NEW ERA UNIVERSITY COLLEGE OF LAW

LABOR LAW I
Under Atty. Jose-Antonio T. Aliling
AY 2016-2017
Tues 6 to 9pm, Rm 301

RE:
An Overview of Relevant Philippine Labor Standards
================================================================
The Philippines makes it a policy to balance the interests of both the workers and the
employers. However, all doubts in the implementation and interpretation of labor laws
shall be resolved in favor of labor.1
All labor laws revolve around seven (7) basic rights of the worker guaranteed by the
Philippine Constitution: (a) the right to organize; (b) to conduct collective bargaining; (3)
to engage in peaceful concerted activities, including the right to strike in accordance
with law; (4) to enjoy security of tenure; (5) to work under humane conditions; (6) to
receive a living wage; and (7) to participate in policy and decision-making processes
affecting their rights and benefits as may be provided by law.2
1.

WHAT IS THE LOCALLY ACCEPTED PROOF OF AGE AND THE

MINIMUM AGE REQUIREMENTS FOR EMPLOYMENT?

Minimum Age
Presidential Decree 442, as amended, otherwise known as The Labor Code of the
Philippines (Labor Code) mandates that no child below fifteen (15) years of age shall
be employed, except when he works directly under the sole responsibility of his parents
or guardian, and his employment does not in any way interfere with his schooling.
However, a child between fifteen (15) to eighteen (18) may be employed for such
number of hours and such period of the day as determined by the Secretary of Labor
and employment, but in no case shall a person below eighteen (18) be allowed to
undertake hazardous and deleterious work.3 Non-hazardous work or undertaking is
one where the employee is not exposed to any risk, which constitutes a danger to his
safety and health.4
Prohibition Against Child Discrimination
The Law prohibits discrimination against children in respect to terms and conditions of
employment on account of his age.5
2.

WHAT ARE THE MINIMUM LABOR STANDARDS GOVERNING HOURS

OF WORK?

Article 4, Presidential Decree (PD) 442, as amended, otherwise known as The Labor Code of the
Philippines
2 Section 3, Article XIII, 1987 Philippine Constitution
3 Article 139, Labor Code
4 Section 3, Rule XII, Book III of the Rules and Regulations Implementing the Labor Code (Labor
Code IRR)
5
Article 140, Labor Code
1

Page 2
The rules on hours of work about to be discussed generally apply to all employees in all
establishments, except:
a.

Government employees whether employed by the National Government

or any of its political subdivisions, including those in governmentowned and/or controlled corporations;

b.

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

namely:
1.
2.
3.

Their primary duty consists of the management of the

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

As used herein, "managerial employees" refer to those whose primary duty consists of
the management of the establishment in which they are employed or of a department or
subdivision thereof, and to other officers or members of the managerial staff.6
c.

d.

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;

3.

(i) Regularly and directly assist a proprietor or a managerial

employee whose primary duty consists of the management of the
establishment in which he is employed or subdivision thereof; or
(ii) execute under general supervision work along specialized or
technical lines requiring special training, experience, or
knowledge; or (iii) execute under general supervision special
assignments and tasks; and,

4.

Who do not devote more than twenty percent (20%) 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).

Domestic servants and persons in the personal service of another, if

they perform such services in the employers home, which are usually
necessary or desirable for the maintenance and enjoyment thereof, or
minister to the personal comfort, convenience, or safety of the employer
as well as the members of his employers household;

Article 82, Labor Code

Page 3
e.

Workers who are paid by results, including those who are paid on
piece-work or task basis, if their output rates have been approved by the
Philippine Department of Labor and Employment (DOLE);

f.

Non-agricultural field personnel, if they regularly perform their duties

away from the principal or branch office of place of business of the
employer and whose actual hours of work in the field cannot be
determined with reasonable certainty;7 and,

g.

Field Personnel or those whose work hours are not or cannot be

effectively monitored by the employer.

Hours of Work
The normal hours of work of an employee shall not exceed eight (8) hours a day.8 These
hours include (a) all time during which an employee is required to be on duty or to be at
a prescribed workplace; and (b) all time during which an employee is suffered or
permitted to work. Rest periods of short duration shall be counted as hours worked.9
In determining whether time spent by an employee is considered hours worked, the
following general principles mandated by Section 3, Rule I, Book III of the
Implementing Rules of the Labor Code (Labor Code IRR) should serve as a guide:
a.

All hours are hours worked which the employee is required to give his
employer, regardless of whether or not such hours are spent in
productive labor or involve physical or mental exertion.

b.

An employee need not leave the premises of the workplace in order that
his rest period shall not be counted, it being enough that he stops
working, may rest completely and may leave his workplace, to go
elsewhere, whether within or outside the premises of his workplace.

c.

If the work performed was necessary, or it benefited the employer, or

the employee could not abandon his work at the end of his normal
working hours because he had no replacement, all time spent for such
work shall be considered as hours worked, if the work was with the
knowledge of his employer or immediate supervisor.

d.

The time during which an employee is inactive by reason of

interruptions in his work beyond his control shall be considered time

Section 1, Rule 1, Book III, Implementing Rules and Regulations of the Labor Code (Labor Code
IRR)
8 Article 83, Labor Code also states that health personnel in cities and municipalities with a
population of at least one million (1,000,000) or in hospitals and clinics with a bed capacity of at
least one hundred (100) shall hold regular office hours for eight (8) hours a day for five (5) days a
week, exclusive of time for meals, except where the exigencies of the service require that such
personnel work for six (6) days or forty-eight (48) hours, in which case they shall be entitled to
additional compensation of at least thirty (30%) percent of their regular wage for work on the sixth
day. The term health personnel includes resident physician, nurses, nutritionists, dieticians,
pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists,
midwives, attendants and all other hospital or clinic personnel.
9 Article 84, Labor Code
7

Page 4
worked either if the imminence of the resumption of work requires the
employees presence at the place of work or if the interval is too brief to
be utilized effectively and gainfully in the employees own interest.
Waiting Time
Waiting time spent by an employee is considered working time if waiting is an integral
part of his work or if the employee is required or engaged by an employer to wait.
Whether waiting time constitutes working time depends upon the circumstances of each
particular case and is a question of fact.10
Meal and Rest Periods
Under Article 85 of the Labor Code, meal periods should not be less than sixty (60)
minutes, in which case it is considered time off or non-compensable time. Under
specified cases, meal times may be less than sixty (60) minutes, but such shortened meal
times (e.g., 30 minutes) should be with full pay, and the time when the employee cannot
eat should also be paid. Note that to shorten meal times to less than twenty (20) minutes
is not allowed.
Such shorter meal periods may be authorized only under the following circumstances:
a.

Where the work is non-manual work in nature or does not involve

strenuous physical exertion;

b.

Where the establishment regularly operates not less than sixteen (16)
hours a day;

c.

