IMG_7645.HEIC INTRODUCTORY CHAPTER cost of living allowances were later on integrated into the basic pay through Presidential Decree No. 1751 and Wage Order No. 4. After the regime of President Ferdinand E. Marcos, the following labor standards laws were enacted: Memorandum Order No. 28 which amended Presidential Decree No. 851 by removing the salary ceiling for the entitlement to the 13th-month pay; Executive Order No. 178 which integrated the emergency cost of living allowances under Wage Order Nos. 1, 2, 3, 5, and 6 into the basic pay; Executive Order No. 203 which provided a list of regular and special holidays to be observed throughout the Philippines; Executive Order No. 247 which reorganized the Philippine Overseas nployment Administration; Republic Act No, 6640 which increased the minimum wage; Republic Act No. 6725 which strengthened the prohibition on discrimination against women; Republic Act No. 6727 (Wage Rationalization Act); Republic Act No. 7641 (amending the retirement law); Republic Act No. 7655 (increasing the minimum wage of domestic workers); Republic Act No. 7730 (strengthening the visitorial and enforcement power of the Secretary of Labor and Employment); Republic Act No. 7875 (National Health Insurance Act of 1995); Republic Act No: 8042 (Migrant Workers and Overseas Filipinos Act of 1995); Republic Act No. 8187 (Paternity Leave Act of 1996); Republic Act No. 8558 (reducing the retirement age of underground mine workers); Republic Act No. 9241 (amending the National Health Insurance Act); Republic Act No. 10606 (National Health Insurance Act of 2013); Republic Act No, 9679 which strengthened the Home Development Mutual Fund; Republic Act No, 10151 (allowing the employment of night workers); Republic Act No. 10361 (Domestic Workers Act); Republic Act No. 10757, which reduced the retirement age for surface mine workers; Republic Act No. 10789 (the Racehorse Jockeys Retirement Act); Republic Act No. 10801 (Overseas Workers Welfare Administration Act); Republic Act No, 11058 (Strengthening Compliance with Occupational Safety and Health Standards) Republic Act No. 11199 (Social Security Act of 2018); Republic Act No. 11210 (Expanded Maternity Leave Law), and Republic Act No. 11223 (Universal Health Care Act). Labor Law Labor law is that branch of law that governs and regulates the relationship between employers and employees. The General Classification of Labor Laws (1) Labor standardsLABOR LAW 1 : : ‘THE LAW ON LABOR STANDARDS (2) Labor relations (8) Welfare laws Labor Standards — Labor standards is that branch of labor law that prescribes the minimum requirements for hours of work, wages, monetary benefits, welfare benefits, and occupational health and safety. Labor Relations — Labor relations is that branch of labor law that regulates the activities of labor organizations and prescribes the modes and machinery for the settlement of labor disputes, including collective bargaining, and the modes and procedure for terminating an employment. Welfare Laws — Welfare laws are statutes intended to provide protection to the employee and his beneficiaries in case of disability, sickness, old age, death and other contingencies that results in loss of income or financial burden. Social Legislation — There is no precise definition for social legislation. Social legislation is so broad that it covers labor laws, agrarian laws, and welfare laws. Essentially, these are laws or statutes enacted pur- suant to the social justice clause of the Constitution. The emphasis is more on the aspect of general public good and social welfare. THE PROVISIONS OF THE CIVIL CODE ON LABOR. 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. COMMENT: After the approval of the new Civil Code, the relations between labor and capital have ceased to be merely contractual. They becamessa i < IMG _7647.HEIC Arts. 1701-1702 INTRODUCTORY CHAPTER impressed with public interestthat for their determitiation, as well as the incidents arising therein, other considerations of moral and social character have to be reckoned with to promote industrial peace. This is in keeping with the spirit of social justice.' /Art, 1701. Neither capital nor labor shall act oppressively against the other, or impair the interest or convenience of the public. COMMENT: Employees now enjoy Security of tenure in the sense that they cannot be dismissed without just cause or authorized cause. Security of tenure protects employees not only against dismissal without valid cause but also against other personnel actions which are calculated to force an employee to give up his job without valid reason. It must be understood, however, that security of tenure is not a guarantee of perpetual employment. An employer cannot legally be compelled to ntinue with the employment of an employee guilty of misfeasance or malfeasance towards his employer and whose continuance in the service is patently inimical to his interests, because the law, in protecting the rights of employees authorizes neither oppression nor self-destruction of the employer.’ Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. COMMENT: “The public good requires that this presumption be established whenever there is some doubt in any labor contract. The safety and decent living of the toiling classes do not affect them alone but are matters of deep and immediate concern to the entire nation. When in any nation, a large section of the inhabitants is not afforded a safe and decent life, the economic progress of the country is impeded, and the level of the general well-being is pulled down.”* ‘Macleod & Co. v. Progressive Federation of Labor, 97 Phil. 205 ?Manila Trading and Supply Co. v. Zulueta, 69 Phil. 485 Report of the Code Commission, cited in Montemayor, Labor, Agrarian and Social Legislation, 2nd Ed. p.1096 LABOR LAW 1 Arts. 1703-170 THE LAW ON LABOR STANDARDS Art. 1703. No contract which practically amounts to involuntary servitude, under any guise whatsoever, shall be valid. COMMENT: Involuntary servitude is frowned upon by the Constitution, Section 18(2), Article III of the Constitution provides that “(no involuntary servitude in any form shall exist except for punishment for a crime whereof the party shall have been duly convicted.” Art. 1704. In collective bargaining, the labor union or members of the board or committee signing the contract shall be liable for non-fulfillment thereof. COMMEN’ In c of an illegal strike union officers who knowingly participated in the illegal strike stand to lose their employment status. Dismissal of union officers who stage an illegal strike is but proper. Since the objective of the Labor Code is to ensure a stable but dynamic and just industrial peace, union leaders are duty bound to guide their members to respect the law.‘ The responsibility of the union officers, as main players in an illegal strike, is greater than that of the members, as the union officers have the duty to guide their members to respect the law.® Art. 1705. The laborer’s wages shall be paid in legal currency. ‘COMMENT: Artic: the wag tickets, 102 of the Labor Code forbids employers from paying by means of promissory notes, vouchers, coupons, tokens, chits, or any object other than legal tender, even when expressly requested by the employee. Art. 1706. Withholding of the wages, except for a debt due, shall not be made by the employer. ‘Association of Independent Unions v. NLRO, 305 SCRA 219 'Piltel v. PILTE CRA 361Arts. 1707-1709 INTRODUCTORY CHAPTER COMMENT: Article 116 of the Labor Code declares it unlawful for any person, directly or indirectly, to withhold any amount from the wages 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. Art. 1707. The laborer’s wages shall be a lien on the goods manufactured or the work done. COMMENT; Under Article 1731 of the Civil Code, one who has executed work upon a movable has a right to retain it by way of pledge until he is paid. Moreover, claims for laborers wages, on the goods manufactured or the work done are considered as special preferred credits with respect to the specific movable property of the debtor.