/ 
.. 
FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
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SENATE 
Senate Bill No., __ 
8.=....=.D-=8_ 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
This bill seeks to establish the New Labor Code of the Philippines And For Other 
Purposes. 
I. Rationale 
1. The Constitutional Mandate on Labor: (Article XIII, Sec. 3, Constitution 
of the Philippines) 
"The State shall afford full protection to labor, local and 
overseas, organized and unorganized, and promote full 
employment and equality of employment opportunities for all. 
"It shall guarantee the rights of all workers to self-
organization, collective bargaining and negotiations, and 
peaceful concerted activities, including the right to strike in 
accordance with law. They shall be entitled to security of 
tenure, humane conditions of work, and a living wage. They 
shall also participate in policy and decision-making processes 
affecting their rights and benefits as may be provided by law. 
"The 
State 
shall 
promote 
the 
principle 
of 
shared 
responsibility between workers and employers and the 
preferential use of voluntary modes in settling disputes, 
including 
conciliation, 
and 
shall 
enforce 
their mutual 
'compliance therewith to foster industrial peace. 
"The State shall regulate the relations between workers and 
employers, recognizing the rights of labor to its just share in 
the fruits of production and the right of enterprises to a 
reasonable returns on investments, and to expansion and 
growth." 
The above-stated Constitutional provision is entirely quoted in Article 3, 
Declaration of Policy, of the proposed New Labor Code. And foremost, Article 3 will 
reinforce the narrow orientation and coverage of the Constitution to afford full protection 
to labor based on employer-employee relationship.This change is a significant 
1 


/ 
, 
improvement of the 1974 Labor Code which quoted its Declaration of Policy from 
Section 9 of Article 11 of the 1973 Constitution of the Philippines, to wit: 
"Section 9. Declaration of Principles and State Policies -
The State shall promote a just and dynamic social order that will 
ensure the prosperity and independence of the Nation and free 
the people from poverty through policies that provide adequate 
social services, promote full employment, a riSing standard of 
living and improved quality of life for all." 
2. The Challenge of the Emerging World Economic Order. 
The Congressional Commission on Labor (LABORCOM) was created by Joint 
Resolution No.31 and signed into law on February 9, 1998, to review and assess 
the state of Philippine Labor in the light of the implementation of the Manila 
Action Plan of the Asia Pacific Economic Cooperation (APEC), and recommend 
policy, institutional and infrastructural measures to ensure the protection of the 
rights. and promotion of the welfare of the workers. The whereas clauses of the 
Joint Resolution No.31 read: 
"WHEREAS, the workers are the lifeline of the economy; they 
represent the human element -
the brains and the brawn in the 
transformation of resources, both natural and capital, into goods and 
services in accordance with the needs of the society; 
"WHEREAS, without the workers, capital cannot be translated into 
wealth;'it is, by itself, worthless; 
''WHEREAS, what is technology without the' worker to operate it; 
what is production process without the worker to execute it; what is 
commodity without the worker to buy and consume it; 
"WHEREAS, the largest component of income of most Filipino 
individuals and families is a retum for their skills and knowledge; 
"WHEREAS, for decades, the Filipino worker has a comparative 
advantage in relation to his Asian and African counterpart in terms of 
literacy and skills; he is 
educated and equipped with the know-how 
and communication skills that most big companies ordinarily require; he 
has been bringing in the much-needed dollars into our otherwise wobbly 
economy; 
"WHEREAS, the emerging world economic order has spawned 
structural changes in national economies; trade liberalization, deregulation, 
privatization, and market integration; these current developments have 
fundamentally altered the work environment particularly in Third World 
countries like the Philippines; 
2 


:WHEREAS, because of the mobility of capital and sophisticated 
communications, workers across the globe are now in direct competition, 
competitively underbidding each other, and virtually keeping wages at low 
levels; 
"WHEREAS, capitalists have adopted "flexible" 
management 
policies such as subcontracting, casualization of workers, job-sharing 
which have 
engendered an atmosphere of insecurity and 
helplessness in the labor market; 
"WHEREAS, more and more are now constantly threatened by 
retrenchment, company closures and union busting while not a single 
company has been penalized for a labor law violation." 
The work of the Commission was undertaken principally through four Standing 
Committees: (i) Committee on Employment and Productivity; (ii) Committee on labor 
Relations; (iii) Committee on labor Standards and Working 
Conditions; and (iv) 
Committee on Institutions and Bureaucracy. 
Technical Working Group, Sectoral and Regional Consultations, and Standing 
Committee Meetings were conducted by each Committee, deliberating on issues and 
problems within their respective areas of concern. Participants to these meetings 
included experts and resource persons from Government, employers and labor sectors 
and 
concerned 
non-government 
organizations. 
The 
results 
of 
these 
meetings/consultations form part of the bases for the Report of each Standing 
Committee, and become the major consideration of the Final Report of the Commission, 
entitled "Human Capital in the Emerging Economy". The Final Report of the 
Commission was presented to Malacanang on February 10, 2001, in the presence of 
Congressional leaders. 
The 
four 
Standing 
Committees 
(lABORCOM) 
carne 
out 
with 
policy 
recommendations as prioritized by the Congressional Oversight Cornmittee on labor 
and Employment (COClE) which was created by Concurrent Resolution No. 31 on 
February 2001 and became effective after the term of the lABORCOM expired in June 
2001, to oversee and monitor the implementation of lABORCOM recommendations, as 
well as all programs, projects and activities related to labor, employment and allied 
concern in both the public and private sector. The Committee on Employment and 
Human Res?urces Development listed 19 policy recommendations, among which are 
the following: 
. i) 
Consider apprenticeship as a training modality. 
ii) 
Apprenticeship should be a dual training mode: theoretical education 
and practical training in school. 
iii) 
Apprenticeship period should be based on the nature of the 
occupation. The length of the period should be determined by a 
Tripartite body and provided for in the apprenticeship agreement. 
iv) 
To redefine the term "apprentice" as a person undergoing training for 
an approved apprenticeable occupation in an established period 
assured by an apprenticeship agreement. 
v) 
Contents of the apprenticeship agreement should be specified in 
details. 
3 


The Committee on Labor Relations made 33 recommendations, among which are 
the following: 
i) 
Grievance machinery remains the recommended mechanism for 
dispute settlement. 
ii) 
Strengthen provisions on social dialogue and promote the concept of 
shared 
responsibility and tripartism. 
Promote conciliation 
and 
mediation as the first level of government intervention and encourage 
best-offer arrangements. 
iii) 
The rules on the formation and recognition of unions must be 
simplified to avoid costly restraints. Other forms of worker's 
organization should also be recognized as collective bargaining units. 
iv) 
The registration of trade unions should be made ministerial in the 
DOLE. The resolution of claims of recognition or certification cases 
should be purely administrative and without judicial intervention. 
v) 
The development of industry-wide organizations should be promoted. 
Encourage industry-wide bargaining. 
vi) 
Take measures to ensure workers' representation and bargaining 
status in the event of a change of management due to takeovers, 
consolidation or mergers. 
vii) 
Limit the jurisdiction of the Secretary of Labor on disputes involving 
the national interest to disputes involving essential services only as 
defined by the ILO. 
The Committee on Labor Standards and Working Conditions listed 11 policy 
recommendations. They include the following: 
i) 
Policies have to be modified to address the actual situation, the 
participation of children below 14 years of age in paid and unpaid 
labor activities 
ii) 
Concrete policy guidelines should be instituted for the immediate 
protection and withdrawal of children employed in hazardous 
industries including children in the hotel and entertainment industries. 
iii) 
Strengthening the Regional Tripartite Wages and Productivity Boards 
iv) 
Productivity 
The Committee on Institutions and Bureaucracy listed 16 policy recommendations. 
Among others, they are as follows: 
i) 
Encourage the Institute of Labor Studies of the DOLE to undertake 
studies that could assist or guide the parties in collective bargaining 
ii) 
Part of the mandate of the proposed National Employment Plan is the 
maintenance and networking of the Public Employment Service 
Office (PESO): and strengthening of the Special Program for 
Employment of Students (SPES) 
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iii) 
DOLE should focus more on worker safety and occupational health 
(preventive) 
3. Considerable/substantial changes of P.O. 442. otherwise known as the 
Labor Code of the Philippines, as amended, since its promulgation in 
1974. 
In Book I, "Pre-employment", the changes are introduced largely by RA 
8042, or the "Migrant Workers Act of 1995" which was approved on June 7, 1995. 
The law affected provisions of Title I of this Book which reflects the policy shift on 
overseas employment from a stop-gap measure in the 80's to managing the 
outflow of labor, as a matter of employment option. Other significant enactment 
that modified, superseded or amended/existing provisions of this Book is : (i) E.O. 
797, "Reorganizing the Ministry of Labor and Employment, Creating the POEA, as 
amended, by E.O. No. 247 "Reorganizing the POEA" 
In 
Book II, "Human Resources Development Program", the National 
Manpower and Youth Council (NMYC), was established in 1975 to take charge of 
training and manpower/human resources development. This was changed after 
the Congressional Committee on Education Report of 1992 identified the 
weaknesses 
in 
the 
educational 
system 
and 
manpower 
training 
and 
recommended remedial measures. This paved the way to the enactment of RA. 
7796 or the "TESDA Law" and R.A. 7686 or the "Dual Training System Act of 
1994." These laws reflect the policy shift in the country's human resource 
development program from a purely government undertaking to private sector-
government partnership. The National Manpower Development Program in this 
Book is taken over by TESDA to achieve a truly world-class and globally 
competitive Filipino workforce. The private sector involvement in the technical-
vocational training is enhanced further through the "Dual Training System" 
provided for by RA 7686. 
In Book III, "Conditions of Employment," the changes are introduced by 
RA. 6727 or the "Wage Rationalization Act" which also created the National 
Wages and Productivity Commission (NWPC) and Regional Tripartite Wages 
and Productivity Boards (RTWPB). Other changes are introduced by the 
following enactments: (i) R.A. 8188 "Double Indemnity Act", (ii) RA. 6971 
"Productivity Incentives Act of 1990", (iii) p.o. 851, as amended by Memorandum 
Order No. 28 "13th Month Pay Law", (iv) RA 8424 "Tax Reform Act", (v) RA 
8187 "Paternity Leave Act of 1996", (vi) RA. 7877 "Anti-Sexual Harassment Act 
of 1995 and (vii) RA 7610, as amended, by RA 7658 "Special Protection of 
Children against Child Abuse, Exploitation and Discrimination Act." 
In Book IV, "Health, Safety and Social Welfare Benefits", recent 
enactments like, RA 8282 "Social Security Systems Act of 1997," RA. 8291 
"GSIS Act of 1997", RA. 7699 "Limited Portability Scheme," RA7742 "Pag-Ibig 
Fund", and RA 8425, "Social Reform and Poverty Alleviation Act" have 
introduced significant changes on the health, safety and social welfare benefits of 
all workers. Hence, relevant provisions of these laws are included under this 
Book. 
In Book V, "Labor Relations", most of the changes have been made by 
new laws and have been reflected in the present Labor Code, such as RA 6715 
(The New Labor Relations Law); RA. 7700 "Concurrent Jurisdication Between 
and Among the 1
5
\ 2nd and 3rd Divisions of the NLRC" to further ensure the 
speedy disposition of cases; and Section 10 of RA 8042 "Migrant Workers Act" 
5 


which transferred the jUrisdiction to hear and decide money claims of OCW's to 
the NLRC from POEA. 
Other enactments are yet to be reflected in this Book, like the 
amendments on the powers and functions of the Bureau of Labor Relations with 
the creation of the National Conciliation and Mediation Board (NCMB) by E.O. 
126 as amended by E.O. 251. The same E.O. also affected the Institute for Labor 
and Manpower Studies which was transformed into the Institute for Labor Studies 
and its education function was transferred to the BLR. 
'In Book VI, "Post-Employment", the changes were introduced by R.A. 
6715 .''New Labor Relations Law" and R.A. 7641 "New Retirement Law" approved 
on December 9, 1992. The amendments have been integrated but specific to 
Article 287 on retirement R.A. 8558 introduced an additional paragraph in this 
Article, providing for lower retirement age for underground mine workers. 
In Book VII 'TranSitory and Final Provisions," majority of the provisions 
under this Book have been rendered obsolete with the changes that took place 
since the enactment of this Code. 
The present Labor Code consists of 287 Articles excluding the Articles in 
Book VII, Transitory and Final Provisions, which majority of the provisions have 
been rendered obsolete with the changes that took place since the enactment of 
this Code. Out of these 287 Articles, 106 Articles are being amended, 10 Articles 
are deleted for being repealed/superseded by subsequent laws, orders or 
legislative proposals, 28 Articles are new provisions, and 161 Articles are being 
retained for its present applicability. 
II. Objectives 
The Congressional Oversight Committee on Labor and Employment (COCLE) 
presented the different policy recommendations of the LABORCOM in the Technical 
Consultation Meetings that it had conducted in order to finalize what policy 
recommendations could be inputted into the proposed "New Labor Code". And taking 
into account the results of the TCM's, reflecting the views, comments and reactions of 
Government, 
ernployer 
and 
labor 
sectors, 
and 
concerned 
Non-government 
organizations and academe, and the Center for Research and Special Studies (CRSS) 
draft of the Labor Code translating the various LABORCOM recommendations, this bill, 
seek to achieve the following objectives: 
1. In Book One -
Pre-employment, among which: (i) Providing a 
more effective regulation of recruitment and placement activities 
with the restoration of the 'regulatory functions' of the POEA; and 
(ii) Greater protection and promotion of the rights and welfare of the 
overseas contract workers by securing the best terms and 
conditions of employment for OFW's, establishing a one-stop-shop 
processing centers and imposing a stiffer penalty for illegal 
, recruitment as well as, those with a license or authority who violated 
any provision of this Title . 
. 2. In Book Two -
Human Resources Development Programs, 
among which: (i) The Technical Education and Skills Development 
Authority (TESDA), R.A. 7796, which took over, provides a 
manpower development program more directly related to the 
6 


