UP 2013 Labor

Fundamental Principles and Policies ..................................... 1 CONSTITUTIONAL PROVISIONS ................................. 1 CIVIL CODE ................................................................. 2 LABOR CODE .............................................................. 3

Recruitment and Placement . 5 RECRUITMENT OF LOCAL AND MIGRANT WORKERS ... 5 ILLEGAL RECRUITMENT ...................................................... 5 DIRECT HIRING ............................................................... 11 REGULATION AND ENFORCEMENT ........................... 11 SUSPENSION OR CANCELLATION OF LICENSE OR AUTHORITY ....... 11 REGULATORY AND VISITORIAL POWERS ................................. 11 REMITTANCE OF FOREIGN EXCHANGE EARNING ....................... 11 PROHIBITED ACTIVITIES .................................................... 11

Labor Standards ................... 12 COVERAGE ................................................................ 12 GOVERNMENT EMPLOYEES ................................................ 12 MANAGERIAL EMPLOYEES ................................................. 12 FIELD PERSONNEL ........................................................... 12 DEPENDENT FAMILY MEMBERS ........................................... 13 GOVERNMENT EMPLOYEES ................................................ 13 DOMESTIC HELPERS ......................................................... 13 PERSONS IN PERSONAL SERVICE OF ANOTHER ........................ 13 WORKERS PAID BY RESULT ................................................ 13 HOURS OF WORK ...................................................... 13 COVERAGE/EXCLUSIONS ................................................... 13 NORMAL HOURS OF WORK ................................................. 13 MEAL BREAK ..................................................................16 WAITING TIME ................................................................16 OVERTIME WORK, OVERTIME PAY ........................................ 17 NIGHT WORK, NIGHT SHIFT DIFFERENTIAL ............................ 18 PART-TIME WORK .......................................................... 18 CONTRACT FOR PIECE OF WORK ........................................ 18 WAGES ..................................................................... 18 GENERAL CONCEPT ......................................................... 18 WAGE VS. SALARY .......................................................... 19 MINIMUM WAGE ............................................................. 19 MINIMUM WAGE OF WORKERS PAID BY RESULTS ..................... 20 COMMISSIONS ............................................................... 20 DEDUCTIONS FROM WAGES .............................................. 20 PART-TIME DEDUCTIONS FROM WAGES ............................... 20 NON-DIMINUTION OF BENEFITS .......................................... 21 FACILITIES V. SUPPLEMENTS .............................................. 21 WAGE DISTORTION/RECTIFICATION ..................................... 21 DIVISOR TO DETERMINE DAILY RATE .................................... 22 REST DAY ................................................................. 22 WEEKLY REST DAY .......................................................... 22 EMERGENCY REST DAY WORK ............................................ 22 HOLIDAY PAY/PREMIUM PAY ................................... 23 HOLIDAYS .................................................................... 23 COVERAGE ................................................................... 23 REGULAR HOLIDAYS ........................................................ 23 HOLIDAY PAY COMPUTATION ............................................. 23 RIGHT TO HOLIDAY PAY .................................................... 24

TEACHERS, PIECE WORKERS, SEAFARERS, SEASONAL WORKERS, ETC. ........................................................................... 25 LEAVES .................................................................... 26 SERVICE INCENTIVE LEAVE PAY .......................................... 26 MATERNITY LEAVE .......................................................... 26 PATERNITY LEAVE .......................................................... 27 PARENTAL LEAVE .......................................................... 27 LEAVES FOR VICTIMS OF VIOLENCE AGAINST WOMEN ............... 28 SERVICE CHARGES ................................................... 30 COVERAGE ................................................................... 30 EXCEPTIONS ................................................................. 30 DISTRIBUTION ............................................................... 30 INTEGRATION ................................................................ 30 THIRTEENTH (13TH) MONTH PAY AND OTHER BONUSES ................................................................. 30 RATIONALE .................................................................. 30 COVERAGE ................................................................... 30 EXCLUSIONS/EXEMPTIONS FROM COVERAGE ......................... 30 NATURE OF THE 13TH MONTH PAY ....................................... 31 13THE MONTH PAY IN SPECIAL CASES ................................... 31 SEPARATION PAY ..................................................... 32 DEFINITION .................................................................. 32 GENERAL RULE .............................................................. 32 EXCEPTION ................................................................... 32 AMOUNT ...................................................................... 32 NOTICE OF TERMINATION ................................................. 32 BASIS OF SEPARATION PAY ............................................... 32 INCLUSION OF REGULAR ALLOWANCE IN THE COMPUTATION ...... 32 RETIREMENT PAY ..................................................... 32 RATIONALE .................................................................. 32 ELIGIBILITY ................................................................... 32 AMOUNT OF RETIREMENT PAY ........................................... 33 RETIREMENT BENEFITS OF WORKERS WHO ARE PAID BY RESULTS 33 RETIREMENT BENEFIT OF PART-TIME WORKERS ..................... 33 TAXABILITY................................................................... 33 WOMEN WORKERS ................................................... 34 PROVISIONS AGAINST DISCRIMINATION ................................ 34 STIPULATION AGAINST MARRIAGE ...................................... 34 PROHIBITED ACTS .......................................................... 34 ANTI-SEXUAL HARASSMENT ACT ........................................ 34 MINOR WORKERS .................................................... 35 CONSTITUTIONAL BASIS ................................................... 35 EMPLOYMENT OF CHILDREN FROM 15 TO 18 .......................... 36 REGULATION OF WORKING HOURS OF A CHILD ....................... 36 EMPLOYMENT OF HOUSEHELPERS .......................... 36 DEFINITION .................................................................. 36 BENEFITS ACCORDED HOUSEHELPERS.................................. 36 TERMINATION ............................................................... 37 EMPLOYMENT OF HOMEWORKERS .......................... 37 DEFINITION .................................................................. 37 RIGHTS AND BENEFITS ACCORDED HOMEWORKERS ................. 37 CONDITIONS FOR DEDUCTION FROM HOMEWORKERS EARNINGS 37 APPRENTICES AND LEARNERS ................................. 38 APPRENTICES................................................................ 38 LEARNERS ................................................................... 39 HANDICAPPED WORKERS DIFFERENTLY-ABLED WORKERS ................................................................ 40 DEFINITIONS ................................................................. 40

RIGHTS OF DISABLED WORKERS ......................................... 40 PROHIBITIONS ON DISCRIMINATION AGAINST DISABLED PERSON 41 INCENTIVES FOR EMPLOYERS ............................................ 42

Termination of Employment ......................................... 42 EMPLOYER-EMPLOYEE RELATIONSHIP .................... 42 FOUR-FOLD TEST ........................................................... 42 ECONOMIC DEPENDENCE TEST ........................................... 43 KINDS OF EMPLOYMENT ................................................... 43 JOB CONTRACTING ......................................................... 47 DISMISSAL FROM EMPLOYMENT ...............................51 SECURITY OF TENURE .......................................................51 CONFLICT WITH MANAGEMENT PREROGATIVES ...................... 52 JUST CAUSES ................................................................ 52 AUTHORIZED CAUSES ...................................................... 53 DUE PROCESS ............................................................... 56 RELIEFS FOR ILLEGAL DISMISSAL ............................ 57 REINSTATEMENT ............................................................ 57 BACKWAGES ................................................................. 59 PREVENTIVE SUSPENSION ....................................... 59 DEFINITION .................................................................. 59 CONSTRUCTIVE DISMISSAL ...................................... 59