* Art. 1708. The laborer’s wages shall not be subject to execution or attachment, except for debts incurred for food, shelter, clothing and medical attendance. COMMENT: This Article applies only to “wages” as distinguished from “salaries” because there is a fine distinction between wages and salaries. “Wage” refers to compensation for manual labor or lower and less responsible character of employment, while “salary” is suggestive of a higher and more important service. Thus, only wages are exempt from execution or attachment for debts incurred for any purpose other than for food, shelter, clothing, and medical attendance. Salaries are not exempted because Article 1708 of the Civil Code was intended to operate in favor of 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.” Art. 1709. The employer shall neither seize nor retain any tool or other articles belonging to the laborer, Aart. 2241(6), Civil Code 7Gaa v. Court of Appeals, 140 SCRA 304LABORLAW2 Arts, 17101739 : THE LAW ON LABOR STAND. ‘CCOMMEN int i f the laborer, To allloy, i r the livelihood of t : This is intended to protect the | le k the Pree to seize the tools which the laborer ne Snipe ny > employ se: ti i Puss his occupation would certainly deprive him of his means of suppo, a Art. 1710. Dismissal of laborers shall be subject to the supervision of the government, under special laws. COMME The Labor Code now assures all workers the right to security of tenure in the sense that an employer can no longer dismiss employees without just cause. Art. 1711. (superseded by the Labor Code}* Art. 1712. [superseded by the Labor Codef “Art. 1711. Owne: pensation for the death mechanics or other employees, even though al or entirely due to a fortuitous cause, if the death or personal injury arose out of and in the course of the employment. The employer is also liable for compensation if the employee contracts any illness or disease caused by such employment or as the result of the nature of the employment. If the mishap was due to the employee's own notorious negligence, ¢r Voluntary act, or drunkenness, the employer shall aot he liable for compensation. When the employee's lack of due care contributed tobbic death or injury, the compen sation shall be equitably reduced. “Art, 1712, If the death or injury is due to the er shalll be solidarily liable fo intentional or malicious act is the only cause of the 8 of enterprises and other employers are of or injuries to their laborers, workmen, the event may have been purely accident: obliged to pay com-LABOR CODE oF THE PHILIPPINES PRESIDENTIAL DECREE No. 442 1920, 1921, , 70, 130, and 7, 261, and Republic Act Nos. 6715, 6725, 6727, 7610, 7641, 7655, 7658, 7700, 7730, 7796, 7877, 8042, 8558, 9347, 9481, 10151, 10361, 10395, 10396, 10741, 10757, 10789, and 11360.) A DECREE INSTITUTING A LABOR CODE, THEREBY REVISING AND CONSOLIDATING LABOR AND. SOCIAL LAWS TO AFFORD PROTECTION TO LABOR, PROMOTE EMPLOYMENT: AND HUMAN RESOURCES DEVELOPMENT AND INSURE INDUSTRIAL PEACE BASED ON SOCIAL JUSTICE. PRELIMINARY TITLE CHAPTER | GENERAL PROVISIONS ARTICLE 1. Name of Decree. — This Decree shall be known as the “Labor Code of the Philippines.” COMMENT: Salient Features of the Labor Code / (1) It re-orients labor laws towards development and employment goals; (2) It institutionalizes the National Labor Relations Com- mission to facilitate the speedy settlement of labor disputes; (3) It establishes a new system of workmen's compensation; 9LABOR LAW 1 Art. 1 : THE LAW ON LABOR STANDARDS i a em for employment of overseas 4) Tt establishes a system oymeni wae and optimizes national benefit hereto zal the ful of dollar remittances and improved skills and technology for our people; and | (5) It institutionalizes voluntary arbitration as a mode of settling labor disputes. The Essence of Labor Laws Labor law is about employer-employee relationship. Therefore, the applicability of labor laws is dependent upon the existence of employer-employee relationship.’ If the relationship is something else other than “employer-employee,” the principles of ordinary civil law will apply. The Tests of Employer-Employee Relationship The Economic Reality Test — Under the economic reality test, when a worker possessés some attributes of an employee and others of an independent contractor whi make him fall’ within an intermediate area, he may be classified under the category of an employee when the economic facts Zi of the relation make it more nearly one of employment than one of / independent business enterprise with respect to the ends sought to | be accomplished Sunripe Coconut Products v. CIR 83 Phil. 518 FACTS: Sunripe Coconut Products has “parers” and “shellers” working under the “pakiao” system, Their work consists in paring and shelling coconuts, These “parers” and “shellers” work under some degree of control and supervision of the company, if not under its absolute direction. For the most part, they depend on their work at, Sunripe Coconut Products for their livelihood. They perform their work at the premises of the company. Sunripe Coconut Products contends that these “parers” and “shellers” are independent contractors, and therefore, not its employees, ISSUE: Whether the exists between Sunri; “shellers” of coconuts. relationship of employer-employee pe Coconut Products and the “parers” and eae al "Madrigal Shipping Co. v. Melad, 7SORA 990LABOR CODE OF 7 "HE PHILIPPIN ‘APTER I— GENERAL PROVISION HELD: The r: betwesnNGnnes Gentoo of employer-employee exists “chellore” of ae “oconut Products and the “parers’ and employesiee teas roa the economic facts showing ne S_outweigh those indicative of independent : ive pe contractor. When a worker possesses some attributes of an emp/oyee and others of an independent contractor, which make him fall within an intermediate area, he may be claésified under the category of an employee when the economic facts of the relation make it more nearly one of employment than one of independent business enterprise with respect to the ends sought to be accomplished. The Control Test — The relationship of employer-employee will be deemed to exist where the person for whom the services are performed reserves the right to control not only the end to be achieved but also the means to be used in reaching such end? Elements of Employer-Employee Relationship In the case of Viana v. Al-Lagadan,? the Supreme Court laid down the following elements that are generally considered in determining the existence of employer-employee relationship: (1) Selection and engagement of the employee; (2) Payment of wages: (3) Power of dismissal; and (4) Power to control the employees’ conduct. Selection and Engagement — Under this criterion, the relationship of employer-employee is created by the act of hiring a person as an employee. Hiring may be express or implied, A written contract is not necessary.‘ However, it is essential that there should be an understanding between the parties that one is to render personal service to or for the benefit of the other and recognition by them of the right of one to order and ‘LVN Pictures v. Philipp} Loop Technology, 481 SCRA 364 *99 Phil. 408 " ‘Compania Maritima v. Cabagnot, 107 Phil. 873 ine Musicians Guild, 110°Phil, 725; Almiree v, InfiniteLABOR LAW 1 Arty . THE LAW ON LABOR STANDARDS k and to direct th, control the other in the performance of the worl ai manner and method by performance. Payment of Wages — Under this criterion, the relationship of smplover elias is deemed to exist if the person hired is compensate a acd of “wages.” It should be emphasized, however, tha nee designation of the compensation as “salaries” will notpenibelas licate the existence of employer-employee relationship.’ To determine whether the compensation falls within the connotation of the term “wages,” the consideration for its payment should be taken into account. Thus (1) ifpaid in consideration of the labor being performed, the compensation is considered as “wages”; ) if paid in consideration of the results or finished work, the compensation is not considered as “wages.” This distinguishes lease of work by contract fora fixed Price (job contracting) from lease of Services of hired servants (employment), In the case of Chartered Bank v, Constantino,* the Supreme Court laid down the distinction in this wise: (2) In lease of work b contracting), the direct object of the contra preme Court held that: _ NAMAWU v. Valero, 132 SCRA 578 "The term “ “wages” means remuneration or earnings however essed in terms of money, whether fixed or ascertai 1, pioce commission, or other es n employer to an employee und Ployment, for work done or to be don includes the fair and reason, able value of board, lodgi, designated, ca- ined on the basis lethod of calculating the same, which is ee written or unwritten contract of ear, 856 Phil. 717, 729 *6 Phil, 100, 10LABOR CODE OF THE PHILIPPINES CHAPTER I— GENERAL PROVISIONS ‘Ttis claimed by the appellants that the contract alleged in the complaint made the plaintiff a co-partner of the defendants in the business which they wore carrying on. This contention cannot be sustained. It was a mere contract of employment. The plaintiff had no voice or vote in the management of the affairs of the company. The fact that the compensation received by him was to be determined with reference to the profits made by the defendants in their business did not in any sense make him a partner therein,” The Supreme Court issued a similar ruling in the case of Bastida v. Menzi & Co.,'° where it was held that: “After considering the evidence and arguments we are unanimously of the opinion that under the facts of this case, the relationship established between