requirements of the economy; and (iI) Improvement of the training 
and employment of apprentices, learners and handicapped workers, 
which establishes apprenticeship as a training modality and a. dual 
training mode: theoretical education and practical training in school, 
and the learners to receive a training allowance which shall begin at 
not less than the applicable minimum wage, while the handicapped 
workers can undergo training as apprentices, and adding, is the 
creation of the Special Program for Employment of Students 
(SPES). 
3. In Book Three -
Conditions of Employment, among which (i) 
Ensure humane conditions of work, increasing the service incentive 
leave from five (5) to ten (10) days, granting male workers paternity 
leave of seven (7) days with full pay and granting the right to family 
and medical leave of four (4) weeks without pay every year when 
the worker and his family is suffering from serious illness; (iI) Fuller 
enforcement of the law on wages, by declaring unlawful "Labor-Only 
Contracting" and giving the workers first and absolute preference 
regarding their wages and monetary claims in case of closures or 
cessations 
of operations 
of the 
employer's 
business; 
(iii) 
Improvement of the working conditions for special groups of 
employees: 
women 
minors, 
house 
helpers 
and 
industrial 
homeworkers, increasing the maternity leave benefits for women 
workers from 45 to 60 days and 78 days for caesarean delivery, 
providing for the enabling law for Convention 182 recently ratified by 
the Senate on "Worst Forms of Child Labor" for minor workers and 
strengthening the provisions on house helpers by adopting some 
'provisions of the "Batas Kasambahay"; and (iv) Incorporating the 
"Productivity 
and 
Performance 
Incentives 
and 
Gainsharing 
Program; 
4. In Book Four -
Health, Safety and Social Welfare Benefits, 
among which: (i) A strengthened and coordinated program on 
occupational health and safety, by making the DOLE the principal 
agency in coordinating and monitoring the activities of all laWs to 
promote occupational safety and health. The DOLE Secretary shall 
issue rules and regulations necessary to implement the provisions 
of this Title; and (ii) A strengthened employees compensation 
program, by removing from the employee the burden of proving that 
his/her 'sickness' is compensable, and increasing the age limit from 
sixty (60) to seventy (70) years old for compulsory coverage in the 
State Insurance Fund. 
5. In Book Five - Labor Relations, among which: (i) Affording the 
fullest possible exercise by workers of their constitutional rights to: 
self-organization: 
collective 
bargaining; 
peaceful 
concerted 
activities; and the right to strike in accordance with law; by making 
the registration of labor organizations clearly a ministerial functions; 
holding of a certification elections shall no longer require a petition, 
only a "request"; defining additional terms like, "industry union" and 
"workers association" and providing for the organization of 'workers 
association' by "ambulant, intermittent, etc."; providing for a six (6) 
years term of the collective bargaining agreement because other 
provisions of the CBA can be renegotiated after three (3) years; 
providing for the procedures for determining a representative even 
7 


where there is a bargaining agent but there is no collective 
bargaining agreements; making violation of the duty of fair 
representation and entering into CBA's which provide terms and 
conditions of employment below minimum standards established by 
law; and replacing the phrase "in an industry indispensable to 
, 
national interest" to "in an enterprise engaged in providing essential 
, services", such as, but not limited to, hospital, electrical services, 
water supply and communication and transportation in the 
assumption power of the Secretary of Labor over labor disputes; (ii) 
Providing that the exercise of free ingress to or egress from the 
employer's premises shall not be used to take out company's 
products, machineries and equipments or to bring in new 
employees for the operation of the company; and (iii) Speedy labor 
justice by strengthening the administrative machinery for the 
expeditious settlement of labor disputes: providing that "no labor 
dispute shall be under the jurisdiction of the National Labor 
Relations Commission (NLRC) until after all the efforts to resolve 
such labor dispute at the work place by the grievance machinery or 
by conciliation in accordance with the rules and regulations 
promulgated by the Sec. of Labor have failed; expressly providing 
that the National Conciliation and Mediation Board (NCMB) "shall 
implement the preferential use of voluntary modes of settling labor 
disputes through conciliation"; providing that "the cost of Voluntary 
Arbitration including the Voluntary Arbitrator's fee shall be borne by 
the special voluntary arbitration fund 
supplemented by the 
appropriations of the budget of the Board and strengthening the 
NLRC by increasing the number of divisions from five (5) to eight (8) 
and also increasing the number of years of experience for Executive 
Labor Arbiter and Labor Arbiter from seven (7) to ten (10) years. 
6. In Book Six - Post Employment, among which: (i) Providing more 
clearly for the right of a regular employee to security of tenure; (ii) 
Defining clearly what is a regular or an indefinite period of 
employment and temporary or a definite period of employment; (iii) 
Providing for a clearer idea of a probationary period; and 
implementation of the right to security of tenure of employees in 
case there is a merger or consolidation of employers corporations. 
8 


7. In Book Seven - Transitory and Final Provision, among which: 
(i) Providing for a longer period of prescription for the filing of 
money claims from three (3) to five (5) years; and (ii) Providing that 
"Employee dismissal actions shall prescribe in four (4) years". 
Other provisions under this Book are deleted for becoming dead letter laws. 
In view of the foregoing premises, we earnestly seek your Honors' immediate 
approval of this measure. 
9 
EJERCITO ESTRADA 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. __ 
8=-=-6-,8~ 
. 
/. 
y;-
1 J 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
ESTABLISHING THE NEW LABOR CODE OF THE PHILIPPINES AND 
FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines 
in Congress assembled: 
PRELIMINARY TITLE 
GENERAL PROVISIONS 
ARTICLE 1. Title - This Act shall be known as the" New Labor Code of the 
Philippines." 
ARTICLE 2. Date of Effectivity. This Code shall take effect fifteen (15) days after 
its publication in the Official Gazette .. 
ARTICLE 3. 
Declaration of basic policy. -
The State shall afford full protection 
to labor, local and overseas, organized and unorganized. 
It shall 
promote full 
employment and equality of employment opportunities for all. It shall guarantee the 
rights of all, workers to self-organization, collective bargaining and negotiations and 
peaceful concerted activities including the right to strike in accordance with law. They 
shall be entitled to security of tenure, humane conditions of work, and a living wage. 
The State shall regulate the relations between workers and employers, recognizing the 
right of labor to its just share in the fruits of production and right of enterprises to 
reasonable returns on investments and to expansion and growth. 
ARTICLE 4. Construction in favor of labor. -
All doubts in the implementation 
and interpretation of the provisions of this Code, including its implementing rules and 
regulations, shall be resolved in favor of labor. . 
ARTICLE 5. Rules and regulations. -
The Department of Labor and 
Employment in consultation with other government agencies charged with the 
administration and enforcement of this Code or any of its parts shall promulgate the 
necessary implementing rules and regulations. Such rules and regulations shall become 
effective fifteen (15) days after announcement of their adoption in newspapers of 
general circulation. 
10 


ARTICLE 6. Applicability. -
All rights and benefits granted to workers under 
this Code shall, except as may otherwise be provided herein, apply alike to all workers, 
in the private sector. 
The terms and conditions of employment of all govemment employees, including 
employees of government-owned and controlled corporations with original charters shall 
be governed by the Civil Service Law, rules and regulations. (a) 
BOOK ONE 
PRE-EMPLOYMENT 
ARTICLE 7. 
Statement of objectives. -
It is the policy of the State to: 
(a) 
'Promote and maintain a state of full employment through active industrial 
policy, balal'lced agricultural development, unified human resources development and 
enhanced.employment facilitation assistance to job seekers; 
(b) 
Protect every citizen desiring to work locally or overseas by securing for 
him the best possible terms and conditions of employment; 
(c) 
Facilitate a free choice of available employment by persons seeking work 
in conformity with the national interest; 
(d) 
Facilitate and regulate the movement of workers in conformity with the 
national interest; 
(e) 
Regulate the employment of aliens, including the establishment of a 
registration and/or work permit system; 
(f) 
Strengthen the network of public employment offices and rationalize the 
participation of the private sector in the recruitment and placement of workers, locally 
and overseas, to serve national development objectives; 
(g) 
Insure careful selection of Filipino workers for overseas employment in 
order to protect the good name of the Philippines abroad. (A, Art.12) 
Title I 
RECRUITMENT AND PLACEMENT OF WORKERS 
CHAPTER I 
GENERAL PROVISIONS 
ARTICLE 8. Definitions. -
(a) "Workers" means any member of the labor 
force, whether employed or unemployed. 
(b) 
"Recruitment and placement" refers to any act of canvassing, enlisting, 
contracting, ,transporting, utilizing, hiring or procuring workers, and includes referrals, 
11 


contract services, promising or advertising for employment, locally or abroad, whether 
for profit or not: Provided, That any person or entity which, in any manner, offers or 
promises for a fee employment to two or more persons shall be deemed engaged in 
recruitment and placement. 
(c) 
"Private employment agency" means any person or entity engaged in the 
recruitment and placement of workers for a fee which is charged, directly or indirectly, 
from the workers or employers or both. 
(d) "Plan" means National Employment Plan. 
(e) "Human resources development" means the development of the capacity of 
the workers through technical and skills development. 
(f) "Active industrial policy" means the promotion of rapid industrial growth for job 
creation purposes. (Art.13-a) 
ARTICLE 9. Employment promotion. -
The 
Secretary of Labor and 
Employment in coordination with the Local Government Units shall have the power and 
authority to: 
(a) 
Initiate, organize and maintain employment offices in addition to the 
existing employment offices under the Department of Labor as the need arises; 
(b) 
Organize and establish a nationwide job clearance and labor market 
information system to inform applicants registering with a particular employment office 
of job opportunities in other parts of the country as well as job opportunities abroad and 
promote job and skills matching; 
(c) 
Develop and organize a program that will facilitate occupational, industrial 
and geographical mobility of labor and provide assistance in the relocation of workers 
from one area to another; 
(d) 
Require any person, establishment, organization or institution to submit 
such employment information as may be prescribed by the Secretary of Labor; and 
(e) 
Formulate a National Employment Plan and recommend appropriate 
employment policies, strategies and measures to maximize employment based on 
active industrial policy, balanced agricultural development, unified human resource 
development and enhanced employment facilitation assistance. (Art.14-a) 
ARTICLE 10. 
Bureau of Local Employment. -
The Bureau of Local 
Employment shall be primarily responsible for assisting the Secretary of Labor and 
Employment in developing and monitoring a comprehensive national employment plan 
and its implementing programs. (Art.15-a) 
ARTICLE 11. Private recruitment. -
Except as provided in Chapter II of this 
Title, no person or entity, other than the public employment offices, shall engage in the 
recruitment and placement of workers. 
ARTICLE. 12. Philippine Overseas Employment Administration. 
-
The 
Philippine Overseas Employment Administration or POEA shall have the following 
powers and functions: 
12 


• 
(a) 
Regulate private sector participation in the recruitment and overseas 
placement of workers by setting up a licensing and registration system; 
(b) 
Formulate and implement, in coordination with appropriate entities 
concerned, when necessary, a system for promoting and monitoring the overseas 
employment of Filipino workers taking into consideration their welfare and the domestic 
manpower requirements; 
(c) 
Protect the rights of Filipino workers for overseas employment to fair and 
equitable recruitment and employment practices and ensure their welfare; 
(d) 
. Exercise original and exclusive jurisdiction to hear and decide all claims 
arising ou~ of an employer-employee relationship or by virtue of any law or contract 
involving Filipino workers for overseas employment including the disciplinary cases; and 
all pre-employment cases which are administrative in character involving or arising out 
of violation of requirement laws, rules and regulations, or violation of the conditions for 
issuance of license or authority to recruit workers. 
All prohibited recruitment activities and practices which are penal in character as 
enumerated and defined under and by virtue of existing laws, shall be prosecuted in the 
regular courts in close coordination with the appropriate Departments and agencies 
concerned. 
(e) 
Maintain a registry of skills for overseas placements; 
(f) 
Recruit and place workers to service the requirement for trained and 
competent Filipino workers by foreign governments and their instrumentalities and such 
other employers as public interest may require consistent with Section 4 of Republic Act 
NO.8042: Provided, that no Filipino worker shall be deployed to countries that have a 
track record of violating the rights of Migrant Workers; 
(g) 
Promote the development of skills and careful selection of Filipino workers 
for overseas employment. 
(h) 
Undertake overseas market development activities for placement of 
Filipino workers; 
(i) 
Secure the best terms and conditions of employment of Filipino contract 
workers and ensure compliance therewith; 
0) 
Promote and protect the well-being of Filipino workers overseas; 
(k) 
Develop and implement programs for the effective monitoring of returning 
contract workers, promoting their re-training and re-employment or their smooth 
reintegration into the mainstream of the national economy in coordination with other 
government agencies; 
(I) 
Institute a system for ensuring fair and speedy disposition of cases 
involving violation of recruitment rules and regulations as well as violation of terms and 
conditions of overseas employment; 
(m) 'Establish a system for speedy and efficient enforcernent of decisions laid 
down through the exercise of its adjudicatory function; 
(n) 
Establish and maintain close relationship and enter into joint projects with 
the Department of Foreign Affairs, Philippine Tourism Authority, Manila International 
Airport Authority, Department of Justice, Department of Budget and Management and 
13 


