PRE-EMPLOYMENT AND RECRUITMENT

A. Pre-Employment
1. Employment Contracts
Article 4. Construction in Favor of Labor. All doubts in the implementation and
interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor.
Leyte Geothermal Power Progressive Employees Union - ALU – TUCP vs.
Philippine National Oil Company - Energy Development Corporation,
NB: Article 280 of the Labor Code, as worded, establishes that the nature of
the employment is determined by law, regardless of any contract expressing
otherwise. The supremacy of the law over the nomenclature of the contract
and the stipulations contained therein is to bring to life the policy enshrined
in the Constitution to “afford full protection to labor.”10 Thus, labor
contracts are placed on a higher plane than ordinary contracts; these are
imbued with public interest and therefore subject to the police power of the State.

2. Prohibited Stipulations
a) Article 136, Labor Code of the Philippines.

“Art. 136. Stipulation against marriage. It shall be unlawful for an employer to

require as a condition of employment or continuation of employment that a
woman employee shall not get married, or to stipulate expressly or tacitly that
upon getting married, a woman employee shall be deemed resigned or
separated, or to actually dismiss, discharge, discriminate or otherwise prejudice
a woman employee merely by reason of her marriage.”

b) Article 248(b), Labor Code of the Philippines.

“To require as a condition of employment that a person or an employee shall

not join a labor organization or shall withdraw from one to which he belongs;”

c) Article 135, Labor Code of the Philippines as amended by Republic Act 9710,
otherwise known as the Magna Carta for Women.

“Art. 135. Discrimination prohibited. It shall be unlawful for any employer to

discriminate against any woman employee with respect to terms and conditions
of employment solely on account of her sex.”
The following are acts of discrimination:
a. Payment of a lesser compensation, including wage, salary or other form of
remuneration and fringe benefits, to a female employees as against a male
employee, for work of equal value; and
b. Favoring a male employee over a female employee with respect to promotion,
training opportunities, study and scholarship grants solely on account of
their sexes.”
d) Article 140, Labor Code of the Philippines.

“Art. 140. Prohibition against child discrimination. No employer shall

discriminate against any person in respect to terms and conditions of
employment on account of his age.”
3. Restrictive Covenants in Employment Contracts
Elements to a valid restrictive covenant
In determining whether the contract is reasonable or not, the trial court should consider the
following factors:
(a) whether the covenant protects a legitimate business interest of the employer;
(b) whether the covenant creates an undue burden on the employee;
(c) whether the covenant is injurious to the public welfare;
(d) whether the time and territorial limitations contained in the covenant are reasonable;
and
(e) whether the restraint is reasonable from the standpoint of public policy
B. Classification of Employment
Article 295. Regular and casual employment. The provisions of written agreement to the
contrary notwithstanding and regardless of the oral agreement of the parties, an
employment shall be deemed to be regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade of
the employer, except where the employment has been fixed for a specific project or
undertaking the completion or termination of which has been determined at the time of the
engagement of the employee or where the work or service to be performed is seasonal in
nature and the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding
paragraph: Provided, That any employee who has rendered at least one year of service,
whether such service is continuous or broken, shall be considered a regular employee with
respect to the activity in which he is employed and his employment shall continue while
such activity exists (280).
1. Classification Based on Nature of Position
a) Regular Employment
b) Casual Employment
c) Seasonal Employee
d) Project Based Employment
e) Fixed-Term Employment

a) Regular Employment
Regular Employees
are those who have been engaged to perform activities which are usually necessary
or desirable in the usual business or trade of the employer even if the parties enter
into an agreement stating otherwise.

Bustamante v. NLRC (1996)

Even if work of employee is not necessary or desirable to the business, having rendered
non-continuous or broken service for more than one year, are still considered regular
employees.
Pure Foods Corporation vs. NLRC, et. al. (1997)
The two kinds of regular employees are:
(1) those who are engaged to perform activities which are necessary or desirable in the
usual business or trade of the employer; and
(2) those casual employees who have rendered at least one year of service, whether
continuous or broken, with respect to the activity in which they are employed.
b) Casual Employment
Mercado v NLRC (1991)
The second paragraph of Art. 280 demarcates as “casual” employees, all other employees
who do not fall under the definition of the preceding paragraph. The proviso, in said second
paragraph, deems as regular employees those “casual” employees who have rendered at
least one year of service regardless of the fact that such service may be continuous or
broken.
c) Seasonal Employee
Hacienda Bino/Hortencia Starke, Inc. vs. Candindo Cuence (2005)
The primary standard for determining regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual trade or
business of the employer; For certain farm workers to be excluded from those classified as
regular employees, it is not enough that they perform work or services that are seasonal in
nature—they must have been employed only for the duration of the season.
REGULAR SEASONAL EMPLOYEES
Manila Hotel Company vs. Court of Industrial Relations (1963)
Where it appears that the questioned employees were never separated from the
service but their status is that of regular seasonal employees who are called to work
from time to time, mostly during summer season, and the nature of their
relationship with the hotel is such that during off season they are temporarily laid off
but during summer season they are re-employed, or when their services are needed,
and they are not strictly speaking separated from the service but are merely
considered as on leave of absence without pay until they are re-employed, it is held
that their employment relationship is never severed but only suspended, and, as
such, they can be considered as in the regular employment of the hotel.

d) Project Based Employment

Department Order No. 10 (Series of 1997)
ARTICLE IV. Section 5, Rule I, Book VI of the Implementing Rules of the Labor Code is hereby
amended, to read as follows:
"Section 5. (a) Regular employment. - The provisions of written agreements to the contrary
notwithstanding and regardless of the oral agreements of the parties, employment shall be
deemed regular for purposes of Book VI of the Labor Code where 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 job, work or service to be performed
is seasonal in nature and the employment is for the duration of the season."

ALU-TUCP, et. al. vs. NLRC (1994)

Second paragraph of Article 282 of the Labor Code, providing that an employee who served
for at least one (1) year, shall be considered a regular employee, relates to casual
employees, not to project employees.
Judy O. Dacuital vs. L.M. Camus Engineering Corporation (2010)
Effect of failure to present written contract of project employment -presumption that the
employees were not informed of the nature and duration of their employment.
Gadia v. Sykes Asia, Inc. (2015)
For an employee to be considered project-based, the employer must show compliance with
2 requisites, namely that:
(a) the employee was assigned to carry out a specific project or undertaking; and
(b) the duration and scope of which were specified at the time they were engaged for such
project.
Employment contracts need not state an actual date as to when their employment would
end, opining that it is enough that such date is determinable. The duration of the
undertaking begins and ends at determined or determinable times’" while clarifying that the
phrase ‘determinable times’ simply means capable of being determined or fixed."

D.M. Consunji v. Gobres (2010)

If the termination is brought about by the completion of the project, no prior notice is
required.
Work Pool
Maraguinot, Jr. et. al., v. NLRC and Viva Films (1998)
A project employee or a member of a work pool may acquire the status of a regular
employee when the following concur:
1) There is a continuous rehiring of project employees even after cessation of a project; and
2) The tasks performed by the alleged “project employee” are vital, necessary and
indispensable to the usual business or trade of the employer.
e) Fixed-Term Employment
Brent School Inc. v Ronaldo Zamora, et. al, (1990)
The decisive determinant in term employment is not the nature of the activities performed
by the employee, but the “day certain” agreed upon by the parties for the commencement
and termination of their employment relationship.
Stipulations in employment contracts providing for “term employment” or “fixed period
employment” are valid when
1. the period where agreed upon knowingly, and voluntarily by the parties without
force, duress or improper pressure exerted on the employee; and
2. when such stipulations were not designed to circumvent the laws on security of
tenure.