Management Prerogative...... 59 DISCIPLINE ............................................................... 59 TRANSFER OF EMPLOYEES ...................................... 59 PRODUCTIVITY STANDARD ...................................... 59 GRANT OF BONUS .................................................... 60 CHANGE OF WORKING HOURS ................................. 60 RULES ON MARRIAGE BETWEEN EMPLOYEES OF COMPETITOR-EMPLOYERS ....................................... 60 POST-EMPLOYMENT BAN ......................................... 60

Social and Welfare Legislation ............................................................................. 60 SSS LAW ................................................................... 60 COVERAGE ................................................................... 60 EXCLUSIONS FROM COVERAGE ............................................61 BENEFITS ......................................................................61 BENEFICIARIES .............................................................. 62 GSIS .......................................................................... 62 COVERAGE ................................................................... 62 EXCLUSIONS FROM COVERAGE ........................................... 62 BENEFITS ..................................................................... 62 BENEFICIARIES .............................................................. 63 LIMITED PORTABILITY LAW ...................................... 63 COVERAGE ................................................................... 63 PROCESS ..................................................................... 63 WHY? ......................................................................... 63

EMPLOYEES COMPENSATION COVERAGE AND WHEN COMPENSABLE .............................................. 63 COVERAGE ................................................................... 63 EFFECTIVITY .................................................................. 64 WHEN COMPENSABLE ...................................................... 64

Labor Relations Law .................... 64 RIGHT TO SELF-ORGANIZATION ............................... 64 BASIS OF RIGHT TO SELF-ORGANIZATION .............................. 64 RIGHT TO SELF-ORGANIZATION: A FUNDAMENTAL RIGHT .......... 64 INFRINGEMENT OF THE RIGHT TO SELF-ORGANIZATION ............ 64 SCOPE OF RIGHT TO SELF-ORGANIZATION ............................. 64 WORKER QUALIFICATION.................................................. 65 DEFINITIONS ................................................................. 65 WHO MAY UNIONIZE FOR PURPOSES OF COLLECTIVE BARGAINING 65 WHO CANNOT FORM, JOIN, OR ASSIST LABOR ORGANIZATIONS .. 66 BARGAINING UNIT .......................................................... 67 VOLUNTARY RECOGNITION ............................................... 68 CERTIFICATION ELECTION ................................................. 69 RIGHT TO COLLECTIVE BARGAINING ........................ 75 DUTY TO BARGAIN COLLECTIVELY ....................................... 75 MANDATORY PROVISIONS OF CBA ....................................... 76 UNION SECURITY ............................................................ 79 UNFAIR LABOR PRACTICE IN COLLECTIVE BARGAINING ............. 80 UNFAIR LABOR PRACTICE (ULP) ......................................... 81 RIGHT TO PEACEFUL CONCERTED ACTIVITIES .......... 83 CONSTITUTIONAL BASIS ................................................... 83 STATUTORY BASIS .......................................................... 83 FORMS OF CONCERTED ACTIVITIES ...................................... 83 WHO MAY DECLARE A STRIKE OR LOCKOUT............................ 84 REQUISITES OF A VALID STRIKE .......................................... 84 REQUISITES OF A VALID LOCKOUT ....................................... 85 REQUISITES FOR LAWFUL PICKETING ................................... 86 ASSUMPTION OF JURISDICTION BY THE DOLE SECRETARY OR

CERTIFICATION OF THE LABOR DISPUTE TO THE NLRC FOR

COMPULSORY ARBITRATION ............................................. 87 NATURE OF ASSUMPTION ORDER OR CERTIFICATION ORDER ...... 87 EFFECT OF DEFIANCE OF ASSUMPTION OR CERTIFICATION ORDERS

................................................................................. 87 ILLEGAL STRIKE ............................................................. 88 INJUNCTIONS ................................................................ 89

Procedure and Jurisdiction ... 90 LABOR ARBITER ....................................................... 90 JURISDICTION ............................................................... 90 REINSTATEMENT PENDING APPEAL ..................................... 91 REQUIREMENTS TO PERFECT APPEAL TO NLRC ....................... 91 NATIONAL LABOR RELATIONS COMMISSION ........... 91 JURISDICTION ............................................................... 91 EFFECT OF NLRC REVERSAL OF LABOR ARBITERS ORDER OF REINSTATEMENT ............................................................ 91 REMEDIES .................................................................... 91 CERTIFIED CASES ........................................................... 91 BUREAU OF LABOR RELATIONS (BLR) MED ARBITERS ................................................................. 92 JURISDICTION (ORIGINAL AND APPELLATE) .......................... 92 NATIONAL CONCILIATION AND MEDIATION BOARD (NCMB) .................................................................... 92 NATURE OF PROCEEDINGS ................................................ 92 CONCILIATION VS. MEDIATION ........................................... 92 DOLE REGIONAL DIRECTORS ................................... 93

JURISDICTION ............................................................... 93 DOLE SECRETARY ..................................................... 93 VISITORIAL AND ENFORCEMENT POWERS.............................. 93 POWER TO SUSPEND EFFECTS OF TERMINATION ..................... 93 ASSUMPTION OF JURISDICTION .......................................... 94 APPELLATE JURISDICTION ................................................ 94 VOLUNTARY ARBITRATION POWERS .................................... 94 GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATORS .......................................................... 94 SUBJECT MATTER OF GRIEVANCE ........................................ 94 VOLUNTARY ARBITRATOR................................................. 94 COURT OF APPEALS ................................................. 95 RULE 65, RULES OF COURT .............................................. 95 SUPREME COURT ..................................................... 95 RULE 45, RULES OF COURT .............................................. 95 PRESCRIPTION OF ACTIONS ..................................... 95 MONEY CLAIMS .............................................................. 95 ILLEGAL DISMISSAL......................................................... 96 UNFAIR LABOR PRACTICE ................................................. 96 OFFENSES PENALIZED BY THE LABOR CODE AND IRR ISSUED

PURSUANT THERETO ....................................................... 96 PRESCRIPTIVE PERIOD OF ILLEGAL RECRUITMENT CASES .......... 96 ANNEX A................................................................... 97 ANNEX B: COMPARISON BETWEEN SSS AND GSIS ... 99

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Fundamental Principles and Policies CONSTITUTIONAL PROVISIONS ARTICLE II, SECS. 9, 10, 11, 13, 14, 18, 20.

Article II, Section 9. The State shall promote a just and dynamic social order that will ensure the prosperity and independence of the nation and free the people from poverty through policies that provide adequate social services, promote full employment, a rising standard of living, and an improved quality of life for all.

Article II, Section 10. The State shall promote social justice in all phases of national development.

General definition Social Justice is neither communism, nor despotism, nor atomism, nor anarchy, but the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated. [Calalang vs. Williams, 1940] Welfare State The welfare state concept is found in the constitutional clause on the promotion of social justice to ensure the well-being and economic security of all the people, and in the pledge of protection to labor with specific authority to regulate the relations between landowners and tenants and between labor and capital. [Alalayan vs. National Power Corporation, 1968]

Article II, Section 11. The State values the dignity of every human person and guarantees full respect for human rights.

Article II, Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.

Article II, Section 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.

Article II, Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of workers and promote their welfare.

Article II, Section 20. The State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments.

