Persons in the personal service of another;

b. Homeworkers engaged in

needlework; c. Workers employed in cottage

industries duly registered in

accordance with law and who perform the work in their homes;

d. Workers in duly registered

cooperatives as recommended by

the Bureau of Cooperative

Development and approved by the Secretary of Labor; and

e. Farm Tenancy or lease hold.

Minimum Wage

Wage distortions

Wage distortion involves four elements:

a. An existing hierarchy of positions with corresponding salary rates

b. A significant change in the salary

rate of a lower pay class without

a concomitant increase in the salary rate of a higher one

c. The elimination of the distinction

between the two levels d. The existence of the distortion in

the same region of the country

What are the provisions that

protect the wages of

employees?

a. Prohibition as to deduction from

wages without authorization,

except only as authorized by law b. Prohibition as to withholding of

wages and kickbacks

c. Freedom of disposition of wages by employees

d. Payment of wages in legal tender

e. Direct payment of wages to employee

f. Direction as to period of payment

of wages

g. Direction as to place of payment of wages

Worker‟s preference in case of bankruptcy

22 1B 09-10

Preferential right given to workers

under Art. 110 may be invoked only during bankruptcy or insolvency

proceedings against the employer.

(1) In our jurisdiction, bankruptcy or insolvency (or general judicial

liquidation) proceedings provide

the only proper venue for the enforcement of a creditor’s

preferential right such as that

established by Art. 110.

(2) Art. 110 cannot be viewed in isolation of, and must always be

reckoned with, the provisions of

the Civil Code on concurrence and preference of credits, viz.,

Articles 2241 to 2245.

(3) What Art. 110 of the Labor Code established is not a lien, but a

preference of credit in favor of

employees. Unlike a lien, a preference of credit does not

create a charge upon any

particular property of the debtor.

This simply means that during bankruptcy or insolvency

proceedings against the

properties of the employer, the employees have the advantage of

having their unpaid wages

satisfied ahead of certain claims which may be proved therein.

Hours of Work

Principles in determining

hours of work

Exclusions from hours of work

GOV-ME-MS-FP-FM-DH-WR

(1) Government employees,

including employees of owned or

controlled corporations with

original charter because they are

governed by the Civil Service Law. XPN: employees of

government owned and

controlled corporations organized under the Corporation Code are

covered by the provisions of the

Labor Code (2) Managerial Employees

(3) Managerial Staff

(4) Field Personnel

(5) Family Members (6) Domestic Helpers and Persons in

the personal service of another

(7) Workers paid by Results

Who are considered as

managerial staff?

(1) Their primary duty consists of

the performance of work directly

related to management policies of their employer

(2) They customarily and regularly

exercise discretion and independent judgment

(3) They regularly and directly assist

the managerial employee whose primary duty consists of the

management of a department of

the establishment in which they are employed

(4) They execute, under general

supervision, work along

specialized or technical lines requiring special training,

experience and knowledge

(5) They execute, under general supervision, special assignments

and tasks

(6) They do not devote more than 20% of their hours worked in a

work-week to activities which are

not directly and clearly related to

23 1B 09-10

the performance of their work

hereinbefore described

Holidays

Service incentive leave

Yearly leave benefit of five days with

pay, enjoyed by an employee who has rendered at least one year of service.

Maternity leave

Female employee who has paid at least

three monthly maternity contributions

in the 12-month period preceding the semester of her childbirth, abortion or

miscarriage and who is currently

employed shall be paid a daily maternity benefit equivalent to one

hundred percent of her present basic

salary, allowances and other benefits or

the cash equivalent of such benefits for sixty days subject to the following

conditions (pp.81-82)

Paternity leave

Every male employee in the private sector shall be entitled to paternity

leave benefits of seven days with full

pay for the first four deliveries by his

lawful spouse under such terms and conditions provided in the rules.

Service charges

13th Month Pay

What are the constitutional provisions protecting women?