In cases of actual or impending emergencies or there is urgent work to

be performed on machineries, equipment, or installations to avoid
serious loss which the employer would otherwise suffer; and,

d.

Where the work is necessary to prevent serious loss of perishable goods.

Rest periods or coffee breaks running from five (5) to twenty (20) minutes shall be
considered as compensable working time.11
Employment of Night Workers
Night workers are those whose work covers the period from 10 oclock in the evening to 6 oclock
in the morning provided that the worker performs no less than seven (7) consecutive hours of
work.12 Except (1) those employed in agriculture, (2) stock raising, (3) fishing, (4) maritime
transport, and (5) inland navigation.13
Health Assessment14

Section 5, Rule I, Book III, Labor Code IRR.

Sec. 7, Rule I, Book III, IRR of PD 442.
12
Department Order No. 119-12 dated 20 January 2013
13
Article 154, Labor Code
14
Article 155, Labor Code
10
11

Page 5
Workers shall have the right to undergo health assessment without charge and to
receive advice on how to reduce or avoid health problems associated with their work:
a.

Before taking up an assignment as a night worker;

b.

At regular intervals during such assignment; and

c.

If they experience health problems during such an assignment which

are not caused by factors other than the performance of night work.

Transfer15
Night workers who are certified as unfit for night work, due to health reasons, shall be
transferred, whenever practicable, to a similar job for which they are fit to work.
Women Night Workers16
Measures shall be taken to ensure that an alternative to night work is available to
women workers who would otherwise be called upon to perform such work:
a.

Before and after childbirth, for a period of at least sixteen (16) weeks, which
shall be divided between the time before and after childbirth;

b.

For additional periods, in respect of which a medical certificate is produced

stating that the said additional periods ate necessary for the health of the or
child:
i. During pregnancy;
ii. During specified time beyond the period, after childbirth is
fixed

c.

A woman worker shall not be dismissed or given notice of dismissal, except for
just or authorized causes provided for by the Labor Code that are not connected
with pregnancy, childbirth and childcare responsibilities.

d. A woman worker shall not lose the benefits regarding her status, seniority, and
access to promotion, which may attach to her regular night work position.
Pregnant women and nursing mothers may be allowed to work at night only if a
competent physician, other than the company physician, shall certify their fitness to
render night work, and specify, in the case of pregnant employees, the period of the
pregnancy that they can safely work.
Night Shift Differential

15Article
16

157, Labor Code

Article 158, Labor Code

Page 6
Employees who perform work between 10 p.m. and 6 a.m. (whether or not the period is
part of the workers regular shift) must be paid a night shift differential of not less than
Ten Percent (10%) of his applicable daily rate for every hour worked.17
If the work done between 10 p.m. and 6 a.m. is overtime work, then the 10% differential
must be based on his overtime rate (please refer to the above discussions under the
heading Premium Pay for Overtime/Holiday Work).
The foregoing section is an exception to the general rule as it covers all employers, whether
operating for profit or not, including educational, religious and charitable institutions, except to
the Government and to government-owned or controlled corporations and to employers of
household helpers and persons in their personal service insofar as such workers are concerned.
Philippine Holidays18
BASED ON MEMORANDUM CIRCULAR NO. 0119
Pursuant to the provisions of the Labor Code, as amended in relation to the observance of
declared holidays and in response to the queries received every time a Presidential Proclamation
or a law is enacted by Congress which declares certain days either as a regular holiday, a special
day or a special working holiday, the following guidelines shall be observed by all employers in
the private sector:
1.

2.

For regular holidays as provided for under EO 203 (incorporated in EO 292) as amended
by RA 9177:
New Year's Day

January 1

Maundy Thursday

Movable Date

Good Friday

Movable Date

Araw ng Kagitingan

April 9

Labor Day

May 1

Independence Day

June 12

National Heroes Day

Last Sunday of August

Bonifacio Day

November 30

Eidul Fitr

Movable Date

Christmas Day

December 25

Rizal Day

December 30

the following rules shall apply:

a.
If it is an employee's regular workday

If unworked: 100%

If worked:
o
1st 8 hours - 200%
o
excess of 8 hours - plus 30% of hourly rate on said day
b.
If it is an employee's rest day

Article 86, Labor Code

Section 26, Chapter 7, Executive Order No.292, otherwise known as The Revised Administrative Act
of 1987, as amended by Republic Act No. 9177, which was approved on 13 November 2002
19
March 08, 2004.
17
18

Page 7

3.

4.

If unworked - 100%
If worked
o
1st 8 hours - plus 30% of 200%
o
excess of 8 hours - plus 30% of hourly rate on said day

For declared special days such as Special Non-Working Day, Special Public Holiday,
Special National Holiday, in addition to the two (2) nationwide special days (November
1, All Saints Day and December 31, Last Day of the Year) listed under EO 203, as
amended, the following rules shall apply:
a.

If unworked

No pay, unless there is a favorable company policy, practice or collective

bargaining agreement (CBA) granting payment of wages on special days
even if unworked.

b.

If worked

1st 8 hours - plus 30% of the daily rate of 100%

excess of 8 hours - plus 30% of hourly rate on said day

c.

Falling on the employee's rest day and if worked

1st 8 hours - plus 50% of the daily rate of 100%

excess of 8 hours - plus 30% of hourly rate on said day

For those declared as special working holidays, the following rules shall apply:
For work performed, an employee is entitled only to his basic rate. No premium pay is
required since work performed on said days is considered work on ordinary working
days.

HOLIDAY PAY NOT APPLICABLE: except in retail and service establishments regularly
employing less than ten (10) workers.
Overtime Work
The employer may also require compulsory overtime work; provided, the employee is
paid additional compensation when overtime work is necessary. The following are some
of the circumstances when overtime work may be required: (1) when there is urgent
work to be performed on machines, installations, or equipment, or in order to avoid
serious loss or damage to the employer or some other causes of similar nature, (2) when
the work is necessary to prevent loss or damage to perishable goods, (3) when the
completion or continuation of work started before the 8th hour is necessary to prevent
serious obstruction or prejudice to the business or operations of the employer, (4) when
overtime work is necessary to avail of favorable weather or environmental conditions
where performance or quality or work is dependent thereon. Unless these circumstances
exist, no employee may be made to do overtime work against his will.20

Aside from these circumstances, compulsory overtime may also be required when the country is
at war or when other national or local emergency has been declared by the National Assembly or
the Chief Executive, and when overtime work is necessary to prevent loss of life or property, or in
case of imminent danger to public safety due to actual or impending emergency in the locality
caused by serious accident, fire, flood, typhoons, earthquake or other disaster or calamities;
Section 10, Rule I, Book III, Labor Code IRR.

20

Page 8
Premium Pay for Overtime/ Holiday Work
A.