Limits of Social Justice Social justice should be used only to correct an injustice. It must be founded on the recognition of the necessity of interdependence among diverse units of a society, and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life. As partners in nation-building, labor and management need each other to foster productivity and

economic growth; hence, the need to weigh and balance the rights and welfare of both the employee and employer. [Agabon vs. NLRC, 2004] Liberty of Contract/Laissez Faire The prohibition to impair the obligation of contracts is not absolute and unqualified. In spite of the constitutional prohibition and the fact that both parties are of full age and competent to contract, it does not necessarily deprive the State of the power to interfere where the parties do not stand upon an equality, or where the public health demands that one party to the contract shall be protected against himself. [Leyte Land Transportation Co. vs. Leyte Farmers & Workers Union, 1948] The Constitution is primarily a document of social justice, and although it has recognized the importance of the private sector, it has not embraced fully the concept of laissez-faire or relied on pure market forces to govern the economy. [Employees Confederation of the Philippines vs. NWPC, 1991] ARTICLE III, SECS. 1, 4, 8.

Article III, Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.

Due Process Due process requirements are two-fold substantive [dismissal should be for a valid and authorized cause as provided by law] and procedural (due notice and hearing). [Salaw vs. NLRC, 1991] Labor as Property Right Ones employment is a property right, and the wrongful interference therewith is an actionable wrong. [Sibal vs. Notre Dame of Greater Manila, 1990]

Article III, Section 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances.

Article III, Section 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.

ART. XIII, SECS. 1, 2, 3, 13, 14.

Article XIII, Section 1. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments.

Article XIII, Section 2. The promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance.

Article XIII, Section 3. The State shall afford full protection to labor, local and overseas, organized and unorganized,


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and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits as may be provided by law. The State shall promote the principle of shared responsibility between workers and employers and the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual compliance therewith to foster industrial peace. The State shall regulate the relations between workers and employers, recognizing the right of labor to its just share in the fruits of production and the right of enterprises to reasonable returns to investments, and to expansion and growth.

Participation in Decision-Making Process Verily, a line must be drawn between management prerogatives regarding business operations per se and those which affect the rights of the employees. In treating the latter, management should see to it that its employees are at least properly informed of its decisions or modes action. Indeed, industrial peace cannot be achieved if the employees are denied their just participation in the discussion of matters affecting their rights. [Phil. Airlines Inc. vs. NLRC, 1993] Management and the Constitution: Management Function/Prerogative The law in protecting the rights of the employees authorizes neither oppression nor self-destruction of the employer. It should be made clear that when the law tilts the scale of justice in favor of labor, it is but a recognition of the inherent economic inequality between labor and management. Never should the scale be so tilted if the result is an injustice to the employer. [Phil. Geothermal Inc. vs. NLRC, 1994] This Court held that the employers right to conduct the affairs of his business according to its own discretion and judgment, is well-recognized. An employer has a free reign and enjoys wide latitude of discretion to regulate all aspects of employment. This is a management prerogative, where the free will of management to conduct its own affairs to achieve its purpose takes form. [Torreda vs. Toshiba, 2007] But, like other rights, there are limits thereto. The managerial prerogative to transfer personnel must be exercised without grave abuse of discretion, bearing in mind the basic elements of justice and fair play. Having the right should not be confused with the manner in which the right is exercised. [Tinio vs. CA, 2007] This Court declared that it recognizes the exercise of management prerogatives and it often declines to interfere with the legitimate business decisions of the employer. xxx However, as expressed in PAL v NLRC, the privilege is not absolute, but subject to exceptions. One of these exceptions is when the Secretary of Labor assumes jurisdiction over labor disputes involving industries indispensable to the national interest under Article 263(g)

of the Labor Code. [University of Immaculate Concepcion Inc v Sec of Labor, 2005]

Article II, Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs.

Article XIII, Section 14. The State shall protect working women by providing safe and healthful working conditions, taking into account their maternal functions, and such facilities and opportunities that will enhance their welfare and enable them to realize their full potential in the service of the nation.

CIVIL CODE ARTICLE 19

Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice, give everyone his due, and observe honesty and good faith.

ARTICLE 1700

Art. 1700. The relations between capital and labor are not merely contractual. They are so impressed with public interest that labor contracts must yield to the common good. Therefore, such contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts, closed shop, wages, working conditions, hours of labor and similar subjects.

ARTICLE 1702

Art. 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer.

Contracts Under the Civil Code, contracts of labor are explicitly subject to the police power of the state because they are not ordinary contracts but are impressed with public interest. Inasmuch as in this particular instance the contract in question would have been deemed in violation of pertinent labor laws, the provisions of said laws would prevail over the terms of the contract, and private respondent would still be entitled to overtime pay. [PAL Employees Savings And Loan Assn., Inc. vs. NLRC, 1996] Liberal Construction While the terms and conditions of a CBA constitute the law between the parties, it is not however, an ordinary contract to which is applied the principles of law governing ordinary contracts. A CBA, as a labor contract within the contemplation of Article 1700 of the Civil Code of the Philippines which governs the relations between labor and capital, is not merely contractual in nature but impressed with public interest, thus, it must yield to the common good. As such, it must be construed liberally rather than narrowly and technically, and the courts must place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and purpose which it is intended to serve. [Cirtek Employees Labor Union-FFW v Cirtek Electronics, 2010]


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Fair treatment The right of an employer to dismiss an employee differs from and should not be confused with the manner in which such right is exercised. It must not be oppressive and abusive since it affects one's person and property. [General Bank and Trust Co. vs. CA, 1985] Mutual obligation The employer's obligation to give his workers just compensation and treatment carries with it the corollary right to expect from the workers adequate work, diligence and good conduct. [Firestone Tire And Rubber Co. vs. Lariosa, 1987] Compliance with law It is also important to emphasize that the return-to-work order not so much confers a right as it imposes a duty; and while as a right it may be waived, it must be discharged as a duty even against the worker's will. [Sarmiento vs. Tuico, 1988] Employee's compliance and obedience to employer's orders The lack of a written or formal designation should not be an excuse to disclaim any responsibility for any damage suffered by the employer due to his negligence. The measure of the responsibility of an employee is that if he performed his assigned task efficiently and according to the usual standards, then he may not be held personally liable for any damage arising therefrom. Failing in this, the employee must suffer the consequences of his negligence if not lack of due care in the performance of his duties. [PCIB vs. Jacinto, 1991] LABOR CODE ARTICLE 3

Art. 3. Declaration of basic policy. The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work.

ARTICLE 4

Art. 4. Construction in favor of labor. All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.

ARTICLE 166

Art. 166. Policy. The State shall promote and develop a tax-exempt employees compensation program whereby employees and their dependents, in the event of work-connected disability or death, may promptly secure adequate income benefit and medical related benefits.

ARTICLE 211

Art. 211. Declaration of Policy. (A) It is the policy of the State:

(a) To promote and emphasize the primacy of free collective bargaining and negotiations, including voluntary arbitration, mediation and conciliation, as modes of settling labor or industrial disputes;

(b) To promote free trade unionism as an instrument for the enhancement of democracy and the promotion of social justice and development;

(c) To foster the free and voluntary organization of a strong and united labor movement;

(d) To promote the enlightenment of workers concerning their rights and obligations as union members and as employees;

(e) To provide an adequate administrative machinery for the expeditious settlement of labor or industrial disputes;

(f) To ensure a stable but dynamic and just industrial peace; and

(g) To ensure the participation of workers in decision and policy-making processes affecting their rights, duties and welfare.

