Yes, they are entitled to their regular hourly rate on days declared as special holidays or when classes are called off or shortened.
Labor Standards ~o~ Holidays – Termination of Employment
Producers Bank v. NLRC HOLIDAYS Can a person be forced to work during a holiday? The same with instances when required to work overtime. If you are made to work, you are paid twice of the daily rate. Peculiar situation: teaching personnel paid per hour Refer to Jose Rizal College If two holidays fall on two successive days, he must be paid for both days. BUT you must be present or you must be on leave of absence with pay on the first holiday otherwise you cannot claim the second holiday.
Jose Rizal College v. NLRC
The divisor of 314 is arrived at by subtracting all Sundays from the total number of calendar days in a year. GR: for a 5-day workweek, if the divisor is 261 and for a 6-day workweek, if the divisor is 314, then the monthly salary if the employee already includes payment of the legal holiday. But this depends on the circumstances of each case.
San Miguel Corp. v. CA There should be no distinction between Muslims and non-Muslims as regards payment of benefits for Muslim holidays.
Asian Transmission Corporation v. CA
Are hourly paid faculty members entitled to regular holiday pay? No. Regular holidays specified as such by law are known to both school and faculty members as “no class days,” certainly the latter do not expect payment for said unworked days and this was clearly in their minds when they entered into the teaching contracts. Are they entitled to be paid for special holidays and shortened class days due to typhoons and the like?
Holiday pay is a legislated benefit enacted as part of the Constitutional imperative that the State shall afford protection to labor. Unlike a bonus, which is a management prerogative, holiday pay is a statutory benefit demandable under the law.
Labadan v. Forest Hills Academy The provision that a worker is entitled to twice his regular rate if he is required to work on a holiday implies that the provision entitling a worker to his regular rate on holidays applies even if he does not work.
1 1B 09-10
SERVICE INCENTIVE LEAVE AND OTHER LEAVES
Imbuido v. NLRC
If the company is giving an employee a benefit of more than 5 days of SIL, then the employee will not enjoy the benefit. Suppose 15 days of sick leave by virtue of a CBA, would employee be entitled to SIL? A: Yes. But if vacation leave, employee will not be entitled because they are of the same nature. Sick leave is of a different nature where the employee cannot work as a consequence of ailment. Unlike other leaves granted by law, the SIL is commutable and can be converted to cash. Other leaves provided by the CBA not provided for by law may be granted out of the policy or out of agreement. There is no law which grants sick and vacation leave. Service charges: amounts which are charged by hotels, restaurants and the like which constitutes 10% of the amount consumed for food. All service charges are pooled together and paid to rank-and-file employees. 85% goes to them while 15% goes to managerial employees. It is paid every 15 days. If the company decides to remove the 10% service charge in order to lessen their prices, dapat ibigay ng employer yung average na narereceive nung employee na parte ng service charge dati.
An employee is entitled to service incentive leave after one period of service (whether continuous or broken) or its equivalent period, and it is one of the benefits which would have accrued if an employee was not otherwise illegally dismissed, it is fair and legal than its computation should be up to the date of reinstatement as provided in Art. 279.
Auto Bus Bautista
Transport
Systems
v.
What must be ascertained in order to resolve the issue of propriety of the grant of service incentive leave to a bus driver-conductor is whether or not he is a field personnel. According to the Labor Code, “field personnel” shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. The definition of a "field personnel" is not merely concerned with the location where the employee regularly performs his duties but also with the fact that the employee’s performance is unsupervised by the employer. Field personnel are those who regularly perform their duties away from the principal place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty . Thus, in order to conclude whether an employee
2 1B 09-10
SERVICE INCENTIVE LEAVE AND OTHER LEAVES
Imbuido v. NLRC
If the company is giving an employee a benefit of more than 5 days of SIL, then the employee will not enjoy the benefit. Suppose 15 days of sick leave by virtue of a CBA, would employee be entitled to SIL? A: Yes. But if vacation leave, employee will not be entitled because they are of the same nature. Sick leave is of a different nature where the employee cannot work as a consequence of ailment. Unlike other leaves granted by law, the SIL is commutable and can be converted to cash. Other leaves provided by the CBA not provided for by law may be granted out of the policy or out of agreement. There is no law which grants sick and vacation leave. Service charges: amounts which are charged by hotels, restaurants and the like which constitutes 10% of the amount consumed for food. All service charges are pooled together and paid to rank-and-file employees. 85% goes to them while 15% goes to managerial employees. It is paid every 15 days. If the company decides to remove the 10% service charge in order to lessen their prices, dapat ibigay ng employer yung average na narereceive nung employee na parte ng service charge dati.
An employee is entitled to service incentive leave after one period of service (whether continuous or broken) or its equivalent period, and it is one of the benefits which would have accrued if an employee was not otherwise illegally dismissed, it is fair and legal than its computation should be up to the date of reinstatement as provided in Art. 279.
Auto Bus Bautista
Transport
Systems
v.
What must be ascertained in order to resolve the issue of propriety of the grant of service incentive leave to a bus driver-conductor is whether or not he is a field personnel. According to the Labor Code, “field personnel” shall refer to non-agricultural employees who regularly perform their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. The definition of a "field personnel" is not merely concerned with the location where the employee regularly performs his duties but also with the fact that the employee’s performance is unsupervised by the employer. Field personnel are those who regularly perform their duties away from the principal place of business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty . Thus, in order to conclude whether an employee
2 1B 09-10
is a field employee, it is also necessary to ascertain if actual hours of work in the field can be determined with reasonable certainty by the employer. A bus driver-conductor, not being a field personnel but a regular employee who performs tasks usually necessary and desirable to the usual trade of the company’s business, is entitled to the grant of service incentive leave. If the employee entitled to service incentive leave does not use or commute the same, he is entitled upon his resignation or separation from work to the commutation of his accrued service incentive leave. Prescription period: 3 years. It commences from the time when the employer refuses to pay its monetary equivalent after demand or commutation or upon termination of the employee’s services, as the case may be.
Fernandez v. NLRC Can the claim for service incentive leave be limited to a certain number of years? No. An employee who has served for more than one year is entitled to service incentive leave. He may use it as leave days or he may collect its monetary value. To limit the award is to unduly restrict such right.
The difference between the minimum wage and the actual salary received by the employees cannot be deemed as their 13th month pay and service incentive leave pay as such difference is not equivalent to or of the same import as the said benefits contemplated by law.
Paloma v. PAL No law provides for commutation of unused or accrued sick leave credits in the private sector – commutation is allowed by way of voluntary endowment by an employer through a company policy or by a Collective Bargaining Agreement.
Sugue v. Triumph International In the grant of vacation and sick leave privileges to an employee, the employer is given leeway to impose conditions on the entitlement to the same as the grant of vacation and sick leave is not a standard of law, but a prerogative of management – it is a mere concession or act of grace of the employer and not a matter of right on the part of the employee.