On A Regular Day (In Excess of Eight [8] Hours)

An employee who is permitted to work beyond eight (8) hours on ordinary
working days shall be paid an additional compensation for the overtime work
in an amount equivalent to Twenty-Five Percent (25%) of his applicable daily
wage.21

B.

On A Regular Holiday (First 8 Hours)

The employer may require an employee to work on any regular holiday, but
such employee shall be compensated equivalent to twice his daily rate (200% of
applicable daily rate).

C.

On A Special Holiday or Scheduled Rest Day (First 8 Hours)

Section 9, Rule I, Book III of the Labor Code IRR provides that, except for those
above-mentioned employees not governed by these rules on the hours of work,
an employee who is permitted or suffered to work on special holidays or on his
designated rest days not falling on regular holidays, shall be paid additional
compensation as premium pay of not less than Thirty Percent (30%) percent of
his applicable daily wage (130% of applicable daily rate).

D.

On A Special Holiday or Scheduled Rest Day (In Excess of 8 Hours)

For work performed in excess of eight (8) hours on special holidays and rest
days not falling on regular holidays, an employee shall be paid an additional
compensation for the overtime work equivalent to his rate for the first eight
hours on a special holiday or rest day (130% of applicable daily rate) plus at
least Thirty Percent thereof (30% of the rate for working on special holiday/rest
day 30% of 130% or 169%).22
For purposes of computing the additional compensation, the regular wage or
daily wage of an employee shall include the cash wage only, without deduction
on account of facilities23 provided by the employer.24

3.

OTHER MINIMUM LABOR STANDARDS

Section 8, Ibid.
Section 9 (a), Rule I, Book III, Labor Code IRR
23 Facilities include articles or services (such as board and lodging) provided the employee by the
employer for the benefit of the employee or his family. Facilities are wage deductible. The term
does not include tools of the trade or articles or services primarily for the benefit of the employer
or necessary to the conduct of the employers business. It is required, however, that the employee
voluntarily accepts the facilities; otherwise the cost of the facilities cannot be charged against his
wages.
24 Section 11, Rule I, Book III, Labor Code IRR
21
22

Page 9
Weekly Rest Day
Article 91 of the Labor Code provides that every employer, whether operating for profit
or not, shall provide each of his employees a rest period of not less than twenty-four (24)
consecutive hours after every six (6) consecutive normal work days.
Service Incentive Leave
Every employee who has rendered at least one (1) year of service shall be entitled to a
yearly service incentive leave (SIL) of five (5) days with pay. This provision shall not
apply to those already enjoying vacation leave with pay of at least five (5) days and
those employed in establishments exempted from granting this benefit (as determined
by the Secretary of Labor considering the viability and financial condition of the
establishment). Unused SIL should be converted to cash at the end of the year.
Managerial employees, as defined above, are not included in the coverage of the
provision under the law with respect to service incentive leave.25
Paternity Leave
Every married male employee in the private and public sectors shall be entitled to a
paternity leave of seven (7) days with full pay for the first four (4) deliveries of the
legitimate spouse with whom he is cohabiting.26
Maternity Leave Benefit Under the Philippine Social Security System
Employers are not required to extend maternity leaves with pay under the Labor Code.
By default, the Philippine Social Security System (SSS), specifically Section 14-A of
Republic Act No. 8282, otherwise known as The Social Security Act of 1997, provides for
maternity leave benefits to a female member who has paid at least three (3) monthly
contributions in the twelve (12)-month period immediately preceding the semester of
her childbirth or miscarriage.
Daily maternity benefit is equivalent to one hundred percent (100%) of her average daily
salary credit for sixty (60) days or seventy-eight (78) days in case of caesarean delivery,
subject to the following conditions:
a.

That the employee shall have notified her employer of her pregnancy
and the probable date of her childbirth, which notice shall be
transmitted to the SSS in accordance with the rules and regulations it
may provide;

b.

The full payment shall be advanced by the employer within thirty (30)
days from the filing of the maternity leave application;

c.

That payment of daily maternity benefits shall be a bar to the recovery

of sickness benefits provided by the Social Security Act for the same
period for which daily maternity benefits have been received;

Section 1 (c), Rule V, Book III, Labor IRR

As mandated by Republic Act No. 8187 (11 June 1996), otherwise known as the Paternity Leave Act
of 1996.

25
26

Page 10
d.

That the SSS maternity benefits shall be paid only for the first four (4)
deliveries or miscarriages;

e.

That the SSS shall immediately reimburse the employer of one hundred
percent (100%) of the amount of maternity benefits advanced to the
employee by the employer upon receipt of satisfactory proof of such
payment and legality thereof; and,

f.

That if an employee member should give birth or suffer miscarriage

without the required contributions having been remitted for her by her
employer to the SSS, or without the latter having been previously
notified by the employer of the time of the pregnancy, the employer
shall pay to the SSS damages equivalent to the benefits which said
employee member would otherwise have been entitled to.

SSS maternity leave benefits, like other benefits granted by the SSS, are granted to the
employee in lieu of wages and, therefore, may not be included in computing the
employees 13th month pay27 for the calendar year.
Recognized Rights of Solo Parents
Republic Act No. 8972, otherwise known as The Solo Parent Welfares Act of 2002
refers to solo parent as any individual who falls under any of the following categories:

27

1.

A woman who gives birth as a result of rape and other crimes against
chastity even without a final conviction of the offender: Provided, That
the mother keeps and raises the child;

2.

Parent left solo or alone with the responsibility of parenthood due to

death of spouse;

3.

Parent left solo or alone with the responsibility of parenthood while the
spouse is detained or is serving sentence for a criminal conviction for at
least one (1) year;

4.

Parent left solo or alone with the responsibility of parenthood due to

physical and/or mental incapacity of spouse as certified by a public
medical practitioner;

5.

Parent left solo or alone with the responsibility of parenthood due to

legal separation or de facto separation from spouse for at least one (1)
year, as long as he/she is entrusted with the custody of the children;

6.

Parent left solo or alone with the responsibility of parenthood due to

declaration of nullity or annulment of marriage as decreed by a court or
by a church as long as he/she is entrusted with the custody of the
children;

7.

Parent left solo or alone with the responsibility of parenthood due to

abandonment of spouse for at least one (1) year;

As discussed in Part 4 hereunder.

Page 11
8.

Unmarried mother/father who has preferred to keep and rear her/his

child/children instead of having others care for them or give them up to
a welfare institution;

9.

Any other person who solely provides parental care and support to a
child or children;

10.

Any family member who assumes the responsibility of head of family as

a result of the death, abandonment, disappearance or prolonged
absence of the parents or solo parent.28

any solo parent shall enjoy the following benefits:

4.

1.

Flexible Work Schedule. This is the right granted to a solo parent

employee to vary his/her arrival and departure time without affecting
the core work hours as defined by the employer, i.e., individual and
company productivity. The employer may request for an exemption
from this provision on certain meritorious grounds.29

2.