To encourage a truly democratic method of regulating the relations between the employers and employees by means of agreements freely entered into through collective bargaining, no court or administrative agency or official shall have the power to set or fix wages, rates of pay, hours of work or other terms and conditions of employment, except as otherwise provided under this Code. [As amended by Section 3, Republic Act No. 6715, March 21, 1989]

ARTICLE 212

Art. 212. Definitions. (a) "Commission" means the National Labor Relations

Commission or any of its divisions, as the case may be, as provided under this Code.

(b) "Bureau" means the Bureau of Labor Relations and/or the Labor Relations Divisions in the regional offices established under Presidential Decree No. 1, in the Department of Labor.

(c) "Board" means the National Conciliation and Mediation Board established under Executive Order No. 126.

(d) "Council" means the Tripartite Voluntary Arbitration Advisory Council established under Executive Order No. 126, as amended.

(e) "Employer" includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer.

(f) "Employee" includes any person in the employ of an employer. The term shall not be limited to the employees of a particular employer, unless the Code so explicitly states. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice if he has not obtained any other substantially equivalent and regular employment.

(g) "Labor organization" means any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment.

(h) "Legitimate labor organization" means any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof.

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(i) "Company union" means any labor organization whose formation, function or administration has been assisted by any act defined as unfair labor practice by this Code.

(j) "Bargaining representative" means a legitimate labor organization whether or not employed by the employer.

(k) "Unfair labor practice" means any unfair labor practice as expressly defined by the Code.

(l) "Labor dispute" includes any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee.

(m) "Managerial employee" is one who is vested with the powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees for purposes of this Book.

(n) "Voluntary Arbitrator" means any person accredited by the Board as such or any person named or designated in the Collective Bargaining Agreement by the parties to act as their Voluntary Arbitrator, or one chosen with or without the assistance of the National Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in the Collective Bargaining Agreement, or any official that may be authorized by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written request and agreement of the parties to a labor dispute.

(o) "Strike" means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute.

(p) "Lockout" means any temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.

(q) "Internal union dispute" includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by laws of a union, including any violation of the rights and conditions of union membership provided for in this Code.

(r) "Strike-breaker" means any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours or conditions of work or in the exercise of the right of self-organization or collective bargaining.

(s) "Strike area" means the establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the employer struck against,

as well as the immediate vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment.

ARTICLE 255

Art. 255. Exclusive bargaining representation and workers participation in policy and decision-making. The labor organization designated or selected by the majority of the employees in an appropriate collective bargaining unit shall be the exclusive representative of the employees in such unit for the purpose of collective bargaining. However, an individual employee or group of employees shall have the right at any time to present grievances to their employer. Any provision of law to the contrary notwithstanding, workers shall have the right, subject to such rules and regulations as the Secretary of Labor and Employment may promulgate, to participate in policy and decision-making processes of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and welfare. For this purpose, workers and employers may form labor-management councils: Provided, That the representatives of the workers in such labor-management councils shall be elected by at least the majority of all employees in said establishment. [As amended by Section 22, Republic Act No. 6715, March 21, 1989]

ARTICLE 277

Article 277. Miscellaneous provisions. (a) All unions are authorized to collect reasonable

membership fees, union dues, assessments and fines and other contributions for labor education and research, mutual death and hospitalization benefits, welfare fund, strike fund and credit and cooperative undertakings. [As amended by Section 33, Republic Act No. 6715, March 21, 1989]

(b) Subject to the constitutional right of workers to security of tenure and their right to be protected against dismissal except for a just and authorized cause and without prejudice to the requirement of notice under Article 283 of this Code, the employer shall furnish the worker whose employment is sought to be terminated a written notice containing a statement of the causes for termination and shall afford the latter ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires in accordance with company rules and regulations promulgated pursuant to guidelines set by the Department of Labor and Employment. Any decision taken by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a complaint with the regional branch of the National Labor Relations Commission. The burden of proving that the termination was for a valid or authorized cause shall rest on the employer. The Secretary of the Department of Labor and Employment may suspend the effects of the termination pending resolution of the dispute in the event of a prima facie finding by the appropriate official of the Department of Labor and Employment before whom such dispute is pending that the termination may cause a serious labor dispute or is in implementation of a mass lay-off. [As amended by Section 33, Republic Act No. 6715, March 21, 1989]

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(c) Any employee, whether employed for a definite period or not, shall, beginning on his first day of service, be considered as an employee for purposes of membership in any labor union. [As amended by Section 33, Republic Act] No. 6715]

(d) No docket fee shall be assessed in labor standards disputes. In all other disputes, docket fees may be assessed against the filing party, provided that in bargaining deadlock, such fees shall be shared equally by the negotiating parties.

(e) The Minister of Labor and Employment and the Minister of the Budget shall cause to be created or reclassified in accordance with law such positions as may be necessary to carry out the objectives of this Code and cause the upgrading of the salaries of the personnel involved in the Labor Relations System of the Ministry. Funds needed for this purpose shall be provided out of the Special Activities Fund appropriated by Batas Pambansa Blg. 80 and from annual appropriations thereafter. [Incorporated by Batas Pambansa Bilang 130, August 21, 1981]

(f) A special Voluntary Arbitration Fund is hereby established in the Board to subsidize the cost of voluntary arbitration in cases involving the interpretation and implementation of the Collective Bargaining Agreement, including the Arbitrators fees, and for such other related purposes to promote and develop voluntary arbitration. The Board shall administer the Special Voluntary Arbitration Fund in accordance with the guidelines it may adopt upon the recommendation of the Council, which guidelines shall be subject to the approval of the Secretary of Labor and Employment. Continuing funds needed for this purpose in the initial yearly amount of fifteen million pesos (P15,000,000.00) shall be provided in the 1989 annual general appropriations acts.

The amount of subsidy in appropriate cases shall be determined by the Board in accordance with established guidelines issued by it upon the recommendation of the Council.

The Fund shall also be utilized for the operation of the Council, the training and education of Voluntary Arbitrators, and the Voluntary Arbitration Program. [As amended by Section 33, Republic Act No. 6715, March 21, 1989]

(g) The Ministry shall help promote and gradually develop, with the agreement of labor organizations and employers, labor-management cooperation programs at appropriate levels of the enterprise based on the shared responsibility and mutual respect in order to ensure industrial peace and improvement in productivity, working conditions and the quality of working life. [Incorporated by Batas Pambansa Bilang 130, August 21, 1981]

(h) In establishments where no legitimate labor organization exists, labor-management committees may be formed voluntarily by workers and employers for the purpose of promoting industrial peace. The Department of Labor and Employment shall endeavor to enlighten and educate the workers and employers on their rights and responsibilities through labor education with emphasis on the policy thrusts of this

Code. [As amended by Section 33, Republic Act No. 6715, March 21, 1989]

(i) To ensure speedy labor justice, the periods provided in this Code within which decisions or resolutions of labor relations cases or matters should be rendered shall be mandatory. For this purpose, a case or matter shall be deemed submitted for decision or resolution upon the filing of the last pleading or memorandum required by the rules of the Commission or by the Commission itself, or the Labor Arbiter, or the Director of the Bureau of Labor Relations or Med-Arbiter, or the Regional Director. Upon expiration of the corresponding period, a certification stating why a decision or resolution has not been rendered within the said period shall be issued forthwith by the Chairman of the Commission, the Executive Labor Arbiter, or the Director of the Bureau of Labor Relations or Med-Arbiter, or the Regional Director, as the case may be, and a copy thereof served upon the parties.