• 
other relevant government entitles, in the pursuit of its objectives. The Administration 
shall also establish and maintain jOint projects with private organizations, domestic or 
foreign, in the furtherance of its objectives. (Art. 17 -a) 
ARTICLE 13. 
Ban on direct-hiring. -
No employer may hire a Filipino 
worker for overseas employment except through the Boards and entities authorized by 
the Secretary of Labor and Employment. Direct-hiring by members of the diplomatic 
corps, international organizations and such other employers as may be allowed by the 
Secretary of Labor is exempt from this provision. 
ARTICLE 14. 
National Seafarers Office. - A National Seafarers Office is 
hereby created under the POEA, which shall have the following powers and functions: 
(1) To develop an integrated maritime manpower development and placement 
program for Filipino seafarer here and overseas; 
(2) To develop, in coordination with other agencies involved in the maritime 
industry, a one-stop shop for the licensing and deployment of Filipino seafarer. (Art.20-
a) 
ARTICLE 15. 
Foreign service role and participation. -
To provide 
ample protection to Filipino workers abroad, the labor attaches, the labor reporting 
officers duly designated by the Secretary of Labor and the Philippine diplomatic or 
consular officials concerned shall, even without prior instruction or advice from the 
home office, exercise the power and duty to: 
(a) 
Provide all Filipino workers within their jurisdiction assistance on all 
matters arising out of employment; 
(b) . Insure that Filipino workers are not exploited or discriminated against; 
(c)· 
Verify and certify as requisite to authentication that the terms and 
conditions of employment in contracts involving Filipino workers are in accordance with 
the Labor Code and rules and regulations of the Philippine Overseas Employment 
Administration (POEA); 
(d) 
Make continuing studies or researches and recommendations on the 
various aspects of the employment market within their jurisdiction; 
(e) 
Gather and analyze information on the employrnent situation and its 
probable trends, and to make such information available; and 
(f) 
Perform such other duties as may be required of them from time to time. 
ARTICLE 16. 
Mandatory remittance offoreign exchange earnings. ---- It 
shall be mandatory for all Filipino workers abroad to remit a portion of their foreign 
exchange earnings to their families, dependents and/or beneficiaries in the country in 
accordance with rules and regulations prescribed by the Secretary of Labor. 
ARTICLE 17. 
Agencies to issue rules and collect fees. -
The Agencies 
involved in the recruitment and placement of workers shall issue appropriate rules and 
regulations to carry out their functions. They shall have the power to im'pose and collect 
fees from employers concerned, which shall be deposited to the respective accounts of 
said Agencies and be used by them exclusively to promote their objectives. (Art.24-a) 
Title I 
RECRUITMENT AND PLACEMENT OF WORKERS 
CHAPTER II 
14 


• 
REGULATION OF RECRUITMENT AND 
PLACEMENT ACTIVITIES 
ARTICLE 18. 
Private sector participation in the recruitment and 
placement of workers. -
Pursuant to national development objectives and in order to 
harness and maximize the use of private sector resources and initiative in the 
development and implementation of a comprehensive employment program, the private 
employment sector shall participate in the recruitment and placement of workers, locally 
and overseas, under such guidelines, rules and regulations, as may be issued by the 
Secretary of Labor and Employment. 
ARTICLE 19. 
Travel agencies prohibited to recruit. -
Travel agencies 
and sales agencies of airline companies are prohibited from engaging in the business of 
recruitment and placement of workers for overseas employment whether for profit or 
not. 
ARTICLE 
20. 
Citizenship requirement. -
Only Filipino citizens or 
corporations, partnerships or entities at least 75 percent of the authorized and voting 
capital stock of which is owned and controlled by Filipino citizens shall be permitted to 
participate in the recruitment and placement of workers, locally or overseas. 
ARTICLE 21. 
Capitalization and Licensing. -
All applicants for authority to 
hire or renewal of license to recruit are required to have such substantial capitalization 
and other requirements as determined by the Secretary of Labor and Employment. No 
agency shall be denied a license unless the said agency is unable to meet the required 
capitalization and other conditions set by the Department of Labor and Employment. 
(Art.28-a) 
ARTICLE 22. 
Non-transferability of license or authority. -
No license or 
authority shall be used directly or indirectly by any person other than the one in whose 
favor it was issued at any place other than that stated in the license or authority, nor 
may such license or authority be transferred, conveyed or assigned to any other person 
or entity. Any transfer of business address, appointment or designation of any agent or 
representative including the establishment of additional offices anywhere shall be 
subject to the prior approval of the Department of Labor. 
ARTICLE 
23. 
Registration fees. -
The Secretary of Labor and 
Employment shall promulgate a schedule of fees for the registration of all applicants for 
license or authority. 
ARTICLE 24. 
Bonds. -
All applicants for license or authority shall post 
such cash and surety bonds as determined by the Secretary of Labor and Employment 
to guarantee compliance with prescribed recruitment procedures, rules and regulations, 
and terms and conditions of employment as may be appropriate. 
ARTiCLE 25. 
Fees to be paid by workers. -
Any person applying with a 
private fee charging employment agency for employment assistance shall not be 
charged any fee until he has obtained employment through his efforts or has actually 
commenced employment. Such fee shall be always covered with appropriate receipt 
clearly showing the amount paid. The Secretary of Labor and Employment shall 
promulgate a schedule of allowable fees. 
ARTICLE 
26. 
Reports on employment status. -
Whenever the public 
interest so requires, the Secretary of Labor may direct all persons or entities within the 
coverage of this Title to submit a report on the status of employment, including job 
15 


vacancies; details of job requisitions, separation from jobs, wages, other terms and 
conditions, and other employment data. 
ARTICLE 27. 
Prohibited practices. -
It shall be unlawful for any individual, 
entity, licensee or holder of authority: 
(a) 
To charge or accept directly or indirectly any amount greater than that 
specified in the schedule of allowable fees prescribed by the Secretary of Labor, or to 
make a worker pay any amount greater than that actually received by him as a loan or 
advance; 
(b) 
To furnish or publish any false notice or information or document in 
relation to recruitment or employment; 
(c) 
To give any false notice, testimony, information or document or commit 
any act or misrepresentation for the purpose of securing a license or authority under this 
Code; 
(d) 
To induce or attempt to induce a worker already employed to quit his 
employment in order to offer him to another unless the transfer is designed to liberate 
the worker from oppressive terms and conditions of employment; 
(e) 
To influence or to attempt to influence any person or entity not to employ 
any worker who has not applied for employment through his agency; 
(f) 
To engage in the recruitment or placement of workers in jobs harmful to 
public health or morality or to the dignity of the Republic of the Philippines; 
(g) 
To obstruct or attempt to obstruct inspection by the Secretary of Labor or 
by his duly authorized representatives; 
(h) 
To fail to file reports on the status of employment, placement vacancies, 
remittance of foreign exchange earnings, separation from jobs, departures and such 
other matters or information as may be required by the Secretary of Labor; 
(i) 
To substitute or alter employment contracts approved and verified by the 
Department of Labor and Employment from the time of actual signing thereof by the 
parties up to and including the periods of expiration of the same without the approval of 
the Secretary of Labor. 
U) 
To become an officer or member of the Board of any corporation engaged 
in travel agency or to be engaged directly or indirectly in the management of a travel 
agency; 
(k) 
To withhold or deny travel documents from applicant workers before 
departure for monetary or financial considerations other than those authorized under 
this Code and its implementing rules and regulations 
ARTICLE 28. 
Suspension and/or cancellation of license or authority. 
-
The Secretary of Labor and Employment shall have the power to suspend or cancel 
and in both instances impose a fine, any license or authority to recruit employees for 
overseas employment for violation of rules and regulations issued by the Secretary of 
Labor and Employment and the Philippine Overseas Employment Administration or for 
violations of the provisions of this and other applicable laws. (Art.35-a) 
16 


Title I 
RECRUITMENT AND PLACEMENT OF WORKERS 
CHAPTER III 
MISCELLANEOUS PROVISIONS 
ARTICLE 29. 
Regulatory power. -
The Secretary of Labor shall have the 
power to restrict and regulate the recruitment and placement activities of all agencies 
within the coverage of this Title and is hereby authorized to issue orders and 
promulgate rules and regulations to carry out the objectives and implement the 
provisions of this Title. 
ARTICLE 30. 
Visitorial power. -
The Secretary of Labor or his duly 
authorized representatives may, at any time, inspect the premises, books of accounts 
and records of any person or entity covered by this Title, require it to submit reports 
regularly on prescribed forms, and act on violations of any provisions of this Title. 
ARTICLE 31. 
Illegal Recruitment. - (a) Any recruitment activities, including 
the prohibited practices enumerated under Article 27 of this Code, to be undertaken by 
non-licensees or non-holders of authority shall be deemed illegal and punishable 
under Article 32 of this Code. The Department of Labor and Employment or any law 
enforcement officer may initiate complaints under this Article. 
(b) Illegal recruitment when committed by a syndicate or in large scale shall 
be considered an offense involving economic sabotage and shall be penalized in 
accordance with Article 39 hereof. 
Illegal recruitment is deemed committed by a syndicate if carried out by a 
group of three (3) or more persons conspiring and/or confederating with one another 
in carrying out any unlawful or 
illegal transaction, enterprises or scheme defined 
under the first paragraph hereof. Illegal recruitment is deemed 
committed in large 
scale if committed against three (3) or more persons individually or as a group. 
(c) 
Victims of illegal recruitment shall automatically be covered by the 
govemment's witness protection program. 
(d) 
A criminal action arising from illegal recruitment as defined herein shall be 
filed with the Regional Trial Court of the province or city where the offense was 
committed or where the offended party actually resides at the time of the commission of 
the offense: Provided, that the court where the criminal action is first filed shall acquire 
jurisdiction to the exclusion of other courts: Provided, however, that the aforestated 
provisions shall also apply to those criminal actions that have already been filed in court 
at the time of the effectivity of this Act. (Art.38-a) 
ARTICLE 32. 
Penalties - (a) The penalty of life imprisonment and a fine of 
not less than Two Hundred Thousand Pesos (12200,000) nor more than Five Hundred 
Thousand Pesos (P500,000.) shall 
be imposed if illegal 
recruitment constitutes 
economic sabotage as defined herein: 
(b) 
Any license or holder of authority found violating or causing another to 
violate any provision of this Title or its implementing rules and regulations shall, upon 
conviction thereof, suffer the penalty of imprisonment of not less than two (2) years nor 
17 


more than five (5) years and a fine of not less than 
~20,000 nor 
~200,000; 
more 
than 
(c) 
Any person who is neither a licensee nor a holder of authority under this 
Title 
found 
violating any 
provIsion 
thereof or its implementing 
rules 
and 
regulations shall, upon conviction thereof, suffer the penalty of imprisonment of not less 
than four (4) years nor more than eight (8) years and a fine of not less than 
~50,000 nor more than ~OO,OOO; 
(d) 
If the offender is a corporation, partnership, association or entity, the 
penalty 
shall be 
imposed 
upon the 
officer or officers 
of 
the corporation, 
partnership, association or entity responsible for violation; and if such officer is an 
alien, he shall, in addition to the penalties herein prescribed, be deported without 
further proceedings; 
(e) In every case, conviction shall cause and carry the automatic revocation 
of the license or authority and all the permits and privileges granted to such person 
or entity under this Title, and the forfeiture of the cash and surety bonds in favor of 
the Department of Labor and Employment which is authorized to use the same 
exclusively to promote its objectives. (Art.39-a) 
TITLE \I 
EMPLOYMENT OF NON-RESIDENT ALIENS 
ARTICLE 33. 
Employment permit of non-resident aliens. -
Any alien 
seeking admission to the Philippines for employment purposes and any domestic or 
foreign employer who desires to engage an alien for employment in the Philippines shall 
obtain an employment permit from the Department of Labor and Employment. 
The employment permit may be issued to a non-resident alien or to the applicant 
employer after a determination of the non-availability of a person in the Philippines who 
is competent, able and willing at the time of application to perform the services for which 
the alien is desired. 
For an enterprise registered in preferred areas of investments, said employment 
permit may be issued upon recommendation of the government agency charged with 
the supervision of said registered enterprise. 
ARTICLE 34. 
Prohibition against transfer of employment. -
(a) After 
the issuance of employment permit, the alien shall not transfer to another job or change 
his employer without prior approval of Secretary of Labor. 
(b) 
Any non-resident alien who shall take up employment in violation of the 
provision of this Title and its implementing rules and regulations shall be punished in 
accordance with the provisions of Articles 294 and 295 of the Labor Code. 
In addition, the alien worker shall be subject to deportation after service of his 
sentence. 
ARTICLE 35. 
Submission of list. -
Any employer employing non-
resident foreign nationals on the effective date of this Code shall submit a list of such 
nationals to the Secretary of Labor and Employment within 30 days after such date 
indicating their names, citizenship, foreign and local addresses, nature of employment 
18 


