Updates on Labor Law and Jurisprudence (Philippines) February 15, 2013

Updates on Labor Law
and Jurisprudence
Resource Speaker:
Atty. Apollo X.C.S. Sangalang
Business Lawyer & Legal Coach

Why study Labor Law?
• Because our employment system is highly regulated.
• Because employees are favored by our laws.
• Because you need to be sure that you are getting the
right kind of legal advice.
• Because you don’t want to get your business or
company into trouble, especially if you have no or
little access to expert legal help.
• Because you want to deal with employees and their
unions in the most effective way.

Disclaimer
• This seminar will not make you instant lawyers or
even experts in Labor Law.
• This is not a comprehensive study of the entire field
of Labor Law.
• The study of Labor Law is not a one-time course or
undertaking.
• This seminar needs focus and attention from
participants, with some amount of interest in law in
general, and Labor Law in particular.

What is Labor Law?
• It is the field of law that defines the relationship
between employer and their employees, as well as
certain third parties, in connection with
employment.
• It establishes the rights of each parties…
• …And determines their duties and obligations.
• It also defines the role of government.

Where do you find
Labor Law?
• Constitution
• Decisions of the Supreme Court (Jurisprudence)
• Civil Code and Revised Penal Code
• Special statutes that are not yet codified
• American jurisprudence
• LABOR CODE
• Rules and Regulations issued by the Department of
Labor and Employment (DOLE)

Where else do you find
Labor Law?
• Bible:
• “You have six days each week for your ordinary
work, but on the seventh day you must stop
working. This gives your ox and your donkey a
chance to rest. It also allows your slaves and the
foreigners living among you to be refreshed.”
(Exodus 23:12 NLT)
• “Do not rob or defraud your neighbor. Do not
make your hired workers wait until the next day to
receive their pay.” (Leviticus 19:13 NLT)

Classification of Labor Law
• Labor Relations
• Labor Standards
• Terms and Conditions of Employment
• Other Social Legislation
• Batas Kasambahay (RA 10361)

The Labor Code
• The Labor Code (Presidential Decree No. 442, as
amended) revolutionized our employment system on
May 1, 1974.
• What is a code?
• What does the Labor Code contain?
• What does it exclude?
• What has it done to Labor Law in general?

Parts of the Labor Code
Book 1: Pre-Employment (with the Preliminary Title)
Book 2: Human Resources Development Program
Book 3: Conditions of Employment
Book 4: Health, Safety and Social Welfare Benefits
Book 5: Labor Relations
Book 6: Post Employment
Book 7: Transitory and Final Provisions

Who are covered by
Labor Law?
• Labor Law applies only if an employer-employee
relationship exist.
• It applies to employers and their employees, as well
as to certain third parties.
• Third Parties:
• Recruitment agencies in case of overseas contract
workers (OCWs or OFWs).
• Principals or indirect employers in job contracting
arrangements.
• Unions and other workers’ associations.

Who are EXEMPTED
from Labor Law?
• No employer-employee relationship:
• The Principal and his Agent.
• The Capitalist Partner and his Industrial Partner.
• The Project Owner and his Contractor.
• The Corporation and the Corporate Officers.
• Rule No. 1: Labor Law applies only when there is
or was an employer-employee relationship.
• Exception to the Rule: Non-employment related
issues, i.e. stockholders’ rights in corporations and
members’ rights in cooperatives.

Test of Employment
Four-fold Test (or the 4 Elements):
• SELECTION AND PLACEMENT
• PAYMENT OF WAGES
• POWER OF DISMISSAL
• POWER OF CONTROL
What is Management Prerogative?

Control Test
• The power of one party to determine, not only the
end result of the work, but also the manner of doing
the work, is the POWER OF CONTROL.
• Only an employer has the power of control over his
employees.
• The power of control need not be actually exercised.
• Illustrations:
• Job contracting arrangements.
• Independent contracting arrangements.