Despite the expiration of the applicable mandatory period, the aforesaid officials shall, without prejudice to any liability which may have been incurred as a consequence thereof, see to it that the case or matter shall be decided or resolved without any further delay. [Incorporated by Section 33, Republic Act No. 6715, March 21, 1989]

Recruitment and Placement RECRUITMENT OF LOCAL AND MIGRANT WORKERS ILLEGAL RECRUITMENT License vs. Authority A license is a document issued by the Department of Labor and Employment (DOLE) authorizing a person or entity to operate a private employment agency, while an authority is a document issued by the DOLE authorizing a person or association to engage in recruitment and placement activities as a private recruitment agency. [Art. 13(d) and (f), Labor Code]

License Authority

Authorize an entity to

operate as a private

employment agency

Authorize an entity to

operate as a private

recruitment entity

When a license is given, one

is also authorized to collect

fees

Does not entitle a private

recruitment entity to collect

fees.

Entities disqualified from being issued a license (1) Travel agencies and sales agencies of airline

companies. [Art. 26] (2) Officers or members of the Board of any corporation or

members in partnership engaged in the business of a travel agency.

(3) Corporations and partnerships, when any of its officers, members of the board or partners, is also an officer,


PAGE 6

member of the board of partner of a corporation or partnership engaged in the business of a travel agency.

(4) Persons, partnerships or corporations which have derogatory records.

(5) Any official or employee of the DOLE, POEA, OWWA, DFA and other government agencies directly involved in the implementation of R.A. 8042 as amended and/or any of his/her relatives within the 4

th civil

degree of consanguinity and affinity. [POEA Rules of 2002].

Citizenship requirement (1) Only Filipino citizens or (2) Corporations, partnerships or entities at least seventy-

five percent (75%) of the authorized and voting capital stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the recruitment and placement of workers, locally or overseas. [Art. 27, LC]

See: POEA Rules, Part II, Rule I, Sec. 1(a) Capitalization requirement All applicants for authority to hire or renewal of license to recruit are required to have such substantial capitalization as determined by the Secretary of Labor. [Art. 28, LC] Based on POEA Rules the following are the substantial capital requirements: (1) Single proprietorships or partnerships with minimum

capitalization of P2,000,000. (2) Corporations with minimum paid-up capital of

P2,000,000. Non-transferability of license or authority (1) No license or authority shall be used directly or

indirectly by any person other than the one in whose favor it was issued or at any place other than that stated in the license or authority,

(2) Nor may such license or authority be transferred, conveyed, or assigned to any other person or entity.

Any transfer of business address, appointment or designation of any agent or representative including the establishment of additional offices anywhere shall be subject to the prior approval of the Department of Labor. [Art. 29, LC] SEE: POEA Rules Part II, Rule II, Sec. 7, 8, and 9. Enforceability of the license - Licensed agencies are prohibited from conducting any recruitment activities of any form outside of the address stated in the license, acknowledged branch or extension office, without securing prior authority from the POEA. [People vs. Buli-e, 2003] Duration of validity 4 years [POEA Rules of 2002] Private Employment Agency (PEA) v. Private Recruitment Entity (PRE)

Private Employment Agency Private Recruitment Agency

Definition

Any person or entity engaged in recruitment and placement of workers for a fee

Any person or association engaged in the recruitment and placement of workers, locally or overseas, without charging, directly or

indirectly, any fee

Requires

License Authority

Essential elements of illegal recruitment Definition of recruitment and placement Recruitment and placement" refers to any act of (C-E-C-T-U-H) (a) canvassing, (b) enlisting, (c) contracting, (d) transporting, (e) utilizing, or (f) hiring procuring workers, And also includes (a) referrals, (b) contract services, (c) promising, or (d) advertising for employment, locally or abroad, whether

for profit or not Provided, That any person or entity which, in any manner, offers or promises for a fee employment to two or more persons shall be deemed engaged in recruitment and placement. [Labor Code, Art. 13 (b)] (a) Any of the acts mentioned above constitutes

recruitment and placement. (b) The proviso provides for a presumption that a person or

entity so described engages in recruitment and placement [See People v. Panis].

What constitutes recruitment The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of the acts mentioned in Article 13(b) will constitute recruitment and placement even if only one prospective worker is involved. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a promise or offer of employment to two or more prospective workers, the individual or entity dealing with them shall be presumed to be engaged in the act of recruitment and placement. [People v. Panis, 1988] Acts of referral The act of referral, which is included in recruitment, is "the act of passing along or forwarding of an applicant for employment after an initial interview of a selected applicant for employment to a selected employer, placement officer or bureau." Petitioners admission that she brought private complainants to the agency whose owner she knows and her acceptance of fees including those for processing betrays her guilt. [Rodolfo vs. People, 2006] Promising employment The Court finds that accused-appellant was engaged in unlawful recruitment and placement activities. The prosecution established that accused-appellant promised three complainants employment as factory workers and he asked them for money in order to process their papers and procure their passports. Relying completely upon such representations, complainants entrusted hard-earned money to accused-appellant in exchange for what they would later discover to be a vain hope of obtaining employment abroad. It is not disputed that accused-appellant is not authorized nor licensed by the DOLE to


PAGE 7

engage in recruitment and placement activities. The absence of the necessary license or authority renders all of accused-appellants recruitment activities criminal. [People vs. Saulo, 2000]

Note: To determine which law applies, the place of work is the determining factor: (1) If in the Philippines: Labor Code (LC) applies (2) If abroad: Migrant Workers Act [R.A. 8042, as amended by R.A. 10022]. Illegal recruitment for local workers [governed by the labor code] Simple Illegal Recruitment Elements: (1) The person charged with the crime must have

undertaken recruitment activities defined under Art. 13(b) or prohibited activities defined under Art. 34; and

(2) The said person does not have a license or authority to do so. [Art. 38, LC]

Profit or lack thereof is immaterial In 1996, LCL had no approved POEA license to recruit. C.F. Sharps accreditation as LCLs new manning agency was still pending approval at that time. Yet it entertained applicants for LCLs vessels, and conducted preparatory interviews. Based on Art. 13 (b), this is a recruitment activity. The fact that C.F. Sharp did not receive any payment during the interviews is of no moment. The act of recruitment may be "for profit or not." Notably, it is the lack of the necessary license or authority, not the fact of payment that renders the recruitment activity of LCL unlawful. [C.F. Sharp vs. Espanol, 2007] Accused must give the impression of ability to send complainant abroad It is well-settled that to prove illegal recruitment, it must be shown that appellant gave complainants the distinct impression that she had the power or ability to send complainants abroad for work such that the latter were convinced to part with their money in order to be employed. [People v. Ochoa, 2011] Prohibited practices It shall be unlawful for any individual, entity, licensee, or holder of authority: (a) To charge or accept, directly or indirectly, any amount

greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than that actually received by him as a loan or advance;

(b) To furnish or publish any false notice or information or document in relation to recruitment or employment;

(c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under this Code.

(d) To induce or attempt to induce a worker already employed to quit his employment in order to offer him to another unless the transfer is designed to liberate the worker from oppressive terms and conditions of employment;

(e) To influence or to attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency;

(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines;

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives;

(h) To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor.