• 
and status of stay in the country. The Secretary of Labor and Employment shall then 
determine if they are entitled to an employment permit. 
BOOK TWO 
Human Resources Development Program 
TITLE I 
TRAINING AND EMPLOYMENT OF SPECIAL WORKERS 
CHAPTER I 
APPRENTICES 
ARTICLE 36. Statement of Objectives. - This Title aims: 
(1) To help meet the demand of the economy for trained manpower; 
(2) 
To establish 
a national apprenticeship system that is competency- and 
occupation-based, including an on- and off-the job training program 
through the 
participation of employers, workers, and government. 
(3) To establish apprenticeship standards for the protection of apprentices. 
(Art. 57 -a) 
ARTICLE 37. Definition of Terms - As used in this Title: 
(a) "Apprenticeship" means enterprise-based practical training with compulsory 
related theoretical instructions in or outside the enterprise involving a contract between 
an apprentice and an enterprise on an approved apprenticeable occupation. 
(b). 
An "apprentice" is a person undergoing training for an approved 
apprenticeable occupation in an established period assured by an apprenticeship 
agreement. 
(c) An "apprenticeable occupation" is an occupation promulgated by the TESDA 
Board, with equal representation from firm owners, workers and training institutions, 
and approved for' apprenticeship by TESDA. The apprenticeable occupation requires a 
minimum duration of four (4) months; provided, however, that the TESDA Board may 
prescribe a longer training period depending on its approved occupational skills 
standards. 
(d) "Apprenticeship agreement" is a contract wherein an enterprise binds itself to 
train the apprentice who in turn accepts the tenns of training for a recognized 
apprenticeable occupation emphasizing the rights, duties and responsibilities of each 
party. 
(e) 
"Occupational Skills Standards" are written specifications setting out the 
requirements of knowledge and skills with respect to a particular trade. 
(f) "Occupational Skills Assessment" is a formal recognition of a worker'S skills 
qualification for a particular trade. 
19 


(g) "Apprenticeship fee" is a tax imposed on enterprises with the view in mind of 
financing apprenticeship-training activities. (Art. 58-a) 
ARTICLE 38. Qualifications of an apprentice - To qualify as an apprentice, a 
person shall: 
(a) be a high school graduate; 
(b) possess vocational aptitude and capacity for apprenticeship as established 
through appropriate testing; and 
(c) po.ssess the ability to comprehend and follow oral and written instructions. 
Inqustry training boards, industry associations, and labor groups may 
recommend to the 
TESDA appropriate educational requirements for different 
occupations. (Art. 58-a) 
ARTICLE 39. Training of apprentices - Registered enterprises may enter into 
apprenticeship 
agreements 
or train 
apprentices 
in 
approved 
apprenticeable 
occupations. (Art.60-a) 
ARTICLE 40. 
Contents 
of 
apprenticeship 
agreements. 
Apprenticeship agreements, shall conform to the rules issued by the TESDA and shall 
include: 
(a) The nature, and purpose of training; 
(b) The curriculum and period of training; 
(c) The prescribed training allowance which in no case shall start below 75% of 
the applicable minimum wage; 
(d) Schedule of training allowance payments; 
(e) Training hours which shall not exceed the working hours of a regular 
employee; 
(f) The process of termination of apprenticeship; and 
(g) The general rights and obligations of both parties. (Art.61-a) 
ARTICLE 41. Signing of apprenticeship agreement - Every apprenticeship 
agreement shall be signed by the employer or his agent, or by an authorized 
representative of any of the recognized organizations, associations or groups and by 
the apprentice. 
An apprenticeship agreement with a minor shall be signed in his behalf by his 
parent or guardian or, if the latter is not available, by an authorized representative of the 
Department of Labor and Employment, and the same shall be binding during its lifetime. 
Every' apprenticeship agreement entered into under this title shall be ratified by 
the 
Tripartite Apprenticeship Committee which shall have equal representation 
consisting of two (2) from enterprise, two (2) from workers, and one (1) from the 
government. (Art.62-a) 
20 


ARTICLE 42 .. Apprenticeship schemes -
Registered enterprise, group or 
association, industry organization or civic group wishing to organize the apprenticeship 
program, or a would-be apprentice, may choose from any of the following 
apprenticeship schemes which may use the dual training system approach: 
(a) Apprenticeship involving a company and an identified training institution; 
(b) Apprenticeship involving a group of companies and a training institution; 
(c) 
Apprenticeship involving an industry training center and a company or a 
group of companies; 
(d) Other schemes to be established by the TESDA in consultation with industry 
training boards, industry association and labor groups, and subject to the approval of 
the TESDA Board. (Art.63-a) 
ARTICLE 43. 
Apprenticeship Administration - The overall policy for 
apprenticeship shall be the function of the TESDA Board. 
The responsibility for 
apprenticeship administration, monitoring and evaluation of on- and off-the-job training 
shall be the concern of the TESDA Secretariat particularly the Office of Apprenticeship. 
The identification and prioritization of apprenticeable occupations and the 
development of standards and curricula shall be the responsibility of industry training 
boards, industry associations and labor groups. The Tripartite Plant Apprenticeship 
Committees shall be established in participating enterprises to ensure that program 
implementation is in accordance with policies. 
, 
Any of the apprenticeship schemes recognized herein may be undertaken or 
sponsored by an enterprise or by a group or association thereof, or by a civic 
organization. Actual training of apprentices may be undertaken: 
(a) In the premises of the sponsoring enterprise in the case of individual 
apprenticeship programs; 
(b) In the premises of one or several designated firms in the case of programs 
sponsored by a group or association of enterprises or by civic organizations; or 
(c) In TESDA training center or other training institution. (Art.64-a) 
ARTICLE 44. - Investigation of Violation of Apprenticeship Agreement - The 
Tripartite Plant Apprenticeship Committee, upon complaint of any interested party or 
motu propio, shall have the initial responsibility for settling differences arising from 
apprenticeship agreements. In case it is not able to settle such differences, the TESDA 
Secretariat or its authorized representative shall investigate and render a decision 
pursuant to pertinent rules and regulations. (Art.65-a) 
ARTICLE 45 .• Appeal to the TESDA Secretariat - The decision of the TESDA 
Secretariat may be appealed by any aggrieved person to the TESDA Board within five 
(5) days from receipt of the decision. The decision of the TESDA Board shall be final 
and executory. (Art. 66-a) 
ARTICLE 46. 
Exhaustion of administrative remedies. -
No person 
shall institute any action for the enforcement of any apprenticeship agreement or 
damages for breach of any such agreement, unless he has exhausted all available 
administrative remedies. 
21 


ARTICLE 47. Aptitude Testing of Applicants - Consonant with the minimum 
qualifications of the apprentice-applicants required under this Chapter, the employers or 
entities with duly recognized apprenticeship programs 
shall have the primary 
responsibility for providing appropriate aptitude tests in the selection of apprentices. If 
they do not have adequate facilities for the purpose, the TESDA may perform the service 
free of charge. (Art.58-a) 
ARTICLE 48. Responsibility for Theoretical Instruction. -
Supplementary 
theoretical instruction to apprentices in cases where the program is undertaken in the 
plant may be done by the employer. If the latter is not prepared to assume the 
responsibility, the same may be delegated to an appropriate government agency. 
ARTICLE 49. -
Voluntary Organization of Apprenticeship Program: 
Exemptions -
(a) The organization of apprenticeship programs shall be primarily a voluntary 
undertaking of enterprises. 
(b) When national security or particular requirements of economic development 
so demand, the President of the Philippines may require compulsory training of 
apprentices in certain trades, occupations, jobs or employment levels where shortage of 
trained manpower is deemed critical as determined by the TESDA Board upon the 
recommendation of its Secretariat. 
(c) Where services of foreign technicians are utilized by private companies in 
apprenticeable 
trades, 
such 
companies 
are 
required 
to 
set-up 
appropriate 
apprenticeship programs. (Art.70-a) 
ARTICLE 50. 
Apprenticeship Training Fund and Exemption. -There 
shall be an 
Apprenticeship-Training Fund which shall be derived from the 
apprenticeship fee paid by every enterprise in industries employing apprenticeable 
trades. Workers who are graduates of Apprenticeship Programs shall likewise pay a 
one-time apprenticeship fee upon employment as contribution to the Apprenticeship 
Training Fund. 
The apprenticeship fee rates and guidelines to be applied shall be 
approved by the TESDA Board after a public hearing with the management and labor 
sectors. The fee shall be collected and paid through the SSS and transferred to the 
Apprenticeship Training Fund to be administered by the TESDA. The apprenticeship 
fee rate may be increased by the TESDA Subject to the requirements of a public 
hearing. 
The Apprenticeship Training Fund shall be deemed distinct and separate from 
the TESDA Development Fund under Section 31 of republic Act No. 7796 or the TESDA 
Law, and as such, shall not be subject to its implementing rules and regulations. Such 
Apprenticesl'lip Fund may be used to defray expenses of the trainees in the institution or 
training cel")ter as well as other expenses to be approved by the TESDA Board to 
improve t~e implementation of the program. 
An additional deduction from taxable income equivalent to fifty (50) percent of 
training expenses shall be granted to persons or enterprises organizing the program 
and shall be exempted from: 
(a) 
Paying the apprenticeship fee; 
(b) 
Duty on all equipment dedicated to training; and 
22 


(c) 
VAT on locally purchased training equipment and materials. 
Provided that such program is duly recognized by the Department of Labor and 
Employment. Provided, further, that such deduction shall not exceed ten (10) percent 
of direct labor wage. 
Micro-cottage and small enterprises or those with less than 100 employees shall 
also be exempt from the payment of apprenticeship fee. (Art.71-a) 
ARTICLE 51.· 
Exemption from Probationary Employment; System of 
Equivalency - Certified apprenticeship graduates shall be exempted from probationary 
employment. They shall be employed as regular workers if chosen to be retained by 
the Enterprise. 
Apprenticeship graduates shall, likewise be awarded equivalent unit credits in the 
formal system of education and that can be used in pursuing tertiary degree courses, 
subject to the integrated policies and guidelines on equivalency and adult education 
acceleration program of TESDA, Commission on Higher Education (CHED) and DECS. 
(Art.72-a) 
TITLE I 
TRAINING AND EMPLOYMENT OF SPECIAL WORKERS 
CHAPTER II 
LEARNERS 
ARTICLE 52. Learners Defined. -
Learners are persons hired as trainees in 
semi-skilled 
and 
other 
industrial 
occupations 
which 
are 
non-apprenticeable. 
Learnership programs must be approved by the TESDA. (Art.73-a) 
ARTICLE 53. 
When Learners may be hired. -
Learners may be 
employed when no experienced workers are available, the employment of learners is 
necessary to prevent curtailment of employment opportunities, provided, that the 
employment does not create unfair competition in terms of labor costs or impair or 
lower working standards. Provided, further, that the number of apprentices shall not 
exceed 10% of the total workforce of the company. 
ARTICLE 54. Learnership Agreement. -
Any employer/enterprise desiring to 
employ learners shall enter into a learnership agreement with them, which agreement 
shall include: 
(a) 
(b) 
months; 
The names and addresses of the learners; 
The duration of the learnership period, which shall not exceed three (3) 
(c) 
The training allowances of the learners which shall begin at not less than 
the applicable minimum wage for a specific occupation and subject to tripartite 
consultation; 
(d) 
A commitment to employ the learners, if they so desire, as regular 
employees upon completion of the learnership. All learners who have been allowed or 
suffered to work during the first two (2) months shall be deemed regular employees if 
23 


training is terminated by the employer before the end of the stipulated period through no 
fault of the learner. (Art.75-a) 
ARTICLE 55. 
Learners in piece work. -
Learners employed in piece or 
incentive rate jobs during the training period shall be paid in full for the work done. 
ARTICLE 56. 
Penalty clause. -
Any violation of this Chapter or its 
implementing rules and regulations shall be subject to the general penalty clause 
provided for in this Code. 
TITLE I 
TRAINING AND EMPLOYMENT OF SPECIAL WORKERS 
CHAPTER III 
HANDICAPPED WORKERS 
ARTICLE 57. 
Definition. -
Handicapped workers are those whose 
earning capacity is impaired by age or physical or mental deficiency or injury. 
ARTICLE 58. 
When employable. -
Handicapped workers may be 
employed when their employment is necessary to prevent curtailment of employment 
opportunities and when it does not create unfair competition in labor costs or impair or 
lower working standards. 
ARTICLE 59. 
Employment agreement. -
Any employer who employs 
handicapped workers shall enter into an employment agreement with them, which 
agreement shall include: 
(a) 
The names and addresses of the handicapped workers to be employed; 
(b) 
The rate to be paid the handicapped workers which shall be not less than 
75 percent of the applicable legal minimum wage; 
(c) 
The duration of employment period; and 
(d) 
,The work to be performed by the handicapped workers. 
The employment agreement shall be subject to inspection by the Secretary of 
Labor and Employment or his duly authorized representatives. 
ARTICLE 60. 
Eligibility 
for 
apprenticeship. 
-
Subject 
to 
the 
appropriate provisions of this Code, handicapped workers may be hired as learners or 
undergo training as apprentices if their handicap is not such as to effectively impede 
the performance of job operations in the particular occupations for which they are hired. 
(Art.81-a) 
TITLE I 
Training and Employment of Special Workers 
CHAPTER IV 
Other Training Programs 
24 