Classification of Employees
• Based on Employer: Civil Service and non-Civil
Service (including Employees of GOCCs).
• Based on Security of Tenure: Regular and Non-
Regular.
• Based on Function: Rank-and-file and Non-rank-and-
file (including Managerial & Supervisory).
• Based on Nature: Agricultural and Non-Agricultural.
• Based on Time and Motion: Workers paid based on
hours-worked and workers paid based on results.

Labor Standards
• The minimum requirements of law with respect to
hours of work, rates of pay, and other terms and
conditions of employment is Labor Standards.
• It is based on the Constitutional Right to Humane
Conditions of Work and to a Living Wage.
• Rule – It is prohibited to have terms and conditions
of employment lower than what the law provides.
• What are the consequences of non-compliance with
Labor Standards?

Labor Standards Updates
• Download from the Bureau of Working Conditions
website:
• “Handbook of Workers’ Statutory Monetary
Benefits, 2012 Edition” (updated as of January
10, 2012)
• Other government websites:
– www.dole.gov.ph (DOLE website & portal)
– www.nwpc.dole.gov.ph (Minimum wage)
– www.bwc.dole.gov.ph (Labor standards)
– www.oshc.dole.gov.ph (Health & safety)

• Download from the National Wages and
Productivity Commission website:
• “Wage Order No. NCR-17” (issued May 17,
2012, but effective on June 3, 2012 with second
tranche on November 1, 2012)

• Download from the Official Gazette (www.gov.ph)
website:
• Republic Act No. 10361, “Domestic Workers
Act” or “Batas Kasambahay” (approved on
January 18, 2013 and effective February 2,
2013).

Labor Standards Benefits
1. Minimum Wage 7. Service Incentive Leave
2. Holiday Pay 8. Maternity Leave
3. Premium Pay 9. Paternity Leave
4. Overtime Pay 10. Parental Leave
5. Night Shift Pay 11. Leave for VAWC
6. Service Charge Share 12. Special Leave for
Women

Labor Standards Benefits
13. 13th Month Pay
14. Separation Pay
15. Retirement Pay
16. Employee Compensation (ECC) Benefits*
17. PhilHEALTH Benefits*
18. SSS Benefits*
19. PagIBIG Benefits*

Retail and Service Establishment
Exemptions
Labor Standard
Benefits
1 to 5 Workers 1 to 9 Workers
Holiday Pay None None
Night Shift Pay None Applicable
Service Incentive
Leave
None None
Retirement Pay None None

Minimum Wage Law
(RA 6727)
• National Wages and Productivity Commission.
• Regional Tripartite Wage and Productivity Boards.
• Wage Orders are issued by region, and also by
sector, by type of establishments, by size of
workforce, by capitalization, and by gross sales.
• Penalty for Violation:
• Imprisonment of 2 to 4 years (without probation
benefits); or
• Fine of P25,000 to P100,000; or both.
• Plus DOUBLE INDEMNITY for the workers.

Minimum Wage (NCR)
• Wage Order No. NCR-17 (May 17, 2012)
• June 3, 2012:
• Old COLA was Integrated to Basic Wage:
• P22 + P404 = New Basic Wage: P426
• New COLA: P20
• New Minimum Wage: P426 + P20 = P446
• November 1, 2012:
• Add P10 to New COLA: P30 + P426 = P456

Minimum Wage (NCR)
• Rule (June 3/November 1, 2012) :
• BW: P426 + COLA: P20/P30 = MW: P446/P456
• Exception:
• BW: P389 + COLA: P20/P30 = MW: P409/P419
• Agriculture;
• Private Hospitals with bed capacity of 100 or less;
• Retail and Service Establishments with 15
workers or less;
• Manufacturing Establishments with 9 workers or
less.

Minimum Wage
• Other Exceptions:
• Government Employees under Civil Service Law.
• Domestic Workers under RA 10361 (MW:
P2,500/P2,000/P1,500 per month).
• Personal Assistants, including family drivers.
• Barangay Micro Business Enterprises (BMBEs)
under DTI and LGU guidelines.
• Distressed Establishments, but only for a period
not exceeding 1 year under NWPC guidelines.