Non-discrimination at the work place. The employer shall not

discriminate against any solo parent employee with respect to terms
and conditions of employment on account of his/her status.

3.

Parental Leave. This refers to a leave benefit granted to a solo parent to

enable him/her to perform parental duties and responsibilities where
physical presence is required. The solo parent is entitled to parental
leave with pay of not more than seven (7) working days per year in
addition to leave privileges, such as vacation/sick leave, already
granted to him/her. The seven (7)-day leave shall be non-cumulative
and in case it is not availed of, the leave cannot be converted to cash,
unless specifically agreed upon previously.

WHAT ARE THE RULES GOVERNING THE PAYMENT OF WAGES?

Minimum Wage
SUMMARY OF CURRENT REGIONAL DAILY MINIMUM WAGE RATES
Non-Agriculture, Agriculture
As of April 2014
(In pesos)
AGRICULTURE

REGION

WO No.
DATE OF EFFECTIVITY

NONAGRICULTURE

Plantation

NCR a/

WO 20/June 2, 2016

P 454.00 - 491.00

P 454.00

Section 3 of Republic Act No. 8972, otherwise known as The Solo Parent Welfares Act of 2002
(RA 8972)
29 An inquiry with the DOLE revealed that the Secretary of Labor exempted an employer from this
provision because the employee concerned was the secretary of the General Manager, who had to
be present during the times when the manager was in the office.
28

NonPlantation
P 454.00

Page 12
CAR b/

WO 17/June 29, 2015

265.00 - 285.00

255.00 - 285.00

255.00 - 285.00

I c/

WO 17/July 19, 2015

227.00 - 253.00

233.00

227.00

II d/

WO 17/May 14, 2016

300

280

280

III e/

WO 19/January 1, 2016

313.00 - 364.00

298.00-334.00

298.00-334.00

IV-A f/

WO 17/ July 1, 2016

285.00 - 378.50

275.00 353.50

275.00 - 353.50

IV-B g/

WO 07/July 3, 2015

225.00 - 285.00

230.00 - 235.00

230.00 - 235.00

V h/

WO 17/ December 25, 2015

248.00 - 265.00

248.00

248.00

VI i/

WO 22/May 2, 2015

256.50 - 298.50

266.50

256.50

VII j/

WO19/October 10, 2015

295.00 - 353.00

275.00 - 335.00

275.00 - 335.00

VIII k/

WO 18/March 30, 2015

260.00

241.00

235.00

IX l/

WO 18/ June 10, 2013

280.00

255.00

235.00

X m/

WO 18/July 3, 2015

303.00 - 318.00

291.00 - 306.00

291.00 - 306.00

XI n/

WO 18/June 1, 2014

317.00

307.00

307.00

XII o/

WO 18/Aug. 1, 2014

275.00

257.00

257.00

XIII p/

WO 14/July 1, 2016

275.00

275.00

275.00

ARMM q/

WO 16/ Mar. 1, 2016

265.00

255.00

255.00

a/ Provides P10 COLA and integration of the P15 COLA under W.O. 19 into the basic pay.
b/ Granted P5 &P10 under WO No.16 & P2-P8 increase in the basic pay upon effectivity; integration of the
remaining P10 & P15 COLA effective Jan.1, 2016.
c/ Granted P14.00 increase in basic pay in the Non-Agri (micro) and Agriculture (Non-Plantation to be given in two
tranches; P7 upon effectivity & P7 on Dec. 1, 2015.
d/ Granted P45-P53 increase in basic pay for non-agriculture; P37-P45 for agriculture; P53-P61 for retail/service
employing more than 10 workers and P31 for R/S employing less than 10 workers.
e/ Granted P15.00 wage increase in the basic pay for all regions in two tranches: P8 upon effectivity & P7 effective
May 1, 2016. Granted P20 increase in basic pay for retail/service establishments with less than 16 workers in Aurora
province; P10 upon effectivity & P10 effective May 1, 2016.
f/ Granted P12 increase in the basic pay for workers receiving below P267) and P13 SEA for workers receiving above
P267
g/ Integrated the P5 COLA into the basic pay & granted P5-P30 increase in basic pay to be given in four tranches
h/ Granted P5.00 and P12.00 increase in basic pay.
i/ Granted P11.50 wage increase
j/ Granted P13 increase in basic pay within Metro Cebu and P10 for all sugar mill workers
k/ Integrated the P15 COLA under WO No. 16; P6 Increase in basic pay for R/S employing 10 workers & belwo
upon effectivity; and P14.50 increase in basic pay for the Non-Plantation sector to be given in two tranches: P7.50
upon effectivity & P7 effective May 1, 2015
l/ Granted P13 wage increase.
m/ Granted P12 wage increase
n/ Granted P11 increase in basic pay upon effectivity & P5 COLA effective Dec. 1, 2014; integrated the P15 COLA
under WO No. 17 into the basic pay.

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o/ Integration of P10 to P14 COLA under WO No. 17, into the basic pay and granted P5 COLA effective Jan. 1 2015
and P3-P4 basic wage increase due to simplification of industry classification.
p/ Granted P7 increase in basic pay upon effectivity and P5 COLA effective on October 1, 2016.
q/ Granted P5 and P15 per day wage increase for Non-Agriculture and Agriculture sector respectively.
Source: National Wages and Productivity Commission
Updated: 03 August 2016
The NCR, considered to be a place with a higher standard of living than other places in
the Philippines, has the highest wage rates.
The basis of minimum wage rates prescribed by law shall be the normal working hours,
which shall not be more than eight (8) hours a day.
The Regional Wage Board may increase minimum wages and/or ECOLA from to time
to time by issuing new wage orders to that effect.
Monthly-paid employees refer to those who are deemed paid every day of the month,
including unworked rest days, special days, and regular holidays.
Daily-paid employees refer to those who are deemed paid on the days they actually
work, including unworked regular holidays during which they are paid their basic
wage, whether they are present or on leave with pay on the working day before the
regular holiday.
Payment of Wages
Wages shall be paid at least once every two (2) weeks or twice a month at intervals not
exceeding sixteen (16) days.30 The Labor Code IRR provides that the employer should
pay his employees through payroll, which should clearly show, among others, the
employees pay rate, the deductions made, and the amount actually paid.31
Wages should be paid directly to the workers to whom they are due, except in case of
force majeure or under special circumstances determined by the Secretary of Labor, in
which case the worker may be paid through another person under written authority
given by the worker for the purpose; or where the worker has died, in which case the
wages may be paid to his heirs.32
13th Month Pay
All employers are required to pay all their rank-and-file employees a 13th month pay not
later than December 24 of every year.33 The minimum 13th month pay required by law
shall not be less than 1/12 of the total basic salary earned by the employee. The basic
salary of an employee, for purposes of computing the 13th month pay, shall include all
remunerations or earnings paid by the employer for services rendered, but does not
include allowances and monetary benefits which are not considered or integrated as
part of the basic salary, such as the cash equivalent of unused vacation and sick leave
Article 103, Labor Code
Section 7, Rule X, Book III, Labor Code IRR
32 Art. 105, Ibid.
33 Section 1, Memorandum Order No. 28 (13 August 1986)
30
31