Sec. 14, Article II – expressly

recognized the role of women in nation-building and commands the State to

ensure, at all times, the fundamental

equality before the law of women and men

Sec. 3 of Article XIII – requires the State to afford full protection to labor

and to promote full employment and

equality of employment opportunities for all, including assurance of

entitlement to tenurial security of all

workers

Sec. 14 of Art. XIII – mandates that the

State shall protect working women

through provisions for opportunities that would enable them to reach their

full potential

Employment of Minors

Househelpers

Difference between apprentices

and learners

Retirement

Employee-employer

relationship

Labor standards

Termination of Employment

~o~

24 1B 09-10

Art. 278 – Coverage

Establishments or Undertakings, whether for Profit or Not

Art. 279 – Security of Tenure Regular Employment – employer

shall not terminate the services of an

employee except for a just cause or authorized cause

Unjust dismissal – employee is

entitled to

1. Reinstatement without loss of seniority rights and other

privileges

2. Full back wages inclusive of allowances computed from the

time his compensation was

withheld from him up to the time of his actual reinstatement

Art. 280 – Regular and Casual Employment

Regular Employment – employee

has been engaged to perform activities

which are usually necessary or desirable in the usual business or trade

of the employer except where the

employment has been fixed for a specific project or undertaking the

completion or termination of which has

been determined at the time of the engagement of the employee or where

the work or service to be performed is

seasonal in nature and the employment is for the duration of the season.

Casual Employment – if not

covered by regular employment provided that any employee 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.

Art. 281 – Probationary Employment

Not exceed 6 months from the date the employee started working

unless it is covered by an

apprenticeship agreement stipulating a longer period.

The services of a probationary

employee may be terminated for: a. Just cause; or

b. 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.

Art. 282 – Termination by Employer

An employer may terminate an

employment for any of the following causes:

a. Serious misconduct or willful disobedience by the employee of

the lawful ordered of his

employer or representative in connection with his work;

b. Gross and habitual neglect by

the employee of his duties;

c. Fraud or willful breach by the employee of the trust reposed in

him by his employer or duly

authorized representative; d. Commission of a crime or

offense by the employee against

the person of his employer or any immediate member of his family

25 1B 09-10

or his duly authorized

representatives; and e. Other causes analogous to the

foregoing.

Art. 283 – Closure of Establishment

and Reduction of Personnel

The employer may also terminate the

employment of any employee due to:

a. Installation of labor-saving

devices b. Redundancy

c. 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

Employer must serve a written notice on the workers and the Ministry of

Labor and Employment at least one

month before the intended date.

In case of termination due to the

installation of labor-saving devices or

redundancy, the worker affected shall be entitled to a separation pay

equivalent to at least his one month

pay or to at least one month pay for every year of service, whichever is

higher.

In case of retrenchment (under C), the

separation pay shall be equivalent to

one 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 months shall be considered as one whole year.

Art. 284 – Disease as a 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: a. He is paid separation pay

equivalent to at least one month

salary or to one-half (1/2) month

salary for every year of service, whichever is greater;

b. A fraction of at least six months

being considered as one whole year

Art. 285 – Termination by Employee

a. An employee may terminate

without just cause the employee-employer relationship by serving

a written notice on the employer

at least one (1) month in

advance. The employer upon whom no such notice was served

may hold the employee liable for

damages. b. An employee may put an end to

the relationship without serving

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

(S-I-C-O):

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

26 1B 09-10

immediate members of his

family; and

Other causes analogous to any

of the foregoing.

ART. 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 month from

the resumption of operations of his

employer or from his relief from the military or civic duty.

Title II – Retirement from the Service

Art. 287 – Retirement

An employee may be retired upon reaching the retirement age based in

the CBA or other applicable

employment contract

In case of retirement, the employee

shall be entitled to receive such

retirement benefits as he may have earned under existing laws and any

CBA and other agreements: Provided:

a. That an employee’s retirement benefits under any collective

bargaining and other agreements

shall not be less than those provided therein.