Minimum Wage
• Special Circumstances:
• Reduced working hours, i.e Underemployed or
those working less than 8-hours of work per day.
• Reduced working days, i.e. Shortened workweek.
• Workers paid by results i.e. They should be paid
not less than the minimum wage rate
proportionate to the number of working hours they
actually rendered.
• Apprentices, Learners, and (unqualified) Disabled
Workers: 75% of minimum wage.

Minimum Wage:
Domestic Workers
• P2,500/month for those employed in NCR
• P2,000/month for those employed in chartered cities
and first class municipalities
• P1,500.00/month for those employed in other
municipalities.
• After 1 year from effectivity of RA 10361 (February
2, 2014), and periodically thereafter, the Regional
Wage Boards shall review, and if proper, determine
and adjust the minimum wage rates of domestic
workers.

Rules on Wages
• What is Wage Distortion?
• What is “Across-the-Board Wage Increase”?
• What is the Rule on Payment of Wages?
• Paid in legal currency at or near the workplace.
• Frequency: 2x/month not exceeding 16 days
interval.
• What is the Rule on Wage Deduction?
• Mandatory: Allowed by law.
• Non-mandatory: Written Authorization needed.

Rules on Wages:
Domestic Workers
• Payment of wages shall be made on time directly to
the domestic worker to whom they are due in cash at
least once a month.
• The employer, unless allowed by the domestic
worker through a written consent, shall make no
deductions from the wages other than that which is
mandated by law.
• No employer shall pay the wages of a domestic
worker by means of promissory notes, vouchers,
coupons, tokens, tickets, chits, or any object other
than the cash wage.

Rules on Wages:
Domestic Workers
• The employer shall at all times provide the domestic
worker with a copy of the pay slip containing the
amount paid in cash every pay day, and indicating
all deductions made, if any.
• The copies of the pay slip shall be kept by the
employer for a period of three (3) years.
• It shall be unlawful for the employer to interfere with
the freedom of any domestic worker to dispose of
the latter’s wages.

Rules on Wages:
Domestic Workers
• The employer shall not force, compel or oblige the
domestic worker to purchase merchandise,
commodities or other properties from the employer
or from any other person, or otherwise make use of
any store or services of such employer or any other
person.
• It shall be unlawful for an employer, directly or
indirectly, to withhold the wages of the domestic
worker. Likewise, the employer shall not induce the
domestic worker to give up any part of the wages by
force, stealth, intimidation, threat or by any other
means whatsoever.

Rules on Hours of Work:
Who are covered?
• All employees in all establishments, for profit or not.
• Exceptions –
• Government employees under Civil Service Law;
• Managerial employees and managerial staff;
• Domestic workers under RA 10361;
• Persons in the personal service of another;
• Workers paid by results;
• Field personnel and those whose time and
performance are unsupervised; and
• Dependent family members of the Employer.

Who are the
Managerial Employees?
• Principal Duty – Management of the establishment
in which they are employed, or a department or
division thereof.
• They customarily direct the work of 2 or more
employees.
• They have authority to hire/fire, or their suggestions
on this matter are given weight.
• They exercise Management Prerogative on behalf
of the Employer.

Who are the
Managerial Staff?
• Primary duty – Perform work directly related to
management policies.
• They customarily exercise discretion and
independent judgment.
• They regularly assist managerial employees.
• They do not devote more than 20% of their work
time to activities not related to all the above.

Who are the
Domestic Workers?
• Domestic Worker or “kasambahay” refers to any
person engaged in domestic work within an
employment relationship such as, but not limited to,
the following: general househelp, nursemaid or
“yaya”, cook, gardener, or laundry person. (It may
include family drivers and persons in the personal
service of another.)
• Excluded are any person who performs domestic
work only occasionally or sporadically and not on an
occupational basis.
• “Domestic work” refers to work performed in or for
a household or households.

