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

Updates on Labor Law and

JurisprudenceResource 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 findLabor 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 findLabor 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.


• 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.


• 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 DetermineHours 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;• Managerial employees and managerial staff;• Persons in the personal service of another; • Workers paid by results;• Field personnel and other employees whose

time and performance are unsupervised; and• Dependent family members of the Employer.

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;• Managerial employees and managerial staff;• Persons in the personal service of another; • Workers paid by results;• 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 – • Government employees subject to Civil

Service Law;• Managerial employees and managerial staff;• Househelpers and persons in the personal

service of another; • Workers paid by results;• Field personnel and other employees whose

time and performance are unsupervised; • Dependent family members of the Employer.

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 – • Government employees subject to Civil Service

Law;• Managerial employees and managerial staff;• Househelpers and persons in the personal service

of another; • Field personnel and other employees whose time

and performance are unsupervised; • Workers paid by results; • Dependent family members of the Employer; and• 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 – • Government employees subject to Civil Service

Law;• Managerial employees and managerial staff;• Persons in the personal service of another; • Field personnel and other employees whose time

and performance are unsupervised; • Workers paid by results; • Dependent family members of the Employer; and• 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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Transcript of Updates on Labor Law and Jurisprudence (Philippines) February 15, 2013