In the absence of a retirement plan or agreement providing for retirement

benefits of employees in the

establishment, an employee upon reaching the age of sixty (60) years or

more, but not beyond sixty-five (65)

years which is hereby declared the compulsory retirement age, who has

served at least five (5) years in the

said establishment, may retire and shall be entitled to retirement pay

equivalent to at least one-half (1/2)

month salary for every year of service, a

fraction of at least six (6) months being considered as one whole year.

Unless the parties provide for broader inclusions, the term „one-half (1/2)

month salary‟ shall mean fifteen (15)

days plus one-twelfth (1/12) of the 13th month pay and the cash

equivalent of not more than five (5)

days of service incentive leaves.

Retail, service and agricultural

establishments or operations employing

not more than ten (10) employees or workers are exempted from the

coverage of this provision.

Violation of this provision is hereby

declared unlawful and subject to the

penal provisions under Article 288 of this Code.

Implementing Rules

Sec. 1 – Coverage

Applies to all establishments whether

operated for profit or not with the exception of the Government and its

political subdivision including

government-owned or controlled corporations

Sec. 2 – Security of Tenure

27 1B 09-10

If regular employment – employer shall

not terminate except for a just or authorized causes as provided by law

and subject to the requirements of due

process

If employment covered by contracting

or subcontracting arrangement – no employee shall be dismissed prior to

the expiration of the contract between

the principal and the contractor or

subcontractor unless dismissal is for just or authorized cause or is brought

about by the completion of the phase of

the contract for which the employee was engages subject to the

requirements of due process or prior

notice

In all cases of termination, the

following standards of due process shall be observed:

For termination based on just cause:

a. Written notice specifying the ground/s for termination

b. Hearing

c. Written notice of termination served

For termination of employment as defined in Art. 283:

a. Requirement of due process

deemed complied with upon service of a written notice to the

employee and the appropriate

Regional Office of the DOLE at

least 30 days before the effectivity of the termination

specifying the ground/s for

termination

If termination is brought about by the

completion of a contract or phase or by failure of an employee to meet the

standards of the employer in case of

probationary employment, a written notice is sufficient served within a

reasonable time.

Sec. 3 – Reinstatement

An employee who is unjustly dismissed from work shall be entitled to

reinstatement without loss of seniority

rights and backwages

Sec. 4 – Reinstatement to Former

Position

Employee – separated without just

cause – reinstated to his former

position unless: a. Such position no longer exists at

the time of reinstatement in

which case he shall be given a substantially equivalent position

in the same establishment

without loss of seniority rights

b. In case the establishment ceased operations or former position no

longer exists at the time of

reinstatement for reasons not attributable to the fault of the

employer, the employee shall be

entitled to separation pay equivalent at least to one month

for every year of service,

whichever is higher, a fraction of at least six months being

considered as one whole year.

Sec. 5 – Regular and casual employment

(a) Employment shall be considered to be regular employment where the

employee has been engaged to perform

activities which are usually necessary or desirable in the usual business or

28 1B 09-10

trade of the employer except where the

employment has been fixed for a specific project or undertaking the

completion or termination of which has

been determined at the time of the engagement of the employee or where

the work or service to be performed is

seasonal in nature and the employment is for the duration of the season.

(b) Employment shall be deemed as

casual in nature 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 not, 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.

(c) An employee who is allowed to work

after a probationary period shall be

considered a regular employee.

Sec. 6 – Probationary employment

(a) Where the work for which an employee has been engaged is

learnable or apprenticeable, the

probationary employment period of the employee shall be limited to the

authorized learnership or

apprenticeship period, whichever is applicable.

(b) Where the work is neither

learnable nor apprenticeable, the probationary employment period shall

not exceed six (6) months reckoned

from the date the employee actually started working.