Normal Hours of Work
• Shall not exceed 8 hours/day.
• Rationale.
• Broken time or workday is lawful.
• Shortening of work week is lawful.

What are Hours Worked?
• All time during which an employee is
required to be on duty or at a prescribed
work place.
• All the time during which an employee is
permitted or suffered to work.

Principles to Determine
Hours Worked
• All hours required, whether spent in
productive labor or involved physical or
mental exertion, are hours worked.
• Rule on rest period.
• Rule on work interruptions.

Other Rules on Work Hours
• “Waiting time” – compensable if integral part of
work.
• “On call” – compensable if time cannot be used
for personal purpose.
• “Travel time” – if part of work, yes. Home to
work, no. Travel away from home, yes only if it
cuts across employee’s workday.
• “Attendance to seminars” – No, if voluntary,
outside of work hours and/or no productive
work done.

Other Rules…
• “Power interruptions” – yes, if less than 20
minutes. No if more, and employee leave
premises.
• “Union matters” – no, unless CBA provides
otherwise.
• “Attendance at hearings” – not compensable.
• “Strike participation” – NO, definitely.

Meal Periods
• Required. – It should not be less than 60
minutes, but it is not compensable.
• Shortening of meal period to less than 60
minutes? – Yes, it is allowed but it must be
paid.

Overtime Pay
• Overtime Pay refers to the additional compensation
for work performed beyond 8 hours per day.
• Rule: Overtime work is not permitted.
• Exceptions:
• When there is an emergency or urgent situation.
• When completion or continuation after work hours
is necessary to prevent prejudice to business or
operations.
• Rate: 125% of regular hourly rate on ordinary
working days. 130% for overtime work on Rest
Days.
• COLA not included in computation.

Overtime Pay:
Who are Covered?
• Exceptions –
• Government employees subject to Civil Service
Law;
• Field personnel and other employees whose time
and performance are unsupervised; and

Overtime Pay:
Domestic Workers?
• The domestic worker shall be entitled to an
aggregate daily rest period of eight (8) hours per day.
• The domestic worker shall be entitled to all other
benefits under existing laws.
• Therefore, domestic workers are entitled to overtime
pay for work done within their daily rest period.
• This concept of overtime pay is by way of analogy
since under RA 10361, a domestic worker can waive
a particular rest day in return for an equivalent daily
rate of pay.

When Is Overtime Work
Valid & Must Be Paid?
Even if without prior permission:
• The work performed was necessary.
• The work benefited the Employer.
• Employee could not abandon his work at the
end of normal working hours because there is
no replacement.

Undertime Not Offset
By Overtime
• Undertime work on any day shall not be offset
by overtime work on any other day.
• Permission granted by the Employer for the
Employee to go on leave on some other day shall
not exempt him from the payment of additional
compensation for overtime work rendered.
• Valid overtime work is always subject to
Overtime Pay.

15-Minute
Networking Break
• “Masters, treat your slaves the
SAME WAY. Don’t threaten them;
Remember, you both have the
same Master in Heaven, and He
has no favorites.” EPHESIANS 6:9
New Living Translation (NLT)

Holiday Pay
• Holiday Pay refers to the payment of regular
daily wage for any unworked Regular Holiday at
the rate of 100%.
• If the Employee is allowed or required to work
on a Regular Holiday, he is entitled to 200% of
his daily wage rate (Basic Wage + COLA).
• If 2 Regular Holidays fall on the same day and
the Employee is allowed or required to work on
such day, he is entitled to 300%.

Holiday Pay:
Who are Covered?
• All employees in all establishments, for profit or not,
including daily-paid workers.
• Exceptions –
• Government employees subject to Civil Service Law;
• Field personnel and other employees whose time and
performance are unsupervised;
• Dependent family members of the Employer; and
• Retail/Service Establishment regularly employing less than
10 workers.