13th MONTH PAY Christmas bonus: provided equal to 13th month 13th month is in the nature of wages therefore no deductions without the consent of the employee
JPL Marketing Promotions v. CA Service incentive leave is a yearly leave benefit of 5 days with pay, enjoyed by an employee who has rendered at least one year of service.
Are commissions to be included? In the case of salesmen, salary + commissions, are commissions
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included in the computation of 13th month pay? Duplicators case: stencils Minimum wage + commissions Q: Can commissions be included? A: Yes because it is acquired by actual market transactions Boie Takeda: Medical Representatives Q: Can commissions be considered to be part of basic wage? A: No because it is not acquired by actual market transaction. They are gratuities. House of Sarah Lee: they are only given to rank-and-file employees. Piece rate workers are also entitled. In the case of sea-farers, it would depend in the contract.
Honda Phil Inc v. Samahan Malayang Manggagawa sa Honda
ng
Every employee receiving a commission in addition to a fixed or guaranteed wage or salary is entitled to 13th month pay. NOTE: Drivers and Conductors are entitled to 13th month pay. The drivers and conductors are not paid purely by what they receive as commission. They are automatically entitled to basic minimum pay mandated by law in case the commissions they earned be less than their basic minimum for eight hours of work. While commissions may be in the form of incentives or encouragement to inspire drivers and conductors to put more zeal and industry in their jobs, it is safe to say that the same are direct renumerations for services rendered which is the reason why Vallacar Transit allowed the drivers and conductors a guaranteed minimum wage.
Phil. Duplicators, Inc v. NLRC Payments for sick, vacation and maternity leaves, night differentials, regular holiday pay and premiums for work done on rest days and special holidays are excluded from the computation of basic salary. Pro-rating an employee’s 13th month pay is to undermine the wisdom behind such grant.
The salesmen’s commission, comprising a pre-determined percent of the selling price of the goods sold by each salesman, were properly included in the term “basic salary” for purposes of computing their 13th month pay.
Boie-Takeda Chemicals Inc v. Dela Serna
House of Sarah Lee v. Rey Only rank-and-file employees entitled to 13th month pay.
Phil. Agricultural Commercial Industrial Workers Union v. NLRC
are
&
In remunerative schemes consisting of a fixed or guaranteed wage plus commission, the fixed or guaranteed wage is patently the "basic salary" for this is what the employee receives for a standard work period. Commissions are given for extra efforts exerted in consummating sales or other related
4 1B 09-10
transactions. They are, as such, additional pay, which this Court has made clear do not form part of the "basic salary." Hence, in determining 13th month pay, such commissions should be excluded in the computation.
The Labor Arbiter ruled that the computation was invalid. The petition by Honda was also dismissed by the Court of Appeals. ISSUE: W/N Honda’s implementation of pro-rated 13th month pay, 14th month pay and financial assistance is invalid
CASE DIGESTS: Honda Phils., Inc. v. Samahan ng Malayang Manggagawa ng Honda
HELD: Petition lacks merit FACTS: The issue stems from certain provisions of the CBA between Honda Phils and its labor union. The CBA provided that the company shall maintain the present practice in the implementation of the 13th month pay, the company shall grant a 14th month pay computed on the same basis as the computation of the 13th month pay and the company agrees to continue the practice of granting, in its discretion, financial assistance to covered employees in December in each year of not less than 100% of basic pay. The CBA is effective until 2000. In lieu of the strikes and bargaining deadlocks, the company issued a memorandum announcing the new formula for the computation of the 13th and 14th month pay and the 31 day long strike shall be considered as unworked days for purposes of computing said benefits. According to the new formula, the amount equivalent to 1/12 of the employee’s basic salary shall be deducted from these bonuses with a commitment however that in the event that the strike is declared legal, Honda shall pay the amount deducted. Respondent union opposed the pro-rated computation of the bonuses.
Honda wanted to implement a prorated computation of the benefits based on the "no work, no pay" rule. According to the company, the phrase "present practice" as mentioned in the CBA refers to the manner and requisites with respect to the payment of the bonuses, i.e., 50% to be given in May and the other 50% in December of each year. Respondent union, however, insists that the CBA provisions relating to the implementation of the 13th month pay necessarily relate to the computation of the same. A cursory reading of the provisions of the CBA shows that they did not state categorically whether the computation of the 13th month pay, 14th month pay and the financial assistance would be based on one full month’s basic salary of the employees, or pro-rated based on the compensation actually received. The arbitrator thus properly resolved the ambiguity in favor of labor. The Court of Appeals affirmed the arbitrator’s finding and added that the computation of the 13th month pay should be based on the length of service and not on the actual wage earned by the worker.
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Under the Revised Guidelines on the Implementation of the 13th month pay provided that the minimum 13th month pay required by law shall not be less than one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year. The revised guidelines also provided for a proration of this benefit only in cases of resignation or separation from work. As the rules state, under these circumstances, an employee is entitled to a pay in proportion to the length of time he worked during the year, reckoned from the time he started working during the calendar year. The Court of Appeals correctly held that there being no gap in the service of the workers during the calendar year in question, the computation of the 13 th month pay should not be pro-rated but should be given in full. It has not been refuted that Honda has not implemented any pro-rating of the 13th month pay before the instant case. Honda did not adduce evidence to show that the 13th month, 14th month and financial assistance benefits were previously subject to deductions or prorating or that these were dependent upon the company’s financial standing. It was also the company’s practice to give the bonuses in its full amount.
Phil. Agricultural Commercial and Industrial Workers Union v. National Labor Relations Commission
behalf of the drivers and conductors of Vallacar Transit on the ground that although the drivers and conductors are compensated on a “purely commission” basis as described in the CBA, they are automatically entitled to the basic minimum pay mandated by law should the commission be less than the basic minimum for eight hours work. In Vallacar Transit’s position paper, they contend that since the drivers and conductors are compensated on a purely commission basis, they are not entitled to 13th month pay pursuant to the exempting provisions enumerated in par. 2 of the Revised Guidelines on the Implementation of the 13th Month Pay Law. They further contended that Sec. 2 of Art. XIV of the CBA expressly provided that drivers and conductors paid on a purely commission are not legally entitled to 13th month pay. The Labor Arbiter dismissed the complaint. The appeal of the petitioner to the NLRC was also dismissed. ISSUE: W/N bus drivers and th conductors are entitled to 13 month pay HELD: Yes, they are entitled to 13 th month pay. RATIONALE: 13 th Month Pay Law (PD 851)
FACTS: Phil. Agricultural Commercial and Industrial Workers Union is the bargaining agent of the rank and file employees of Vallacar Transit. They instituted a complaint with the NLRC for the payment of 13 th month pay in
Sec. 1 of the 13th Month Pay law provides that all employers are required to pay all their employees receiving basic salary of not more than 1,000/month, regardless of the nature
6 1B 09-10
of the employment, a 13th month pay not later than Dec. 24 of every year. Rules and Regulations of PD 851 The Rules and Regulations of PD 851 provided that the basic salary shall include renumerations or earning paid by an employer to an employee for services rendered.
their basic minimum for eight hours of work. While commissions may be in the form of incentives or encouragement to inspire drivers and conductors to put more zeal and industry in their jobs, it is safe to say that the same are direct renumerations for services rendered which is the reason why Vallacar Transit allowed the drivers and conductors a guaranteed minimum wage.