Menzi and Co. and the plaintiff by the contract, Exhibit A, was not that of partners, but that of employer and employee, whereby the plaintiff was to receive 35 percent of the net profits of the fertilizer business of Menzi & Co., Ine. in compensation for his services of supervising the mixing of the fertilizers. Power of Dismissal — Under this criterion, the relationship of employer-employe is deemed to exist if the person hired is subjected to the ruli pline of the employer. Prohibiting a person hired from competing with the firm under pain of dismissal, and subjecting the person hired to disciplinary action are indications that the employer wields the power of dismissal." In the case of Ysmael v. CIR, the power of dismissal was manifested by the following acts: cutting off the transportation benefit for misrepresentation, disloyalty, or freelancing for any company during his tour of duty; withdrawing the authority to sell in case of disloyalty, freelancing, or failure to make any good sale within a reasonable period; and forcing agents to resign for any compelling reason. Power to Control the Employee’s Conduct — Among the four (4) elements of employer-employee relationship, the power to control the employee's conduct is the most important, 58 Phil. 188 t Cosmopolitan Funeral Homes v. Maalat, 187 SCRA 108 2108 Phil. 407as Art LABOR LAW 1 i r - THE LAW ON LABOR STANDARDS arded.® When used ag eis ay even be disregarded sed as q that the other elements m: pemaeerr e existence of test in determining the existence pos i the term “control” has a technical meaning. It refers to the authority of the employer to manage the employee on both the result of the work to be done and the means by which the work is to be accomplished. However, it should be stressed that not every form of contro] may be accorded the effect of establishing an employer-employee relationship.» To fall within the ambit of employer-employee relationship, control should be on both the means and the end."* If control is limited only to the result of the work, employer-employee relationship does not exist.” The mere fact that the hiring party imposes certain rules on the hired party does not per se indicate that the power to control is in existence. Rules which serve as guidelines towards the achievement of the mutually desired result, are not indicative of the power to control.'* Thus, the power to control cannot be inferred from the mere fact that the relationship may be terminated for certain specified causes, Such as failure to meet the annual sales quota, inability to make sales production during a certain period, or conduct detrimental to the company. ‘The reason is because the causes thus specified have no relation whatsoever to the means and methods of work that is ordinarily required of or imposed upon employees.® Similarly, the power to control cannot be inferred from the mere fact that a newspaper publisher requires a newspaper carrier to follow a fixed route and time in the delivery of its newspapers. The reason is because the requirements are all designed to secure the accomplishment of one result — the distribution of the publisher's newspapers. If there is a certain degree of control, it is only on the result of the work but not on the means or manner of doing the work. In the same manner, a building contractor does not become: an employee simply because he agrees to build a house according to specifications, for a certain degree of time, with liability for any "SSara v. Agarrado, 166 SCRA ‘SSS v. Court of Appeals, 156 ‘AFP Mutual Benefit As Manufacturers Life, 570 SC *Insular Life y. ‘Sasan v. NLRC, ORA 383 eae v. NLRC, 267 SORA 47; ‘Tongko v. The LRO, 179 SCRA 459; Vinoya v. NLRC, 824 SORA 469 569 SCRA 670 "Orozco v. Court of Appeals, 562 SCRA 36 Investme: nt Planning Corp. v. SSS, 21 SCRA 924LABOR CODE OF pup : CHAPTER To OF THE PHILIPPINES Be GENERAL PROVISIONS delay and with res) t would bea rare sn nSibility for poor workmanship.” Realistically, 7 arty hing att of service that gives untrammeled freedom to the party hired and eschews zi in his performance of the agreement: any intervention whatsoev Employer-Employee Relationship Held to Exist (1) Professors — The relationship of em Ployer-employee exists between a school and its professors, shown by the fact that the school controls the work of its faculty, considering that it prescribes the course or subjects that the professors teach, including when and where to teach. Moreover, the professor’s work is characterized by regularity and continuity for a fixed duration. They are compensated for their services on salary basis. Furthermore, the professors cannot substitute others to do their work without the consent of the school and that they can be terminated if their work is found t6 be unsatisfactory. (2) Insurance Agents — An insurance company may have two classes of agents who sell insurance policies, namely: (a) personnel who keep definite hours of work and are paid on salary basis; and (b) registered representatives who do not keep definite hours of work and are paid on commission basis The relationship of employer-employee exists with regard to salaried personnel who keep definite hours of work, because they are under the control and supervision of the insurance company. But as regards the registered representatives who work on commission basis, the relationship of employer-employee does not exist because they are not required to report for work at any time; they do not devote their time exclusively for the company; the time and effort they spend in their work depend entirely upon their own will; they are not required to account for their time; they are not required to submit a report of their activities; they shoulder their own selling 2Quinio v. Munoz, 15 SCRA 140 .sular Life v. NLRC, 179 SCRA 459 *2Feati University v. Bautista, 18 SCRA 1191LABOR LA ‘THE LAW ON LABOR STANDARDS expenses, including transportation expense and they are Paid their commissions based on a certain percentage of their sales. (3) In-House Lawyers — It is a common practice among big corporations to hire in. house lawyers to handle their legal problems. These lawyers are paid regular salaries. They are ranked in the company’s table of organization and are treated like other officers and employees, Under this set-up, the relationship of employer-employee existe between the corporation and its in-house lawyer. (4) Jeepney Drivers Under the “Boundary” System — The relationship between a jeepney owner and a jeepney driver operating under the “boundary” system is not one of lessor- les: but of employer-employee. Even if the driver takes material possession of the jeepney, the jeepney owner still exercises supervision over the driver by seeing to it that the route prescribed by the proper government agency is followed. The mere fact that the driver is not paid any fixed wage, and the fact that the driver shoulders the gasoline and pays a fixed amount to the operator do not per se establish a lessor-lessee relationship. In lease of chattels, the lessor loses complete control over the chattel leased. But under the “boundary” system the jeepney owner exercises supervision and control over the driver.** This doctrine is also applicable by analogy to taxi owners/operators and taxi drivers under the boundary system.” Employer-Employee Relationship Held to be Non-Existent Q) TV Talent — In the case of Sonza v. ABS-CBN Broadcasting,” the Supreme Court held that no employer-employee relationship exists between a television station and its talents, Said the Court: “ocx ABS-CBN engaged SONZA’s services specifically to co-host the “Mel & Jay’ Programs. ABS-CBN did not assign any reat Pacific Life v. Judico, 180 SCRA 445 *4Hydvo Resources v. Paglilauan, 172 SCRA 399 *NLU vy, Dinglasan, 98 Phil 649; Dose v, WCC, 104 Phil. 496; Magboo v. Bernardo, 7SCRA 952 "Martinez v. NLRO, 27 431 SCRA 583 SCRA 798; Paguio v. NLRC, 294 SCRA 657LABOR CODE OF THR : CHAPTER Risy OF THE PHILIPPINE! GENERAL PROVISIONS work to SONZA. To ckille. and talent, Perform his work, SONZA only needed his How SONZA delive s lines, appeared on television, and sounded on radio wore euteide ABS.CB control. SONZA did not have to render eight hours of work per day. The Agreement required SONZA to attend on! sals and tapings of the shows, as well as pre- and post-production staff meetings. ABS-CBN could not dictate the contents of SONZA's script. However, the Agreement prohibited SONZA from criticizing in his shows ABS-CBN or its interests. The clear implication is that SONZA had a free hand on what to say or discuss in his shows provided he did not attack ABS-CBN or its interests. We find that ABS-CBN was not involved in the actual performance that produced the finished product of SONZA's work. ABS-CBN did not instruct SONZA on how to perform his job. ABS-CBN merely reserved the right to modify the program format and airtime schedule ‘for more effective programming.’ ABS-CBN’s sole concern was the quality of the shows and their standing in the ratings. Clearly, ABS-CBN-did not exercise control over the means,and methods of performance of SONZA’s work.” (2) Golf Club Caddies — In the case of Manila Golf & Country Club v. Intermediate Appellate Court, the Supreme Court held that there is no employer- employee relationship between caddies and golf clubs. Said the Court: “As long as it is, the list made in the appealed decision detailing the various matters of conduct, dress, language, ete, covered by the petitioner’s regulations, does not, in the mind of the Court, so circumscribe the actions or judgment of the caddies concerned as to leave them little or no freedom of choice whatsoever in the manner of carrying out their services. In the very nature of things, caddies must submit to some supervision of their conduct while enjoying the privilege of pursuing their occupation within the premises and grounds of whatever club they do their work in. For all that is made to appear, they work for the club to which they attach themselves on sufferance but, on the other hand, also without having to observe any working free to leave anytime they please, to stay away for ‘ke, It is not pretended that if found remiss of said rules, any discipline may be meted he premises which, it may be hours, 2 as long as they Il in the observance them beyond barring them from t 28937 SCRA 207LABOR LAW 1 THE LAW ON LABOR STANDARDS ase even absent any breach ht to work on their y with the concept supposed, the Club may do in any case eve} of the rules, and without violating any Bot part. All these considerations clash frontal of employment (3) Jockeys — 4 SS Jourt vals,® the Supreme Court In the case of SSS v. Court of Appeals, Si held that no employer-employee relationship exists beeesene Manila Jockey Club or Philippine Racing Club and its jockeys. Said the Court: “Why jockeys do not fall under the facts obtaining within such a category was explained in the Court of Appeals’ decision in this wise: ‘The evidence invariably shows that the selection and employment of the jockey is made by the race horse owner whose horse the jockey will ride, not by the race club. Upon the: other hand, the jockey decides for himself the horse he is to mount. xxx Thus, the matter as to which jockey shall ride which horse, is mutually agreed upon by and between the race horse owner andthe jockey. Once such agreémerit i reachéd, the race club cannot compel the race horse owner to-accept another jockey or the jockey to ride another horse, Nor can the race club prevent the jockey from riding the horse which the jockey had previously agreed with the race horse owner to ride’.” (4) 1 In the case of Orozco v. Court of Appeals,” the Supreme Court held that no employer-employee relationship exists between a newspaper company and a newspaper columnist, The mere fact that the newspaper company approves or rejects the publication of a specific article which the columnist writes, is not the control contemplated in the “control test.” Itis but logical that the one who commissions another to do a piece of work should have the right to accept or reject the product. Said the Court: lewspaper Columnist — “soux it does not appear that there was any actual restraint or limitation on the subject matter— within the Lifestyle section ~ that she could write about, Respondent PDI did not dictate how she wrote or what she wrote in her column. Neither did PDIs guidelines dictate the kind of research, time, and effort she put into each column, In fact, petitioner herself said that she received “no comments on her articles ... except for her to 7980 SCRA 210, 213-214 562 SCRA 36LABOR Cop: CHAPTER [ E OF THE PHILIPPIN! INERAL PROVISIONS shorten them to n tbexnghe meal pry box allotted to her column.” Therefore, finished product of aoe over petitioner was only as to the Githes shoertct of her efforts, ie, the column itself, by way of ning or outright rejection of the cohamn is say Poe to approve or reject publication contac C le she wrote for her column cannot be the emplated in the “control test” as it is but logical that the one who commissions another to do a piece of work should have the right to accept or reject the product. The important factor to consider in the “control test” is still the element of control over how the work itself is done, not just the end result thereof. (5) Newspaper Carrier — In the case of Quinio v, Munoz,” the Supreme Court held that employer-employee relationship does not exist between a newspaper carrier and newspaper publisher because: “The carrier owned the delivery truck; he’ worked for four hours at most and he was paid per trip made, instead of by the hour, These factors are important. For, ifthe time of employment is short, the worker is less apt to subject himself to control as to the details and the job is more likely to be,considered ‘his job than the job of the one employing him. This is especially true if payment is to be made by the job and not by the hour. And the »s his own tools is some evidence that fact that a worker supplie ho is not an employee. On the other hand, if the worker is using His employer's tools or instrumentalities, especially ifthey are of substantial value, itis norm: ally understood that he will follow the directions of the owner in their use and:this indicates that the owner is a master.” (6) Commission Agents — vestment Planning Corporation v. Social ‘e Court held that no employer- f commission agents. Said In the case of Ini hs Security System,” the Suprem employee relationship exists in the case of the Court: mined the contract forms between petitioner presentatives and found nothing therein that the latter are under the control of “We have exa and its registered Pe which would indicate "15 SCRA 140, 146 221 SCRA 924, 932LABOR LAW 1 f THE LAW ON LABOR STANDARDS sspect to the means and methods they employ in the former im ice of their work. The fact that for certain specified the parformance © ship may be terminlted (e-g.taikiva taitiaal causes the rien of sales, inability to make any sales production the annua’ ‘avNonth period, conduct detrimental to petitioner oe ey roean tbat ately conbeel eciatel ior (ic lenteeaamn oe oe thus specified have no relation to the means and nathods of work that are ordinarily required of or imposed upon employees.” (7) Commission Salesman — In the case of Abante v, Lamadrid Bearing & Parts Co.,* the Supreme Court held that no employer-employee relationship exists with respect to commission salesmen upon the following findings: “Applying the aforementioned test, an employer-employee relationship is notably absent in this case. It is undisputed that petitioner Abante was a commission salesman who received 3% commission of his gross sales, Yet no. quota Was imposed on him by the respondent; such that a dismal performance or even a dead result will not result in any sanction or provide a ground for dismissal. He was not required to report to the office at any time or submit any periodic written report on his sales performance and activities. Although he had the whole of Mindanao as his. base of operation, he was not designated by the respondent to conduct his sales activities at any particular or specific place. He pursued his selling activities without interference or supervision from respondent company and relied on his own resources to perform his functions. Respondent company did not prescribe the manner of selling the merchandise; he was left alone to adopt any style or strategy to entice his cus! While it is true that he occasionally to attend conferences on marketing strategies, it was intended not to control the manner and means to be used in reaching the desired end, but to serve asa guide and to upgrade his skills for tomers. reported to Manila office ales, collection, competitors, market strategies, price listi petitioner during his co; he was under the contr nferences to Manila do not indicate that ‘ol of respondent, xxx"LABOR CODE oF THE CHAPTER 1 QR THE F PHILIPPINES - ~ GENERAL PROVISIONS (8) Insurance Underwriters — In the ¢; 7 Mutual Benefit Association v. NLRC,* eld that no employer- e relationship exists between a mutual benefit ee ceive underwriters. The fact that the insurance underwriters were required to solicit business exclusively for the mutual benefit sociation does not per se indicate the existence of the’ power to control, because the exclusivit restriction springs from a regulation issued by the Insurance Commission, and not from an intention by the mutual benefit association to establish control over the method and manner by which the Msurance agents shall accomplish their work. Neither can the power to control be inferred from the fact that the underwriters were bound ‘by company policies, memo/circulars, rules and