ARTICLE 61. Special Program for Employment of Students. - Any provision 
of law to the contrary notwithstanding, any person or entity employing more than ten 
(10) persons may employ poor but deserving students fifteen (15) years of age but not 
more than twenty-five (25) years old, paying them a salary or wage not lower than the 
minimum wage for private employers and the applicable hiring rate for the national and 
local government agencies: Provided, however, that their employment shall not exceed 
three (3) months. Provided, further, that students employed in activities related to their 
course shall earn equivalent academic credits as may be determined by appropriate 
government agencies. 
For this purpose, poor but deserving students refers to those whose parents' 
combined income, together with their own, if any, do not exceed the annual national 
poverty threshold level for a family of six (6) for the preceding year as may be 
determined by the National Statistics Coordination Board (NSCB). Employment 
facilitation services for applicants to the program shall be done by the Public 
Employment,Service Office (PESO). (N) 
SECTION· 4. 
BOOK THREE 
Conditions of Employment 
TITLE I 
WORKING CONDITIONS AND REST PERIODS 
CHAPTER I 
HOURS OF WORK 
ARTICLE 
62. 
Coverage. -
The provision of this Title shall apply to 
employees, whether regular or temporary as defined in Article 284, in all establishments 
and undertakings, whether for profit or not, but not to government employees, 
managerial employees, field personnel, immediate members of the family of the 
employer who are dependent on him for support, domestic helpers, and persons in the 
personal service of another. 
As used herein, "managerial employees" refer to managers and supervisors as 
defined in Article 215(w). 
"Field personnel" refer to non-agricultural employees who regularly perform their 
duties away from the principal place of business or branch office of the employer and 
whose actual hours of work in the field cannot be determined with reasonable certainty. 
All employers, contractors and subcontractors, shall observe the provisions of 
this book and are directly liable for their violations in accordance with Article 71 of this 
Code. (Art.82-a) 
ARTICLE 63. 
Normal hours of work. -
The normal hours of work of any 
employee shall not exceed eight in a day. 
Health personnel in cities or municipalities with a population of at least one 
million (1,000,000) or in hospitals or 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, 
25 


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 an additional compensation of at least thirty (30%) percent of their regular 
wage for work on the sixth day. For purposes of this Article, "health personnel" shall 
include: resident physicians, nurses, nutritionists, dieticians, pharmacists, social 
workers, laboratory technicians, paramedical technicians, psychologists, midwives, 
attendants and all other hospital or clinic personnel. 
ARTICLE 64. 
Hours worked. -
Hours worked shall 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 during working hours shall be counted as hours 
worked. 
ARTICLE 65. 
Meal periods. -
Subject to such regulations as the Secretary 
of Labor may prescribe, it shall be the duty of every employer to give his employees not 
less than sixty minutes time-off for their regular meals. 
ARTICLE 66. 
Night shift differential. -
Every employee shall be paid a 
night shift differential of not less than ten (10%) percent of his regular wage for each 
hour of work performed between ten o'clock in the evening and six o'clock in the 
morning. 
ARTICLE 67. 
Overtime work ----- Work may be performed beyond eight (8) 
hours a day provided that the employee is paid for the overtime work, an additional 
compensation equivalent to his regular wage plus at least twenty-five percent (25%) 
thereof. Work performed beyond eight hours on a holiday or rest day shall be paid an 
additional compensation equivalent to the rate of the first eight hours on a holiday or rest 
day plus at least thirty percent (30%) thereof. 
ARTICLE 68. 
Undertime not offset by overtime. -
Undertime work on any 
particular day shall not be offset by overtime work on the same or any other day, except 
as otherwise provided in a Collective Bargaining Agreement. Permission given to the 
employee. to go on leave on some other day of the week shall not exempt the employer 
from paying the additional compensation required in this Chapter. (Art.88-a) 
ARTICLE 69. 
Emergency overtime work. -
Any employee may be 
required by the employer to perform overtime work in any of the following cases: 
(a) 
When the country is at war or when any other national or local emergency 
has been declared by Congress or the Chief Executive; 
(b) 
When it is necessary to prevent loss of life or property or in case of 
imminent danger to public safety due to an actual or impending emergency in the 
locality caused by serious accidents, fire, flood, typhoon, earthquake, epidemic or other 
disaster or calamity; 
(c) 
When there is urgent work to be performed on machines, installation or 
equipment, in order to avoid serious loss or damage to the employer or some other 
cause of similar nature; 
(d) 
goods; 
When the work is necessary to prevent loss or damage to perishable 
26 


(e) 
Where the completion or continuation of the work started before the eight 
(8th) hour is necessary to prevent serious obstruction or prejudice to the business or 
operations of the employer. 
Any employee required to render overtime work under this Article shall be paid 
the additional compensation required in this Chapter. 
ARTICLE 70. Computation of additional compensation. - For purposes of 
computing overtime and other additional remuneration as required by this Chapter the 
regular wage of an employee shall include the cash wage and the corresponding 
cash equivalent of the facilities provided by the employer if the value of the same is 
deducted from the salary of the employee or added to his salary as part of his regular 
wage. (Art.gO-a) 
TITLE I 
WORKING CONDITIONS AND REST PERIODS 
CHAPTER II 
WEEKLY REST PERIODS 
ARTICLE 71. 
Right to weekly rest day. -
(a) It shall be the duty of every 
employer, whether operating for profit or not, to provide each of his employees a rest 
period of not less than twenty-four consecutive hours after every six consecutive normal 
work days. 
(b) 
The employer shall determine and schedule the weekly rest day of his 
employees, subject to collective agreement and to such rules and regulations as the 
Secretary of Labor and Employment may provide. However, the employer shall respect 
the preference of employees as to their weekly rest day when such preference is based 
on religious grounds. 
ARTICLE 72. 
When employer may require work on a rest day. -
The 
employer may require his employees to work on any day: 
(a) 
In case of actual or impending emergencies caused by serious accidents, 
fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of 
life and property or imminent danger to public safety; 
(b) 
In cases of urgent work to be performed on the machinery, equipment or 
installation to avoid serious loss which the employer would otherwise suffer; 
(c) 
In the event of abnormal pressure of work due to special circumstances, 
where the employer cannot ordinarily be expected to resort to other measures; 
(d) 
To prevent loss or damage to perishable goods; 
(e) 
Where the nature of the work requires continuous operations and the 
stoppage of work may result in irreparable injury or loss to the employer; and 
(f) 
Under other circumstances analogous or similar to the foregoing as 
determined by the Secretary of Labor and Employment. 
27 


ARTICLE 73. 
Compensation for rest day, Sunday or holiday work. -
(a) 
Where an employee is made or permitted to work on his scheduled rest day, he shall be 
paid an additional compensation of at least thirty percent (30%) of his regular wage. An 
employee shall be entitled to such additional compensation for work performed on 
Sunday only when it is his established rest day. 
(b) 
When the nature of the work of the employee is such that he has no 
regular workdays and no regular rest days can be scheduled, he shall be paid an 
additional compensation of at least thirty percent (30%) of his regular wage for work 
performed on Sundays and holidays. 
(c) 
Work performed on any special holiday shall be paid an additional 
compensation of at least thirty (30%) percent of the regular wage of the employee. 
Where such holiday work falls on the employee's scheduled rest day, he shall be 
entitled to an additional compensation of at least fifty percent (50%) of his regular wage. 
(d) 
Where 
the 
collective 
bargaining 
agreement 
or other applicable 
employment contract stipulates the payment of a higher premium pay than that 
prescribed under this Article, the employer shall pay such higher rate. 
TITLE I 
WORKING CONDITIONS AND REST PERIODS 
CHAPTER III 
HOLIDAYS, SERVICE INCENTIVE LEAVES 
AND SERVICE CHARGES 
ARTICLE. 74. 
Right to Holiday and 13th Month Pay.-
(a) Every worker shall be paid his regular daily wage during regular holidays, 
except in retail and service establishments regularly employing less than (10) workers; 
(b) 
The employer may require an employee to work on any holiday but such 
employee shall be paid a compensation equivalent to twice his regular rate; and 
(c) 
As used in this Article, "holiday" includes: 
New Year's Day, Maundy 
Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the last 
Sunday of August, the thirtieth 
of November, the twenty-fifth and the thirtieth of 
December, and the day designated by law for holding a general election. 
(d) All employers are required to pay all their rank and file employees regardless 
of the nature of the employment, a 13th-month pay not later than December of every 
year. The provisions of Presidential Decree No. 851 shall apply. 
(e) The provisions of PD 1083 regarding payment of holiday pay for days therein 
enumerated as Muslim holidays shall continue. (Art.94-a) 
ARTICLE 75. 
Right to Service Incentive Leave. -
28 


(a) Every employee who has rendered at least one year of service shall be 
entitled to a yearly service incentive leave of ten (10) days each with pay. Unused 
service incentive leave may be converted to cash at the option of the employee. 
(b) This provision shall not apply to those who are 
already enjoying the 
benefit herein provided, those enjoying vacation leave with pay of at least ten (10) 
days and those employed 
in 
establishments regularly employing 
less than ten 
employees 
or 
in establishments 
exempted from granting this benefit 
by the 
Secretary of Labor after considering the viability or financial condition of such 
establishment. 
(c) 
The grant of benefit in excess of that provided 
herein shall not be 
made a subject of arbitration or any court or administrative action. (A, Art.95) 
ARTICLE 76. Paternity Leave and Right to Family and Medical Leave -
Notwithstanding any law, rules and regulations to the contrary, 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. The male employee applying for paternity leave shall notify his 
employer of the pregnancy of his legitimate spouse and the expected date of such 
delivery. 
For purposes of this Act, delivery shall include childbirth or any miscarriage. 
The employers shall grant up to four (4) weeks of unpaid leave a year to 
employees whose spouse, parent, unmarried child, or when they themselves are 
suffering from serious illness. (n) 
ARTICLE 77. 
Service charges. -
All service charges collected by hotels, 
restaurants and similar establishments shall be distributed at the rate of eighty-five 
percent (85%) for all covered employees and fifteen percent (15%) for management. 
The share of the employees shall be equally distributed among them. In case the 
service charge is abolished, the share of the covered employees shall be considered 
integrated into their wages. 
TITLE II 
WAGES 
CHAPTER I 
PRELIMINARY MATTERS 
ARTICLE 78. 
Definition. -
As used in this Title: (a) "Person" means an 
individual, partnership, association, corporation, business trust, legal representative or 
any organized group of persons. 
(b) 
"Employer" includes any person acting directly or indirectly in the interest 
of an employer in relation to an employee and shall include the Government and all its 
branches, subdivisions and instrumentalities, all government-owned or controlled 
corporations and institutions, as well as contractors and subcontractors and non-profit 
private institutions or organizations. 
(c) 
"Employee" includes any individual employed by an employer as defined 
in the preceding paragraph. 
29 


(d) 
"Agriculture" includes farming in all its branches and among other things 
includes the cultivation and tillage of soil, dairying, the production, cultivation, growing 
and harvesting of any agricultural and horticultural commodities, the raising of livestock 
or poultry, and any practices performed by a farmer on a farm as an incident to or in 
conjunction with such farming operations, but does not include the manufacturing or 
processing of sugar, coconuts, abaca, tobacco, pineapples or other farm products. 
(e) 
"Employ" includes to suffer or permit to work. 
(f) 
"Wage" paid to any employee shall mean the remuneration or earnings, 
however designated, capable of being expressed in terms of money, whether fixed or 
ascertained on a time, task, piece, or commission basis, or other method of calculating 
the same, which is payable by an employer to an employee under a written or unwritten 
contract of employment for work done or to be done or for services rendered or to be 
rendered and includes the fair and reasonable value, as determined by the Secretary of 
Labor and Employment, of board, lodging or other facilities customarily furnished by the 
employer to the employee. "Fair and reasonable value" shall not include any profit to the 
employer or to any person affiliated with the employer. (Art.97 -a) 
ARTICLE 79. 
Application of Title. -
This Title shall not apply to farm 
tenancy or leasehold, domestic service and persons working in their respective homes 
in needlework or in any cottage industry duly registered in accordance with law. 
TITLE \I 
WAGES 
CHAPTER \I 
MINIMUM WAGE RATES 
ARTICLE 
80. 
Regional minimum wages. - The minimum wage rates for 
agricultural and non-agricultural employees and workers in each and every region of the 
country shall be those prescribed by the Regional Tripartite Wages and Productivity 
Boards. 
ARTICLE 81. 
Prohibition against elimination or diminution of benefits. -
Nothing in this Book shall be construed to eliminate or in any way diminish 
supplements, or other employee benefits being enjoyed at the time of the promulgation 
of this Code. 
ARTICLE 82. 
Payment by results. -
The Secretary of Labor and 
Employment shall regulate the payment of wages by results, including pakyao, 
piecework and other non-time work, in order to ensure the payment of fair and 
reasonable wage rates, preferably through time and motion stUdies or in consultation 
with representatives of workers' and employers' organizations. 
TITLE \I 
WAGES 
CHAPTER //I 
PAYMENT OF WAGES 
30 