Page 14
credits, overtime, premium, night shift differential and holiday pay, and cost of living
allowances.
5.WHAT ARE THE RULES GOVERNING HOSPITALIZATION, LOSS OF PAY DUE
TO ACCIDENT, LEAVES, ETC.?
The Philippine Social Security System (SSS)
Coverage in the SSS shall be compulsory upon all employees not over sixty (60) years of
age and their employers.34 Compulsory coverage of the employer shall take effect on the
first day of its operation and that of the employee on the first day of his employment:
Provided, that the compulsory coverage of the self-employed shall take effect upon his
registration with the SSS.35
Both the employer and employee are mandated by law to make contributions to the SSS
depending on the salary range of the employee in accordance with the table provided
below.
Under the SSS, benefits are paid in the form of a daily cash allowance for the number of
days a member is unable to work due to sickness, injury, maternity, and disability.
The Philippine Employees Compensation Program
The Philippines has a tax-exempt employees compensation program drawn against the
State Insurance Fund36 whereby employees and their dependents, in the event of a
work-related disability or death, may promptly secure adequate income benefits, and
medical or related benefits.37
This employees compensation law applies to all employers, including Filipinos working
abroad for employers doing business in the Philippines. Once registered with the SSS,
both the employer and the employee are covered by this employees' compensation
program under the management of the Employees Compensation Commission (ECC).
Only the employer, not the employee, contributes to the State Insurance Fund. The rate
of contribution varies on the brackets of monthly salary credits the ECC gives. These
brackets are the basis by which the employers payment of one percent (1%)
contribution to the employees compensation fund is based.38
The liability of the State Insurance Fund is exclusive and in place of all other liabilities of
the employer to the employee, his dependents or anyone otherwise entitled to receive
damages in behalf of the employee or his dependents.39
A.

Compensable Injury and Death Under the Employees Compensation

Program

Section 9, Republic Act No. 8282, otherwise referred to as The Social Security Law as of 1997
(RA 8282)
35 Section 10, RA 8282
36 Presidential Decree No. 626
37 Article 166, Labor Code
38 Amended Rules on Employees Compensation.
39 Artcle 173, Labor Code
34

Page 15
For injury and the resulting disability or death to be compensable, the injury must be the
result of an accident arising out of and in the course of employment.40
Compensable coverage would also include an injury or death resulting from an accident
while he is going to or coming from the workplace. In such case, the injury or death shall
be considered compensable, if the following conditions are established or definitely
proven:
a.

The act of the employee of going to or coming from the workplace must
have been a continuing act, that is, he had not been diverted from it by
any other activity, and he had not departed from his usual route to or
from his workplace; and

b.

Regarding an employee on special errand, the special errand must have

been official and in connection with his work.

No compensation for disability or death caused by intoxication, willful intention to

injure or kill himself or another, or notorious negligence (contributory negligence or a
deliberate act of the employee to disregard his own personal safety) will be allowed.41
B.

Compensable Sickness Under the Employees Compensation Program

Aside from injury or accident, the other cause that gives rise to employees
compensation claim is sickness. But for the sickness to be compensable, the resulting
death or disability must be in the ECCs list of the occupational diseases or any illness
caused by employment, subject to proof that the risk of contracting the same is increased
by working conditions.
TABLE OF SS AND EC CONTRIBUTIONS
OF EMPLOYER AND EMPLOYEE IN PhP42
For Employed Members
SALARY
RANGE OF
BRACKET COMPENSATION

MONTHLY
SALARY
CREDIT

MONTHLY CONTRIBUTION
EMPLOYER
SS

EMPLOYEE

EC

TOTAL

SS

1,000 - 1,249.99

1,000

73.70

10.00

36.30

120.00

II

1,250 - 1,749.99

1,500

110.50

10.00

54.50

165.00

III

1,750 - 2,249.99

2,000

147.30

10.00

72.70

230.00

IV

2,250 - 2,749.99

2,500

184.20

10.00

90.80

275.00

2,750 - 3,249.99

3,000

221.00

10.00

109.00

330.00

VI

3,250 - 3,749.99

3,500

257.80

10.00

127.70

385.00

VII

3,750 - 4,249.99

4,000

294.70

10.00

145.30

440.00

VIII

4,250 - 4,749.99

4,500

331.50

10.00

163.50

495.00

IX

4,750 - 5,249.99

5,000

368.30

10.00

181.70

550.00

ECC Resolution No. 27999, 25 July 1984

172, Labor Code; Paez vs. CWW, et al., L- 73441, 04 September 1963
42 These are the rates last 2014, not yet updated.
40

41Article

Page 16
X

5,250 - 5,749.99

5,500

405.20

10.00

199.80

605.00

XI

5,750 - 6,249.99

6,000

442.00

10.00

218.00

660.00

XII

6,250 - 6,749.99

6,500

478.80

10.00

236.20

715.00

XIII

6,750 - 7,249.99

7,000

515.70

10.00

254.30

770.00

XIV

7,250 - 7,749.99

7,500

552.50

10.00

272.50

825.00

XV

7,750 - 8,249.99

8,000

589.30

10.00

290.70

880.00

XVI

8,250 - 8,749.99

8,500

626.20

10.00

308.80

935.00

XVII

8,750 - 9,249.99

9,000

663.00

10.00

327.00

990.00

XVIII

9,250 - 9,749.99

9,500

699.80

10.00

345.20

1,045.00

XIX

9,750 - 10,249.99

10,000

736.70

10.00

363.30

1,100.00

XX

10,250 - 10,749.99

10,500

773.50

10.00

381.50

1,155.00

XXI

10,750 - 11,249.99

11,000

810.30

10.00

399.70

1,210.00

XXII

11,250 - 11,749.99

11,500

847.20

10.00

417.80

1,265.00

XXIII

11,750 - 12,249.99

12,000

884.00

10.00

436.00

1,320.00

XXIV

12,250 - 12,749.99

12,500

920.80

10.00

454.20

1,375.00

XXV

12,750 - 13,249.99

13,000

957.70

10.00

472.30

1,430.00

XXVI

13,250 - 13,749.99

13,500

994.50

10.00

490.50

1,485.00

XXVII

13,750 - 14,249.99

14,000

1,031.30

10.00

508.70

1,540.00

XXVIII

14,250 - 14,749.99

14,500

1,068.20

10.00

526.80

1,595.00

XXIX

14,750 15,249.99

15,000

1,105.00

30.00

545.00

1,650.00

XXX

15,250- 15,749.99

15,500

1,141.80

30.00

563.20

1,705.00

XXXI

15,750- OVER

16,000

1,178.70

30.00

581.30

1,760.00

The National Health Insurance Program (NHIP)