When term employment cannot be said to be in circumvention of the law on security of

tenure:
1) The fixed period of employment was knowingly and voluntarily agreed upon by the
parties without any force, duress, or improper pressure being brought to bear upon the
employee and absent any other circumstances vitiating his consent; or
2) It satisfactorily appears that the employer and the employee dealt with each other on
more or less equal terms with no moral dominance exercised by the former or the latter.
2. Classification Based on Duties and Responsibilities
ART 212, LABOR CODE
a) Rank and File Employees
All employees not falling within any of the above definitions are considered rank-
and-file employees for purposes of this Book.

b) Supervisory Employees
Supervisory employees are those who, in the interest of the employer, effectively
recommend such managerial actions if the exercise of such authority is not merely
routinary or clerical in nature but requires the use of independent judgment.
c) Managerial Employees
Managerial employee" is one who is vested with powers or prerogatives to lay
down and execute management policies and/or to hire, transfer, suspend, lay off,
recall, discharge, assign or discipline employees.
 3. Special Types of Employment

a) Learners
Article 73. Learners defined. Learners are persons hired as trainees in semi-skilled and other
industrial occupations which are non-apprenticeable and which may be learned through
practical training on the job in a relatively short period of time which shall not exceed three
(3) months.
Omnibus Rules: Book II, Rules VI-VII
Section 6. Employment of minors as learners. — A minor below fifteen (15) years of age shall
not be eligible for employment as a learner. Those below eighteen (18) years of age may
only be employed in non-hazardous occupations.

b) Apprentices
Article 58. Definition of Terms. As used in this Title:
"Apprenticeship" means practical training on the job supplemented by related theoretical
instruction.
An "apprentice" is a worker who is covered by a written apprenticeship agreement with an
individual employer or any of the entities recognized under this Chapter.
An "apprenticeable occupation" means any trade, form of employment or occupation which
requires more than three (3) months of practical training on the job supplemented by
related theoretical instruction."
Apprenticeship agreement" is an employment contract wherein the employer binds himself
to train the apprentice and the apprentice in turn accepts the terms of training.
Omnibus Rules Implementing the Labor Code (BOOK II)
RULE VI
Apprenticeship Training and Employment of Special Workers
Section 11. Qualifications of apprentices. — To qualify as apprentice, an applicant shall:
(a) Be at least fifteen years of age; provided those who are at least fifteen years of age but
less than eighteen may be eligible for apprenticeship only in non-hazardous occupations;
(b) Be physically fit for the occupation in which he desires to be trained;
(c) Possess vocational aptitude and capacity for the particular occupation as established
through appropriate tests; and
(d) Possess the ability to comprehend and follow oral and written instructions.
Section 29. Wages. — The wage rate of the apprentice shall start at seventy five (75%) per
cent of the statutory minimum wage for the first six (6) months; thereafter, he shall be paid
the full minimum wage, including the full cost of living allowance.
Section 19. Apprenticeship period. — The period of apprenticeship shall not exceed six (6)
months.
Century Canning Corporation vs. CA (2007)
RA 7796 has transferred the authority over apprenticeship programs from the Bureau of
Local Employment of the DOLE to the TESDA
An apprenticeship agreement which lacks prior approval from the TESDA is void. Prior
approval from the TESDA is necessary to ensure that only employers in the highly technical
industries may employ apprentices and only in apprenticeable occupations.
Where a worker is not considered an apprentice because the apprenticeship agreement was
enforced before the TESDA’s approval of the apprenticeship program, the worker is deemed
a regular employee.

c) Foreign or Alien Employment

Articles 40-42, Labor Code of the Philippines
EMPLOYMENT OF NON-RESIDENT ALIENS
Article 40. Employment permit of non-resident aliens. Any alien seeking admission to the
Philippines for employment purposes and any domestic or foreign employer who desires to
engage an alien for employment in the Philippines shall obtain an employment permit from
the Department of Labor.
The employment permit may be issued to a non-resident alien or to the applicant employer
after a determination of the non-availability of a person in the Philippines who is
competent, able and willing at the time of application to perform the services for which the
alien is desired.
For an enterprise registered in preferred areas of investments, said employment permit may
be issued upon recommendation of the government agency charged with the supervision of
said registered enterprise.
Article 41. Prohibition against transfer of employment. After the issuance of an employment
permit, the alien shall not transfer to another job or change his employer without prior
approval of the Secretary of Labor.
Any non-resident alien who shall take up employment in violation of the provision of this
Title and its implementing rules and regulations shall be punished in accordance with the
provisions of Articles 289 and 290 of the Labor Code.
In addition, the alien worker shall be subject to deportation after service of his sentence.
Article 42. Submission of list. Any employer employing non-resident foreign nationals on the
effective date of this Code shall submit a list of such nationals to the Secretary of Labor
within thirty (30) days after such date indicating their names, citizenship, foreign and local
addresses, nature of employment and status of stay in the country. The Secretary of Labor
shall then determine if they are entitled to an employment permit.
Almodiel v NLRC (1993)
Article 40 of the Labor Code which requires employment permit refers to non-resident
aliens (not to resident aliens). The employment permit is required for entry into the country
for employment purposes and is issued after determination of the non-availability of a
person in the Philippines who is competent, able and willing at the time of application to
perform the services for which the alien is desired.

WPP Marketing Communications, Inc. vs. Jocelyn M. Galera (2010)

Galera, an alien, worked in the Philippines without a proper work permit but now wants to
claim employee’s benefits under Philippine labor laws. The law and the rules are consistent
in stating that the employment permit must be acquired prior to employment. Hence,
Galera could not claim employee’s benefits.
Dreamland Hotel Resort v Stephen B. Johnson (2014)
Permanent Alien Residents are exempted from the requirement of securing an AEP as
expressed under Department Order No. 75-06, Series of 2006 of t he DOLE.
C. Hiring Policies/Standards
1. Management Prerogative
Armando G. Yrasuegi vs. Philippine Airlines, Inc. (2008)
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—qualification
referred to as bona fide occupational qualification (BFOQ).
2. Women
Article 135. Discrimination prohibited. It shall be unlawful for any employer to discriminate
against any woman employee with respect to terms and conditions of employment solely on
account of her sex.
The following are acts of discrimination:
1. Payment of a lesser compensation, including wage, salary or other form of
remuneration and fringe benefits, to a female employee as against a male employee,
for work of equal value; and
2. Favoring a male employee over a female employee with respect to promotion,
training opportunities, study and scholarship grants solely on account of their sexes.

3. Solo Parent
Section 7, RA 8972, otherwise known as the Solo Parents"#Welfare Act of
2000
Section 7. Work Discrimination. - No employer shall discriminate against any solo parent
employee with respect to terms and conditions of employment on account of his/her status.