Rules on Holiday Payment
• Employees are entitled when they are present or on
leave with pay on the preceding workday.
• Employees are NOT entitled if absent or on leave
without pay on the preceding workday, unless they
work on such Regular Holiday, in which case they
are entitled to 200%.
• When preceding day is non-work day or rest day, the
Employee is entitled, if he worked on the day before
such non-work day or rest day.
• In case of successive Regular Holidays i.e. Holy
Week, the Employee shall NOT be entitled to the
successive Regular Holidays if he is absent or on
leave without pay on the preceding work day
(Wednesday), unless he worked on the first Holiday.

Holiday Pay Rules continued…
• Seasonal workers may not be paid during off season.
• Those without regular working days are entitled.
• When company is on temporary or periodic
shutdown not due to business reverses, the employee
is entitled.
• But when shutdown is due to business reverses, the
employee is not entitled.
• If a Regular Holiday falls on the same day, the
Employee shall still be paid 100% for each days or a
total of 200%.

What are the Regular Holidays?
• EO 292, as amended by RA 9849.
• 12 Regular Holidays: New Year’s Day,
Maundy Thursday, Good Friday, Araw ng
Kagitingan, Labor Day, Independence Day,
National Heroes’ Day, Eidul Fitr (End of
Ramadhan), Eidul Adha (Feast of Sacrifice
October 26, 2012), Bonifacio Day, Christmas
Day, Rizal Day.
• 4 Muslim Holidays observed in ARMM (for
both Muslims and Non-Muslims) and
applicable to all Muslims outside ARMM.

What are Special Days?
• EO 292, as amended by RA 9849.
• 3 Special Days: Ninoy Aquino Day, All Saints
Day, and Last Day of the Year.
• The President (or Congress) may proclaim other
days as Special Day i.e. November 2, 2012 (per
Proclamation No. 295).
• Unworked Special Day is NOT paid.
• Work performed on a Special Day is paid 130%.
• Special Work Day (or Special Working Day) is
treated as an ordinary work day.

What are Weekly Rest Days?
• It is the duty of the Employer to provide a Rest Day
of not less than 24 hours after 6 consecutive working
days.
• Old law: Rest Day is Sunday.
• New law: Rest Day is any day.
• Employer determines the Rest Day of the Employee,
subject to agreement and rules of DOLE.
• Employees are given preference based on religion.

Premium Pay
(Rest Day/Special Day Pay)
• Rule: Work on Rest Day (and Special Day) is not
permitted.
• Exceptions (Rest Day):
• When there is an emergency or urgent situation.
• When work is necessary to prevent prejudice to
business or operations.
• Rate: 130% of regular hourly rate on ordinary
working days. 150% if Rest Day and Special Day fall
on the same day.
• COLA not included in the computation (unlike in
Holiday Pay).

Premium Pay:
Who are Covered?
• Exceptions –
• Househelpers and persons in the personal service of
another;

Night Shift Differential Pay
• NSD Pay refers to the the additional compensation
for each hour of work performed between 10PM and
6AM.
• Rate: 110% of the regular hourly wage rate.

Night Shift Differential Pay:
Who are Covered?
• Exceptions –
• Househelpers and persons in the personal service of
another;
• Retail/ Service Establishment employing not more
than 5 workers.

Service Incentive Leave
• The Employee is entitled to 5 days of leave with pay
for every one year of service; provided that he has
served for 1 year already.
• If Employer grants vacation leave with pay of at
least 5 days every year, then this is already
compliance with SIL.
• Commutable to cash and becomes SIL Pay.
• Part-time employees are also entitled to full service
incentive leave.
• No Labor Code provisions on vacation leave or sick
leave.

Service Incentive Leave:
Who are Covered?
• Exceptions –
• Retail/ Service Establishment employing less than 10
workers.

Service Incentive Leave:
Domestic Workers
• A domestic worker who has rendered at least one (1)
year of service shall be entitled to an annual service
incentive leave of five (5) days with pay.
• Any unused portion of said annual leave shall not be
cumulative or carried over to the succeeding years.
• Unused leaves shall not be convertible to cash.