Memorandum Order 28
Philippine Duplicators v. NLRC Memorandum Order 28 issued by Pres. Aquino modified to the extent that all employers are required to pay all their rank and file employees a 13th month pay not later than Dec. 24 of every year. In connection with the order, the Minister of Labor and Employment issued an Explanatory Bulletin which provides that employees who are paid a fixed or guaranteed wage plus commission are also entitled to 13th month pay. Drivers and Conductors are entitled to 13 th month pay From the cited provisions, it is clear that every employee receiving a commission in addition to a fixed or guaranteed wage or salary is entitled to a 13th month pay. It is immaterial whether the employees concerned are paid a guaranteed wage plus commission or a commission with guaranteed wage. The drivers and conductors are not paid purely by what they receive as commission. They are automatically entitled to basic minimum pay mandated by law in case the commissions they earned be less than
FACTS: The Third Division of the Supreme Court rendered a decision dismissing the Petition for Certiorari filed by Philippine Duplicators or the Duplicators case wherein the Court upheld the decision of NLRC, which affirmed the order of the Labor Arbiter directing petitioner to pay 13th month pay to private respondent employees computed on the basis of their fixed wages plus sales commissions. It also denied the Motion for Reconsideration. Phil. Duplicators filed a Second Motion for Reconsideration. Petitioner invoked the Court’s decision in the consolidated cases of Boie-Takeda and Fuji Xerox Corp. In the said decision, the Second Division of the Court declared null and void the second paragraph of Sec.5(a) of the Revised Guidelines issued by the Secretary of Labor. The said paragraph provides that employees who are paid a fixed or guaranteed wage plus commission are also entitled to the mandated 13th month pay, based on their total earnings during the calendar year on both their fixed or guaranteed wage and commission. Petitioner contends that the decision in the
7 1B 09-10
Duplicators case should now be considered as abandoned by the Boie Takeda decision. Petitioner prays that the decision rendered in Duplicators be set aside and another be entered directing the dismissal of the money claims of Phil. Duplicator’s Employees’ Union. The case was then referred to the Supreme Court en banc. ISSUE: W/N the Duplicators case be set aside HELD: No Doctrine of Stare Decisis The decision rendered in Boie-Takeda cannot serve as a precedent under the doctrine of stare decisis because it was decided a month after the Court rendered the decision on the Duplicators case. The petitioner’s Motion for Reconsideration of the decision was also denied with finality. The petitioners did not allege the validity of the Revised Guidelines on the Implementation of the 13th Month Pay Law either in its Petition for Certiorari or in its Motion for Reconsideration. In fact, the petitioner’s counsel relied on these guidelines and asserted their validity in opposing the decision rendered by the NLRC. Decision in Boie-Takeda is not directly opposite or contrary to the Duplicators case In the Duplicators case, the sales commissions received for every duplicating machine sold constituted part of the basic compensation or renumeration of the salesmen of Phil.
Duplicators for doing their job. The Third Division correctly held that the sales commissions were an integral part of the basic salary structure of Phil. Duplicators’ employees-salesmen. These commissions are not overtime payments, profit-sharing payments nor any other fringe benefit. Thus, the salesmen’s commissions, comprising of a pre-determined percent of the selling price of the goods sold by each salesman, were properly included in the term “basic salary” for purposes of computing their 13th month pay. In Boie-Takeda the commissions "paid to or received by medical representatives of Boie-Takeda Chemicals or by the rank and file employees of Philippine Fuji Xerox Co.," were excluded from the term "basic salary" because these were paid to the medical representatives and rank-andfile employees as "productivity bonuses." The Second Division characterized these payments as additional monetary benefits not properly included in the term “basic salary” in computing their 13th month pay. The "commissions" paid by the Boie Takeda Company to its medical representatives could not have been "sales commissions" in the same sense that Philippine Duplicators paid its salesmen sales commissions. Medical representatives are not salesmen; they do not effect any sale of any article at all. In common commercial practice, medical representatives are employees engaged in the promotion of pharmaceutical products or medical devices manufactured by their employer. They promote such products
8 1B 09-10
by visiting identified physicians and inform them of the existence and chemical composition and virtues of particular products of their company. They commonly leave medical samples with each physician visited; but those samples are not "sold" to the physician and the physician is, as a matter of professional ethics, prohibited from selling such samples to their patients. Thus, the additional payments made to Boie-Takeda's medical representatives were not in fact sales commissions but rather partook of the nature of profitsharing bonuses. The doctrine in Boie-Takeda is that additional payments made to employees to the extent they partake of the nature of profit-sharing payments are properly excluded from the term basic salary“ for purposes of computing the 13th month pay due to employees. Such additional payments are not commissions within the meaning of the second paragraph of Sec. 5(a) of the Revised Guidelines Implementing 13th Month Pay. The Supplementary Rules and Regulations Implementing PD 851 subsequently issued by Labor Minister Ople clarified the scope of items excluded in the computation of the 13th month pay. Overtime pay, earnings and other renumerations which are not part of the basic salary shall not be included in the computation of the 13 th month pay. The particular types of earnings and renumeration are or are not properly included or integrated in the basic salary are questions to be resolved on a case to case basis. In principle, where these earnings and remuneration are closely akin to fringe
benefits, overtime pay or profit-sharing payments, they are properly excluded in computing the 13th month pay. However, sales commissions which are effectively an integral portion of the basic salary structure of an employee shall be included in determining his 13th month pay. Productivity bonuses and sales commissions may have an incentive effect. Productivity bonuses are generally tied to the productivity or profit generation of the employer corporation. Productivity bonuses are not directly dependent on the extent an individual employee exerts himself. A productivity bonus is something extra for which no specific additional services are rendered by any particular employee and hence not legally demandable, absent a contractual undertaking to pay it. Sales commissions, on the other hand, such as those paid in Duplicators , are intimately related to or directly proportional to the extent or energy of an employee's endeavors. Commissions are paid upon the specific results achieved by a salesman-employee. It is a percentage of the sales closed by a salesman and operates as an integral part of such salesman's basic pay.
Boie-Takeda Chemicals, Inc. v. De la Serna FACTS: In Boie-Takeda A routine inspection was conducted in Boie-Takeda Chemicals by Labor and Development Officer Reynaldo Ramos
9 1B 09-10
under Inspection Authority. Finding that Boie-Takeda had not been including the commissions earned by its medical representatives in the computation of the 13th month pay, Ramos served a Notice of Inspection Results on Boie-Takeda requiring to effect restitution or correction of the underpayment of 13th month pay within ten (10) calendar days from notice.
A similar routine inspection was conducted in Phil. Fuji Xerox Corp. The Notice of Inspection Results noted that there was an underpayment of the 13 th month pay. Director Piezas issued an order directing the Senior Labor Employment Officer to compute the deficiency. Fuji appealed the order to the Office of the Secretary of Labor. Undersecretary Trajano denied the appeal.