4. Persons with Disabilities

Title One, Chapter I, Section 4(k), the Magna Carta for Disabled Persons
Section 4. Definition of Terms. — For purposes of this Act, these terms are defined as
follows:
(k) Marginalized Disabled Persons refer to disabled persons who lack access to rehabilitative
services and opportunities to be able to participate fully in socioeconomic activities and who
have no means of livelihood and whose incomes fall below the poverty threshold.
Bernardo v. NLRC (1999)
The Magna Carta for Disabled Persons mandates that a qualified disabled employee should
be given the same terms of employment as a qualified able-bodied person. This being so,
petitioners are thus covered by Art. 286 of the Labor Code which defines regular
employment to be that the employee has been engaged to perform activities usually
necessary or desirable in the usual business or trade of the employer.
 The task of counting and sorting bills is necessary to the business of respondent
bank. Except for sixteen of them, the petitioners performed these tasks for more
than six months. Therefore, the 27 petitioners should be deemed regular employees
entitled to security of tenure.

D. Recruitment and Placement

1. Recruitment and Placement Defined

Article 13 (b), Labor Code of the Philippines
Article 13. Definitions.
"Recruitment and placement" refers to any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring or procuring workers, and includes referrals, contract services,
promising or advertising for employment, locally or abroad, whether for profit or not:
Provided, That any person or entity which, in any manner, offers or promises for a fee,
employment to two or more persons shall be deemed engaged in recruitment and
placement.
People v. Saley (1998)
Illegal recruitment is committed when two elements concur:
1) That the offender has no valid license or authority required by law to enable one to
lawfully engage in recruitment and placement of workers; and
2) That the offender undertakes either any activity within the meaning of recruitment and
placement defined under Article 13(b), or any prohibited practices enumerated under
Article 34.
Recruitment includes the act of referral or “the act of passing along or forwarding of an
applicant for employment after an initial interview of a selected applicant for employment
to a selected employer, placement officer or bureau.”
People v Goce (1995)
There is illegal recruitment when one gives the impression of having the ability to send a
worker abroad.

People v. Panis (1986)

The number of persons dealt with is not an essential ingredient of the act of recruitment
and placement of workers. Any of the acts mentioned in the basic rule in Article 13(b) will
constitute recruitment and placement even if only one prospective worker is involved. The
proviso in said provision merely lays down a rule of evidence that where a fee is collected in
consideration of a promise or offer of employment to two or more prospective workers, the
individual or entity dealing with them shall be deemed to be engaged in the act of
recruitment and placement.
The word “shall be deemed” should by the same token be given the force of a disputable
presumption or of prima facie evidence of engaging in recruitment and placement.
 2. Illegal Recruitment
a) Local vs Overseas
Article 38. Illegal recruitment.
Any recruitment activities, including the prohibited practices enumerated under Article 34
of this Code, to be undertaken by non-licensees or non-holders of authority, shall be
deemed illegal and punishable under Article 39 of this Code. The Department of Labor and
Employment or any law enforcement officer may initiate complaints under this Article.
Illegal recruitment when committed by a syndicate or in large scale shall be considered an
offense involving economic sabotage and shall be penalized in accordance with Article 39
hereof.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3)
or more persons conspiring and/or confederating with one another in carrying out any
unlawful or illegal transaction, enterprise or scheme defined under the first paragraph
hereof. Illegal recruitment is deemed committed in large scale if committed against three (3)
or more persons individually or as a group
Department Order No. 141-14, Series of 2014, Revised Rules and Regulations Governing
Recruitment and Placement for Local Employment
Section 42. Acts constituting illegal recruitment. – Illegal recruitment shall mean any act of
canvassing, enlisting, contracting, utilizing, hiring or procuring workers and includes
referrals, contract services, promising or advertising for local employment, whether for
profit or not, when undertaken by a non-licensee or non-holder of authority; provided, that
any such non-licensee or non-holder of authority who, in any manner, offer or promises for
a free employment to two or more persons shall be deemed so engaged.
The following acts shall be unlawful when committed by any person whether or not a holder
of a license or authority:
a. To charge or accept directly or indirectly any amount or to make a worker pay the agency
or its representatives any amount greater than that actually loaned or advanced to him;
b. To furnish or publish any false notice or information in relation to recruitment or
employment;
c. To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority;
d. To induce or attempt to induce a worker already employed to quit his employment in
order to offer him another unless the transfer is designed to liberate a worker from
oppressive terms and conditions of employment;
e. To influence or attempt to influence any person or entity not to employ any worker who
has not applied for employment through his agency;
f. To engage in the recruitment or placement of workers in jobs harmful to public health or
morality or to the dignity of the Republic of the Philippines;
g. To obstruct or attempt to obstruct inspection by the Secretary or by his/her duly
authorized representatives;
h. To substitute or alter to the prejudice of the worker, employment contract prescribed by
the Department from the time of actual signing thereof by the parties up to and including
the period of the expiration of the same without the approval of the Department.
Illegal Recruitment in Overseas Employment
R.A. No. 8042 as amended by R.A. No. 10022:
Section 6. Definition. - For purposes of this Act, illegal recruitment shall mean any act of
canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and
includes referring, contract services, promising or advertising for employment abroad,
whether for profit or not, when undertaken by non-licensee or non-holder of authority
contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise
known as the Labor Code of the Philippines: Provided, That any such non-licensee or non-
holder who, in any manner, offers or promises for a fee employment abroad to two or more
persons shall be deemed so engaged. It shall likewise include the following acts, whether
committed by any person, whether a non-licensee, non-holder, licensee or holder of
authority:
(a) To charge or accept directly or indirectly any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to
make a worker pay or acknowledge any amount greater than that actually received by him
as a loan or advance;
(b) To furnish or publish any false notice or information or document in relation to
recruitment or employment;
(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor Code,
or for the purpose of documenting hired workers with the POEA, which include the act of
reprocessing workers through a job order that pertains to nonexistent work, work different
from the actual overseas work, or work with a different employer whether registered or not
with the POEA;
(d) To induce or attempt to induce a worker already employed to quit his employment in
order to offer him another unless the transfer is designed to liberate a worker from
oppressive terms and conditions of employment;
(e) To influence or attempt to influence any person or entity not to employ any worker who
has not applied for employment through his agency or who has formed, joined or
supported, or has contacted or is supported by any union or workers' organization;
(f) To engage in the recruitment or placement of workers in jobs harmful to public health or
morality or to the dignity of the Republic of the Philippines;
(h) To fail to submit reports on the status of employment, placement vacancies, remittance
of foreign exchange earnings, separation from jobs, departures and such other matters or
information as may be required by the Secretary of Labor and Employment;
(i) To substitute or alter to the prejudice of the worker, employment contracts approved
and verified by the Department of Labor and Employment from the time of actual signing
thereof by the parties up to and including the period of the expiration of the same without
the approval of the Department of Labor and Employment;
(j) For an officer or agent of a recruitment or placement agency to become an officer or
member of the Board of any corporation engaged in travel agency or to be engaged directly
or indirectly in the management of travel agency;
(k) To withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations, or for any other reasons, other than those authorized
under the Labor Code and its implementing rules and regulations;
(l) Failure to actually deploy a contracted worker without valid reason as determined by the
Department of Labor and Employment;
(m) Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where the deployment
does not actually take place without the worker's fault. Illegal recruitment when committed
by a syndicate or in large scale shall be considered an offense involving economic sabotage;
and
(n) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning
agency."

Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3)
or more persons conspiring or confederating with one another. It is deemed committed in
large scale if committed against three (3) or more persons individually or as a group."

b) Types of Illegal Recruitment

(1) Simple Illegal Recruitment

Republic v. PASEI (2012)

Section 6 of RA 8042 defines the crime of "illegal recruitment" and enumerates the acts
constituting the same. Contrary to the RTC’s ruling that the definition is Section 6 vague as it
fails to distinguish between licensed and non-licensed recruiters and for that reason gives
undue advantage to the non-licensed recruiters in violation of the right to equal protection
of those that operate with government licenses or authorities, the SC stated that "illegal
recruitment" as defined in Section 6 is clear and unambiguous and, contrary to the RTC’s
finding, actually makes a distinction between licensed and non-licensed recruiters.
By its terms, persons who engage in "canvassing, enlisting, contracting, transporting,
utilizing, hiring, or procuring workers" without the appropriate government license or
authority are guilty of illegal recruitment whether or not they commit the wrongful acts
enumerated in that section. On the other hand, recruiters who engage in the canvassing,
enlisting, etc. of OFWs, although with the appropriate government license or authority, are
guilty of illegal recruitment only if they commit any of the wrongful acts enumerated in
Section 6.
Section 10 of R.A. 8042 holds the corporate directors, officers, and partners of recruitment
and placement agencies jointly and solidarily liable for money claims and damages that may
be adjudged against the latter agencies. Contrary to the RTC’s ruling that the 2nd paragraph
of Section 10 is unconstitutional since absent sufficient proof that the corporate officers and
directors of the erring company had knowledge of and allowed the illegal recruitment,
making them automatically liable would violate their right to due process of law, the liability
of corporate directors and officers is not automatic. To make them jointly and solidarily
liable with their company, there must be a finding that they were remiss in directing the
affairs of that company, such as sponsoring or tolerating the conduct of illegal activities.

(2) Illegal Recruitment Involving Economic Sabotage

(a) Syndicated Illegal Recruitment

People v. Lalli (2011)

Elements of Syndicated Illegal Recruitment:
(1) the accused have no valid license or authority required by law to enable them to lawfully
engage in the recruitment and placement of workers;
(2) the accused engaged in this activity of recruitment and placement by actually recruiting,
deploying and transporting;
(3) illegal recruitment was committed by three persons, conspiring and confederating with
one another.

(b) Large Scale Illegal Recruitment

People v. Ballesteros (2002)

To constitute large-scale illegal recruitment, 3 elements must concur:
1. The accused undertook any recruitment activity defined under Art. 13 (b) or any
prohibited practice enumerated under Art. 34 of the Labor Code.
2. He did not have the license or the authority to lawfully engage in the recruitment and
placement of workers.
3. He committed the same against three or more persons, individually or as a group.

People v. Laurel (1998)

Accused argues through counsel that since illegal recruitment in large scale is defined in Art.
38, par. (b), of the Labor Code immediately following the definition of illegal recruitment
committed by a syndicate, it follows that for illegal recruitment to be considered committed
in large scale it should have been committed by a syndicate. Hence, an individual who
commits an act of illegal recruitment even if it be against three (3) or more persons cannot
be charged with illegal recruitment in large scale.The interpretation is completely
erroneous.
The language of the law is very clear that illegal recruitment is committed in large scale if
done against three or more persons individually or as a group. The number of offenders,
whether an individual or a syndicate, is clearly not considered a factor in the determination
of its commission. Counsel for accused-appellant was misled by the fact that illegal
recruitment in large scale is defined immediately after illegal recruitment by a syndicate.
However, the only reason therefor is that they are both considered offenses involving
economic sabotage as the law itself so provides.

People v. Trinidad, G.R. No. 181244, 9 August 2010

NB: Liable for both syndicated and large scale illegal recruitment

People v. Fernandez, G.R. No. 199211, 4 June 2014]

NB: Mere impression sufficient to constitute illegal recruitment

Rodolfo v. People, G.R. No. 146964, 10 August 2006

NB: Referral enough to constitute act of recruitment

People v. Jamilosa (2007)

Even in the absence of money or other valuables given as consideration for the “services” of
the recruiter, he is still considered as being engaged in recruitment activities—it can be
gleaned from the language of Article 13(b) of the Labor Code that the act of recruitment
may be for profit or not.

c) Illegal Recruitment v ESTAFA

Sy v. People (2010)
Illegal recruitment and estafa cases may be filed simultaneously or separately. The filing of
charges for illegal recruitment does not bar the filing of estafa, and vice versa. Sy's acquittal
in the illegal recruitment case does not prove that she is not guilty of estafa. Illegal
recruitment and estafa are entirely different offenses and neither one necessarily includes
or is necessarily included in the other. A person who is convicted of illegal recruitment may,
in addition, be convicted of estafa under Article 315, paragraph 2(a) of the RPC.
In the same manner, a person acquitted of illegal recruitment may be held liable for estafa.
Double jeopardy will not set in because illegal recruitment is malum prohibitum, in which
there is no necessity to prove criminal intent, whereas estafa is malum in se, in the
prosecution of which, proof of criminal intent is necessary.

d) Liability of Local Recruitment Agency and Foreign Employer

(1) Solidary Liability

Implementing Rules and Regulations of RA 8042

Section 3. Joint and Several Liability.

The liability of the principal/employer and the recruitment/ placement agency on any and
all claims under this Rule shall be joint and several. This liability shall be incorporated in the
contract for overseas employment and shall be a condition precedent for its approval. The
performance bond to be filed by the recruitment / placement agency, as provided by law,
shall be answerable for all money claims or damages that may be awarded to the workers.
If the recruitment/placement agency is a juridical being, the corporate officers and directors
and partners, as the case may be, shall themselves be jointly and severally liable with the
corporation or partnership for the aforesaid claims and damages.
Such liabilities shall continue during the entire period or duration of the employment
contract and shall not be affected by any substitution, amendment or modification of the
contract made locally or in a foreign country.

R.A. No. 8042, as amended by R.A. No.10022

In case of termination of overseas employment without just, valid or authorized cause as

defined by law or contract, or any unauthorized deductions from the migrant worker's
salary, the worker shall be entitled to the full reimbursement if his placement fee and the
deductions made with interest at twelve percent (12%) per annum, plus his salaries for the
unexpired portion of his employment contract or for three (3) months for every year of the
unexpired term, whichever is less.

(2) Theory of Imputed Knowledge

This is a doctrine in agency which states that the principal is chargeable with and bound by
the knowledge of or his agent received while the agent was acting as such. Simply put,
notice to the agent is notice to the principal. Since the local employment agency is
considered the agent of the foreign employer, the principal, knowledge of the former of
existing labor and social legislation in the Philippines is binding on the latter. Consequently,
notice to the former of any violation thereof is notice to the latter.

Sunace International Management Services, Inc. v NLRC (2006)

The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the
principal, employer Xiong, not the other way around. The knowledge of the principal-foreign
employer cannot, therefore, be imputed to its agent Sunace.
III. EMPLOYMENT PROPER

A. Employer-Employee Relationship

a) Four-Fold Test

Insular Life Assurance Co., Ltd. v NLRC and Melecio Basiao, G.R. No.84484

In determining the existence of employer-employee relationship, the following elements are

generally considered, namely:

(1) the selection and engagement of the employee;

(2) the payment of wages;

(3) the power of dismissal; and

(4) the power to control the employees' conduct — (the most important element )

However, the court said that not every form of control that the hiring party reserves to
himself over the conduct of the party hired in relation to the services rendered may be
accorded the effect of establishing an employer-employee relationship between them in the
legal or technical sense of the term.

the line should be drawn between rules that (1)merely serve as guidelines towards the
achievement of the mutually desired result without dictating the means or methods to be
employed in attaining it, and (2)those that control or fix the methodology and bind or
restrict the party hired to the use of such means.