This refers to the mandatory health insurance program for employees, who are already
SSS members, and their dependents under Republic Act No. 7875, otherwise known as
The National Health Insurance Act of 1995.
The Philippine Insurance Health
Corporation (PhilHealth) is the administrator of the NHIP. Monthly contributions of
members shall be dependent on his/her salary and shall be according to the prescribed
NHIP Premium Contribution Schedule.
Premium Contribution Schedule43
Monthly
Salary
Bracket

Monthly Salary
Range in PhP

Salary
Base (SB)

Total
Monthly
Contribution

Personal Share
(PS)
(PS=SBx1.25%)

Employer
Share
(ES=PS)

8,999.99 and Below

8,000.00

200.00

100.00

100.00

9,000.00 to 9,999.99

9,000.00

225.00

112.50

112.50

10,000.00 to 10,999.99 10,000.00

250.00

125.00

125.00

Current rates and are subject to change.

http://www.philhealth.gov.ph/partners/employers/contri_tbl.html

43

Page 17
4

11,000.00 to 11,999.99 11,000.00

275.00

137.50

137.50

12,000.00 to 12,999.99 12,000.00

300.00

150.00

150.00

The Home Mutual Development Fund (PAG-IBIG FUND)

Under Republic Act No. 7742, it is now mandatory for all SSS members with a monthly
salary of P4,000.00 to be covered by the PAG-IBIG Fund.
Monthly contributions of employees with monthly compensation (Basic + COLA) of:

P1,500.00 and less, an amount equivalent to one percent (1%) of their

monthly compensation.
Over P1,500.00, an amount equivalent to two percent (2%) of the monthly
compensation of each covered employee.

Employers are mandated to match their employees' monthly contributions with an

amount equivalent to two percent (2%) of the monthly compensation of each covered
employee.
For self-employed members, monthly contribution is equivalent to two percent (2%) of
their monthly gross earnings.
Employees, who have earned the required number of contributions, can avail of various
PAG-IBIG Fund benefits include savings and short-term, multi-purpose, and housing
loans, among others.
Penalties
Non-compliance or delinquency in the payment of contributions to the ECC, SSS,
PhilHealth, and PAG-IBIG Fund exposes the employer to penalties of imprisonment
and/or fine, and interest penalty from the date the contribution falls due until paid.
6.

WHAT ARE THE RULES GOVERNING RETIREMENT BENEFITS?

Coverage
All employees regardless of their position, designation, or status and irrespective of the
method by which their wages are paid are entitled to retirement benefits as provided for
by Republic Act No. 7641 (RA 7641) upon compulsory retirement at the age of sixtyfive (65) or upon optional retirement at the age of sixty (60).
This benefit does not apply to the following:
a.
b.

Government employees; and,

Employees of retail, service and agricultural establishments or
operations regularly employing not more than ten (10) employees.

When there is no retirement plan or applicable agreement providing for benefits, an

employee shall be retired upon reaching the age of sixty-five (65).

Page 18
Optional Retirement
An employee below sixty-five (65) may retire and shall be entitled to retirement pay
under RA 7641 if:
a.
b.
c.

There is no retirement plan or applicable agreement on retirement

benefits in an establishment;
He has reached sixty (60) years or more; and,
He has served at least five (5) years in said establishment.

Upon optional or compulsory retirement, the employee is likewise entitled to his

proportionate 13th month pay for the calendar year and to the cash equivalent of leave
benefits, if demandable.
Amount of Retirement Pay
The minimum retirement pay due covered employees shall be equivalent to one-half
(1/2) month salary for every year of service, a fraction of at least six months being
considered as one whole year.
For purposes of computing retirement pay, one-half month salary shall include all of
the following:
a.
b.
c.
d.

Fifteen (15) days salary based on the latest salary rate;

Cash equivalent of five (5) days of service incentive leave (or vacation
leave);
One-twelfth (1/12) of the 13th month pay (where the 13th month pay is
the total basic salary for the last twelve (12) months of service divided
by twelve); and,
Other benefits agreed upon by the employer and employee.

The retirement benefits under RA 7641 are apart from those granted under the SSS.
Under the SSS, a cash benefit is paid to a member upon his retirement from work due to
old age.44 They are either in the form of a monthly pension or a lump sum. The lump
sum amount is granted to a retiree who has not paid the required one hundred twenty
(120) monthly contributions.
7.

WHAT ARE THE OTHER REQUIREMENTS OF SPECIAL LAWS?

Republic Act 9165 (RA 9165)

Pursuant to RA 9165 or the Comprehensive Dangerous Drug Act of 2002, the DOLE
issued guidelines45 for the establishment and implementation of the required drug-free
policies in the workplace. It is now mandatory for private establishments employing ten
(10) or more workers to formulate and implement drug abuse prevention and control
programs in the workplace, including the formulation and adoption of company policies
against dangerous drug use.
Those qualified for retirement benefits under the SSS include those who are sixty (60) years old
and has paid at least 120 monthly contributions prior to the semester of retirement. Likewise, a
member who is sixty-five (65) years old, whether employed or not, is also qualified. If employed,
he should have paid 120 monthly contributions prior to the semester of retirement.
45 Department Order No 53-03, Series of 2003 (DO 53-03), 14 August 2003
44

Page 19
The DOLE requirements include posting of messages or signage encouraging a drugfree workplace; yearly random drug testing for officers and employees; and assistance
and counseling programs for emotionally-stressed employees.
TO SUMMARIZE:
The employer is required to adopt a policy on Drug-Free
Workplace pursuant to the foregoing.46
Republic Act 8504 (RA 8594)
RA 8504 or the Philippine AIDS Prevention and Control Act of 1998 mandates that all
government and private employees, workers and managers, and supervisors shall be
provided with the standardized basic information and instruction on HIV/AIDS, which
shall include topics on confidentiality in the workplace and attitude towards infected
employees and workers.47
Section 35 of RA 8504 also lays down the policy that discrimination in any form from
pre-employment to post-employment, including hiring, promotion, or assignment based
on actual, perceived, or suspected HIV status of an individual is prohibited. Persons with
HIV/AIDS already employed by any public or private company shall be entitled to the
same employment rights, benefits, and opportunities as other employees, namely:
a.
b.
c.
d.

Security of tenure;
Reasonable alternative working arrangements, when necessary;
Social security, union, credit and other similar benefits; and,
Protection from stigma, demotion, discrimination and termination by coworkers, unions, employers and clients. 48

More importantly, Section 16 of RA 8504 states that compulsory HIV testing as a precondition to employment shall be considered unlawful. Consistent with this provision,
termination from work on the sole basis of actual, perceived or suspected HIV status is
deemed unlawful.49
All discriminatory acts and policies shall be punishable with a penalty of:
a.
b.