(i) To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor;

(j) To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency; and

(k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under this Code and its implementing rules and regulations. [Art. 34, LC]

Offense involving Economic Sabotage (Large-Scale or by a Syndicate) Illegal recruitment is considered economic sabotage when the commission thereof is attended by the ff. qualifying circumstances: (1) By a syndicate - if carried out by a group of 3 or more

persons conspiring and confederating with one another;

(2) In large scale - if committed against 3 or more persons individually or as a group. [Art. 38(b), LC]

Illegal recruitment by a syndicate (1) The offender undertakes either any activity within the

meaning of "recruitment and placement" defined under Article 13(b), or any of the prohibited practices enumerated under Art. 34 of the Labor Code;

(2) He has no valid license or authority required by law to enable one to lawfully engage in recruitment and placement of workers; and

(3) The illegal recruitment is committed by a group of three

(4) or more persons conspiring or confederating with one another. [People v. Gallo, 2010]

Illegal recruitment in large scale The acts committed by the accused constituted illegal recruitment in large scale, whose essential elements are the following: (1) The accused engages in acts of recruitment and

placement of workers defined under Article 13(b) of the Labor Code or in any prohibited activities under Article 43 of the Labor Code;

(2) The accused has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of license or an authority to recruit and deploy workers, either locally or overseas; and

(3) The accused commits the unlawful acts against three or more persons individually or as a group.

Three or more complainants must be in a single case When the Labor Code speaks of illegal recruitment "committed against three (3) or more persons individually or as a group," it must be understood as referring to the number of complainants in each case who are complainants therein, otherwise, prosecutions for single


PAGE 8

crimes of illegal recruitment can be cumulated to make out a case of large scale illegal recruitment. In other words, a conviction for large scale illegal recruitment must be based on a finding in each case of illegal recruitment of three or more persons whether individually or as a group. [People vs. Reyes, 1995] Illegal recruitment vs estafa Illegal recruitment and estafa are entirely different offenses and neither one necessarily includes or is necessarily included in the other. A person who is convicted of illegal recruitment may, in addition, be convicted of estafa by false pretenses or fraudulent acts under Article 315, paragraph 2(a) of the Revised Penal Code. In the same manner, a person acquitted of illegal recruitment may be held liable for estafa. Double jeopardy will not set in because illegal recruitment is malum prohibitum, in which there is no necessity to prove criminal intent, whereas estafa is malum in se, in the prosecution of which, proof of criminal intent is necessary. [Rosita Sy vs. People of the Philippines, 2010] One convicted for IR may still be convicted of estafa In People v. Cortez the Court explained that: In this jurisdiction, it is settled that a person who commits illegal recruitment may be charged and convicted separately of illegal recruitment under the Labor Code and estafa under par. 2(a) of Art. 315 of the Revised Penal Code. The offense of illegal recruitment is malum prohibitum where the criminal intent of the accused is not necessary for conviction, while estafa is malum in se where the criminal intent of the accused is crucial for conviction. Conviction for offenses under the Labor Code does not bar conviction for offenses punishable by other laws. Conversely, conviction for estafa under par. 2(a) of Art. 315 of the Revised Penal Code does not bar a conviction for illegal recruitment under the Labor Code. It follows that one's acquittal of the crime of estafa will not necessarily result in his acquittal of the crime of illegal recruitment in large scale, and vice versa. [People v. Ochoa, 2011; People v. Ocden, 2011]

Illegal recruitment for migrant workers [governed by RA 8042, as amended by, RA 10022] Simple Illegal Recruitment 1st type. (1) Person charged undertakes any recruitment activity as

defined in Art.13 (b) of the Labor Code; and (2) Said person does not have a license or authority to do

so. 2nd type. (1) Person charged commits any of the enumerated acts

under Sec. 6 of R.A. 8042, as amended by, R.A. 10022. (2) It is immaterial whether he is a holder or not of any

license or authority Definition Illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not, when undertaken by non-licensee or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or

more persons shall be deemed so engaged. [Sec. 6, RA 8042 as amended] Other prohibited acts It shall likewise include the following acts, whether committed by any person, whether a non-licensee, non-holder, licensee or holder of authority: (a) To charge or accept directly or indirectly any amount

greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay or acknowledge any amount greater than that actually received by him as a loan or advance;

(b) To furnish or publish any false notice or information or

document in relation to recruitment or employment; (c) To give any false notice, testimony, information or

document or commit any act of misrepresentation for the purpose of securing a license or authority under the Labor Code, or for the purpose of documenting hired workers with the POEA, which include the act of reprocessing workers through a job order that pertains to nonexistent work, work different from the actual overseas work, or work with a different employer whether registered or not with the POEA;

(d) To include or attempt to induce a worker already

employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of employment;

(e) To influence or attempt to influence any person or

entity not to employ any worker who has not applied for employment through his agency or who has formed, joined or supported, or has contacted or is supported by any union or workers' organization;

(f) To engage in the recruitment or placement of workers

in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines;

(g) To fail to submit reports on the status of employment,

placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment;

(h) To substitute or alter to the prejudice of the worker,

employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment;

(i) For an officer or agent of a recruitment or placement

agency to become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of travel agency;

(j) To withhold or deny travel documents from applicant

workers before departure for monetary or financial considerations, or for any other reasons, other than those authorized under the Labor Code and its implementing rules and regulations;


PAGE 9

(k) Failure to actually deploy a contracted worker without valid reason as determined by the Department of Labor and Employment;

(l) Failure to reimburse expenses incurred by the worker in

connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker's fault. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage; and

(m) To allow a non-Filipino citizen to head or manage a

licensed recruitment/manning agency.

In addition to the acts enumerated above, it shall also be unlawful for any person or entity to commit the following prohibited acts:

(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which will be used for payment of legal and allowable placement fees and make the migrant worker issue, either personally or through a guarantor or accommodation party, postdated checks in relation to the said loan;

(2) Impose a compulsory and exclusive arrangement

whereby an overseas Filipino worker is required to avail of a loan only from specifically designated institutions, entities or persons;

(3) Refuse to condone or renegotiate a loan incurred by an

overseas Filipino worker after the latter's employment contract has been prematurely terminated through no fault of his or her own;


whereby an overseas Filipino worker is required to undergo health examinations only from specifically designated medical clinics, institutions, entities or persons, except in the case of a seafarer whose medical examination cost is shouldered by the principal/shipowner;


whereby an overseas Filipino worker is required to undergo training, seminar, instruction or schooling of any kind only from specifically designated institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners where the latter shoulder the cost of such trainings;

(6) For a suspended recruitment/manning agency to

engage in any kind of recruitment activity including the processing of pending workers' applications; and

(7) For a recruitment/manning agency or a foreign

principal/employer to pass on the overseas Filipino worker or deduct from his or her salary the payment of the cost of insurance fees, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage. [Sec. 6, RA 8042 as amended]

MWA expands the definition of illegal recruitment The amendments to the Labor Code introduced by Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, broadened the concept of illegal recruitment and provided stiffer

penalties, especially for those that constitute economic sabotage. [People v. Ocden, 2011]