The first, which aim only to promote the result, create no employer-employee relationship
unlike the second, which address both the result and the means used to achieve it.

Nogales vs Capitol Medical Center, G.R. No. 142625, December 19, 2006
In general, a hospital is not liable for the negligence of an independent contractor-physician.
There is, however, an exception to this principle. The hospital may be liable if the physician
is the "ostensible" agent of the hospital. 44 This exception is also known as the "doctrine of
apparent authority."

[U]nder the doctrine of apparent authority a hospital can be held vicariously liable
for the negligent acts of a physician providing care at the hospital, regardless of
whether the physician is an independent contractor, unless the patient knows, or
should have known, that the physician is an independent contractor. The elements
of the action have been set out as follows:

"For a hospital to be liable under the doctrine of apparent authority, a plaintiff must show
that:

(1) the hospital, or its agent, acted in a manner that would lead a reasonable person to
conclude that the individual who was alleged to be negligent was an employee or agent of
the hospital;

(2) where the acts of the agent create the appearance of authority, the plaintiff must also
prove that the hospital had knowledge of and acquiesced in them; and

(3) the plaintiff acted in reliance upon the conduct of the hospital or its agent, consistent
with ordinary care and prudence."

b) Two-Tiered Test of Employment Relationship - Economic RealitiesTest

Angelina Francisco vs. NLRC, G.R. No. 170087, 31 August 2006

 There are instances when, aside from the employer’s power to control the employee
with respect to the means and methods by which the work is to be accomplished,
economic realities of the employment relations help provide a comprehensive analysis
of the true classification of the individual, whether as employee, independent
contractor, corporate officer or some other capacity.

 The better approach would therefore be to adopt a two-tiered test involving:

o (1) the putative employer’s power to control the employee with respect to the
means and methods by which the work is to be accomplished;

o (2) the underlying economic realities of the activity or relationship.

 the determination of the relationship between employer and employee depends upon
the circumstances of the whole economic activity,  such as:
 (1) the extent to which the services performed are an integral part of the employer’s
business;

(2) the extent of the worker’s investment in equipment and facilities;

(3) the nature and degree of control exercised by the employer;

(4) the worker’s opportunity for profit and loss;

(5) the amount of initiative, skill, judgment or foresight required for the success of the
claimed independent enterprise;

(6) the permanency and duration of the relationship between the worker and the
employer; and

(7) the degree of dependency of the worker upon the employer for his continued
employment in that line of business.

B. Probationary Employment

Art. 282. Probationary Employment. — Probationary employment shall not exceed

six (6) months from the date the employee started working, unless it is covered by
an apprenticeship agreement stipulating a longer period. The services of an
employee who has been engaged on a probationary basis may be terminated for a
just cause or when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the time of
his engagement. An employee who is allowed to work after a probationary period
shall be considered a regular employee. (As amended by PD 850).
Buiser v. Hon. Leogardo, G.R. No. L-63316, 31 July 1984.
Generally, the probationary period of employment is limited to six (6) months. The
exception to this general rule is When the parties to an employment contract may agree
otherwise, such as when the same is established by company policy or when the same is
required by the nature of work to be performed by the employee.
In the latter case, there is recognition of the exercise of managerial prerogatives in requiring
a longer period of probationary employment, such as in the present case where the
probationary period was set for eighteen (18) months, i.e. from May, 1980 to October, 1981
inclusive, especially where the employee must learn a particular kind of work such as
selling, or when the job requires certain qualifications, skills, experience or training.
Alcira vs. National Labor Relations Commission, et. al. (G.R. No. 149859, 9 June 2004)

Computation of the 6-month probationary period is reckoned from the date of

appointment up to the same calendar date of the 6th month following.(italics supplied)
In short, since the number of days in each particular month was irrelevant
Magis Young Achievers Learning Center at al v Manalo, G.R. No. 178835, 13 February 2009

For "academic personnel" in private schools, colleges and universities, probationary

employment is governed by Section 92 of the 1992 Manual of Regulations for Private
Schools15 (Manual), which reads:
Section 92. Probationary Period. – Subject in all instances to compliance with the
Department and school requirements, the probationary period for academic personnel
shall not be more than three (3) consecutive years of satisfactory service for those in the
elementary
and secondary levels, six (6) consecutive regular semesters of satisfactory service for those
in the tertiary level, and
nine (9) consecutive trimesters of satisfactory service for those in the tertiary level where
collegiate courses are offered on a trimester basis. 16

Robinsons Galleria/Robinsons Supermarket Corporation vs. Irene Ranchez, G.R. No. 177937

In all cases involving employees engaged on probationary basis, the employer shall make
known to its employees the standards under which they will qualify as regular employees at
the time of their engagement. Where no standards are made known to an employee at the
time, he shall be deemed a regular employee,26 unless the job is self-descriptive, like maid,
cook, driver, or messenger. However, the constitutional policy of providing full protection to
labor is not intended to oppress or destroy management. 27  The rules on probationary
employment should not be used to exculpate a probationary employee who acts in a
manner contrary to basic knowledge and common sense, in regard to which, there is no
need to spell out a policy or standard to be met.28

C. Job Contracting
1. Definition of Job Contracting

Article 106 of the Labor Code provides the relations which may arise between an employer,
a contractor, and the contractors' employees, thus:

ART. 106. Contractor or subcontracting. - Whenever an employer enters into a

contract with another person for the performance of the former's work, the
employees of the contractor and of the latter's subcontractor, if any, shall be paid in
accordance with the provisions of this Code.

Department Order No. 174, series of 2017 (DO 174)

2. Permissible Contracting or Subcontracting Arrangements

Alilin v. Petron Corporation, G.R. No. 177592, 09 June 2014

NB: Elements of legitimate job contracting arrangement; Proof of financial
capacity must be at the time employees were deployed to work for principal
Rolando Sasan, et al. v NLRC, G.R. No. 176240, 17 October 2008
The test to determine the existence of independent contractorship is whether or not the
one claiming to be an independent contractor has contracted to do the work according to
his own methods and without being subject to the control of the employer, except only as
to the results of the work.15
The existence of an independent and permissible contractor relationship is generally
established by the following criteria:
whether or not the contractor is carrying on an independent business;
the nature and extent of the work; the skill required;
the term and duration of the relationship;
the right to assign the performance of a specified piece of work;
the control and supervision of the work to another;
the employer's power with respect to the hiring, firing and payment of the contractor's
workers;
the control of the premises;
the duty to supply the premises, tools, appliances, materials, and labor; and the mode,
manner and terms of payment.16
3. Labor Only Contracting

Eparwa Security and Janitorial Services Inc. v Liceo de Cagayan University, GR No. 150402,
Nov 28, 2006.

Article 109. Solidary liability. — The provisions of existing laws to the contrary

notwithstanding, every employer or indirect employer shall be held responsible with his
contractor or subcontractor for any violation of any provision of this Code. For purposes of
determining the extent of their civil liability under this Chapter, they shall be considered as
direct employers.