Boie-Takeda wrote the Labor Department contesting the Notice of Inspection Results, and expressing the view "that the commission paid to our medical representatives are not to be included in the computation of the 13th month pay since the law and its implementing rules speak of REGULAR or BASIC salary and therefore exclude all other remunerations which are not part of the REGULAR salary." It pointed out that, "if no sales is made under the effort of a particular representative, there is no commission during the period when no sale was transacted, so that commissions are not and cannot be legally defined as regular in nature.
ISSUE: W/N the respondent labor officials in computing the 13th month pay committed grave abuse of discretion amounting to lack of jurisdiction by giving effect to Sec. 5 of the Revised Guidelines on the Implementation of the 13th month pay promulgated by Sec. Drilon.
Regional Director Luna Piezas directed Boie-Takeda to appear before his office but no one appeared from Boie-Takeda. The matter was resolved on the basis of the evidence at hand. Director Piezas ordered Boie-Takeda to pay its medical representatives the underpayment of their 13th month pay. Boie-Takeda appealed the order to Acting Labor Secretary Dionisio de la Serna who affirmed the order with modifications. In Fuji Xerox
PETITIONER’S CONTENTION They maintain that under P.D. 851, the 13th month pay is based solely on basic salary. As defined by the law itself and clarified by the implementing and Supplementary Rules as well as Supreme Court decisions, remunerations which do not form part of the basic or regular salary of an employee, such as commissions, should not be considered in the computation of the 13th month pay. This being the case, the Revised Guidelines on the Implementation of the 13th Month Pay Law issued by then Secretary Drilon providing for the inclusion of commissions in the 13th month pay, were issued in excess of the statutory authority conferred by P.D. 851. Petitioners further contend that assuming that Secretary Drilon did not exceed the statutory authority conferred by P.D. 851, still the Revised
10 1B 09-10
Guidelines are null and void as they violate the equal protection of the law clause. RESPONDENT’S CONTENTION P.D. No. 851, otherwise known as the 13th Month Pay Law has already been amended by Memorandum Order No. 28 issued by President Corazon C. Aquino so that commissions are now imputed into the computation of the 13th Month Pay. They add that the Revised Guidelines issued by then Labor Secretary Drilon merely clarified a gray area occasioned by the silence of the law as to the nature of commissions; and worked no violation of the equal protection clause of the Constitution, said Guidelines being based on reasonable classification. HELD: Petition granted, second paragraph of Sec.5(a) of the Revised Guidelines on the Implementation of the 13th Month Pay law is null and void Memorandum Order no. 28 Memorandum Order no. 28 did not repeal PD 851. It merely modified Sec. 1 by removing the 1,000 salary ceiling. The benefit is still to be computed on the basic salary of the employeerecipient provided under PD 851. The interpretation given to the term “basic salary” in PD 851 applies equally to “basic salary” under Memorandum Order 28. The term "basic salary" is to be understood in its common, generallyaccepted meaning, i .e ., as a rate of pay for a standard work period exclusive of
such additional payments as bonuses and overtime. In remunerative schemes consisting of a fixed or guaranteed wage plus commission, the fixed or guaranteed wage is patently the "basic salary" for this is what the employee receives for a standard work period. Commissions are given for extra efforts exerted in consummating sales or other related transactions. They are, as such, additional pay, which this Court has made clear do not form part of the "basic salary." In including commissions in the computation of the 13th month pay, the second paragraph of Section 5(a) of the Revised Guidelines on the Implementation of the 13th Month Pay Law unduly expanded the concept of "basic salary" as defined in P.D. 851. It is a fundamental rule that implementing rules cannot add to or detract from the provisions of the law it is designed to implement. Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law they are intended to carry into effect. They cannot widen its scope. An administrative agency cannot amend an act of Congress.
EMPLOYMENT OF WOMEN PT&T v. NLRC The policy of not accepting or considering as disqualified from work any woman worker who contracts marriage runs afoul of the test of and the right against discrimination
11 1B 09-10
afforded all women workers by our labor laws and by no less than the Constitution. While it is true that the parties to a contract may establish any agreements, terms and conditions that may deem convenient, the same should not be contrary to law, morals, good customs, public order or public policy.
Lakpue Drug Inc v. Belga Failure on the part of the employee to formally inform the employer of her pregnancy can not be considered as grave misconduct directly connected to her work as to constitute just cause for her separation.
EMPLOYMENT OF HOUSEHELPERS Apex Mining Company, Inc v. NLRC Laundrywoman not actually serving the family of the employer but working in the staffhouses or within the premises of the business of the employer is a regular employee and not a domestic helper.
visitors, mostly Chinese, who came to pray or seek advice before Buddha for personal or business problems; arranged meetings between these visitors and Su and supervised the preparation of the food for the temple visitors; acted as tourist guide of foreign visitors; acted as liaison with some goverment offices; and made the payment for the temple's Meralco, MWSS and PLDT bills. Indeed, these tasks may not be deemed activities of a household helper. They were essential and important to the operation and religious functions of the temple.
Cuajao v. Chua Lo Tan Vacation leave of four days a month entitled to a family driver is deemed waived if not demanded at its opportune time and allowed to lapse over the years in silence. Privilege of vacation leave can neither be accumulated nor converted to cash.
APPRENTICES Nitto Enterprises v. NLRC
NOTE: The term househelper shall refer to any person, whether male or female, who renders services in and about the employer’s home and which services are usually necessary or desirable for the maintenance and enjoyment thereof, and ministers exclusively of the employer’s family.
Barcenas v. NLRC The work that petitioner performed in the temple could not be categorized as mere domestic work. Thus, We find that petitioner, being proficient in the Chinese language, attended to the
In apprenticeship agreements, prior approval by the Department of Labor and Employment of the proposed apprenticeship program is a condition sine qua non before an apprenticeship agreement can be validly entered into. Where the apprenticeship agreement has no force and effect, the worker hired as apprentice should be considered as a regular employee.
Century Canning Corporation v. CA Prior approval from the Technical Education and Skills Development
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Authority (TESDA) is necessary to ensure that only employers in the highly technical industries may employ apprentices and only in apprenticeable occupations.
offense. The act committed must have reference to the work. Managerial: belief that the conduct was committed is sufficient Rank-and-file: higher degree of proof is required; proof of actual involvement
HANDICAPPED WORKERS Golden Thread Knitting v. NLRC Bernardo v. NLRC The Magna Carta for Disabled Persons mandates that a qualified disabled employee should be given the same terms and conditions of employment as a qualified able-bodied person. NOTE: In this case, the fact that the employees were qualified disabled persons necessarily removes the employment contracts from the ambit of Art. 80. Since the Magna Carta accords them the rights of qualified able-bodied persons, they are covered by Art. 280 of the Labor Code.
Nakpil v. Manila Development Corporation
Towers
Building owners may be compelled to provide access ramps for disabled persons.