Service Charges
• Employees are entitled to a share from the Service
Charge being collected by the Employer from his
customers.
• Rank-and-file employee’s share: 85%
• Management’s share: 15%.
• Rank-and-file employees shall receive equal share.
• If abolished, the share of the Rank-and-file employees
shall be considered integrated to their wages.
• If the Employer doesn’t collect Service Charge, the
pooled tips shall be treated the same way as Service
Charge.

Retirement Pay
• Retirement age: 60 to 65 years old.
• Employee must also have worked for at least 5 years
for the Employer.
• Rate: Equivalent to 22.5 days salary for every year of
service payable by Employer.
• Distinct from the Retirement Benefits from SSS.
• Excluded: Government employees; and Retail/
Service/ Agricultural Establishments employing not
more than 10 workers.

Separation Pay
• Employees terminated by the Employer on the basis
of Authorized Causes are entitled to Separation Pay.
• Rate: 1 Month or ½ Month Salary for every year of
service: Retrenchment, Closure of Business, Serious
Disease.
• Rate: 1 Month or 1 Month Salary for every year of
service: Labor-saving device, Redundancy, and
Impossible Reinstatement.
• Regular Allowance in included in the computation.

13th
Month Pay
• Rank-and-file employees are entitled to 13th
month
pay; provided they worked for at least 1 month.
• Rate: 1/12 of the total basic salary earned by an
Employee in a year.
• Excluded: Government employees, Employees paid
based on results, and Managerial employees.
• Domestic workers are now entitled to 13th
Month
Pay per RA 10361.

Maternity Leave
• All pregnant female workers are entitled to
Maternity Leave subject to SSS Law.
• 60 days of the average daily salary credit for normal
birth or miscarriage.
• 78 days of the average daily salary credit for
ceasarian section delivery.
• Requirements: Membership in the SSS with at least
3 months contributions prior to delivery or
miscarriage.

Paternity Leave
• All married male workers are entitled to Paternity
Leave of 7 calendar days with pay for the first 4
deliveries (or miscarriage) of his lawful wife whom
he is cohabiting with.
• Paternity Leave is Not convertible to cash.

Parental Leave for Solo Parents
• Parental Leave shall mean leave benefits granted to a
solo parent to enable him or her to perform parental
duties and responsibilities where physical presence is
required.
• The solo parent is entitled to 7 days leave with pay.
• Parental Leave is Not convertible to cash.
• Requirements: At least 1 year of service and DSWD
Solo Parents ID.

Leave for Victims of VAWC
• Female employees who are certified as victims under
the “Anti-Violence Against Women and their
Children Act of 2004” are entitled to 10 days of
leave with pay to enable her to attend to medical and
legal concerns.
• VAWC Leave is Not convertible to cash.
• Requirements: Certification from the barangay,
prosecutor, or clerk of court that a VAWC case
involving the victim female employee is pending.

Special Leave for Women
• Female employees who has undergone surgery due
to gynecological disorders are entitled to 2 months
leave with pay to enable her to attend to medical and
legal concerns.
• Special Leave is Not convertible to cash.
• Requirements: Certification from physician, and
employment service of at least 6 months within the
12 month period prior to surgery.

Employees’ Compensation Program
• The ECP is designed to provide a compensation
package to Employees and their dependents in case
of work-related sickness, injury, disability or death.
• Benefits: Loss of income benefit; Medical benefit;
Rehabilitation services; Carer’s allowance; and
Death benefits.
• Workers in the formal sector are covered starting on
day 1 of their employment.

PhilHEALTH Benefits
• The National Health Insurance Program, which is
administered by PhilHEALTH, provides financial
assistance to member-Employees when they get
hospitalized.
• All employees are required to be members.
• Benefits: Inpatient hospital care; and outpatient care
based on a Schedule of Benefits.