The contractor is made liable by virtue of his status as direct employer. The principal, on the
other hand, is made the indirect employer of the contractor’s employees for purposes of
paying the employees their wages should the contractor be unable to pay them.

Avelino S. Alelin v Petron Corporation, GR No. 177592, June 9, 2014

In distinguishing between prohibited labor-only contracting and permissible job contracting,

the totality of the facts and the surrounding circumstances of the case shall be
considered."46 Generally, the contractor is presumed to be a labor-only contractor, unless
such contractor overcomes the burden of proving that it has the substantial capital,
investment, tools and the like.

However, where the principal is the one claiming that the contractor is a legitimate
contractor, as in the present case, said principal has the burden of proving that supposed
status.47 

D.) Personnel Movement

a) Valid and Invalid Transfers

Philippine Japan Active Carbon Corporation and Tokuichi Satofuka vs.

National Labor Relations Commission and Olga S. Quiñanola
NB: The exercise of management’s prerogative concerning the employees’
work assignments based on its assessment of the qualifications, aptitudes
and competence of its employees, and by moving them around in the various
areas of its business operations it can ascertain where they will function with
maximum benefit to the company has been held to be a valid exercise of such
prerogative. An employee’s right to security of tenure does not give him such
a vested right in his position as would deprive the company of its prerogative to change his
assignment or transfer him where he will be most useful.

Blue Dairy Corporation and/or Edison T. Aviguetero and Pedro G. Miguel

vs. National Labor Relations Commission and Elvira R. Recalde, G.R. No.
129843, 14 September 1999
NB: The managerial prerogative to transfer personnel must be exercised
without grave abuse of discretion, bearing in mind the basic elements of justice and fair play

Philippine Telegraph and Telephone Corporation vs. Alicia Laplana, Hon.

Ricardo Encarnacion, and National Labor Relations Commission, G.R. No.
76645, 23 July 1991
NB: The employer must be mindful that transfers cannot be used as a
subterfuge to rid itself of an undesirable worker

Elmer M. Mendoza vs. Rural Bank of Lucban, G.R. No. 155421, 7 July
2004
NB: TEST TO DETERMINE VALIDITY - To determine the validity of the
transfer of the employees, the employer must show that the transfer is not
unreasonable, inconvenient or prejudicial to the employee; nor does it involve
a demotion in rank or a diminution of his salaries, privileges and other
benefits.

Jenny F. Peckson vs. Robinsons Supermarket Corporation, Jody Gadia,

Roena Sarte, and Ruby Alex, G.R. No. 198534, 3 July 2013
NB: Failure of the employer to overcome this burden of proof, the employee's
transfer may be treated as a demotion, which is tantamount to unlawful
constructive dismissal.

b) Promotions and Demotions

(1) Promotions
“Promotion is the advancement from one position to another with an
increase in duties and responsibilities as authorized by law, and usually
accompanied by an increase in salary. Promotion denotes a scalar ascent of
a senior officer or employee to another position, higher either in rank or
salary. There is no law that compels an employee to accept a promotion, as
a promotion is in the nature of a gift or a reward, which a person has a right
to refuse. Transfers that result in promotion or demotion, advancement or
reduction or a transfer that aims to lure away the employee from his
permanent position cannot be done without the employees’ consent.”

(2) Demotions
“Demotion, on the other hand has been defined (conversely in relation to
promotion) as involving a situation where an employee is relegated to a
subordinate or less important position constituting a reduction to a lower
grade or rank, with a corresponding decrease in duties and responsibilities,
and usually accompanied by a decrease in salary. Due process required by
law is applicable to demotions, as demotions affect the employment of a worker whose right
to continued employment, under the same terms and
conditions, is also protected by law. Considering that demotion is also a
punitive action, the employee being demoted should as in cases of
dismissals, be given a chance to contest the same.”

D. Philippine Labor Standards

1. Coverage and Exclusions

ART. 82. COVERAGE

The provisions of this Title shall apply to employees in all establishments and
undertakings whether for profit or not, but not to government employees, managerial
employees, field personnel, members of the family of the employer who are dependent
on him for support, domestic helpers, persons in the personal service of another, and
workers who are paid by results as determined by the Secretary of Labor in appropriate
regulations.

As used herein, “managerial employees” refer to those whose primary duty consists of the
management of the establishment in which they are employed or of a department or
subdivision thereof, and to other officers or members of the managerial staff.

“Field personnel” shall refer to nonagricultural 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.

National Sugar Refineries Corporation vs. NLRC, G.R. No. 101761, 24

March 1993.

Managerial employees, if they meet all of the following conditions:

a. Their primary duty consists of the management of the establishment in which they are
employed or of a department or sub-division thereof.
b. They customarily and regularly direct the work of two or more employees therein.
c. They have the authority to hire or fire employees of lower rank; or their suggestions and
recommendations as to hiring and firing and as to the promotion or any other change of
status of other employees, are given particular weight.
Officers or members of the managerial staff, as defined in Section 2, Rule I Book III of the
aforestated Rules to Implement the Labor Code, viz.:

(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 consist 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, or knowledge;
(5) they execute, under general supervision, special assignments and tasks; and
(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 the performance of their work hereinbefore
described.

Far East Agricultural Supply Inc v Labatique GR No. 162813, Feb 12,
2007

Article 82 of the Labor Code is decisive on the question of who are referred to by the term
"field personnel." It provides, as follows:

"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 court emphasized that 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.

The court held that 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 determine whether an employee 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. In so doing, an inquiry must be made as to whether or not the employee’s
time and performance are constantly supervised by the employer.

2. Doctrine on Non-Diminution of Benefits

There is diminution of benefits

when it is shown that: (1) the grant or benefit is founded on a policy or has ripened into
company practice over a period of time; (2) the practice is consistent and deliberate; (3) the
practice is not due to error in the construction or application of a doubtful or difficult
question of law; and (4) the discontinuance is done unilaterally by the employer
Arco MEtal Products Inc. v. SAMARM-NAFLU, G.R No. 170734, 14 May
2008 - on proper basis of doctrine on non diminution

The principle of non-diminution of benefits is founded on the Constitutional mandate to

"protect the rights of workers and promote their welfare," [15] and "to afford labor full
protection."[16] Said mandate in turn is the basis of Article 4 of the Labor Code which states
that "all doubts in the implementation and interpretation of this Code, including its
implementing rules and regulations shall be rendered in favor of labor." Jurisprudence is
replete with cases which recognize the right of employees to benefits which were
voluntarily given by the employer and which ripened into company practice.