TERMINATION OF EMPLOYMENT Aurelio v. NLRC Loss of confidence as a ground for dismissal does not require proof beyond reasonable doubt. NOTE: In loss of trust and confidence, there must be a cause; the employee must have committed a work-related
The characterization of an employee’ s services as no longer necessary or sustainable and therefore properly terminable is an exercise of business judgment on the part of the employer. It is not enough for a company to merely declare that it has become overmanned – it must produce adequate proof that such is the actual situation in order to justify the dismissal of the affected employees for redundancy. In selecting the employees to be dismissed, a fair and reasonable criteria must be used, such as but not limited to: a. Less preferred status b. Efficiency c. Seniority The utterances by an employee of obscene, insulting or offensive words against a superior justify his dismissal for gross misconduct, but the dismissal will not be upheld where it appears that the employee’s act of disrespect was provoked by the employer. The circumstances that an employee lost no time in filing a complaint for illegal dismissal against the employer is incompatible with the charge of abandonment.
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NOTE: Abandonment is a difficult ground to prove. Mere absence does not suffice. It is necessary that by the employee by some overt act manifested that there is no intent to go back to work. Complaint of illegal dismissal negates abandonment for as long as there is no re-instatement. Serious misconduct is a work-related offense.
Asian Alcohol Corp. v. NLRC
(3) that the employer pays the retrenched employees separation pay equivalent to one month pay or at least 1/2 month pay for every year of service, whichever is higher; (4) that the employer exercises its prerogative to retrench employees in good faith for the advancement of its interest of its interest and not to defeat or circumvent the employees' right to security of tenure; and (5) that the employer used fair and reasonable criteria in ascertaining who would be dismissed and who would be retained among the employees, such as status (i .e ., whether they are temporary, casual, regular or managerial employees), efficiency, seniority, physical fitness, age, and financial hardship for certain workers.
Retrenchment and redundancy are just causes for the employer to terminate the services of workers to preserve the viability of the business.
The phrase “retrenchment to prevent losses” means that retrenchment must be undertaken by the employer before losses are actually sustained.
Requirements for valid retrenchment must be proved by clear and convincing evidence:
NOTE: In the case of succession employer, when a company is bought by another, is the new employer liable for money claims? Are they bound by the CBA of the old employer?
Maya Farms Employees Organization v. NLRC Last In, First Out (LIFO) Rule: when there are two or more employees occupying the same position in the company affected by the retrenchment program, the last one employed will necessarily be the first to go.
(1) that the retrenchment is reasonably necessary and likely to prevent business losses, which, if already incurred, are not merely de minimis , but substantial, serious, actual and real, or if only expected, are reasonably imminent as perceived objectively and in good faith by the employer; (2) that the employer served written notice both to the employees and to the Department of Labor and Employment at least one month prior to the intend date of retrenchment;
The answer depends company was acquired.
on
how
the
If it is acquired through the sale of shares of stock, the new employer must respect the CBA and others. On the other hand, if the sale is not by shares of stock but by deed of sale you enumerate all things to be bought. Labor (CBA) contracts are contracts in persona so that when parties acted in
14 1B 09-10
good faith, the new employer is not liable for money claims.
North Davao Mining Corp. v. NLRC Art. 283 of the Labor Code do not obligate an employer to pay separation benefits when the closure is due to losses. NOTE: Are companies required to pay their employees their separation pay due to cessation of business operations? The answer must be qualified. Not necessarily required if it is due to serious business losses wherein the company is already bankrupt hence there are no more assets to pay employee’s separation pay. However, in the case of Cheniver where the company was not suffering serious business losses, the company must pay the employee’s separation pay.
Cheniver Deco Print Technics Corp. v. NLRC The phrase “closure or cessation of operation of an establishment or undertaking not due to serious business losses or reverses” under Art. 283 of the Labor Code includes both the complete cessation of all business operations and the cessation of only part of a company’s business. Even though the transfer of a company plant is due to a reason beyond the control of the employer, it still has to accord its employees some relief in the form of severance pay. Resignation is inconsistent with the filing of a complaint. Resignation must
be voluntary and made with the intention of relinquishing the office, accompanied with an act of relinquishment.
Colegio de San Calamba v. Villas
Juan
de
Letran-
Misconduct is improper or wrongful conduct. It is the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in character and implies wrongful intent and not mere error of judgment. In the case at bar, assuming arguendo that the respondent failed to report for work on the agreed date and enroll during the first semester, the most respondent could be charged with was simple misconduct.
Jose S. Santos, Jr. v. NLRC To constitute immorality, the circumstances of each particular case must be holistically considered and evaluated in light of prevailing norms of conduct and applicable laws. When a teacher engages in extramarital relationship, especially when the parties are both married, such behavior amounts to immorality, justifying his termination from employment. NOTE: The rule before is that even there is just cause but the employer did not complied with the twin requirements of due process, the termination is invalid and the employer is ordered to reinstate the employee. But this was abandoned in Serrano
15 1B 09-10
and modified in Agabon. In the case of Santos, there was just cause and due process was observed therefore the termination is valid.
NOTE: In this case, since the union and the company did not comply with the twin requirements of notice, the employee was illegally dismissed.
Viola Cruz v. NLRC
Agabon v. NLRC
For a disease to be a valid ground for the dismissal of the employee, the continued employment of such employee is prohibited by law or prejudicial to his health or the health of his co-employees, and there must be a certification by a competent public health authority that the disease is of such nature or at such a stage that it cannot be cured within a period of six (6) months, even with proper medical treatment. Since the burden of proving the validity of the dismissal of the employee rests on the employer, the latter should likewise bear the burden of showing that the requisites for a valid dismissal due to a disease have been complied with. In the absence of the required certification by a competent public health authority, this Court has ruled against the validity of the employee's dismissal.
Ferrer v. NLRC When good standing with the employee’s union is a condition for employment and such good standing was allegedly tainted by an employee, the latter has the right to due process. In case the union failed to investigate on such matter, it is the duty of the company to conduct an investigation on the veracity of such allegations.
Minimum penalty for non-compliance with due process but with existence of valid cause to terminate an employee is set at 30,000. It is dependent upon the circumstances of each case. NOTE: SC relaxed in this ruling. In Wenphil, the SC said that provided the termination was for a just case but there was no due process, the termination is valid but failure to comply with due process, the employer is penalized PhP1,000 for noncompliance with due process. In Serrano, if there was no due process given but there is just or authorized cause, the employer will be penalized by backwages from the time of termination and finality of judgment. What are the reliefs available to the employee who was illegally terminated? Reinstatement without loss of seniority rights, backwages, attorney’s fees, and damages (nominal, moral, exemplary). In case of reinstatement, if the position is no longer available and there is no equivalent position available, the relief is separation pay in lieu of reinstatement.
Roguero v. PAL Serious misconduct is defined as "the transgression of some established and definite rule of action, a forbidden act, a dereliction of duty, willful in
16 1B 09-10
character, and implies wrongful intent and not mere error in judgment." For serious misconduct to warrant the dismissal of an employee, it (1) must be serious; (2) must relate to the performance of the employee's duty; and (3) must show that the employee has become unit to continue working for the employer.
constructive dismissal if an act of clear discrimination, insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it could foreclose any choice by him except to forego his continued employment.