regulations issued by the mutual benefit association from time to time. By the nature of the business of soliciting insurance, underwriters are normally left free to devise_ ways and means of persuading people to take out insurance. Said the Court: “xxx Anent the issue of exclusivity in the case at bar, the fact that private respondent was required to solicit business exclusively for the petitioner can hardly be considered as control in labor jurisprudence. Under Memo Circulars No. 2-81 and 2-85, dated December 17, 1981 and August 7, 1985, respectively, issued by the Insurance Commissioner, insurance agents are barred from serving more than one insurance company, in order to protect the public and to enable the insurance companies to exercise exclusive supervision over their agents in their solicitation work. Thus, the exclusivity restriction clearly springs from a regulation issued by the Insurance Commission, and not from an intention by petitioner to establish control over the method and manner by which private respondent shall accomplish his work. xxx “So too, the fact that private respondent was bound by company policies, memo/circulars, rules and regulations issued from time to time is not also indicative of control.” (9) Stevedores/Arrastre Workers — In the case of Hijos de F. Escano v. NLRC,* the Supreme Court held that there is no employer-employee relationship between 4967 SCRA 47LABOR LAW 1 THE LAW ON LABOR STANDARDS a shipping company and the workers of a stevedoring or arrastre company. Said the Court “soxx Stevedoring is not ordinarily included in the business of transporting goods, it (stevedoring) being a special kind of service which involves the loading or unloading of cargo on or from a vessel on port. It consists of the handling of cargo from the hold of the ship to the dock, in case of pier-side loading, or to a barge, in case of unloading at sea. The loading of a ship of outgoing cargo is also part of stevedoring work. Arrastre, upon the other hand, involves the handling of cargo deposited on the wharf or between the establishment of the consignee or shipper and the ship's tackle, Considering that a shipping company is not normally or customarily engaged in stevedoring and arrastre services either for itself or other vessels it contracts with other companies offering those services, The employees, however, of the stevedoring and/or arrastre companies should not be deemed employees of the shipping company, in the absence of showing that the arrastre and/or stevedoring company in fact acted as an agent only of the shipping company. xxx” (10) Sugar Farm Workers — A sugar central does not have privity of any kind with sugar farm workers. Sugar farm workers are the direct responsibility of their respective planters and the central does not deal with the planter's workers but only with the planter. Republic Act No. 809 expressly recognizes the planter, not the central, as the employer of the farm workers by imposing on it the duty of paying its respective workers their share of the proceeds from the milled sugar, (11) Working Scholars There is no employer-employee relationship between students and the school, where students work for the latter in exchange for the privilege to study free of charge.*’ This rule applies only to labor controversies and not to civil suits for damages arising from @ tortious act of a working student. Filamer Christian Institute y. IAC 212 SCRA 637 FACTS: FUNTECHA was a working scholar of FILAMER CHRISTIAN INSTITUTE (FCI). While he was on board the “Victorias Milling Co. v. NLRC, 262 SCRA 623 5"Sec, 14, Rule X, Book III, Rules Implementing the Labor Code Art.1 hel bet Hor cas bet theLABOR Co} CHAPTER oe OF THE PHILIPPINES GENERAL PROVISIONS school jeep, he pe, » he persuade to him. The driver allowe driving the vehicle, FL school teacher, A civil g d the driver to turnover the wheels ved him to drive the vehicle, and while JNTECHA hit an 82-year old retired 7 uit for dama, hen filed against yr 7 an ges was then filed aga FUNTECHA and FCI, FCT claimed that it cannot be held responsible for the tortious act of FUNTECHA on the ground that there is no employer-employee re lationship between them, invoking the provisions of Section 14, Rule X, Book TIT of the Rules Implementing the Labor Code which specifically provides that there is no employer-employee relationship between working scholars and the school where they work. HELD: Section 14, Rule X, Book III of the Rules Implementing the Labor Code is not the decisive law in a civil suit for damages instituted by an injured person against a working student of a school and against the school itself. The said Rule was promulgated only for the purpose of administering and enforcing the provisions of the Labor Code on conditions of employment. It does not apply to civil suits for damages ng from a tortious act of a working student, For purpases of imposing liability for tortious act, FCI is considered an employer and FUNTECHA, an employee, despite the fact that he had no official appointment as driver. It is-Cnough that the driving was for the benefit of FCI (12) Consultants/Visiting Physicians — In the case of Ramos v. Court of Appeals,* the Supreme Court held that the relationship of employer-employee does not exist between hospitals and their consultants or visiting physicians, However, for purposes of allocating liability in medical negligence cases, an employer-employee relationship will be deemed to exist between hospitals and their consultants or visiting physicians. (13) Resident Physicians on Training — ‘As between the resident physician and the training hospital, the relationship of employer-employee will not be deemed to exist (a) the resident physician was engaged pursuant to a training program duly accredited or approved by the appropri- ate government agency; and (b) there is a training agreement between the resident physician and the training hospital.” 321 SCRA 584 Sec, 15, Rule X, Book Ill, Rules Implementing the Labor CodeLABOR LAW 1 aa THE LAW ON LABOR STANDARDS Commencement of Employer-Employee Relationship Employer-employee relationship commences upon hiring of g person as an employee. In the absence of hiring, no actual emploves employee relationship could exist, Suspension of Employer-Employee Relationship The relationship of employer-employee is deemed suspended: (1) when the employee is under preventive suspension; (2) when the employee is serving the disciplinary penalty of suspension; (3) during off-season, in case of regular seasonal employees;* (4) when an employee is laid-off for a period not exceeding six (6) months; and () when an employee is'called upon to fulfill a military or civic duty,* During the period of suspension, entitlement to wages and other benefits is likewise suspended, Termination of Employer-Employee Relationship Employer-employee relationship may be terminated through any of the following modes: () Voluntary resignation; (2) Involuntary resignation (constructive dismissal); (3) Abandonment of employment (constructive resigna- tion); (4) Dismissal for cause; (5) Expiration of employment contract (for fixed-term employees); “Ruga v. NLRC, 181 SCRA 267 Manila Hotel v. CIR, 9 SCRA 184; ICAWO v. CIR, 16 SCRA 562; VISTRAN- CO v. CIR, 19 SCRA 426 “Art, 291, Labor Code “Art. 291, Labor Code Aro BRI Or ‘THE PHILIPPINES ENERAL PROVISIONS @) (7) Completi Piston of project (for project employees); Lay- ‘ay-Off foria period exceeding six (6) months; and pases Proof of Employer-Employee Relationship The issue of whether or not employer-employee relationship exists is a factual question that must be resolved through substantial evidence* onl the basis of the attendant facts and circumstances of each case.“ No particular form of evidence is required to prove the existence of employer-employee relationship, Documentary evidence is not the only means of proving employer-employee relationship, otherwise, no scheming employer would ever be brought before the bar of justice.