Labor Code RA 8042 as amended by RA

10022

Applicability

Local Workers Migrant Workers

Acts Punishable

Art. 13(b) Art. 34 Art. 13(b) Labor Code

Prohibited acts in Sec. 6

Who can be Punished

Non-licensee Non-licensee Non-licensee Licensee/Non-licensee

Offense involving Economic Sabotage (Large-Scale or by a Syndicate) Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or more persons conspiring or confederating with one another. It is deemed committed in large scale if committed against three (3) or more persons individually or as a group. Liabilities and penalties for illegal recruitment Illegal Recruitment Involving Local Workers. The penalty of life imprisonment and a fine of One Hundred Thousand Pesos (P1000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as defined herein; (a) Any licensee or holder of authority found violating or

causing another to violate any provision of this Title or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of imprisonment of not less than two years nor more than five years or a fine of not less than P10,000 nor more than P50,000, or both such imprisonment and fine, at the discretion of the court;

(b) Any person who is neither a licensee nor a holder of

authority under this Title found violating any provision thereof or its implementing rules and regulations shall, upon conviction thereof, suffer the penalty of imprisonment of not less than four years nor more than eight years or a fine of not less than P20,000 nor more than P100,000 or both such imprisonment and fine, at the discretion of the court;

(c) If the offender is a corporation, partnership, association

or entity, the penalty shall be imposed upon the officer or officers of the corporation, partnership, association or entity responsible for violation; and if such officer is an alien, he shall, in addition to the penalties herein prescribed, be deported without further proceedings;

In every case, conviction shall cause and carry the automatic revocation of the license or authority and all the permits and privileges granted to such person or entity under this Title, and the forfeiture of the cash and surety bonds in favor of the Overseas Employment Development Board or the National Seamen Board, as the case may be, both of which are authorized to use the same exclusively to promote their objectives. [Art. 39, LC]


PAGE 10

Illegal recruitment involving migrant workers. (a) Any person found guilty of illegal recruitment shall

suffer the penalty of imprisonment of not less than twelve (12) years and one (1) day but not more than twenty (20) years and a fine of not less than One million pesos (P1,000,000.00) nor more than Two million pesos (P2,000,000.00).

(b) The penalty of life imprisonment and a fine of not less

than Two million pesos (P2,000,000.00) nor more than Five million pesos (P5,000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage as defined therein. Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18) years of age or committed by a non-licensee or non-holder of authority.

(c) Any person found guilty of any of the prohibited acts

shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) years and a fine of not less than Five hundred thousand pesos (P500,000.00) nor more than One million pesos (P1,000,000.00).

If the offender is an alien, he or she shall, in addition to the penalties herein prescribed, be deported without further proceedings.

In every case, conviction shall cause and carry the automatic revocation of the license or registration of the recruitment/manning agency, lending institutions, training school or medical clinic. [Sec. 7, RA 8042 as amended by RA 10022]

Common rules on liability (1) Employees of a company corporation engaged in illegal

recruitment may be held liable as principal, together with his employer, if it is shown that he actively and consciously participated in illegal recruitment. E.g. In this case the appellant was both the APSC Vice-President-Treasurer and the Assistant General Manager. She was a high corporate officer who had direct participation in the management, administration, direction and control of the business of the corporation, and is thus liable under Sec. 6 of RA 8042. The terms control, management or direction broadly cover all phases of business operation, including the aspects of administration, marketing and finances, among others. [People vs. Sagayaga, 2004].

(2) Local Employment Agency is solidarily liable with foreign

principal. Severance of relations between local agent and foreign principal does not affect liability of local recruiter. Private employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the recruitment agreement or contract of employment. This joint and solidary liability imposed by law against recruitment agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is due him. [Becmen Service Exporter and Promotion, Inc. v. Spouses Cuaresma, G.R. 182978-79, April 7, 2009]

(3) If the recruitment/placement agency is a juridical

being, the corporate officers and directors and partners as the case may be, shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid claims and damages. [Becmen Service

Exporter and Promotion, Inc. v. Spouses Cuaresma, G.R. 182978-79, April 7, 2009]

(4) Foreign employer shall assume joint and solidary

liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract, including but not limited to payment of wages, death and disability compensation and repatriation

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

Sec. 1. Requirements for Issuance of License.- Every applicant for license to operate a private employment agency or manning agency shall submit a written application together with the following requirements: (f) A verified undertaking stating that the applicant: xxx (2) Shall assume full and complete responsibility for all claims and liabilities which may arise in connection with the use of license; (3) Shall assume joint and solidary liability with the employer for all claims and liabilities which may arise in connection with the implementation of the contract, including but not limited to payment of wages, death and disability compensation and repatriation; (4) Shall guarantee compliance with the existing labor and social legislations of the Philippines and of the country of employment of recruited workers; and (5) Shall assume full and complete responsibility for all acts of its officials, employees and representatives done in connection with recruitment and placement; [POEA Rules, Book II, Rule II, Sec. 1 (f)]

Common Rules on Illegal Recruitment [Local or Overseas] Venue: A criminal action arising from illegal recruitment shall be filed with the RTC of the province or city: (1) where the offense was committed or (2) where the offended party actually resides at the time of

the commission of the offense. [Sec. 9, R.A. 8042 [this part was not amended by R.A. 10022]].

Prescriptive Periods: (1) Simple Illegal Recruitment 5 years (2) Illegal Recruitment involving Economic Sabotage 20

years. [Sec. 12, R.A. 8042 (this part was not amended by R.A, 10022)].

Pre-Termination of Contract of Migrant Worker In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, or any unauthorized deductions from the migrant worker's salary, the worker shall be entitled to the full reimbursement of his placement fee and the deductions made with interest at twelve percent (12%) per annum,


PAGE 11

plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. [Sec. 10, R.A. 8042, as amended by R.A. 10022] Rule before Serrano: 3-month salary rule applies The employment contract involved in the instant case covers a two-year period but the overseas contract worker actually worked for only 26 days prior to his illegal dismissal. Thus, the three months salary rule applies [Flourish Maritime Shipping v. Almanzor, G.R. No. 177948, March 14, 2008]. Serrano ruling: invalidated the 3-month salary cap The issue in this case is the constitutionality of the last clause of Sec.10 of RA 8042: Sec. 10. Money Claims. - x x x In case of termination of overseas employment without just, valid or authorized cause as defined by law or contract, the workers shall be entitled to the full reimbursement of his placement fee with interest of twelve percent (12%) per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months for every year of the unexpired term, whichever is less. The Court held that said clause is unconstitutional for being an invalid classification, in violation of the equal protection clause. [Serrano v. Gallant Maritime Services, Inc., G.R. No. 167614, March 24, 2009]

DIRECT HIRING General Rule: No employer may hire a Filipino worker for overseas employment except through the Boards and entities authorized by the Secretary of Labor. [Article 18 of the Labor Code]. Exceptions: (1) Members of the diplomatic corps; (2) International organizations; (3) Such other employees as may be allowed by the Sec. of

Labor; (4) Name hirees those individuals who are able to secure

contracts for overseas employment on their own efforts and representation without the assistance or participation of any agency. Their hiring, nonetheless, has to be processed through the POEA. [Part III, Rule III of the POEA Rules Governing Overseas Employment as amended in 2002]

REGULATION AND ENFORCEMENT Note: See also 2002 POEA Rules Governing the Recruitment and Employment of Land-based Overseas Workers

SUSPENSION OR CANCELLATION OF LICENSE OR AUTHORITY The Secretary of Labor shall have the power to suspend or cancel any license or authority to recruit employees for overseas employment for violation of rules and regulations issued by the Department of Labor, the Overseas Employment Development Board, and the National Seamen Board, or for violation of the provisions of this and other applicable laws, General Orders and Letters of Instructions. [Article 35, LC] The acts prohibited under Article 34 are grounds for suspension or cancellation of license. Note that they likewise constitute illegal recruitment under R.A. 8042 as amended by R.A. 10022.