Jurisprudence has not laid down any rule specifying a minimum number of years within
which a company practice must be exercised in order to constitute voluntary company
practice.[20] Thus, it can be six (6) years,[21] three (3) years,[22] or even as short as two (2)
years.
Wesleyan University - Philippines v. Wesleyan University Faculty and
Staff Association, G.R. No. 181806, 12 March 2014; - Discussion on Basis
of Doctrine : 1. Express Policy; 2. Written Contract; 3. Company practice

The Non-Diminution Rule found in Article 10039 of the Labor Code explicitly prohibits
employers from eliminating or reducing the benefits received by their employees. This rule,
however, applies only if the benefit is based on an express policy, a written contract, or has
ripened into a practice.40 To be considered a practice, it must be consistently and
deliberately made by the employer over a long period of time.41
An exception to the rule is when "the practice is due to error in the construction or
application of a doubtful or difficult question of law." 42 The error, however, must be
corrected immediately after its discovery; 43 otherwise, the rule on Non-Diminution of
Benefits would still apply.
Therefore, an employee who suffers a diminution in pay may file a complaint for
constructive
dismissal with the appropriate labor courts where EMPLOYER may be held liable if it is
shown
that the decrease in the employee’s salary rendered his continued work with EMPLOYER
unbearable.
3. Hours of Work
a) Normal Hours of Work
The normal hours of work under the Labor Code of any employee shall not exceed eight (8)
hours in one (1) workday. Workday is understood to mean one twenty-four (24) hour cycle
starting from the time the employee is engaged to work and ends on the same time the
following day. In this regard, hours worked shall include the following:
a. All the time during which an employee is required to be on duty or to be at a prescribed
workplace;
b. All the time during which an employee is suffered or permitted to work; and
c. Rest periods of short duration during working hours.19
While specifically excluding the sixty (60) minute break period that the employer is required
to grant to its employees, which serve as their regular meal break.

b) Meal Break
ART. 85. MEAL PERIODS
Subject to such regulations as the Secretary of Labor may prescribe, it shall be the duty of
every employer to give his employees not less than sixty (60) minutes time-off for their
regular meals.

Meal Time of Less Than 60 Minutes

Under Article 85 of the Code, the meal period should be not less than 60 minutes, in which
case it is time-off or noncompensable time. The implementing rules1 allow the meal time to
be less than 60 minutes, under specified cases and in no case shorter than 20 minutes. But
such shortened meal time (say, 30 minutes) should be with full pay, and, of course, the time
when the employee cannot eat, because he is still working, should also be paid. To shorten
meal time to less than 20 minutes is not allowed. If the so-called “meal time” is less than 20
minutes, it becomes only a rest period and, under the same Implementing Rules, is
considered working time.

The situations where the meal break may be shortened to less than 60 minutes, with full
pay, are the following:
a) where the work is non-manual or does not involve serious physical exertion;
b) where the establishment regularly operates not less than sixteen (16) hours a day;
c) where there is actual or impending emergencies or there is urgent work to be performed
on machineries, equipment or installation to avoid serious loss which the employer would
otherwise suffer; and
d) where the work is necessary to prevent serious loss of perishable
goods.

c.) Flexible Work Arrangement

Under DOLE Advisory No. 2. Series of 2009, employers and employees may develop and
adopt the following work arrangements, provided there is no diminution of existing benefits
as a result of such arrangement:
a. Compressed Workweek - The normal workweek is reduced to less than six (6) days but
the total number of working hours per week remains at a minimum of forty-eight (48)
hours. In order to achieve this, the normal working day is increased to more than eight
(8) hours, but not to exceed twelve (12) hours, without incurring the corresponding
overtime pay.
b. Reduction of workdays - The number of days employees are required to report for work
each week is reduced but the arrangement must not exceed six (6) months.
c. Rotation of workers: - Employees are rotated or provided work alternately within the
workweek.
d. Forced leave - Employees may be required to go on leave for several days or weeks
using their leave credits, should they have any.
e. Broken-time schedule – An arrangement where the work schedule is not continuous but
the total work hours within the week remain the same.
f. Flexi holidays – Employees agree to avail of the holidays at some other days as long as
this arrangement does not result in a diminution of benefits.

For any of the foregoing arrangements to be valid, it must comply with the following
requirements:25
a. It must be entered into on a voluntary basis;
b. The conditions must be mutually acceptable to both the employer and the
employee; and
c. It must not result to a diminution of existing benefits.
In addition, the employer must notify the DOLE Regional Department having jurisdiction
over the employer’s place of business of the adoption of the Flexible Holiday Schedule prior
to its implementation. The DOLE Regional Office shall then visit the establishment intending
to adopt flexible work arrangement and validate whether their adoption is in accordance
with the guidelines.

d) Overtime Pay
Any employee who is permitted or required to work beyond eight (8) hours on ordinary
working days shall be paid an additional compensation for the overtime work in the amount
equivalent to said employee’s regular wage plus at least twenty five (25%) thereof.20
An employee who is permitted or suffered to work on special holidays or on the said
employee’s designated rest days not falling on regular holidays, shall be paid with an
additional compensation as premium pay of not less than thirty percent (30%) of his regular
wage.
For work performed in excess of eight (8) hours on special holidays and rest days not falling
on regular holidays, an employee shall be paid an additional compensation for the overtime
work equivalent to his rate for the first eight hours on a special holiday or rest day plus at
least thirty percent (30%) thereof.

Under the Implementing Rules and Regulations of the Labor Code of the Philippines,
those exempt from overtime pay are the following:
“SECTION 2. Exemption. — The provisions of this Rule shall not apply to the
following persons if they qualify for exemption under the conditions set forth herein:
(a) Government employees whether employed by the National Government or
any of its political subdivision, including those employed in government-owned
and/or controlled corporations;

(b) Managerial employees, if they meet all of the following conditions:

(1) Their primary duty consists of the management of the establishment in
which they are employed or of a department or sub-division thereof.
(2) They customarily and regularly direct the work of two or more
employees therein.
(3) They have the authority to hire or fire employees of lower rank; or their
suggestions and recommendations as to hiring and firing and as to the
promotion or any other change of status of other employees, are given
particular weight.

(c) Officers or members of a managerial staff if they perform the following duties
and responsibilities:
(1) The primary duty consists of the performance of work directly related to
management policies of their employer;
(2) Customarily and regularly exercise discretion and independent
judgment; and
(3) (i) Regularly and directly assist a proprietor or a managerial employee
whose primary duty consists of the management of the establishment
in which he is employed or subdivision thereof; or (ii) execute under
general supervision work along specialized or technical lines requiring
special training, experience, or knowledge; or (iii) execute, under
general supervision, special assignments and tasks; and
(4) Who do not devote more than 20 percent of their hours worked in a
work week to activities which are not directly and closely related to the
performance of the work described in paragraphs (1), (2) and (3)
above.

(d) Domestic servants and persons in the personal service of another if they
perform such services in the employer's home which are usually necessary or
desirable for the maintenance and enjoyment thereof, or minister to the
personal comfort, convenience, or safety of the employer as well as the
members of his employer's household.

(e) Workers who are paid by results, including those who are paid on piece- work,
"takay," "pakiao" or task basis, and other non-time work if their output rates are
in accordance with the standards prescribed under Section 8, Rule VII, Book
Three of these regulations, or where such rates have been fixed by the
Secretary of Labor and Employment in accordance with the aforesaid Section.

(f) Non-agricultural field personnel if they regularly perform their duties away from
the principal or branch office or place of business of the employer and whose
actual hours of work in the field cannot be determined with reasonable
certainty.”

4. Rest Day
ART. 91. RIGHT TO WEEKLY REST DAY
(a) It shall be the duty of every employer, whether operating for profit or not, to provide
each of his employees a rest period of not less than twenty-four (24) consecutive hours
after every six (6) consecutive normal work days.
(b) The employer shall determine and schedule the weekly rest day of his employees
subject to collective bargaining agreement and to such rules and regulations as the
Secretary of Labor may provide. However, the employer shall respect the preference of
employees as to their weekly rest day when such preference is based on religious
grounds.