Imprisonment for six (6) months to four (4) years; and,

A fine not exceeding Ten thousand pesos (P10,000.00).50

The Implementing Rules and Regulations (IRR) of RA8504 also provides that
HIV/AIDS education shall be integrated in the orientation, training, continuing
education, and other human resource development programs of employees and
employers in all government and private offices. Each employer shall develop,
implement, evaluate and fund a workplace HIV/AIDS education and information
program for all their workers with the following elements:

We suggest that you consult an HR Consultant on this matter in order to properly comply with
the technical requirements of RA 9165. Once the required policy is drafted, the same can be
further reviewed as to its legal aspects before finalizing the same.
47 Section 6, RA 8504
48 Section 46, Rule 8, Implementing Rules and Regulations of RA 8504
49 Section 35, RA 8504
50 Section 53, Labor Code IRR
46

Page 20
a.
b.
c.
d.
e.
f.

The HIV/AIDS education prototype and the modifications therein, that

are suited to the target audience;
List of trainers and other resource persons from the same or other
workplace(s);
Training schedule;
Self-learning information materials such as booklets, brochures, flyers
and tapes;
Dissemination and distribution schedule of self-learning materials; and
A monitoring and reporting scheme 51

TO SUMMARIZE:
The employer is required to adopt a policy on STD/HIV/AIDS
Prevention pursuant to the foregoing.52
Republic Act 7877 (RA 7877)
Section 3 of RA 7877 or the Anti-Sexual Harassment Act of 1995 defines sexual
harassment as one committed by an employer, employee, manager, supervisor, agent of
the employer, or any other person who, having authority, influence, or moral ascendancy
over another in a work environment, demands, requests or otherwise requires any sexual
favor from the other, regardless of whether the demand, request, or requirement for
submission is accepted by the object of RA 8504.
In a work-related or employment environment, sexual harassment is committed when:
1.

The sexual favor is made as a condition in the hiring or in the

employment, re-employment or continued employment of said
individual, or in granting said individual favorable compensation, terms
of conditions, promotions, or privileges; or the refusal to grant the sexual
favor results in limiting, segregating or classifying the employee which in
any way would discriminate, deprive or diminish employment
opportunities or otherwise adversely affect said employee;

2.

The above acts would impair the employee's rights or privileges under
existing labor laws; or

3.

The above acts would result in an intimidating, hostile, or offensive

environment for the employee.

In addition, any person who directs or induces another to commit any act of sexual
harassment as herein defined, or who cooperates in the commission thereof by another
without which it would not have been committed, shall also be held liable under RA 7877.
As such, it shall be the duty of the employer to prevent or deter the commission of acts of
sexual harassment and to provide the procedures for the resolution, settlement. or
prosecution of acts of sexual harassment. Towards this end, the employer shall:

Section 15, Labor Code IRR

We suggest that you consult an HR Consultant on this matter in order to properly comply with the
technical requirements of RA 8504. Once the required policy is drafted, the same can be further
reviewed as to its legal aspects before finalizing the same.

51
52

Page 21
a.

Promulgate appropriate rules and regulations in consultation with and

joint1y approved by the employees or students or trainees, through their
duly designated representatives, prescribing the procedure for the
investigation of sexual harassment cases and the administrative sanctions
therefor.
Administrative sanctions shall not be a bar to prosecution in the proper
courts for unlawful acts of sexual harassment.
The said rules and regulations issued shall include, among others,
guidelines on proper decorum in the workplace.

b.

Create a Committee on Decorum and investigation of cases on sexual

harassment. The Committee on Decorum shall conduct meetings, as the
case may be, with officers and employees to increase understanding and
prevent incidents of sexual harassment. It shall also conduct the
investigation of alleged cases constituting sexual harassment.
In the case of a work-related environment, the committee shall be
composed of at least one (1) representative each from the management,
the union, if any, the employees from the supervisory rank, and from the
rank and file employees.
The employer shall disseminate or post a copy of RA 7877 for the
information of all concerned.

TO SUMMARIZE:
The employer is required to adopt a policy against Sexual
Harassment in the Workplace and to create a Committee on Decorum pursuant to the
foregoing.53
Republic Act 7277 (RA 7277)
Handicap workers must be given an equal opportunity for employment under RA 7277.
The law states that no disabled person shall be denied access to opportunities for suitable
employment. A qualified disabled employee shall be subject to the same terms and
conditions of employment and the same compensation, privileges, benefits, fringe
benefits, incentives or allowances as a qualified able-bodied person.54
Furthermore, Section 32 of RA 7277 provides that no entity, whether public or private,
shall discriminate against a qualified disabled person by reason of disability in regard to
job application procedures, the hiring, promotion, or discharge of employees, employee
compensation, job training, and other terms, conditions, and privileges of employment.
The following constitute acts of discrimination:
a.

Limiting, segregating, or classifying a disabled job applicant in such a

manner that adversely affects his work opportunities;

We suggest that you consult an HR Consultant on this matter in order to properly comply with the
technical requirements of RA 7277. Once the required policy is drafted, the same can be further reviewed as
to its legal aspects before finalizing the same.
54 Section 5, RA 7277
53

Page 22
b.

Using qualification standards, employment tests, or other selection criteria

that screen out or tend to screen out a disabled person, unless such
standards, tests, or other selection criteria are shown to be job-related for
the position in question and are consistent with business necessity;

c.

Utilizing standards, criteria, or methods of administration that:

1.

have the effect of discrimination on the basis of disability;

2.

perpetuate the discrimination of others who are subject to

common administrative control.

d.

Providing less compensation, such as salary, wage, or other forms of

remuneration and fringe benefits, to a qualified disabled employee, by
reason of his disability, than the amount to which a non-disabled person
performing the same work is entitled;

e.

Favoring a non-disabled employee over a qualified disabled employee

with respect to promotion, training opportunities, study, and scholarship
grants, solely on account of the latter's disability;

f.

Re-assigning or transferring a disabled employee to a job or position he

cannot perform by reason of his disability;

g.

Dismissing or terminating the services of a disabled employee by reason

of his disability, unless the employer can prove that he impairs the
satisfactory performance of the work involved to the prejudice of the
business entity: Provided, however, That the employer first sought to
provide reasonable accommodations for disabled persons;

h.

Failing to select or administer in the most effective manner employment

tests, which accurately reflect the skills, aptitude, or other factors of the
disabled applicant or employee that such tests purports to measure, rather
than the impaired sensory, manual, or speaking skills of such applicant or
employee, if any; and,

i.

Excluding disabled persons from membership in labor unions or similar

organizations.