* Any competent and relevant evidence will suffice. In the absence of time sheets, time record, or payroll, testimonial evidence may be introduced to prove employer-employee relationship.” Registration of an employee by the employer with the Social Security System is proof of employer-employee relationship* because it is unlikely that’a company would report certain persons as its workers, pay their SSS premiums as well as their wages if they were not its employees.” But the relationship of employer-employee should not be imposed when the evidence does not show such a relationship. Employer-employee relationship is created by contract. It cannot be forced upon either party simply upon order of a labor arbiter.” In the words of the Supreme Court in PAMBUSCO v. PAMBUSCO: Employees Union: “The general right to make a contract in relation to one’s business is an essential part of the liberty of the citizens protected by the due process clause of the Constitution. The right of a laborer to sell his labor to such person as he may choose is in essence the same as the right of an employer to purchase “Domasig v. NLRC, 261 SCRA 779 *MAFINCO v. Ople, 70 SCRA 159 “Vinoya v. NLRC, 324 SCRA 469 “Opulencia Ice Plant v. NLRC, 228 SCRA 473 “Flores v. Nuestro, 160 SORA 568 “Corporal v. NLRC, 341 SCRA 658 Yu y, NLRC, 245 SCRA 134 68 Phil, 6412 LABOR LAW 1 j Anau - ‘THE LAW ON LABOR STANDARDS labor from any person whom it chooses. The pmelover eo the employee have thus an equality of right guarantee yy the Constitution. If an employer can compel an employee to work against the latter's will, this is servitude, If the employee can compel the employer to give him work against the employer's will, this is oppression. ART, 2. Date of Effectivity. — This Code shall take effect six (6) months after its promulgation. COMMENT: Effectivity of the Labor Code The Labor Code was promulgated on May 1, 1974. It took effect on November 1, 1974." ART. 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. COMMENT: Reason for Affording Protection to Labor Protection to labor is intended to raise the worker to equal footing with the employer and shield him from abuses brought about by the necessity for survival. As aptly stated by the Supreme Court in Sanchez v. Harry Lyons:** “xxx In the matter of employment bargaining, there is no doubt that the employer stands on higher footing than the employee, First of all, there is greater supply than demand for labor. Secondly, the need for employment by labor comes from vital and even desperate necessity. Consequently, the law must protect labor, at least to the extent of raising him to equal footing in bargaining relations with capital and to shield him from abuses brought about by the necessity for survival.” “Asuncion Bros. & Co. v. CIR, 163 SCRA 596 587 Phil. 532Article 24 of the Civ aa relations, nt of his moral ness, tender age for his Protection.” il Code ordains that “in when one of the parties dependence, ignorance, or other handicap, the courts must be vigilant Extent of the Protection Protection to lab overseas, organized ca extends to all employees — local and vate sectors. The one nnoreanized, whether in the public or p orecsiv cee protective mantle is available not only against ae ployers but also against unscrupulous union leaders. As succinctly stated by the § e Court in the Heirs o, y the Supre: Y s Toile Crise preme Court in the case of Heirs of ‘Just as this Court has stricken down unjust exploitation of laborers by oppressive employers, so will it strike down their unfaitetreatment by their own ‘unworthy leaders, The constitution énjoins the'State to afford protection to labor. Fair dealing is equally demanded of unions as well as of employers in their dealings with employees. The union has been evolved as an organization. of collective strength for the protection of labor against the unjust exactions of capital, but equally important is the requirement of fair dealing between the union sea te members, which is fiduciary in nature, and arises out of tne factors: ‘one is the degree of dependence of the individual tmployee on the union organization; the other, a corollary of tre feet, is the comprehensive power vested in the union with respect to the individual” The union may be considered but the agent of its members for the purposé of securing for them fair aac ot wages and good working conditions and is subject to the obligation of giving the members as its principals all information 3 and labor matters entrusted to it. xxx the union relevani ae bar was recreant in its duty towards leadership in the cas® # arently having failed to disclose to the union members #® Sf eituation of their judgment: credit the union memo (> wit, that: they were in the advantageous aa Laing abla wnforeement of the respondent position of being Oe posit order, and in presuming that it had court’s P200,000.00-0 Mr quitclaim the estimated P423,756.74.- authority to waive © ers for the unconscionable in mem judgment cred Bin vahich had already been rejected by the amount of P110, workers.” requireLABOR LAW 1 = THE LAW ON LABOR STANDARDS Limitations Protection to labor is not meant to be a sword to oppress employers.” It cannot be used as a pretext to defeat the rights ang prerogatives of an employer. The State affords constitutional blanket of rendering protection to labor, but it must also protect the right of employers to exercise what are clearly management prerogatives, ag Jong as it is exercised without abuse of discretion.” For example, ig an employee is found guilty of violating rules designed for the safety of the employees themselves, his dismissal should be upheld. In thig manner, labor is protected and at the same time the employer is given its due.“ Indeed, protection to labor cannot be extended to an employee found guilty of malfeasance or misfeasance because the law, in protecting the rights of labor authorizes neither oppression nor self-destruction of the employer.” Protection to labor cannot be invoked where both parties haye violated the law because in such a case, neither party is entitled to protection.” Neither can protection to labor be used as an excuse to distribute charities at the expense of an employer. Courts cannot, under the guise of affording protection to labor, render judgment on the basisofsympathies and inclinations, and consequently, distribute charities at the expense of the employer, because our constitutional government assures the latter against deprivation of property except in accordance with the statutes and supplementary equitable principles." Indeed, the benevolent policy of the Constitution and the laws towards the laborer does not oblige the courts to be unjust and unfair to employers. As a ‘ptly stated by the Supreme Court in Federation of Free Farmers v. Court of Appeals: “xoxx After all in the eyes of all fair-minded men, injustice to the more affluent and fortunate sectors of society cannot be less condemnable and reprehensible, and should be avoided as much as injustice to labor and the poor. It is divinely compassionate no doubt to afford more in law those who have less in life, but clear injustice to anyone amounts definitely to injustice to everyone, and all hopes for judicial redress for wrongdoings would vanish, “Sarocam v. Interorient Maritime, 493 SCRA 502 *"Pantranco North Express v. NLRC, 314 SCRA 740 “Northern Motors v. National Labor Union, 102 Phil, 958 “Manila Trading and Supply Co. y, Zulueta, 69 Phil. 485 “PAMBUSCO Employees Union v. CIR, 68 Phil, 691 “Caltex v. Philippine Labor Organization, 92 Phil. 1014 “107 SCRA 352, 463 Arte 4 imny Cor be co Ap Th pre no evi the cot ReArt : CHAI CODE OF THE PHILIPPINES 29 “R1— GENERAL PROVISIONS if the even hand of the law to favor anyone or any group or level Ttis Verily not an exagger hat uphold and afford real repel the forces of malcontent en and without loss of lives devastation, than the bes justice and equity were to be made 1 of society, whoever they ation to assert that in a sense, justice can hold back and even id subversion more effectively Gnd blood and without destruction or equipped regiments of saldiers of the army. Justice mibireal and dagpeel Cettes Ane Horie Jaw must always prevail, and courts are inexorably expected to do justice to every men at all times The Supreme Court yields to no one in that respect, That is ite eacred duty and ita sworn pledge that will remain unbroken Tuat caelum.” ART. 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, COMMENT: Applicability Article 4 of the Labor Code applies only when there is a doubt. The doubt could pertain to interpretation of the law or of the evidence presented by the employer. But when there is no doubt, there is no room for interpretation or construction. Therefore, where the evidence is clear that an employee is not an asset but a liability that delays production and sets a bad example to his co-workers, the courts should not hesitate to confirm or order his dismissal." Reason for the Law Doubts are resolved in favor of labor in line with the principle that those who have less in life should have more in law. When conflicting interest of labor and capital are weighed on the scales of social justice, the heavier influence of the latter must be counterbalanced by the sympathy and compassion the law must accord the underprivileged worker. A contrary ruling would be a dilution and emasculation of the protection to labor clause of the Constitution.” 