(c) The services of an employee who has been engaged on probationary basis

may be terminated only for a just cause

or when authorized by existing laws, or when he fails to qualify as a regular

employee in accordance with

reasonable standards prescribed by the employer.

(d) In all cases involving employees engaged on probationary basis, 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.

Sec. 7 – Termination of Employment by Employer

The just causes: provided in Article 283 of the Code

The separation from work for a just cause does not entitle him to the

termination pay provided in the Code,

without prejudice, however, to

whatever rights, benefits, and privileges he may have under the applicable

individual or collective agreement with

the employer or voluntary employer policy or practice.

Sec. 8 – Disease as a ground for dismissal

Where the employee suffers from a disease and his continued employment

is prohibited by law or prejudicial to his

health or to the health of his co-

employees, the employer shall not terminate his employment unless there

is a certification by competent public

health authority that the disease is of such nature of at such a stage that it

cannot be cured within a period of six

(6) months even with proper medical treatment. If the disease or ailment can

29 1B 09-10

be cured within the period, the

employee shall not terminate the employee but shall ask the employee to

take a leave of absence. The employer

shall reinstate such employee to his former position immediately upon the

restoration of his normal health.

Sec. 9 – Termination pay

(a) An employee shall be entitled to

termination pay equivalent to at least one month's salary for every year of

service a fraction of at least six (6)

months being considered as one whole year, in case of termination of his

employment due to the installation of

labor-saving devices or redundancy.

(b) Where the termination of

employment is due to retrenchment to prevent losses and in case of closure or

cessation of operations of

establishment or undertaking not due

to serious business losses or financial reverses, or where the employment is

prohibited by law or is prejudicial to his

health or to the health of his co-employees, the employee shall be

entitled to termination pay equivalent

to at least one-half month's pay for every year of service, a fraction of at

least six months being considered as

one whole year.

(c) The termination pay provided in the

Section shall in no case be less than

the employee's one month pay.

Sec. 10 – Basis of termination pay

The computation of the termination pay

- latest salary rate unless the same was

reduced by the employer to defeat the intention of the Code, in which case the

basis of computation shall be the rate

before its deduction.

Sec. 11 – Termination of employment

by employee

The just causes for putting an end to

the employer-employee relationship by the employee shall be those provided in

Article 286 of the Labor Code.

Sec. 12 – Suspension of relationship

In case of suspension of operation of

the business or undertaking of the employer for a period not exceeding six

(6) months unless the suspension is for

the purpose of defeating the rights of the employees under the Code, and in

case of mandatory fulfillment by the

employee of a military or civic duty.

The payment of wages of the employee

as well as the grant of other benefits

and privileges while he is on a military or civic duty shall be subject to special

laws and decrees and to the applicable

individual or collective bargaining agreement and voluntary employer

practice or policy.

Sec. 13 – Retirement

In the absence of any collective bargaining agreement or other

applicable agreement concerning terms

and conditions of employment which

provides for retirement at an older age, an employee may be retired upon

reaching the age of sixty (60) years.

Sec. 14 – Retirement benefits

(a) An employee who is retired pursuant to a bona-fide retirement

30 1B 09-10

plan or in accordance with the

applicable individual or collective agreement or established employer

policy shall be entitled to all the

retirement benefits provided therein or to termination pay equivalent to at

least one-half month salary for every

year of service, whichever is higher, a fraction of at least six (6) months being

considered as one whole year.

(b) Where both the employer and the employee contribute to the retirement

plan, agreement or policy, the

employer's total contribution thereto shall not be less than the total

termination pay to which the employee

would have been entitled had there been no such retirement fund. In case

the employer's contribution is less than

the termination pay the employee is entitled to receive, the employer shall

pay the deficiency upon the retirement

of the employee.

(c) This Section shall apply where the

employee retires at the age of sixty (60)

years or older.