Who can suspend or cancel the license? (1) DOLE Secretary (2) POEA Administrator The power to suspend or cancel any license or authority to recruit employees for overseas employment is concurrently vested with the POEA and the Secretary of Labor. [People v. Diaz, 259 SCRA 441 (1996)]. REGULATORY AND VISITORIAL POWERS OF THE DOLE SECRETARY See [Art. 35, LC] Regulatory powers The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this Title and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this Title. [Art. 36, LC] Visitorial powers The Secretary of Labor or his duly authorized representatives may, at any time, inspect the premises, books of accounts and records of any person or entity covered by this Title, require it to submit reports regularly on prescribed forms, and act on violations of any provisions of this Title. [Art. 37, LC] REMITTANCE OF FOREIGN EXCHANGE EARNING It shall be mandatory for all Filipino workers abroad to remit a portion of their foreign earnings to their families, dependents, and/or beneficiaries in the country [Art. 22, LC] Under Executive Order No. 857, the amount of ones salary required to be remitted depends on the type or nature of work performed by the employee. The following are the percentages of foreign exchange remittance required from various kinds of migrant workers: (1) Seaman or mariner 80% of their basic salary (2) Workers for Filipino contractors and construction

companies 70% (3) Doctors, engineers, teachers, nurses and other

professional workers whose contract provide for free board and lodging 70%

(4) All other professional workers whose employment contracts do not provide for free board and lodging facilities 50%

(5) Domestic and other service workers 50% (6) All other workers not falling under the aforementioned

categories 50% (7) Performing artists 50% The following individuals, however, are exempted from the mandatory remittance requirement: (1) The immediate family members, dependents or

beneficiaries of migrant workers residing with the latter abroad;

(2) Filipino servicemen working within US military installations;

(3) Immigrants and Filipino professionals working with the United Nations and its agencies or other specialized bodies.

PROHIBITED ACTIVITIES It shall be unlawful for any individual, entity, licensee, or holder of authority:


PAGE 12

(a) To charge or accept, directly or indirectly, any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to make a worker pay any amount greater than that actually received by him as a loan or advance;

(b) To furnish or publish any false notice or information or document in relation to recruitment or employment;

(c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under this Code.

(d) To induce or attempt to induce a worker already employed to quit his employment in order to offer him to another unless the transfer is designed to liberate the worker from oppressive terms and conditions of employment;

(e) To influence or to attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency;

(f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines;

(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor or by his duly authorized representatives;

(h) To fail to file reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor.

(i) To substitute or alter employment contracts approved and verified by the Department of Labor from the time of actual signing thereof by the parties up to and including the periods of expiration of the same without the approval of the Secretary of Labor;

(j) To become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of a travel agency; and

(k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under this Code and its implementing rules and regulations. [Art. 34, LC]

Labor Standards COVERAGE General rule: Shall apply to employees in all establishments and undertakings whether for profit or not. [Art. 82, LC] Exceptions (NOT Covered) GMFF-DPR: (1) Government employees [Art. 82; Art. 76] (2) Managerial Employees including members of the

managerial staff [Art. 82] (3) Field Personnel [Art. 82] (4) Members of the family of the employer who are

dependent on him for support [Art. 82]; (5) Domestic helpers and persons in personal service of

another [Art. 141] (6) Workers who paid by result as determined by DOLE

regulation [Art. 82].

GOVERNMENT EMPLOYEES The terms and conditions of employment of all

government employees, including employees of GOCCs, are governed by the Civil Service rules and regulations, not by the Labor Code. But this exclusion DOES NOT refer to employees of government agencies and government corporations that are incorporated under the Corporation Code. MANAGERIAL EMPLOYEES Definition "Managerial Employees" Refer to those whose primary duty consists of the management of the establishment in which they are employed or of a department or subdivision thereof, and to other officers or members of the managerial staff. [Art. 82, LC] Characteristics of managerial employees (b) Managerial employees are covered [by the exemption]

if they have the following characteristics: (1) Their primary duty consists of the management of

the establishment in which they are employed or of a department or sub-division thereof.

(2) They customarily and regularly direct the work of two or more employees therein.

(3) They have the authority to hire or fire employees of lower rank; or their suggestions and recommendations as to hiring and firing and as to the promotion or any other change of status of other employees, are given particular weight.

Requisites for managerial staff to be covered under the exception Officers or members of a managerial staff if they perform the following duties and responsibilities: (1) The primary duty consists of the performance of work

directly related to management policies of their employer;

(2) Customarily and regularly exercise discretion and independent judgment; and

(3) (a) Regularly and directly assist a proprietor or a managerial employee whose primary duty consists of the management of the establishment in which he is employed or subdivision thereof; or

(b) execute under general supervision work along specialized or technical lines requiring special training, experience, or knowledge; or (c) execute, under general supervision, special assignments and tasks; and

(4) Who do not devote more than 20 percent of their hours worked in a work week to activities which are not directly and closely related to the performance of the work described in paragraphs (1), (2) and (3) above. [IRR, Bk III, Rule 1, Sec. 2 (b) & (c): Exemption]

The definition of managerial employees in Article 82 covers more people than that in Article 212 (m) as Article 82 also includes managerial staff. In effect, managerial employees in Article 82 includes supervisors, but Article 212(m) does not. It follows that under Book V, supervisors are allowed to form, join or assist a labor union. Supervisors are not, however, entitled to the benefits under Book III Articles 83 through 96, being part of the exemption of managerial employees as defined in Article 82. [Azucena] FIELD PERSONNEL "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


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whose actual hours of work in the field cannot be determined with reasonable certainty. [Art. 82, LC] Field Personnel are those whose performance of their job/service is not supervised by the employer or his representative, the workplace being away from the principal office and whose hours and days of work cannot be determined with reasonable certainty. Legal Test: Field personnel The clause "whose time and performance is unsupervised by the employer" did not amplify but merely interpreted and expounded the clause "whose actual hours of work in the field cannot be determined with reasonable certainty." The former clause is still within the scope and purview of Article 82 which defines field personnel. Hence, in deciding whether or not an EE's actual working hours in the field can be determined with reasonable certainty, query must be made as to whether or not such EE's time and performance is constantly supervised by the employer. [Union of Filipro Employees v. Vivar, 1992] Actual hours work in the field is to be read in conjunction with Rule IV, Book III of the Implementing Rules. Therefore field personnel are EEs whose time and performance is unsupervised by the employer. [Salazar v. NLRC, 1996] If required to be at specific places at specific times, employees including drivers cannot be said to be field personnel, despite the fact that they are performing work away from principal office of EE. [Auto Bus Transport Systems, Inc. v. Bautista, 2005] The fishermen, although performing non-agricultural work away from petitioners business offices, the fact remains that throughout the duration of their work they are under the effective control and supervision of petitioner through the vessels patron or master. Hence, the fishermen are not field personnel. [Mercidar Fishing Corporation v. NLRC, 1998] DEPENDENT FAMILY MEMBERS Workers who are family members of the employer, and who are dependent on him for their support, are outside the coverage of this Title on working conditions and rest periods. DOMESTIC HELPERS "Domestic or household service" shall mean service in the employers home which is usually necessary or desirab

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