It is of public knowledge that drugs can damage the mental faculties of the user. Roquero was tasked with the repair and maintenance of PAL's airplanes. He cannot discharge that duty if he is a drug user. His failure to do his job can mean great loss of lives and properties. Hence, even if he was instigated to take drugs he has no right to be reinstated to his position. He took the drugs fully knowing that he was on duty and more so that it is prohibited by company rules. Instigation is only a defense against criminal liability. It cannot be used as a shield against dismissal from employment especially when the position involves the safety of human lives.
Voluntary resignation is defined as the act of an employee, who finds himself in a situation in which he believes that personal reasons cannot be sacrificed in favor of the exigency of the service; thus, he has no other choice but to disassociate himself from his employment.
The order of reinstatement immediately executory.
Alfaro v. Court of Appeals
is
The claim of petitioner that he was illegally dismissed cannot be sustained, considering that his voluntary resignation has been indubitably established as a fact by the three tribunals below. Indeed, illegal dismissal and voluntary resignation are adversely opposed modes of terminating employment relations, in that the presence of one precludes that of the other.
Intertrod Maritime, Inc v. NLRC Hyatt Taxi Services, Inc v. Catinoy After the 30-day period of preventive suspension, the employee must be reinstated to his former position because suspension beyond this maximum period amounts to constructive dismissal. Constructive dismissal does not always involve forthright dismissal or diminution in rank, compensation, benefit and privileges. There may be
Resignation once accepted and being the sole act of the employee may not be withdrawn without the consent of the employer. The mere fact that they did not accept such withdrawal did not constitute illegal dismissal for acceptance of the withdrawal of the resignation was the employer’s sole prerogative. NOTE: There must be acceptance by the employer of the resignation and
17 1B 09-10
there must be the consent of the employer if the employee (who has resigned) wants to return to work.
San Miguel Corp. v. Del Rosario An employee who was illegally dismissed is entitled to reinstatement and backwages.
Association of Integrated Security Force of Bislig-ALU v. CA An employer may close or cease his business operations even if he were not suffering from business losses or financial reverses.
Heavylift Manila, Inc. v. CA An employee’s attitude problem is a valid ground for termination. It is a situation analogous to loss of trust and confidence that must be duly proved by the employer. What is required is substantial evidence to support the termination on the ground of attitude problems. The mere mention of negative feedback from her team members and the letter dated Feb. 23, 1999, are not proof of her attitude problem. The letter did not constitute the required notice because it did not inform her of the specific acts complained of and their corresponding penalty. The letter never gave the respondent an opportunity to explain herself thus denying her of due process.
King of Mamac
Kings
Transport,
Inc
v.
In order to enable the employees to intelligently prepare their explanation and defenses, the notice should contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employees – a general description of the charge will not suffice. A verbal appraisal of the charges against an employee does not comply with the first notice requirement. NOTE: 24 hours is not ample opportunity to explain. There must be at least 5 days to consult with a lawyer and prepare an answer. The complaint against the employee must include the rules violated and the penalty for its violation. It must also narrate in particular detail these charges against the employee and should no longer be in general statements.
Citibank v. NLRC Where the notice of charges given to an employee is inadequate, the charges being too general to enable the employee to intelligently and adequately prepare her defense, the dismissal could not be in accordance with due process. NOTE: if the employee was only reinstated in the payroll (payroll reinstatement), the employee must reimburse the wages he received if the SC did not decide in his favor. If the employee was actually reinstated, there is no need for reimbursement. But this is an empty victory for the employer. How could you expect the employee to return his wages?
18 1B 09-10
Payroll reinstatement is an ancilliary remedy. Side issue: reinstatement. Is it effective immediately? When the Labor Arbiter rules that the employee must be reinstated, the order is immediately executory. It is the duty of the employer to reinstate the employee. But he has a choice if the reinstatement be actual or payroll.
Flight Attendants and Assoc. of the Phils v. PAL
concept of seniority, loyalty and past efficiency and treated all cabin attendants as if they were on equal footing, with no one more senior than the other.
Postigo v. Phil. Tuberculosis Society PTSI is a private corporation thus the petitioners are employees in the private sector hence entitled to the benefits of RA 7641.
Stewards
The law speaks of serious business losses or financial reverses – sliding incomes or decreasing gross revenues are not necessarily losses, much less serious business losses within the meaning of the law. The employer must also exhaust all other means to avoid further losses without retrenching its employees. Retrenchment is a means of last resort. The fact that PAL underwent corporate rehabilitation does not automatically justify the retrenchment of its cabin crew personnel. The hiring of new employees and subsequent rehiring of “retrenched” employees constitute bad faith. The failure of the employer to resort to other less drastic measures than retrenchment seriously belies its claim that retrenchment was done in good faith to avoid losses. By discarding the cabin crew personnel’s previous years of service and taking into consideration only one year’s worth of job performance for evaluation, PAL did away with the
Employees of government-owned and controlled corporations under the Corporation Code are governed by the provisions of the Labor Code.
Leopard Integrated Services Inc v. Macalinao Most contracts for security services stipulate that the client may request the replacement of the guards assigned to it and a relied and transfer order in itself does not sever employment relationship between a security guard and his agency.
Yrasuegui v. PAL The obesity of a cabin crew, when placed in the context of his work as a flight attendant, becomes an analogous cause under Art. 282(e) of the Labor Code that justifies his dismissal from service. Bona Fide Occupational Qualification: employment in particular jobs may not be limited to persons of a particular sex, religion or national origin unless the employer can show that sex, religion or national origin is an actual qualification for performing the job.
19 1B 09-10
BFOQ is valid provided that it reflects an inherent quality reasonably necessary for satisfactory job performance
But this case provides an XPN to the second requisite. When the certification came from the physician of the employee, the certificate can be relied on.
Meiorin Test: a. The employer must show that it adopted the standard for a purpose rationally connected to the performance of the job; b. The employer must establish that the standard is reasonably necessary to the accomplishment of that work-related purpose; and c. The employer must establish that the standard is reasonably necessary in order to accomplish the legitimate work-related purpose
Santos v. Servier Phils The receipt of retirement benefits does not bar the retiree from receiving separation pay. Retirement benefits and separation pay are not mutually exclusive unless there is no specific prohibition against the payment of both benefits in the retirement plan and/or in the CBA. NOTE: in this case, there being a provision in the Retirement Plan, the petitioner is entitled only to either the separation pay under the law or retirement benefits under the Plan and not both. Requirements for valid termination by reason of ailment: 1. Illness cannot be cured within 6 months 2. Certification by a public health officer 20 1B 09-10
FINALS COVERAGE
the Bureau of Cooperative Development and approved by the Secretary of Labor; and e. Farm Tenancy or lease hold.
What are “Facilities”? Facilities include articles or services for the benefit of the employee or his family.