ARTICLE 83. 
Forms of payment. - No employer shall pay the wages of 
an employee by means of promissory notes, 
vouchers, coupons, tokens, tickets, 
chits or any object other than 
legal tender, even 
when expressly requested by 
the employee. 
Payment 
of wages by check or money order or through a bank, shall be 
allowed when such manner of payment is customary or advisable, or is necessary 
because 
of special circumstances as specified in appropriate regUlations to be 
issued by the Secretary of Labor and Employment or as stipulated in a 
collective 
bargaining agreement. (A, Art.1 02) 
ARTICLE 84. 
Time of payment. -
Wages shall be paid at least once every 
two (2) weeks or twice a month at intervals not exceeding sixteen (16) days. If on 
account of force majeure or circumstances beyond the employer's control, payment of 
wages on or within the time herein provided cannot be made, the employer shall pay the 
wages immediately after such force majeure or circumstances have ceased. No 
employer shall make payment with less frequency than once a month. 
The payment of wages of employees engaged to perform a task which cannot be 
completed in two weeks shall be subject to the following conditions in the absence of a 
collective bargaining agreement or arbitration award: 
(1) 
That payments are made at intervals not exceeding sixteen days, in 
proportion to the amount of work completed; and 
(2) 
That final settlement is made upon completion of the work. 
ARTICLE 85. 
Place of payment. -
Payment of wages shall be made at 
or near the place of undertaking, except as otherwise provided by such regulations as 
the Secretary of Labor may prescribe under conditions to ensure greater protection of 
wages. 
ARTICLE 86. 
Direct payment of wages. -
Wages shall be paid directly 
to the workers to whom they are due, except: 
(a) 
In cases of force majeure rendering such payments impossible or under 
other special circumstances to be determined by the Secretary of Labor in appropriate 
regulations, \n which case the worker may be paid through another person under written 
authority given by the worker for the purpose; or 
(b)' 
Where the worker has died, in which case the employer may pay the 
wages of the deceased worker to the heirs of the latter without the necessity of intestate 
proceedings. The claimant, if they are all of age, shall execute an affidavit attesting to 
their relationship to the deceased and the fact that they are his heirs, to the exclusion of 
all other persons. If any of the heirs is a minor, the affidavit shall be executed on his 
behalf by his natural guardian or next of kin. The affidavit shall be presented to the 
employer who shall make payment through the Secretary of Labor or his representative. 
The representative of the Secretary of Labor shall act as referee in dividing the amount 
paid among the heirs. The payment of wages under this Article shall absolve the 
employer of any further liability with respect to the amount paid. 
ARTICLE 87. 
Contractor or subcontractor. - Whenever an employer enters 
into a contract with another person for the performance of the former's work, the 
employees of the contractor and of the latter's subcontractor, if any, shall be paid in 
accordance with the provisions of this Code. 
31 


In the event that the contractor or subcontractor fails to pay the wages of his 
employees in 
accordance with 
this 
Code, 
the employer shall 
be jointly and 
severally liable with his contractor or subcontractor to such employees to the extent of 
the work performed under the contract, in the same manner and extent that he is 
liable to employees directly employed by him. 
"Labor-only" contracting is hereby declared unlawful. For this purpose, labor-only 
contracting shall refer to an arrangement where the contractor or subcontractor merely 
recruits, supplies or places workers to perform a job, work or service for a principal, and 
any of the following elements are present: 
(1) 
The contractor or subcontractor does not have substantial capital or 
investment which relates to the job, work or service to be performed and the employees 
recruited, supplied or placed by such contractor or subcontractor are performing 
activities which are directly related to the main business of the principal: or 
, 
(2) 
The contractor does not exercise the right to control the performance of 
the work of the contractual employee. 
. 
The foregoing provisions shall be without prejudice to the application of Article 
251 (c) of the Labor Code, as amended. 
"Substantial capital or investment" refers to capital stocks and subscribed 
capitalization in the case of corporations, tools, equipment, implements, machineries 
and work premises, actually and directly used by the contractor or subcontractor in the 
performance or completion of the job, work or service contracted out. 
The "right to control" shall refer to the right reserved to the person for whom the 
services of the contractual workers are performed, to determine not only the end to be 
achieved, but also the manner and means to be used in reaching that end. (Art. 1 06-a) 
ARTICLE 88. Licensing of job contractors. - The Secretary of Labor and 
Employment through the Regional Office shall issue qualified applicants the job 
contractor's license in accordance with guidelines prescribed for the purpose. 
The 
applicant must be a Filipino citizen or a corporation of which one hundred percent 
(100%) of authorized and voting capital is owned and controlled by Filipino citizens, a 
partnership, cooperative, craft union or any other entity. 
Such a contractor Shall, 
likewise, comply with the requirements of other government authorities. (n) 
ARTICLE 89. 
Indirect employer. -
The provisions of the immediately 
preceding Article shall likewise apply to any person, partnership, association or 
corporation which, not being an employer, contracts with an independent contractor for 
the performance of any work, task, job or project. 
ARTICLE 90. 
Posting of bond. -
An employer or indirect employer may 
require the contractor or sub-contractor to furnish a bond equal to the cost of labor 
under contract, on condition that the bond will answer for the wages due the employees 
should the contractor or sub-contractor, as the case may be, fail to pay the same. 
ARTICLE. 91. 
Solidary liability. -
The provisions of existing laws to the 
contrary notwithstanding, every employer or indirect employer shall be held responsible 
with his contractor or subcontractor for any violation of any provision of this Code. 
For purposes of determining the extent of their civil liability under this Chapter, 
they shall be considered as direct employers if the contractor or subcontractor is not 
32 


authorized by the Secretary of Labor and Employment or his duly authorized 
representative to undertake contracting activities. (Art. 1 09-a) 
ARTICLE 92. Worker preference in case of closure. - In the event 
of bankruptcy, liquidation, closure or cessation of operations of an employer's business, 
his workers shall enjoy first and absolute preference as regards their wages and 
other monetary claims, any provision of law to the contrary notwithstanding. Such 
unpaid wages and 
monetary claims shall be paid in full before claims of the 
government and other creditors may be paid. (Art.110-a) 
ARTICLE 93. 
Attorney's fees. -
(a) In cases of unlawful withholding of 
wages the culpable party may be assessed attorney's fees equivalent to ten percent of 
the amount of wages recovered. 
(b) 
It shall be unlawful for any person to demand or accept, in any judicial or 
administrative proceedings for the recovery of the wages, attorney's fees which exceed 
ten percent of the amount of wages recovered. 
TITLE II 
WAGES 
CHAPTER IV 
PROHIBITIONS REGARDING WAGES 
ARTICLE 94. 
Non-interference in disposal of wages. -
No employer 
shall limit or otherwise interfere with the freedom of any employee to dispose of his 
wages. He shall not in any manner force, compel or oblige his employees to purchase 
merchandise, commodities or other property from the employer or from any other 
person or otherwise make use of any store or services of such employer or any other 
person. 
ARTICLE 95. 
behalf of any person, 
except: 
Wage deduction. -
No employer, in his own behalf or in 
shall make any deduction from the wages of his employees 
(a) 
In cases where the worker is insured with his consent by the employer, 
and the deduction is to recompense the employer for the amount paid by him as 
premium on the insurance; 
(b) 
For union dues, in cases where the right of the worker or his union to 
check off has been recognized by the employer or authorized in writing by the individual 
worker concerned; and 
(c) 
In cases where the employer is authorized by law or regulations issued by 
the Secretary of Labor. 
ARTICLE 96. 
Deposits for loss or damage. -
No employer shall require 
his worker to make deposits from which deduction shall be made, for the reimbursement 
of loss of or damage to tools, materials or equipment supplied by the employer, except 
when the employer is engaged in such trades, occupations or business where the 
practice of making deductions or requiring deposits is a recognized one, or is necessary 
33 


or desirable as determined by the Secretary of Labor and Employment in appropriate 
rules and regulations. 
ARTICLE 97. 
Limitations. -
No deduction from the deposits of an employee 
for the actual amount of the loss or damage shall be made unless the employee has 
been heard thereon, and his responsibility has been clearly shown. 
ARTICLE 98. 
Withholding of wages and kickbacks prohibited. -
It shall 
be unlawful for any person, directly or indirectly, to withhold any amount from the wages 
of a worker or induce him to give up any part of his wages by force, stealth, intimidation, 
threat or by ahy other means whatsoever without the worker's consent. 
ARTICLE 99. 
Deduction to ensure employment. -
It shall be unlawful 
to make any deduction from the wages of any employee for the benefit of the employer 
or his representative or intermediary as consideration of a promise of employment or 
retention in employment. 
ARTICLE 100. 
Retaliatory measures. -It shall be unlawful for an employer 
to refuse to payor reduce the wages and benefits, discharge or in any manner 
discriminate against any employee who has filed any complaint or instituted any 
proceeding under this Title or has testified or is about to testify in such proceedings. 
ARTICLE 101. 
False reporting. -
It shall be unlawful for any person to 
make any statement, report or record filed or kept pursuant to the provisions of this 
Code knowing such statement, report or record to be false in any material respect. 
TITLE II 
WAGES 
CHAPTER V 
WAGE STUDIES, WAGE AGREEMENTS 
AND WAGE DETERMINATION 
ARTICLE 
102. 
Creation 
of the National 
Wages 
and Productivity 
Commission. 
-
There is hereby created a National Wages and Productivity 
Commission, hereinafter referred to as the Commission which shall be attached 
to the Department of Labor and Employment for policy and program coordination. 
The Commission shall be composed of three (3) representatives each from the 
government, the workers' and the employers' sectors. The Secretary of Labor and 
Employment 
and the Director-General 
of 
the 
National Economic and 
Development Authority (NEDA) shall serve as the ex-officio Chairman and ex-officio 
vice-Chairman respectively. The 
three (3) representatives each from workers and 
employers sectors 
shall be appointed 
by the President of the Philippines upon 
recommendation of the Secretary of 
Labor 
and Employment on the basis of the 
list of nominees submitted by the workers and employers 
sectors, respectively, 
and 
shall serve for a term of six (6) years. 
They shall receive a per diem of not 
less than five hundred pesos (12500.00) for each meeting actually attended, 
exclusive 
of actual,ordinary and necessary travel and representation expenses. 
The Commission shall be assisted by a Secretariat 
to 
be headed by an 
Executive Director and two (2) Deputy Directors, who shall be appointed by the 
34 


President of the Philippines, upon the recommendation of the Secretary of Labor and 
Employment. 
The Executive Director shall have the same 
rank, salary, benefits and other 
emoluments as that of a Department Assistant Secretary, while the Deputy Directors 
shall have the same rank, salary, benefits and other emoluments as that of a Bureau 
Director, The members of the Commission representing labor and management shall 
have the same rank, emoluments, allowances and other benefits as those prescribed 
by law for labor and management representatives in the Employees' Protection and 
Rehabilitation Commission. (Art.120-a) 
ARTICLE 103. 
Powers and Functions of the Commission. -
The 
Commission shall have the following powers and functions: 
(a) 
To act as the national consultative and advisory body to the President of 
the Philippines and Congress on matters relating to wages, incomes and productivity; 
(b) 
To formulate policies and guidelines on wages, incomes and productivity 
improvement at the enterprise, industry and national levels; 
(c) 
To prescribe rules and guidelines for the determination of appropriate 
minimum wage and productivity measures at the regional, provincial or industry levels; 
(d) 
To review regional wage levels set by the Regional Tripartite Wages and 
Productivity Boards to determine if these are in accordance with prescribed guidelines 
and national development plans; 
(e) 
,To undertake studies, researches and surveys necessary for the 
attainment .of its functions and objectives, and to collect and compile data and 
periodical!y disseminate information on wages and productivity and other related 
information, including, but not limited to, employment, cost-of-living, labor costs, 
investments and returns; 
(f) 
To review plans and programs of the regional Tripartite Wages and 
Productivity Boards to determine whether these are consistent with national 
development plans; 
(g) 
To exercise technical and administrative supervision over the Regional 
Tripartite Wages and Productivity Boards; 
(h) 
To call, 
from time to time, 
a national tripartite conference of 
representatives of government, workers, and employers for the consideration of 
measures to promote wage rationalization and productivity; and 
(i) 
To exercise such powers and functions as may be necessary to 
implement this Act. (Art.121-a) 
ARTICLE 104. 
Creation of Regional Tripartite Wages and Productivity 
Boards. -
There is hereby created Regional Tripartite Wages and Productivity Boards, 
hereinafter referred to as Regional Boards in all regions, including autonomous regions 
as 
may 
be 
established 
by 
law. 
The 
Commission 
shall 
determine 
the 
offices/headquarters of the respective Regional Boards. 
The Regional Boards shall have the following powers and functions in their 
respective territorial jurisdiction: 
35 


(a) 
To develop plans, programs and projects relative to wages, incomes and 
productivity improvement for their respective regions; 
(b) 
To determine and fix minimum wage rates applicable in their respective 
regions, proVinces or industries therein and to issue the corresponding wage orders, 
subject to guidelines issued by the Commission; 
(c) 
To undertake studies, researches, and surveys necessary for the 
attainment of their functions, objectives and programs and to collect and compile data 
on wages, incomes, productivity and other related information and periodically 
disseminate the same; 
(d) 
To coordinate with the other Regional Boards as may be necessary to 
attain the policy and intention of this Code; 
(e) 
To receive, process and act on applications for exemption from prescribed 
wage rates as may be provided by law or any Wage Order; and 
(f) 
To exercise such other powers and functions as may be necessary to 
carry out their mandate under this Code. 
Implementation of the plans, programs and projects of the Regional Boards 
referred to in the second paragraph, letter (a) of this Article, shall be through the 
respective regional offices of the Department of Labor and Employment within their 
territorial jurisdiction; Provided, however, That the Regional Boards shall have technical 
supervision over the regional office of the Department of Labor and Employment with 
respect to the implementation of said plans, programs and projects. 
Each Regional Board shall be composed of the Regional Director of the 
Department of Labor and Employment as chairman, the Regional Directors of the 
National Economic and Development Authority and Department of Trade and Industry 
as vice-chairmen and three (3) members each from workers and employers sectors who 
shall be appointed by the President of the Philippines, upon recommendation of the 
Secretary of Labor and Employment, to be made on the basis of the list of nominees 
submitted by the workers and employers sectors, respectively, and who shall serve for a 
term of three (3) years. 
Each Regional Board to be headed by its chairman shall be assisted by a 
Secretariat. 
The members of the Board shall receive a per diem of not less than Five 
Hundred Pesos (~500.00) for each meeting actually attended, exclusive of actual, 
ordinary and necessary travel and representation expenses. (Art.122-a) 
, 
ARTICLE. 105. Wage Order. - Whenever conditions in the region so warrant, 
the Regional Board at its own initiative or at the instance of the workers by a petition 
shall investigate and study all 
pertinent facts; and based on the standards and 
criteria herein prescribed, shall proceed to determine whether a Wage Order should 
be issued. Any such Minimum Wage Order shall take effect after fifteen (15) days 
from 
its complete publication in at least one (1) newspaper of general circulation in 
the region. 
In the performance of its wage-determining functions, 
the Regional Board shall 
conduct public hearings/consultations, giving notices to employees' 
and employers' 
groups, provincial, city and municipal officials and other interested parties. 
36 