Social Security Benefits
• The Social Security Program provides a package of
benefits in the event of death, disability, sickness,
maternity, and old age. It provides replacement for
income lost during these contingencies.
• All employees in the private sector are mandatorily
covered, including Domestic Workers.
• Benefits: Sickness, Maternity, Disability, Retirement,
Death & Funeral, based on a Schedule of Benefits.

Loan and
Miscellaneous Benefits
• Socialized loans for emergency, housing and other
purposes are available to employees who are
qualified members of the SSS and PagIBIG Fund.
• The duty of the Employer is to deduct and remit the
Employees’ contributions as well as his required
contributions to SSS, PhilHEALTH, ECC, and
PagIBIG.
• Failure on the part of the Employer to remit the
mandatory contributions has serious consequences.

Domestic Workers’
Social Benefits
• A domestic worker who has rendered at least 1
month of service shall be covered by the SSS,
PhilHealth and Pag-IBIG, and shall be entitled to all
the benefits in accordance with the pertinent
provisions provided by law. (This may also include
ECC coverage.)
• Premium payments or contributions shall be
shouldered by the employer.
• But if wage is P5,000 and above, the Domestic
Worker shall pay his/her share in the premium or
contribution payments.

Domestic Workers’
Catch-All Benefit Clause
• “The domestic worker shall be
entitled to all other benefits under
existing laws.” (SEC. 30, RA 10361)
• Fine of P10,000 to P40,000.00.
• Implementing Rule and Regulation
(IRR) within 90 days from effectivity of
law.

Occupational Safety and
Health Standards
• Every covered Employer is required to keep and
maintain his workplace free from work hazards
that are causing or likely to cause physical harm
to the workers or damage to property.
• The Occupational Safety and Health Standards,
as amended, is the body of rules and regulations
that protect every worker against the dangers of
injury, sickness or death through safe and
healthful working conditions.

Special Protection
• Children.
• Physically-impaired.
• Women.
• Domestic Workers.
• Homeworkers and the informal sector.
• Filipino professionals and labor –versus- aliens.

Company-initiated Benefits
• Employers are not prohibited from, and in fact
encouraged to, provide terms and conditions of
employment that are better or higher than Labor
Standards.
• Higher than Labor Standards Benefits are either
initiated by the Employer, on its own, by request of
the Employees, or by demand of their Union or
Association.

Non-diminution of
Benefits
• The reduction or elimination of
benefits provided under the law,
agreement or voluntary practice is
prohibited.

When does an act
become a practice?
• If done for a long period of time (ex. Three
years).
• The act is done consistently and
intentionally.
• The act should NOT be a product of
erroneous interpretation of law.

Exceptions to Rule on
Non-diminution
• If circumstances no longer justify grant of
benefits (Dislocation pay, relocation
allowance, per diem, supplements, etc.)
• Rule on grant of bonus – management
prerogative, but not if given as a salary
supplement and without conditions.

Labor Relations
• Right to Security of Tenure.
• Right to Just Share in the Fruits of Production.
• Right to Self-Organization.
• Right to Bargain Collectively.
• Right to Strike and Other Peaceful Concerted
Action.
• Right Against Unfair Labor Practices.

Labor Relations Updates
• 2011 NLRC Rules of Procedure. (Effective August
2011)
• DOLE Department Order No. 18-A “Rules
Implementing Article 106 to 109 of the Labor Code,
As Amended”. (Effective December 2011)
• “The Rules of Procedure of the Single Entry
Approach (SEnA)” (Effective March 2011)

Role of Government
• Policy-Maker
• Regulator
• Program Administrator
• Inspector
• Conciliator and Mediator
• Arbitrator or Arbiter or Adjudicator
• Enforcer

What is a Labor
Organization?
• Definition – any union or association of employees
which exist in whole or in part for the purpose of (a)
collective bargaining or (b) for dealing with
employers concerning terms and conditions of
employment.

What is a “legitimate” labor
organization?
• Definition – one which is duly registered with the
Department of Labor and Employment.