Minimum Wage Wage distortions
Difference between wages and salaries
Wage distortion involves four elements:
Wages are compensation paid to blue collar workers, i.e., for skilled or unskilled manual labor paid at stated daily, weekly, monthly or seasonal periods Salaries are paid to white collar workers and denote a higher grade of employment, a superior grade of services and a position of office What is a “Living Wage”? It is one which is as nearly adequate as is economically feasible to maintain the minimum standards of living necessary for the health, efficiency and general well-being of the employees within the framework of the national economic and social development program.
Who are excluded from the coverage of Wages? a. Persons in the personal service of another; b. Homeworkers engaged in needlework; c. Workers employed in cottage industries duly registered in accordance with law and who perform the work in their homes; d. Workers in duly registered cooperatives as recommended by 21 1B 09-10
a. An existing hierarchy of positions with corresponding salary rates b. A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one c. The elimination of the distinction between the two levels d. The existence of the distortion in the same region of the country
What are the provisions that protect the wages of employees? a. Prohibition as to deduction from wages without authorization, except only as authorized by law b. Prohibition as to withholding of wages and kickbacks c. Freedom of disposition of wages by employees d. Payment of wages in legal tender e. Direct payment of wages to employee f. Direction as to period of payment of wages g. Direction as to place of payment of wages Worker‟s preference in case of bankruptcy
Preferential right given to workers under Art. 110 may be invoked only during bankruptcy or insolvency proceedings against the employer. (1) In our jurisdiction, bankruptcy or insolvency (or general judicial liquidation) proceedings provide the only proper venue for the enforcement of a creditor’s preferential right such as that established by Art. 110. (2) Art. 110 cannot be viewed in isolation of, and must always be reckoned with, the provisions of the Civil Code on concurrence and preference of credits, viz., Articles 2241 to 2245. (3) What Art. 110 of the Labor Code established is not a lien, but a preference of credit in favor of employees. Unlike a lien, a preference of credit does not create a charge upon any particular property of the debtor. This simply means that during bankruptcy or insolvency proceedings against the properties of the employer, the employees have the advantage of having their unpaid wages satisfied ahead of certain claims which may be proved therein.
Hours of Work Principles in hours of work
determining
Exclusions from hours of work GOV-ME-MS-FP-FM-DH-WR (1) Government employees, including employees of owned or controlled corporations with 22 1B 09-10
original charter because they are governed by the Civil Service Law. XPN: employees of government owned and controlled corporations organized under the Corporation Code are covered by the provisions of the Labor Code (2) Managerial Employees (3) Managerial Staff (4) Field Personnel (5) Family Members (6) Domestic Helpers and Persons in the personal service of another (7) Workers paid by Results
Who are considered managerial staff?
as
(1) Their primary duty consists of the performance of work directly related to management policies of their employer (2) They customarily and regularly exercise discretion and independent judgment (3) They regularly and directly assist the managerial employee whose primary duty consists of the management of a department of the establishment in which they are employed (4) They execute, under general supervision, work along specialized or technical lines requiring special training, experience and knowledge (5) They execute, under general supervision, special assignments and tasks (6) They do not devote more than 20% of their hours worked in a work-week to activities which are not directly and clearly related to
the performance of their work hereinbefore described
ensure, at all times, the fundamental equality before the law of women and men
Holidays Service incentive leave Yearly leave benefit of five days with pay, enjoyed by an employee who has rendered at least one year of service.
Maternity leave Female employee who has paid at least three monthly maternity contributions in the 12-month period preceding the semester of her childbirth, abortion or miscarriage and who is currently employed shall be paid a daily maternity benefit equivalent to one hundred percent of her present basic salary, allowances and other benefits or the cash equivalent of such benefits for sixty days subject to the following conditions (pp.81-82)
Sec. 3 of Article XIII – requires the State to afford full protection to labor and to promote full employment and equality of employment opportunities for all, including assurance of entitlement to tenurial security of all workers Sec. 14 of Art. XIII – mandates that the State shall protect working women through provisions for opportunities that would enable them to reach their full potential
Employment of Minors Househelpers Difference between apprentices and learners Retirement
Paternity leave Every male employee in the private sector shall be entitled to paternity leave benefits of seven days with full pay for the first four deliveries by his lawful spouse under such terms and conditions provided in the rules.
Service charges
Employee-employer relationship Labor standards Termination of Employment
~o~
13th Month Pay What are the constitutional provisions protecting women? Sec. 14, Article II – expressly recognized the role of women in nationbuilding and commands the State to 23 1B 09-10
Art. 278 – Coverage Establishments or Undertakings, whether for Profit or Not Art. 279 – Security of Tenure Regular Employment – employer shall not terminate the services of an employee except for a just cause or authorized cause Unjust dismissal – employee is entitled to 1. Reinstatement without loss of seniority rights and other privileges 2. Full back wages inclusive of allowances computed from the time his compensation was withheld from him up to the time of his actual reinstatement Art. 280 – Regular and Casual Employment Regular Employment – employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season.
employment shall continue while such activity exists. Art. 281 – Probationary Employment Not exceed 6 months from the date the employee started working it is covered by unless an apprenticeship agreement stipulating a longer period. The services of a probationary employee may be terminated for: a. Just cause; or b. When he fails to qualify as a regular employee in accordance with reasonable standards made known by the employer to the employee at the time of his engagement. An employee who is allowed to work after a probationary period shall be considered a regular employee. Art. 282 – Termination by Employer An employer may terminate an employment for any of the following causes:
Casual Employment – if not covered by regular employment provided that any employee has rendered at least one year of service, whether such service is continuous or broken shall be considered a regular employee with respect to the activity in which he is employed and his
24 1B 09-10
a. Serious misconduct or willful disobedience by the employee of the lawful ordered of his employer or representative in connection with his work; b. Gross and habitual neglect by the employee of his duties; c. Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized representative; d. Commission of a crime or offense by the employee against the person of his employer or any immediate member of his family
or his duly authorized representatives; and e. Other causes analogous to the foregoing. Art. 283 – Closure of Establishment and Reduction of Personnel The employer may also terminate the employment of any employee due to: a. Installation of labor-saving devices b. Redundancy c. Retrenchment to prevent losses or the closing or cessation of operation of the establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title
An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as to the health of his co-employees provided: a. He is paid separation pay equivalent to at least one month salary or to one-half (1/2) month salary for every year of service, whichever is greater; b. A fraction of at least six months being considered as one whole year Art. 285 – Termination by Employee
Employer must serve a written notice on the workers and the Ministry of Labor and Employment at least one month before the intended date. In case of termination due to the installation of labor-saving devices or redundancy, the worker affected shall be entitled to a separation pay equivalent to at least his one month pay or to at least one month pay for every year of service, whichever is higher. In case of retrenchment (under C), the separation pay shall be equivalent to one month pay or at least one half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six months shall be considered as one whole year. Art. 284 – Disease as a ground for termination 25 1B 09-10
a. An employee may terminate without just cause the employeeemployer relationship by serving a written notice on the employer at least one (1) month in advance. The employer upon whom no such notice was served may hold the employee liable for damages. b. An employee may put an end to the relationship without serving any notice on the employer for any of the following just causes (S-I-C-O): Serious insult by the employer or his representative on the honor and person of the employee; Inhuman and unbearable accorded the treatment employee by the employer or his representative; Commission of a crime or offense by the employer or his representative against the person of the employee or any of the
immediate members of his family; and Other causes analogous to any of the foregoing.