Any party aggrieved by the Wage Order issued by the Regional Board may 
appeal such order to the Commission within ten (10) calendar days from the publication 
of such order. It shall be mandatory for the Commission to decide such appeal within 
sixty (60) calendar days from the filing thereof. 
The filing of the appeal does not stay the order unless the person appealing 
such order shall file with the Commission an undertaking with a surety or sureties 
satisfactory to the 
Commission for the payment to the employees affected by the 
order of the corresponding increase, in the event such order is affirmed. (Art. 123-a) 
ARTICLE. 106. Standards/Criteria for Minimum Wage Fixing. 
The 
regional minimum wages to be established by the Regional Board shall be as nearly 
adequate as is economically feasible to maintain 
the minimum standards of living 
necessary for the health, efficiency and general well-being of the employees within 
the framework of the national economic and social development program. 
In the 
determination of such regional minimum wages, the Regional Board shall, among other 
relevant factors, consider the following: 
(a) The demand for living wages; 
(b) Wage adjustment vis-a-vis the consumer price index; 
, 
(c) The cost of living and changes or increases therein; 
(d) The needs of workers and their families; 
(e) The need to induce industries to invest in the countryside; 
(f) Improvements in standards of living; 
(g) The prevailing wage levels; 
(h) Fair return of the capital invested and capacity to pay 
of employers; 
(i) Effects on employment generation and family income; 
U) The equitable distribution of income and wealth along the imperatives of 
economic and social development; and 
(k) Productivity 
The wages prescribed in accordance with the provisions of this Title shall serve 
as reference rate for wage bargaining in establishments in every region. These wages 
shall include wages varying within industries, provinces or localities if in the judgment 
of the Regional Board conditions make such local differentiation proper and necessary 
to effectuate the purpose of this Title. 
Any person, company, corporation, partnership or any other entity engaged in 
business shall file and register annually with the appropriate Regional Board, 
Commission and the National Statistics Office 
an itemized listing of their labor 
component, specifying the names of their workers 
and 
employees 
below 
the 
managerial level, including learners and disabled! handicapped workers who were 
hired 
under the 
terms 
prescribed 
in 
the employment contracts, and their 
corresponding salaries and wages. 
37 


Where the application of any prescribed wage increase 
by virtue of a law or 
Wage order issued by any Regional 
Board results in distortions of the wage 
structure within an establishment, the employer and 
the union shall negotiate to 
correct the distortions. Any dispute arising from wage distortions shall be resolved 
through the grievance procedure under their collective bargaining agreement and, if 
it remains unresolved, through voluntary arbitration. Unless otherwise agreed by the 
parties in writing, such dispute shall be decided by the voluntary arbitrator or panel of 
voluntary arbitrators within 
ten 
(10) calendar days from the time said dispute 
was referred to voluntary arbitration. 
In cases where there are no collective agreements or recognized labor unions, 
the employers and workers shall endeavor to correct such distortions. Any dispute 
arising therefrom shall be settled 
through the National Conciliation and Mediation 
Board and, if it remains unresolved after ten (10) calendar days of conciliation, shall 
be referred to the appropriate branch of the National Labor Relations Commission 
(NLRC). 
It 
shall 
be mandatory for the NLRC to conduct continuous hearings and 
decide the dispute within 
twenty (20) calendar days from the time said dispute is 
submitted for compulsory arbitration. 
The pendency of a dispute arising from a wage distortion shall not in any 
way 
delay the applicability of any increase 
in prescribed 
wage rates pursuant to the 
provisions of law or Wage Order. 
As used herein, a wage distortion shall mean a situation where an increase in 
prescribed wage rates results in the elimination or severe contraction of intentional 
quantitative differences in wage or salary rates between and among employee groups 
in an establishment as to effectively obliterate the distinctions embodied in such wage 
structure based on skills, length of service, or other logical bases of differentiation. 
All workers paid by result, including those who are paid on piecework, takay, 
pakyaw or task basis, shall receive the wage rates prescribed in an Order from the 
Department of Labor and Employment approving the Payment-by-Result Plan. In the 
absence of such approval, the employee shall receive not less than the legal minimum 
wage per eight (8) hours of work a day, or a proportion thereof for working less than 
eight (8) hours. 
All recognized learnership and apprenticeship agreements shall be considered 
automatically modified insofar as their wage clauses are concerned to reflect the 
prescribed ~age rates. (Art. 124-a) 
ARTICLE 107. 
Freedom to bargain. -
No Wage Order shall be construed 
to prevent workers in particular firms or enterprises of industries from bargaining for 
higher wages with their respective employer. 
ARTICLE 108. 
Prohibition Against Injunction. -
No preliminary or 
permanent injunction or temporary restraining order may be issued by any court, 
tribunal or other entity against any proceedings before the Commission or the Regional 
Boards. 
ARTICLE 109. 
Non-diminution of Benefits. -, No Wage Order issued by 
any Regional Board shall provide for wage rates lower than the statutory minimum wage 
rates prescribed by Congress. 
38 


TITLE II 
Wages 
CHAPTER VI 
ADMINISTRATION AND ENFORCEMENT 
ARTICLE 110. Visitorial and enforcement power. -
(a) The Secretary of 
Labor and Employment or 
his duly 
authorized 
representatives, including labor 
regulation officers, shall have access to employers' records and premises at any time 
of the day or night whenever work is being undertaken therein, and the right to 
copy therefrom, to question any employee and investigate any fact, 
condition or 
matter which may be necessary to determine violations or which may aid in the 
enforcement of this Code 
and of any 
labor law, 
wage 
order or rules 
and 
regulations issued pursuant thereto. 
(b) .In cases where the relationship of employer-employee 
still 
exists, the 
Secretary of Labor and Employment or his duly authorized representatives shall have 
the power to issue compliance orders, after the parties are given the opportunity to 
present their sides, to give effect to the labor standards provisions of this Code and 
other labor legislations regardless of the amount involved based on the findings of labor 
regulation officers or 
industrial safety engineers made in the course of inspection. 
The Secretary or his duly authorized representatives shall issue writs of execution to 
the appropriate authority for the enforcement of their orders, except in cases where 
the employer contests the findings of 
the labor 
regulation officer 
and raises 
issues supported by documentary proofs which were not considered in the course of 
inspection. 
(c) The Secretary of Labor and Employment may likewise order stoppage of 
work or suspension 
of operations 
of 
any 
unit 
or department 
of 
an 
establishment when non-compliance with the 
law or implementing rules and 
regulations poses grave and imminent danger to the health and safety of workers 
in 
the 
workplace. 
Within twenty-four hours, 
a hearing shall be conducted to 
determine whether an order for the stoppage of work or suspension of operations 
shall 
be lifted or not. 
In case the violation 
is attributable to the 
fault of the 
employer, he shall pay the employees concerned their salaries or wages during the 
period of such stoppage of work or suspension of operation. 
(d) It shall be unlawful for any person or entity to 
obstruct, impede, delay or 
otherwise render ineffective the visitorial and enforcement powers or 
orders of the 
Secretary of Labor or his duly authorized representatives 
issued pursuant to the 
authority granted under this article, and no inferior court or entity shall issue temporary 
or permanent injunction or restraining order or otherwise assume 
jurisdiction over 
any case involving the enforcement orders issued in accordance with this article. 
(e) Any government employee found guilty 
of violation of, or 
abuse of 
authority, under this Article shall after appropriate administrative investigation, 
be 
subject to summary dismissal from the service. 
(f) The Secretary of Labor and Employment may, by appropriate 
regUlations 
require employers to keep and 
maintain such employment records as may be 
necessary in aid of his visitorial and enforcement powers under this Code. (Art.128-
a) 
39 


• 
• 
ARTICLE 111. 
Recovery of wages, simple money claims and other 
benefits. -
Upon complaint of any interested party, the Regional Director of the 
Department of Labor and Employment or any of the duly authorized hearing officers of 
the Department is empowered, through summary proceeding and after due notice, to 
hear and decide any matter involving the recovery of wages and other monetary claims 
and benefits, including legal interest, owing to an employee or person employed in 
domestic or household service or house helper under this Code, arising from employer-
employee relations: Provided, that such complaint does not include a claim for 
reinstatement: Provided, further, that the aggregate money claims of each employee or 
househelper do not exceed fifty thousand pesos (1250,000). The Regional Director or 
hearing officer shall decide or resolve the complaint within thirty (30) calendar days from 
the date of the filing of the same. Any sum thus recovered on behalf of any employee or 
househelper pursuant to this Article shall be held in a special deposit account by, and 
shall be paid, on order of the Secretary of Labor and Employment or the Regional 
Director directly to the employee or househelper concerned. Any such sum not paid to 
the employee or househelper, because he cannot be located after diligent and 
reasonable effort to locate him within a period of three (3) years, shall be held as a 
special fund of the Department of Labor and Employment to be used exclusively for the 
amelioration and benefit of workers. 
Any decision or resolution of the Regional Director or hearing officer pursuant to 
this provision may be appealed on the same grounds provided in Article 225 of this 
Code, within five (5) calendar days from receipt of a copy of said decision or resolution, 
to the National Labor Relations Commission which shall resolve the appeal within ten 
(10) calendar days from the submission of the last pleading required or allowed under 
its rules. 
The Secretary of Labor and Employment or his duly authorized representative 
may supervise the payment of unpaid wages and other monetary claims and benefits, 
including legal interest, found owing to any employee or house helper under this Code. 
TITLE III 
Productivity and Performance Incentives and Gainsharing Program 
CHAPTER I 
POLICY AND DEFINITION 
ARTICLE 112. Policy - It is the declared policy of the state to encourage higher 
levels of productivity, recognizing the complex challenges of globalization, in order that 
Philippine products and services can meet global competition, maintain industrial peace 
and harmony and promote the principles of partnership and shared responsibility in the 
relations between workers and employers so as to strengthen the cooperation between 
labor and capital, and further recognizing the right of labor to its share in the fruits of 
production and the right of business enterprises to reasonable return on investment and 
to expansion and growth, and accordingly to provide corresponding incentives to both 
labor and capital for undertaking voluntary programs that ensure workers with a just 
share in the fruits of their labor in relation to the profit yielded to the employer as a result 
of increased productivity and, thus, enhance the quality of life of the workers and 
employees. (n) 
40 


ARTICLE 113. Definition of Terms - As used herein: 
(a) 
"Business Enterprise" -
refers to industrial, agricultural or agro-industrial 
establishments engaged in the production, manufacturing, processing, repacking or 
assembly of goods, including service-oriented enterprises that are established and 
operated for profit or gain. 
(b) 
"Labor-Management Committee" -
refers to a negotiating body in a 
business enterprise composed of the representatives of labor and management created 
to establish C\ productivity and performance incentives and gainsharing program, and to 
settle disputes arising therefrom in accordance with section 9 hereof. 
(c) . "Productivity and Performance Incentives Program" - refers to a formal 
agreement voluntary established by a joint labor-management committee or any 
existing labor-management mechanism containing a productivity and performance 
improvement program that will promote gainful employment, improve working 
conditions, attain and maintain industrial peace and result in increased productivity and 
efficiency. 
Including cost savings, as well as a gainsharing program whereby the 
employer and the workers share in the positive results of business operation brought 
about by improvement in productivity. The agreement shall be ratified by at least a 
majority of the employees who have rendered at least six (6) months of continuous 
service. In case the joint labor-management committee makes fundamental changes in 
the program, the employees shall likewise ratify such changes. 
(d) "Gainsharing" - refers to a reward system formulated to complement the 
productivity and performance incentives program designed to improve the productivity 
performance of the organization. The gainsharing system to be adopted by business 
enterprises may take the form of profit sharing or other forms of gainsharing 
mechanisms such as productivity bonus, performance bonus, production bonus, 
employee stock option plan, among others. (n) 
CHAPTER II 
COVERAGE 
ARTICLE 114. Coverage - this title shall apply to all business enterprises with 
or without existing and duly recognized collective bargaining representatives, including 
govemment-owned and controlled corporations performing proprietary functions. 
It 
shall cover all employees and workers regardless of their designation or status and 
irrespective of the manner and mode by which their wages are paid. (n) 
CHAPTER III 
CONTENTS OF PRODUCTIVITY AND PERFORMANCE INCENTIVES AND 
GAINSHARING PROGRAM 
ARTICLE 115. 
Productivity and performance incentives and gainsharing 
program -
, 
(a). The productivity and performance incentives program shall contain provisions 
for measuring productivity, performance and efficiency improvements, the gainsharing 
or reward system adopted in sharing productivity bonuses, coverage, percentage 
sharing, and forms of bonus payment in accordance with the terms and conditions that 
may be agreed upon by labor and management: Provided, that the productivity bonus 
41 