Reasonable Accommodation includes (1) improvement of existing facilities used by

employees in order to render these readily accessible to and usable by disabled persons;
and (2) modification of work schedules, reassignment to a vacant position, acquisition or
modification of equipment or devices, appropriate adjustments or modifications of
examinations, training materials or company policies, rules and regulations, the provision
of auxiliary aids and services, and other similar accommodations for disabled persons.55

55

Section 4 (h), RA 7277

Page 23
TERMINATION OF EMPLOYMENT
I.

JUST CAUSES OF TERMINATION (Article 282 of the Labor Code)

a.

Rationale: An employer has the right to dismiss its erring employees as a measure of selfprotection against acts inimical to its interests.

b. Substantive requirements
Just Causes
1. Serious misconduct
2. Willful disobedience
3. Gross neglect of duties
4. Loss of confidence
5. Commission of a crime
6. Analogous cases
Authorized Causes
1. Labor saving devices
2. Redundancy
3. Retrenchment to prevent loss
4. Closure or cessation
5. Disease
Just Causes
a.

Serious misconduct
1. Misconduct is improper or wrong conduct; transgression of established and definite rule
of action, a forbidden act, a dereliction, and implies wrongful intent and not mere error
in judgment.
2. Parameters/Tests:
i.
Grave and aggravated character and not merely trivial or unimportant
ii.
Must be in connection with the employees work
iii.
Must be based on a series of irregularities, not merely on an isolated basis

c.

Willful disobedience
1. An intentional disobedience by the employee of the employers orders, regulations, or
instructions characterized by a wrongful and perverse mental attitude rendering the
employees acts inconsistent with proper subordination.
2. Elements: The orders, regulations, or instructions of the employer or representative must
be:
i. Reasonable and lawful
ii. Sufficiently known to the employee
iii. In connection with the duties, which the employee has been engaged to
discharge

d. Gross neglect of duties

1. Generally, gross neglect means the absence of that diligence that an ordinary prudent
man would use in his own affairs. It can also mean want of slight care or the utter
disregard of consequences.

Page 24
2. Parameter/Tests:
1. To be a valid cause for disciplinary action, it must be habitual
2. Actual loss or damage to the employer is not necessary. It is sufficient that the
gross and habitual neglect tends to prejudice the employers interest
3. Elements of Abandonment:
i. The failure to report for work or absence without valid or justifiable reason
ii. A clear intention to sever employer-employee relationship
e.

Loss of confidence
1.

f.

Guidelines
i. Loss of confidence should not be simulated
Must be due to genuine causes
Must rest on actual breach of duty committed by the employee
ii. It should not be used as a subterfuge for causes, which are improper, illegal, or
unjustified
iii. The employee involved holds a position of trust and confidence
Applies to employees occupying positions of trust and confidence
1. Managerial Employees - Those vested with the powers or prerogatives to:
Lay down management policies
Hire, transfer, suspend, lay-off, recall, discharge, assign, or discipline
employees
Effectively recommend similar managerial actions
2. Employees, who are routinely charged with the care and custody of the
employers money and property
3. Confidential employees
4. Technical employees, since they have access to confidential information
and trade secrets of the employer
Standards Different for Managerial Employees
They perform key and sensitive positions; they are bound by more
exacting work ethics
The rules on termination of employment and the penalties to be imposed
for infractions committed for managerial employees are not necessarily the
same as those for ordinary employees
The act complained of must be related to the employees performance of his
duties
iv. It may not be arbitrarily asserted in the face of evidence to the contrary
Proof required Proof beyond reasonable doubt is not required
Sufficiency of proof If the employer has reasonable ground to believe or to
entertain the moral conviction that the employee is responsible for the
misconduct
Must be founded on clear and established facts

Commission of a crime or offense

1.
2.

3.

Two Types
i. Crime against the person of the employer
ii. Crime against the employers immediate family member
The immediate members of the family referred to are limited to the spouse, ascendants,
descendants, or legitimate, natural, or adopted brothers or sisters of the employer or of
his relative by affinity in the same degrees, and those by consanguinity within the fourth
civil degree.
Conviction or Prosecution Not Required

Page 25
i. Conviction of a crime is not necessary to warrant the dismissal of the employee,
if there is ample reason to mistrust him.
ii. Exoneration from a criminal charge may still lead to the valid dismissal of an
employee, if there are reasonable grounds to have no confidence in the
employees performance of his duties.
g.

Analogous cases

The basis for the dismissal of an employee under analogous causes must be in relation
to any of the just causes enumerated in Article 282 of the Labor Code.

II. PROCEDURE FOR TERMINATION OF EMPLOYEES

a.

Standards of due process if termination is based on just cause

1.

Requirements
i. Employee should be informed of the charge against him
ii. Employee should be given the opportunity to be heard
Notice (Two-notice rule)
Answer and Hearing
Preventive Suspension
Decision to Dismiss
iii. The employer is required to furnish an employee who is to be dismissed with two
written notices before termination
Notice to apprise employee of particular acts or omissions for which his
dismissal is sought (proper charge)
Notice informing employee of employers decision to dismiss him (this
noticed must only be served after the employee is given a reasonable period
from receipt of the first notice within which to answer the charge and ample
opportunity to be heard and defend himself with the assistance of his
representative, if he so desires)

2.

Administrative investigation
i. May be necessary under certain circumstances
ii. Notice should be issued to the employee on the time and place of investigation
iii. Employer shall afford employee ample opportunity to be heard and defend himself
with the assistance of his representative, if he so desires

3.

Preventive suspension
i. During the pendency of the investigation, the employer may place the employee
under preventive suspension if his continued employment poses a serious and
imminent threat to the life and property of the employer or his co-employees
ii. Maximum period of suspension is thirty (30) days
iii. 30-day period may be extended provided employer pays the suspended employee
his wages and other benefits

4.

Decision to dismiss
i. Employers decision to dismiss should be in writing and should clearly state the
reasons
ii. Employee has the right to contest the validity or legality of his dismissal

b. Effects/sanctions for violation of due process requirements

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1.
2.
3.
4.

The dismissal is for just cause and due process was observed
The dismissal is without just cause but due process was observed
The dismissal is without just cause and there was no due process
The dismissal is for just cause but due process was not observed

In the first situation, the dismissal is valid and the employer will not suffer any liability.

In the second and third situations where the dismissals are illegal, the law mandates that
the employee is entitled to reinstatement without loss of seniority rights and other
privileges, and full backwages, inclusive of allowances, and other benefits or their
monetary equivalent, computed from the time the compensation was not paid up to the
time of actual reinstatement. In case reinstatement is impossible by reason of strained
relation, then the employee shall be entitled to separation pay in lieu of reinstatement.

In the fourth situation, the dismissal is upheld. While the procedural infirmity cannot be
cured, it should not invalidate the dismissal. However, the employer may be held liable
for non-compliance with the procedural requirements of due process in the form of
nominal damages. The amount of such damages is addressed to the sound discretion of
the court, taking into account the relevant circumstances.