What distinguishes a
legitimate labor organization?
• Right to represent its members for purposes of collective
bargaining.
• Right to be certified as exclusive representative of all employees
in bargaining unit for purposes of col. Bargaining
• To be furnished financial records
• To sue and be sued in its registered name
• To own property
• To undertake programs to benefit the org/members

Requirements for Registration
• Registration fee
• Names of officers, their addresses, the address of the org.,
minutes of org. meeting and list of workers who
participated.
• Names of all members who comprise 20% of all
employees in the bargaining unit where it seeks to
operate.
• Annual financial records.
• Copies of constitution and by-laws

Purpose of registration
requirements
• To prevent fraud
• To protect members from unscrupulous or fly by
night unions.

Is the requirement for union
registration a violation of the
freedom to associate?
- Any group of employees may organize into a union, even
without registration.
- But registration is condition sine qua non for the exercise
of privileges.
- A group may not register but they cannot avail of the rights
of legitimate unions.
- Registration is an exercise of police powers by the state
because union is invested with public interest.

Critical requirements to be
able to register
• Membership must be at least 20% of all the
employees in the bargaining unit.

What is a bargaining unit?
• It is a group or cluster of jobs or positions that
supports the labor organization which is applying for
registration.
• Test whether the bargaining unit is appropriate-if it
will best assure to all employees the exercise of their
collective bargaining rights.

What is an employer unit?
• Refers to a case where there is only 1 bargaining unit
for all the employees of the company.
• Purpose why the employer unit is encouraged by the
state.

Another way of organizing as
a labor union
• Affiliation as a chapter of an existing labor
federation or a national union.
• What is a labor federation or national union?

Duty of an employer when
workers organize
• Self-organization is a constitutional right. Therefore,
the company must respect the right of employees to
organize.

Penalty for infringing on the
right to unionize
• Unfair labor practice is a prohibited act.
• It is considered a criminal offense.
• Penalty includes imprisonment and payment of fine.

What happens when a union
is organized/registered?
• It becomes entitled to the privileges of a legitimate
labor organization.
• But it is not automatically a bargaining agent or
majority representative.
• To be a bargaining agent, it needs to be certified that
it is the exclusive bargaining agent.

What is needed to be Certified
as a Bargaining Agent?
• It must win a certification election; or,
• It is voluntarily recognized by the employer; or,
• It is selected by the employees through a consent
election.

What is a Certification
Election (CE)?
• It is a process by which the members of a bargaining
unit chooses one among contending unions to be its
exclusive bargaining agent.
• Non-adversarial
• Fact-Finding
• Administered by DOLE

Important things related to CE
Who can participate in Certification
Election?
Role of Employer in a Certification
Election: Neutral Observer.

When a union fights in a CE and
loses, does it mean that it does
not have any more duty to its
members?
• It continues to represent its members but it does not
have the right to engage in collective bargaining.

What is the importance of
being a bargaining agent?
• A bargaining agent possesses the right, by law, to
demand from the employer that it negotiates with it
(union) terms and conditions of employment,
including wages, hours of work, and rates of pay.

Product of Bargaining
• A collective bargaining agreement or CBA, if the
union is able to have an agreement with the
employer about its proposed terms and conditions of
employment.

Recourse of Union in the
event of failed negotiations
• It can engage in strike.
• It can engage in other concerted activities.
• All of which are protected by law if no criminal act
attends the holding of said actions.

Win-Win Labor Relations
1. Master the Basic Principles of Labor Relations.
2. Observe the Golden Rule of Human Relations.
3. Documentation, Documentation, Documentation!
4. Write Clearly.
5. Consult the Experts.
6. Use Best Practices.
7. Be Open-minded.
8. Negotiate, Negotiate, Negotiate!

Thank You!
• “Do not twist JUSTICE in legal
matters by favoring the poor or
being partial to the rich and
powerful. Always judge people
fairly.” (LEVITICUS 19:15 Bible
New Living Translation)

Updates on Labor Law and Jurisprudence (Philippines) February 15, 2013

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Updates on Labor Law and Jurisprudence (Philippines) February 15, 2013