ART. 286 - When Employment not Deemed Terminated The bona-fide suspension of the operation of a business or undertaking for a period not exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall not terminate employment. In all such cases, the employer shall reinstate the employee to his former position without loss of seniority rights if he indicates his desire to resume his work not later than one month from the resumption of operations of his employer or from his relief from the military or civic duty. Title II – Retirement from the Service Art. 287 – Retirement An employee may be retired upon reaching the retirement age based in the CBA or other applicable employment contract In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any CBA and other agreements: Provided: a. That an employee’s retirement benefits under any collective bargaining and other agreements shall not be less than those provided therein. In the absence of a retirement plan or agreement providing for retirement
benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Unless the parties provide for broader inclusions, the term „one-half (1/2) month salary‟ shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. Retail, service and agricultural establishments or operations employing not more than ten (10) employees or workers are exempted from the coverage of this provision. Violation of this provision is hereby declared unlawful and subject to the penal provisions under Article 288 of this Code. Implementing Rules Sec. 1 – Coverage Applies to all establishments whether operated for profit or not with the exception of the Government and its political subdivision including government-owned or controlled corporations Sec. 2 – Security of Tenure
26 1B 09-10
If regular employment – employer shall not terminate except for a just or authorized causes as provided by law and subject to the requirements of due process
standards of the employer in case of probationary employment, a written notice is sufficient served within a reasonable time. Sec. 3 – Reinstatement
If employment covered by contracting or subcontracting arrangement – no employee shall be dismissed prior to the expiration of the contract between the principal and the contractor or subcontractor unless dismissal is for just or authorized cause or is brought about by the completion of the phase of the contract for which the employee was engages subject to the requirements of due process or prior notice In all cases of termination, the following standards of due process shall be observed: For termination based on just cause: a. Written notice specifying the ground/s for termination b. Hearing c. Written notice of termination served For termination of employment as defined in Art. 283: a. Requirement of due process deemed complied with upon service of a written notice to the employee and the appropriate Regional Office of the DOLE at least 30 days before the effectivity of the termination specifying the ground/s for termination If termination is brought about by the completion of a contract or phase or by failure of an employee to meet the
An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and backwages Sec. 4 – Reinstatement Position
to
Former
Employee – separated without just cause – reinstated to his former position unless: a. Such position no longer exists at the time of reinstatement in which case he shall be given a substantially equivalent position in the same establishment without loss of seniority rights b. In case the establishment ceased operations or former position no longer exists at the time of reinstatement for reasons not attributable to the fault of the employer, the employee shall be entitled to separation pay equivalent at least to one month for every year of service, whichever is higher, a fraction of at least six months being considered as one whole year. Sec. 5 – employment
Regular
and
casual
(a) Employment shall be considered to be regular employment where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or
27 1B 09-10
trade of the employer except where the employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the engagement of the employee or where the work or service to be performed is seasonal in nature and the employment is for the duration of the season. (b) Employment shall be deemed as casual in nature if it is not covered by the preceding paragraph; Provided, That any employee who has rendered at least one year of service, whether such service is continuous or not, shall be considered a regular employee with respect to the activity in which he is employed and his employment shall continue while such activity exists. (c) An employee who is allowed to work after a probationary period shall be considered a regular employee. Sec. 6 – Probationary employment (a) Where the work for which an employee has been engaged is learnable or apprenticeable , the probationary employment period of the employee shall be limited to the authorized learnership or apprenticeship period, whichever is applicable. (b) Where the work is neither learnable nor apprenticeable , the probationary employment period shall not exceed six (6) months reckoned from the date the employee actually started working. (c) The services of an employee who has been engaged on probationary basis
may be terminated only for a just cause or when authorized by existing laws, or when he fails to qualify as a regular employee in accordance with reasonable standards prescribed by the employer. (d) In all cases involving employees engaged on probationary basis, the employer shall make known to the employee the standards under which he will qualify as a regular employee at the time of his engagement. Sec. 7 – Termination of Employment by Employer The just causes: provided in Article 283 of the Code The separation from work for a just cause does not entitle him to the termination pay provided in the Code, without prejudice, however, to whatever rights, benefits, and privileges he may have under the applicable individual or collective agreement with the employer or voluntary employer policy or practice. Sec. 8 – Disease as a ground for dismissal Where the employee suffers from a disease and his continued employment is prohibited by law or prejudicial to his health or to the health of his coemployees, the employer shall not terminate his employment unless there is a certification by competent public health authority that the disease is of such nature of at such a stage that it cannot be cured within a period of six (6) months even with proper medical treatment. If the disease or ailment can
28 1B 09-10
be cured within the period, the employee shall not terminate the employee but shall ask the employee to take a leave of absence. The employer shall reinstate such employee to his former position immediately upon the restoration of his normal health. Sec. 9 – Termination pay (a) An employee shall be entitled to termination pay equivalent to at least one month's salary for every year of service a fraction of at least six (6) months being considered as one whole year, in case of termination of his employment due to the installation of labor-saving devices or redundancy. (b) Where the termination of employment is due to retrenchment to prevent losses and in case of closure or cessation of operations of establishment or undertaking not due to serious business losses or financial reverses, or where the employment is prohibited by law or is prejudicial to his health or to the health of his coemployees, the employee shall be entitled to termination pay equivalent to at least one-half month's pay for every year of service, a fraction of at least six months being considered as one whole year. (c) The termination pay provided in the Section shall in no case be less than the employee's one month pay. Sec. 10 – Basis of termination pay The computation of the termination pay - latest salary rate unless the same was reduced by the employer to defeat the intention of the Code, in which case the
basis of computation shall be the rate before its deduction. Sec. 11 – Termination of employment by employee The just causes for putting an end to the employer-employee relationship by the employee shall be those provided in Article 286 of the Labor Code. Sec. 12 – Suspension of relationship In case of suspension of operation of the business or undertaking of the employer for a period not exceeding six (6) months unless the suspension is for the purpose of defeating the rights of the employees under the Code, and in case of mandatory fulfillment by the employee of a military or civic duty. The payment of wages of the employee as well as the grant of other benefits and privileges while he is on a military or civic duty shall be subject to special laws and decrees and to the applicable individual or collective bargaining agreement and voluntary employer practice or policy. Sec. 13 – Retirement In the absence of any collective bargaining agreement or other applicable agreement concerning terms and conditions of employment which provides for retirement at an older age, an employee may be retired upon reaching the age of sixty (60) years . Sec. 14 – Retirement benefits (a) An employee who is retired pursuant to a bona-fide retirement
29 1B 09-10