ART. 92. WHEN EMPLOYER MAY REQUIRE WORK ON A REST DAY

The employer may require his employees to work on any day:
(a) In case of actual or impending emergencies caused by serious
accident, fire, flood, typhoon, earthquake, epidemic or other disaster or
calamity to prevent loss of life and property, or imminent danger to public
safety;
(b) In cases of urgent work to be performed on the machinery,
equipment, or installation, to avoid serious loss which the employer would
otherwise suffer;
(c) In the event of abnormal pressure of work due to special
circumstances, where the employer cannot ordinarily be expected to resort
to other measures;
(d) To prevent loss or damage to perishable goods;
(e) Where the nature of the work requires continuous operations and
the stoppage of work may result in irreparable injury or loss to the employer;
and
(f) Under other circumstances analogous or similar to the foregoing
as determined by the Secretary of Labor.
ART. 93. COMPENSATION FOR REST DAY, SUNDAY OR HOLIDAY WORK
(a) Where an employee is made or permitted to work on his scheduled rest day, he shall
be paid an additional compensation of at least thirty percent (30%) of his regular wage. An
employee shall be entitled to such additional compensation for work performed on
Sunday only when it is his established rest day.
(b) When the nature of the work of the employee is such that he has no regular workdays
and no regular rest days can be scheduled, he shall be paid an additional compensation of
at least thirty percent (30%) of his regular wage for work performed on Sundays and
holidays.
(c) Work performed on any special holiday shall be paid an additional compensation of at
least thirty percent (30%) of the regular wage of the employee. Where such holiday work
falls on the employee’s scheduled rest day, he shall be entitled to an additional
compensation of at least fifty percent (50%) of his regular wage.
(d) Where the collective bargaining agreement or other applicable employment contract
stipulates the payment of a higher premium pay than that prescribed under this Article,
the employer shall pay such higher rate.

5. Holiday Pay
ART. 94. RIGHT TO HOLIDAY PAY
(a) Every worker shall be paid his regular daily wage during regular
holidays, except in retail and service establishments regularly employing less
than ten (10) workers;
(b) The employer may require an employee to work on any holiday but
such employee shall be paid a compensation equivalent to twice his regular
rate; and
(c) As used in this Article, “holiday” includes: New Year’s Day,
Maundy Thursday, Good Friday, the ninth of April, the first of May, the
twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth
of December and the day designated by law for holding a general election.

6. Nightwork

A night worker is understood to mean any employed person whose work requires
performance
of a substantial number of hours of night work which exceeds a specified limit. This limit
shall be
fixed by the Secretary of Labor after consulting the workers’ representatives/labor
organizations
and employers.

7. Leave Benefits

a) Service Incentive Leave

ART. 95. RIGHT TO SERVICE INCENTIVE LEAVE
(a) Every employee who has rendered at least one year of service
shall be entitled to a yearly service incentive leave of five days with pay.
(b) This provision shall not apply to those who are already enjoying
the benefit herein provided, those enjoying vacation leave with pay of at
least five days and those employed in establishments regularly employing
less than ten employees or in establishments exempted from granting this
benefit by the Secretary of Labor after considering the viability or financial
condition of such establishment.
(c) The grant of benefit in excess of that provided herein shall not
be made a subject of arbitration or any court of administrative action.

8. Bonus

Under Philippine labor laws, a bonus is understood to be an amount granted by an employer

to
his/her employees and is paid ex-gratia, constituting an act of enlightened generosity on the
part
of the employer, rather than as a demandable right on the part of the employee.38
Generally, the grant of a bonus is an exercise of management prerogative and given in
addition
to what is ordinarily received by or strictly due the employee. Thus, a bonus is not a
demandable and enforceable obligation on the part of the employee and the grant of which
may
be withdrawn by the employer in case the latter deems necessary or convenient.
However, a bonus may be considered demandable in the following cases: 39
a. If payment of the bonus has been promised by the employer and the grant has been
expressly agreed upon by the parties; or
b. If grant of the bonus has the employer’s long and regular practice developed into an
established company policy.
To be considered a regular practice, the giving of the bonus should have been done over a
long
period of time and must be shown to have been consistent and deliberate. The test of this
rule
on long practice requires an indubitable showing that the employer agreed to continue
giving the
benefits knowing fully well that said employees are not covered by the law requiring
payment
thereof.40

9. Wages
Every employer is required to pay his employees by means of payroll, showing among other
things, the employee’s rate of pay per month, amounts due for regular and overtime work,
any
deductions made, and the amount actually paid.47

The minimum wage rates of employees for both agricultural and non-agricultural employees
in
each and every region of the Philippines shall be those prescribed by the Regional Tripartite
Wages and Productivity Boards.48 The following table summarizes the applicable minimum
wage rates for EMPLOYER’s thirteen (13) Business Sites, inclusive of Cost of Living
Allowances
and other prescribed payments, reflecting the total amount that employees are entitled to.

Withholding of Wages

As a general rule, an employer cannot withhold payment of an employee’s wages, such

being
expressly prohibited by law. Note that the Labor Code strictly declares as 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.59
In interpreting the above quoted provision, the Supreme Court has ruled that an employer
has
no legal authority to withhold the employees earned salaries and benefits, to wit:60
“What an employee has worked for, his employer must pay. Thus, an employer
cannot simply refuse to pay the wages or benefits of its employee because he
has either defaulted in paying a loan guaranteed by his employer; or violated
their memorandum of agreement; or failed to render an accounting of his
employer’s property.”
It has further been ruled that an employee’s failure to comply with company policy on
serving
notice thirty (30) days prior to resigning did not constitute just cause for the eventual
termination
of his/her employment.61
Under the Labor Code, there are only two (2) instances when an employer may legally
deduct
any amount from the wages and salaries due its employees, to wit:
a. When the deductions are authorized by law, including deductions for the insurance
premiums advanced by the employer in behalf of the employee as well as union
dues where the right to check-off has been recognized by the employer or authorized
in writing by the individual employee himself; and
b. When the deductions are with the written authorization of the employees for payment
to the third person and the employer agrees to do so; Provided, that the latter does
not receive any pecuniary benefit, directly or indirectly, from the transaction.
We note that while EMPLOYER may impose a clearance procedure, which may include the
proper endorsement of an employee’s duties, turnover of properties and payment of
liabilities.
Ultimately, an employee’s final pay cannot be withheld without clearly establishing the
liability or
obligation of the resigning employee.

10. Thirteenth Month Pay

The 13th Month Pay Law, requires all employers to pay their employees 62 a 13th month
pay not
later than December 24 of every year, the minimum amount of which shall not be less than
one
1/12 of the total basic salary earned within a calendar year.
The “basic salary” includes all remunerations/earnings paid by his employer for services
rendered. It does not include cost-of-living allowances and other benefits which are not
considered or integrated as part of the regular or basic salary such as the cash equivalent of
unused leave credits, overtime, premium, night shift differential and holiday pay unless
these
salary-related benefits are considered as part of the basic salary by individual or collective
agreement, company practice or policy.
EMPLOYER grants its employees 13th month pay equivalent to their full month’s salary,
prorated
in case the employee has rendered services for less than twelve (12) months within a
particular calendar year.
A. Termination of Employment by the Employee