'Penaflor v. Outdoor Clothing Mfg. Corp., 610 SCRA 497 “Corporal v. ECC, 235 SCRA 165 "Caltex v. Philippine Labor Organization, G.R. L-9915, May 27, 1959 “Eastern Shipping Lines v. POBA, 166 SORA 523 °™MD Transit v. Estrella, 113 SCRA 878LABOR LAW 1 a THE LAW ON LABOR STANDARDS Arts Limitation Liberal construction is not a license to disregard the evide on record or misapply the law. Despite the mandate to constm, labor laws liberally in favor of labor, the fundamental principles of due process should sternly be applied on both the poor and tha rich in order to attain proper justice.” Never should the scales 6p Justice be tilted in favor of labor if it would result in injustice to tha employer — justitia nemini neganda est (Justice is to be denied to no one).* ART. 5. Rules and Regulations. — The Department of Labor and other government agencies charged with the administration and enforcement of this Code or any of ity parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation. COMMENT: Rule-Making Power Article 5 is a grant of quasi-legislative power to the Department of Labor and Employment and other government agencies charged with the administration and enforcement of the Labor Code or any part thereof. Limitation on the Rule-Making Power In the exercise of their rule-making power, the said agencies cannot enlarge or amend the provisions of the Labor Code. Chartered Bank Employees v. Ople 138 SORA 273 FACTS: In im Code on holiday p promulgated Sect plementation of the provision of the Labor ay, the Secretary of Labor and Employment jon 2, Rule IV, Book III of the Rules and — “Escarcha v. Leonis Navigation, 628 SCRA 423 “"Magalona v. WCC, 101 Phil. 441 PLDT v. Balbastro, 519 SCRA 233; Ledesma v. NLRC, 537 SCRA 858 “Insular Bank v, Ing :ca CODE OF THE PHILIPPINES 1— GENERAL PROVISIONS Regulations Implementing the Labor Code which provides that ‘e)mployees who are uniformly paid by the month irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month, whether worked or not.” The validity of the aforequoted provision was challenged on the ground that it adds another group of employees from the exclusions provided for in Article 82 of the Labor Code HELD: Section 2, Rule IV, Book III of the Labor Code is not valid because it expands the provisions of Article 82 of the Labor Code. Article 82 of the Labor Code states who are excluded from the coverage of the law on holiday pay, among others. “Employees who are uniformly paid by the month” are not among those excluded. Considering that Section 2, Rule IV, Book III of the Implementing Rules adds another excluded group, namely: “employees who are uniformly paid by the month,” the statutory provision, in effect, enlarged, While the additional exclusion is only in the form ofa présumption that all monthly paid employees have already been paid holiday pay, it constitutes a taking away ora deprivation which must be in the law if it is tovbe valid. An administrative interpretation which diminishes the benefits of labor more than what the statute delimits or withholds is obviously ultra vires. Effectivity of Implementing Rules The rules and regulations implementing the Labor Code were promulgated on January 19, 1975 and took effect on February 3, 1975, except those relating to self-executing provisions of the Labor Code which became effective on November 1, 1974. Rules and regulations that may subsequently be promulgated shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation, ART. 6. Applicability. — All rights and benefits granted to workers under this Code shall, except as may otherwise be provided herein, apply alike to all workers, whether agricultural or non-agricultural.” 7s amended by P.D. No. 570-ALABOR LAW 1 ; ‘) THE LAW ON LABOR STANDARDS COMMENT: Two Facets of the Law i s tha st be consi, There are two (2) important points that must be considered iq this provision, name! (1) the co’ ge clause, i.e., “shall apply alike to aly workers"; and (2) the exclusionary clause, i.e., “except as may other wig be provided.” The Coverage Clause The “workers” referred to in Article 6 of the Labor Code are employees in the private sector only, which means that the Labor Code generally applies only to employees of private establishmenig Except for the provisions on Employees Compensation, the Labor Code does not apply to employees of the Government because government employees are governed by the Civil Service Law, Regarding government-owned or contr ‘olled corporations, the applicability of the Labor Code will depend upon the manner of their creation. Thus: (1) If created by special charter — not Labor Code; (2) If organized under the Corporation Law — covered by the Labor Code.” covered by the The Exclusionary Clause The phrase “except as may otherw Article 6 of the Labor Code means that under the L in the priy: ise be provided” stated in © some rights and benefits sabor Code are not available to certain types of employees ‘ate sector. These rights and benefits are: (1) The right to form, join, or assist in the formation of any labor organization is not available to managerial employees;"* 'PNOC v. Leogardo, 175 SCRA 26; PNOC v. NLRC, 201 SCRA 487 "Art, 250, Labor CodeLider Cote Leber Coke Leber Cote Labor Cote Labor Cote t. GS, Lalor Cote “hat. Bs, Latoor Colle “Tes Kesambalay Lew graste domestic workers the right to Sve-day service ve pave anh a weekly reat Gey het. 02, Ldbsor Cote "per. 94, Ldlsor Cote Art. Gi, Ldlooe Cote “het. WIL, Latean CoeCHAPTER II EMANCIPATION OF TENANTS. ART. 7, Statement of Objectives. — Inasmuch as the oq concept of land ownership by a few has spawned valid 4 legitimate grievances that gave rise to violent conflict ang social tension and the redress of such legitimate grievances being one of the fundamental objectives of the New Society, it has become imperative to start reformation with the emancipation of the tiller of the soil from his bondage. COMMENT: The Tenant Emancipation Law This Chapter is a reproduction of Presidential Dectee No, 27, otherwise known as the Tenant Emaneipation Law. Applicability of the Law The Tenant Emancipation Law applies only to private agricultural lands primarily devoted to rice and corn under share tenancy or lease-tenancy. It supplements the |Comprehensive Agrarian Reform Law. ART. 8. Transfer of Land to Tenant-Workers, — Being a vital part of the labor force, tenant-farmers on private agricultural lands primarily devoted to rice and corn under a system of share crop or lease tenancy whether classified as landed estate or not, shall be deemed owner of a portion constituting a family-size farm of five (5) hectares, if not irrigated and three (3) hectares if irrigated. In all cases, the landowner may retain an area of not more than seven (7) hectares if such landowner is cultivating or will now cultivate it, *See. 75, R.A. No. 6657DE OF THE PHILIPPINES CHAPTER II — EMANCIPATION OF TENANTS COMMENT: Meaning of “Shall be Deemed Owner” The phrase ‘shall be deemed owner” does not mean automatic transfer of title or ownership of the land to the tenant or lessee. There has to be full payment of just compensation. before the Jandowner could be divested of his land, otherwise, the land would be taken without just compensation in violation of the constitutional injunction against taking of private property without Just compensation. Therefore, notwithstanding the phrase “shall be deemed owner,” the title and ownership over the land will be transferred to the beneficiaries only upon full payment of the just compensation to the landowner, Size of Land to Be Transferred to the Tenant-Farmer The tenant-farmer is entitled to: (1) _ five (6) hectares if not irrigated; or (2) three (8) hectares if irrigated, Stages of Land Transfer The land transfer under Presidential Decree No. 27 is effected in two (2) stages, namely: (1) Issuance of a Certificate of Land Transfer (CLT) to the farmer-beneficiary; and (2) Issuance of Emancipation Patent (EP). Significance of the Certificate of Land Transfer (CLT) The CLT does not vest upon the tenant-beneficiary ownership over the land. It merely qualifies the tenant-beneficiary to possess the land and comply with certain conditions preparatory to ownership. If the tenant-beneficiary complies with the conditions, he is issued an Emancipation Patent.’ “Heirs of Dr. Jose Deleste v. Land Bank, 651 SORA 352 *Levardo v. Yateo, 582 SCRA 98; Vinzons-Magana v. Estrella, 201 SCRA 536LABOR LAW 1 ‘THE LAW ON LABOR STANDARDS Significance of an Emancipation Patent (EP) The EP vests upon the farmer-beneficiary absolute ownership ver the landholding, and it constitutes conclusive authority for the issuance of an original or transfer certificate of title in his names Indefeasibility of EPs EPs are titles brought under the operation of the Torrens system. Henee, they are conferred with the same indefeasibility ang security as provided for by Presidential Decree No. 1529, as amended by Republic Act No. 6732. Emancipation patents become indefeasible and imprescriptible after one (1) year from its registration with the Office of the Registry of Deeds, subject to the conditions, limitations and qualifications under Comprehensive Agrarian Reform Law, the Property Registration Decree, and other pertinent laws. This is provided for in Section 24 of the Comprehensive Agrarian Reform Law, the pertinent portion of which reads as follows: “SECTION 24. Award to Beneficiaries. — The rights and responsibilities of the beneficiaries shall commence from their receipt of a duly registered emancipation patent or certificate of land ownership award and their actual physical possession of the awarded land. Such award shall be completed in not more than one hundred eighty (180) days from the date of registration of the title in the name of the Republic of the Philippines: Provided, That the emancipation patents, the certificates of land ownership award, and other titles issued under any agrarian reform program shall be indefeasible and imprescriptible after one (1) year from its registration with the Office of the Re. try of Deeds, subject to the conditions, limitations and qualifications of this Act, the property registration decree, and other pertinent laws. The emancipation patents or the certificates of land ownership award being titles brought under the operation of the Torrens system, are conferred with the same indefeasibility and security afforded to alll titles under the said system, as provided for by Presidential Decree No. 1529, as amended by Republic Act No. 6732.”LABOR ; CODE OF THE p: 7 CHAPTER y OP THE PHILIPPINES ~ EMANCIPATION OF TENANTS Grounds for Cancellation of EPs Emancipation P, aes atents may be cancelled on the followin Be (1) Abandonment of the land; @) Neglect or misuse of land:8 @) Failure to pay three (3) annual amortization;® (4) Misuse or diversion of financial and support services () Sale, transfer or conveyance of the right to use the land;* and (6) Ilegal conversion of the land» Retention Right of Landowner Under the law, the landowner is entitled to retain an area of not more than seven (7) hectares, if he is cultivating it or will cultivate it. Article 8 of the Labor Code thus provides that: “ART, 8. Transfer of Land to Tenant-Workers — xxx In all cases, the landowner May retain an area of not more than seven (7) hectares if such landowner is cultivating or will now cultivate it.” Personal cultivation by the landowner is not required — cultivation can be done indirectly through labor administration. Retention Right Under P.D. No. 27 vis-a-vis Retention Right Under the CARL If the landowner has already exercised his right of retention under Presidential Decree No. 27, he can no longer exercise the retention right under Comprehensive Agrarian Reform Law. But he can keep the seven-hectare retention limit granted under Presidential Decree No. 27.2 Sec. 22, Comprehensive Agrarian Reform Law "Sec. 26, Comprehensive Agrarian Reform Law ‘Sec. 37, Comprehensive Agrarian Reform Law "Sec. 73, Comprehensive Agrarian Reform Law “Sec. 73, Comprehensive Agrarian Reform Law ‘Sec, 2(b), DAR Administrative Order 05-00 "Sec. 6, Comprehensive Agrarian Reform Law as amendedLABOR LAW 1 ‘THE LAW ON LABOR STANDARDS, Any, p yner chooses to retain five! (5) hectares = eae a "Referral Law, the seven (7) hee Jomprehensive Agraria ’ nr retained by him under Presidential Decree No, 97 4 peed cere placed under the coverage of the compra hensive agrarian reform law.” The Tenant-Farmer Will Pay the Land Bank The farmer-beneficiary or his heirs will pay the Land Bank total costs of the land plus interest at the rate of six percent 6 annum for twenty (20) years in twenty (20) equal annual a tions, The Emancipation Patent will be i ciary after full payment of the amortizatio: Order No. 228 provides that: %) pep ‘mortiza. ued to the farmer-beno s. Section 6 of Executive “SECTION 6. The total costs of the land inchiding interest at the rate of six percent, (6%) per anniem with a two percent (2%) rebate for amortizations paid on time, shall be paid by the farmer-beneficiary or his heirs to the Land Bank over a period of up to twenty’ (20) years in twenty (20) equal annual amortizations, Lands already valued and financed by the Land Bank are likewise extended a 20-year period of payment of twenty (20) equal annual amortizations. However, the farmer- beneficiary if he so elects, may pay in full before the twentieth year or may request the Land Bank to structure a repayment Period of less than twenty (20) years if the amount to be financed and the corresponding annual obligations are well within the farmer's capacity to meet, Ownership of lands acquired by the farmer-beneficiary may be transferred after full payment of amortizations,” Failure on the part of the farmer-beneficiary to pay three @) izations shall cause j the Land Bank to foreclose the mortgage.14 The tenant-farmer, or any of his compulsory heirs may lift the foreclosure within a period of two (2) years from its registration} a Paying the Land Bank all unpaid amortizations on the land wi iterest thereon of six percent (6%) per annum, 7 al = aeArts. 9-10 LABOR ct DE I CHAPTER ooo OF THE PHILIPPINES EMANCIPATION OF TENANTS If the tenant-farmer or any of h compulsory heirs does not take steps to lift the foreclosure within the two-year period, owner- ship of the land will be transferred to thé Land Bank.” Thereafter, the Land Bank, not later than three (3) months after its acquisition of the land, shall sell the foreclosed land to any interested landless farmer duly certified to'as a bona fide landless farmer by'the De- partment of Agrarian Reform, the barangay or the two (2) closest barangays where the land is situated. Payment of Just Compensation to Landowner ‘The just compensation is payable to the landowner through any of the following modes, at the option of the landowner: (1) Direct payment to the landowner by the farmer: beneficiaries, in cash or in kind, on terms to be mutually agreed upon by the beneficiaries and landowners and subject-to the approval of the Department of Agrarian Reform; (2) Payment by the Land’ Bank with 10% payable in cash immediately and the balance payable in the form of Land Banik bonds over a ten-year period, with 1/10 of the face value maturing every year until the 10th year; and (8) Other modes of payment as may be prescribed or approved by the Presidential Agrarian Reform Council.” Lease rentals paid to the landowner by the farmer beneficiary after October 21, 1972 is considered as advance payment for the lands ART. 9, (superseded by Executive Order 228) ART. 10. Conditions of Ownership. — No title to the land acquired by the tenant-farmer under Presidential Decree No. 27 shall be actually issued to him unless and until he has become a full-fledged member of a duly recognized farmers’ cooperative. Sec. 10, £.0. No. 228 "Sec. 11, B.0. No. 228 ec. 8, B.O. No. 228 ec. 2, B.0, No, 228LABOR LAW 1 Art, : NDARDS u Title to the land acquired pursuant to Presidentig, Decree No. 27 or the Land Reform Program of the Governmeng shall not be transferable except by hereditary suecessig, or to the Government in accordance with the provisions dt Presidential Decree No. 27, the Code of Agrarian Reform, and other existing laws and regulations.” COMMENT: Tenant-Beneficiary Cannot Sell or Transfer Ownership of the Lang The tenant-beneficiary cannot sell or transfer ownership of the land which he acquired under the Tenant Emancipation Law, except to the Government or by hereditary succession Meaning of Hereditary Succession Hereditary succession means succession by intestate succes. sion or by will to the compulsory heirs — it does not pertain to sue: J cession to other persons. The prohibition against transfer to persone other than the heirs of the agrarian reform beneficiary stems from the policy of the Government to develop generations of farmers to at tain its avowed goal to have an adequate and sustained agricultural production with certitude, Such objective will not see the light of the day if lands covered by agrarian reform can easily be converted t0 non-agricultural purposes,” ART. 11. Implementing Agency. — The Department of Agrarian Reform shall promulgate the necessary rules and regulations to implement the provisions of this Chapter. COMMENT: Jurisdiction Over Retention or Exemption Issues Issues pertaining to retention rights of the landowner and the exclusion or exemption from agrarian reform coverage are cognizable by the Secretary of the Department of Agrarian Reform because the pertain to administrative implementation of agrarian law.” ‘As amended by B.P. Blg, 32 HBstate of the Late Encarnacion Vda, de Panlilio v. Dizon, 686 SCRA 565 “Sta. Ana v. Carpo, 572 SCRA 483; Magno v, Francisco, 61¢-30RA 0H Art. 11 Jurisd ! paten SecretLABOR CopE, OF THE PHILIPPINES CHAPTER I F THE PHILIPPIN! EMANCIPATION OF TENANTS Jurisdiction Over Cancellation of EPs All cases involving the cancellation of registered emancipation patents are within the exclusive and original jurisdiction of the Secretary of the Department of Agrarian Reform.” "Sec, 24, Comprehensive Agrarian Reform Law