• 
shall be distributed at least once a year, or such frequency as may be determine by the 
parties. 
(b) Productivity agreements voluntarily reached by the parties as provided in this 
title may supplement existing collective bargaining agreements. (n) 
ARTICLE 116. Benefits and Tax Incentives. - (a) Subject to the provisions of 
section 6 hereof, a business enterprise which adopts a productivity and performance 
incentives and gainsharing program, duly and mutually agreed upon by parties to the 
labor-management committee, shall be granted a special deduction from the gross 
income equivalent to fifty percent (50%) of the total productivity bonuses given to 
employees under the program over and above the total allowable ordinary and 
necessary business deductions for said bonuses under the national internal revenue 
code, as amended. 
(b) Grants for manpower training and special studies given to rank-and-file 
employees pursuant to a skills development, program prepared by the labor-
management committee under the productivity and performance incentives program 
shall also entitle then business enterprises to a special deduction from gross income 
equivalent to fifty percent (50%) of the total grants over and above the allowable 
ordinary and necessary business deduction for said grants under the national internal 
revenue code, as amended. 
(c) Bonuses provided for under the productivity and performance incentives and 
gain sharing program shall be given to the employees in a manner determined by the 
parties from the start of such program over and above existing bonuses granted by the 
business enterprises and by law, provided, that the said bonuses shall not be deemed 
as salary increases due the employees and workers. 
(d) The special deductions from the gross income provided for herein shall be 
allowed starting the next taxable year after the effectivity of this title. (n) 
ARTICLE 117. Notification. - A business enterprises which adopts a productivity 
and performance incentives and gain sharing program shall submit copies of the same 
to the appropriate regional tripartite wages and productivity board for evaluation and 
certification. The board shall then forward the certifiable productivity incentives program 
of business enterprises to the bureau of internal revenue for record purposes. (n) 
ARTICLE 118. 
Non-diminution of Benefits. -
Nothing in this title shall be 
construed to diminish or reduce any benefits and other privileges enjoyed by the 
workers under existing laws, decrees, executive orders, company policy or practice, or 
any agreement or contract between the employer and employees. (n) 
CHAPTER IV 
FORMATION OF LABOR-MANAGEMENT COMMITTEE AND DISPUTES AND 
GRIEVANCES 
ARTICLE 119. Labor Management Committee. - (a) A business enterprise or its 
employees, through their authorized representative, may initiate the formation of a 
labor-management committee or any labor-management mechanism that shall be 
composed of representatives from the management and from the rank-and-file 
employees which shall establish and implement a productivity and performance 
incentives program and settle disputes arising therefrom in accordance with section 9 
hereof: provided, that both management and labor shall have equal representation in 
42 


said committee or mechanism: provided, further, that at the request of any party to the 
negotiation, the national wages and productivity boards of the department of labor and 
employment shall provide the necessary studies, technical information and assistance, 
and expert advice to enable the parties to conclude productivity agreements. In case 
there is already an existing labor mechanism in the enterprise, such mechanism may 
suffice; proVided, that it includes as one of its objectives the development and 
implementation of a productivity and performance incentives and gainsharing program. 
(b) 
In 
business enterprises with duly recognized 
collective bargaining 
representatives, the representatives of labor shall be those deSignated by the collective 
bargaining agent of the bargaining unit. 
(c) In business enterprises without duly recognized collective bargaining 
representatives, the representatives of labor shall be elected by at least a majority of all 
rank-and-file employees who have rendered at least six (6) months of continuous 
service. (N) 
ARTICLE 120. Disputes and Grievances. - Whenever disputes, grievances, or 
other matters arise from the interpretation of implementation of the productivity and 
performance incentives program, the Labor-Management committee shall meet to 
resolve the dispute within fifteen (15) days and shall suspend the effectivity of the 
program pending settlement of such dispute or grievance: provided, however, that if 
within the period the dispute remains unresolved, the committee may seek the 
assistance of a third party such as the National Conciliation and Mediation Board of the 
Department of Labor and Employment, the Regional Tripartite Wages and Productivity 
Boards or a facilitator acceptable to both parties in resolving the conflict. The third party 
shall act only in an advisory capacity for purposes of rendering interpretation and 
Clarification to facilitate the adoption of a final resolution of the parties: provided, further, 
that the business enterprises shall not be deemed to have forfeited any tax incentives 
accrued prior to the date of occurrence of such dispute or grievance, and the workers 
shall not be required to reimburse the productivity bonuses already granted to them 
under the incentive program. Likewise, bonuses that have already accrued before the 
dispute or grievance shall be paid the workers within six (6) month from their accrual. 
Any dispute which remains unresolved within thirty (30) days from the time of its 
submission to the labor management committee shall be submitted to voluntary 
arbitration in line with the pertinent provisions of the labor code, as amended. 
The productivity and performance incentives and gainsharing program shall 
include the name of the voluntary arbitrator or panel of voluntary arbitrators previously 
chosen and agreed upon by the parties. (n) 
ARTICLE 121. Penalty. - Any person who shall make any fraudulent claim under 
this title, regardless of whether or not a tax benefit has been granted, shall upon 
conviction be punished with imprisonment of not less than six (6) months but not more 
than one (1') year or a fine of not less than six thousand pesos (P6,000.00), or both, at 
the discretion 
of the court, without prejudice to prosecution for any other acts 
punishable under existing laws. 
In case of partnerships or corporations, the penalty shall be imposed upon the 
officer or employee who knowingly approved, authorized or ratified the filing of the 
fraudulent claim, and other persons responsible therefore. (n) 
. 
TITLE IV 
43 


WORKING CONDITIONS FOR SPECIAL GROUPS OF EMPLOYEES 
CHAPTER I 
EMPLOYMENT OF WOMEN 
ARTICLE 122. 
Night work prohibition. -
No woman, regardless of age, 
shall be employed or permitted or suffered to work, with or without compensation: 
(a) 
In any industrial undertaking or branch thereof between ten o'clock at night 
and six o'clock in the morning of the following day; or 
(b) 
In any commercial or non-industrial undertaking or branch thereof, other 
than agricultural, between midnight and six o'clock in the morning of the following day; 
or 
(c) 
In any agricultural undertaking at night time unless she is given a period of 
rest of not less than nine (9) consecutive hours. 
ARTICLE. 123. Exceptions. -
The prohibitions prescribed by the preceding 
Article shall Qat apply in any of the following cases: 
(a) i'n cases of actual or impending emergencies caused by serious accident, 
fire, flood: typhoon, earthquake, epidemic or other disasters or calamity, to prevent loss 
of life or property, or in cases of force majeure or imminent danger to public safety; 
(b) 
In cases of urgent work to be performed on machineries, equipment or 
installation, to avoid serious loss which the employer would otherwise suffer; 
(c) Where the work is necessary to prevent serious loss of perishable goods; 
(d) Where the woman employee holds a responsible position of managerial or 
technical nature, or where the woman employee has been engaged to provide health 
and welfare service; 
(e) 
Where the women employees are 
immediate members 
of the family 
operating the establishment or undertaking; and 
(f) 
Under other analogous cases exempted 
by the Secretary of Labor and 
Employment in appropriate regulations. (Art.131-a) 
ARTICLE 124. 
Facilities for women. -
The Secretary of Labor and 
Employment shall establish standards that will insure the safety and health of women 
employees. In appropriate cases, he shall by regulations require any employer to: 
(a) 
Provide seats proper for women and permit them to use such seats when 
they are free from work and during working hours, provided they can perform their 
duties in this position without detriment to efficiency; 
(b) 
To establish separate toilet rooms and lavatories for men and women and 
provide at least a dressing room for women; 
(c) 
To establish a nursery in a workplace for the benefit of the women 
employees therein; and 
44 


(d). 
To determine appropriate minimum age and other standards for retirement 
or termination in special occupations such as those of flight attendants and the like. 
ARTICLE 125. 
Maternity leave benefits. -
(a) Every employer shall grant 
to any pregnant woman employee, whether married or not and regardless of her 
employment status, matemity leave of sixty (60) days for normal delivery and seventy-
eight (78) days in case of caesarean delivery. The employer may require from any 
woman employee applying for matemity leave the production of a medical certificate 
stating that delivery will probably take place within two weeks. 
(b) 
The maternity leave shall be extended without pay on account of illness 
medically certified to arise out of the pregnancy, delivery, abortion or miscarriage, which 
renders the woman unfit for work, unless she has eamed unused leave credits from 
which such extended leave may be charged. 
(c) 
The maternity leave provided in this Article shall be paid by the employer 
only for the first four deliveries or miscarriages by a woman employee. (Art.133-a) 
ARTICLE 126. 
Family planning services; incentives for family planning. 
-
(a) Establishments which are required by law to maintain a clinic or infirmary shall 
provide free family planning services to their employees which shall include, but not 
limited to, the application or use of contraceptive pills and intra-uterine devices. 
(b) 
In coordination with other agencies of the government engaged in the 
promotion of family planning, the Department of Labor and Employment shall develop 
and prescribe incentive bonus schemes to encourage family planning among female 
workers in any establishment or enterprise. 
ARTICLE 127. 
Discrimination prohibited. -
It shall be unlawful for any 
employer to discriminate against any woman employee with respect to terms and 
conditions of employment solely on account of her sex. 
The following are acts of discrimination: 
(a) 
Giving preference to a male applicant over a female applicant in the hiring 
process, whether through notices, announcements or advertisements for employment or 
apprenticeship or in the actual recruitment, hiring or employment of workers where the 
particular job can be equally handled by a woman; 
(b). 
Payment of a lesser compensation, including wage, salary or other form of 
remuneration and fringe benefits, to a female employee as against a male employee, for 
work of equal value; 
(c) 
Favoring a male employee over a female employee with respect to 
promotion, assignment, training opportunities, study and scholarship grant solely on 
account of their sexes; and 
(d) 
Favoring a male employee over a female employee with respect to 
dismissal of personnel or the application of any retrenchment policy of the employer 
solely on account of their sexes. 
Criminal liability for the willful commission of any unlawful act as provided in this 
article or any violation of the rules and regulations issued pursuant to Section 2 hereof 
shall be penalized as provided in Articles 293 and 294 of this Code: Provided, that the 
institution of any criminal action under this provision shall not bar the aggrieved 
employee from filing an entirely separate and distinct action for money claims, which 
45 


may include claims for damages and other affirmative reliefs. The actions hereby 
authorized shall proceed independently of each other. (Art.13S-a) 
ARTICLE 128. 
Stipulation against marriage. -
It shall be unlawful for an 
employer to require as a condition of employment or continuation of employment that a 
woman employee shall not get married, or to stipulate expressly or tacitly that upon 
getting married a woman employee shall be deemed resigned or separated or to 
actually dismiss, discharge, discriminate or otherwise prejudice a woman employee 
merely by reason of her marriage. 
ARTICLE 129. 
Prohibited acts. -
It shall be unlawful for any employer: 
(1) 
To deny any woman employee the benefits provided for in this Chapter or 
to discharge any woman employed by him for the purpose of preventing her from 
enjoying any of the benefits provided under this Code; 
(2) 
. To discharge such woman on account of her pregnancy, or while on leave 
or in confi~ement due to her pregnancy; 
(3) 
To discharge or refuse the admission of such woman upon returning to 
her work for fear that she may again be pregnant. or 
(4) 
To deny any woman the benefits of employment or other statutory 
benefits under our laws by reason of her sex. (Art. 137-a) 
ARTICLE 130. 
Classification of certain women workers. -
Any woman 
who is permitted or suffered to work with or without compensation in any night club, 
cocktail lounge, massage clinic, bar or similar establishment, under the effective control 
or supervision of the employer for a substantial period of time as determined by the 
Secretary of Labor and Employment, shall be considered as an employee of such 
establishment for purposes of labor and social legislation. 
TITLE III 
WORKING CONDITIONS FOR SPECIAL GROUPS OF EMPLOYEES 
CHAPTER II 
EMPLOYMENT OF MINORS 
ARTICLE. 131. Minimum employable age. - (a) Children below fifteen (15) 
years of age shall not be employed, except: 
1. 
When a child in an industrial undertaking works directly under the sole 
responsibility of his parents or legal guardian and where only members of the 
employer's family are employed, Provided, that his employment, neither endangers his 
life, safety, health and morals, nor impairs his normal development and in any way 
interferes with his schooling. 
2. Where employment or participation in public entertainment or information 
through cinema, theater, radio or television is essential; Provided, the employment 
contract is concluded by the child's parents or legal guardian, with the express 
agreement of the child concerned, if possible, and the approval of the Department of 
Labor and Employment. 
, 
46 


3. In other permissible employments as may be determined by the Secretary of 
Labor and Employment taking into consideration the welfare and normal development of 
a child 
The following requirements in all instances, shall be strictly complied with: : 
1. 
The employer shall ensure the protection, health, safety, morals and 
normal development of the child; 
2. 
The employer shall institute measures to prevent the child's exploitation or 
discrimination, taking into account the system and level of remuneration, and the 
duration and arrangement of working time; and 
3. 
The employer shall formulate and implement, subject to the approval and 
supervision of competent authorities, a continuous program for training and skills 
acquisition of the child. 
In the above exceptional cases where any such child may be employed, the 
employer shall first secure, before engaging such child, a work permit from the 
Department of Labor and Employment which shall ensure observance of the above 
requirements. 
The Department of Labor and Employment shall promulgate rules and 
regulations necessary for the effective implementation of this section 
(b) Any person between fifteen (15) and eighteen (18) 
years of age may be 
employed for such number of hours and such periods of the day as determined by the 
Secretary of Labor in appropriate regulations. 
(c) The foregoing provisions shall in no 
case allow the employment of a 
person below eighteen (18) years of age in any work, undertaking or activity which is 
considered hazardous hereof and as may be further determined by the Secretary of 
Labor and El'nployment. (Art. 139-a) 
ARTICLE 132. Worst forms of child labor - No child shall be employed in or 
exposed to the worst forms of child labor which comprised of: 
1) 
All forms of slavery or practices similar to slavery, such as the sale and 
trafficking of children, debt bondage and serfdom, and forced or compulsory labor, 
including forced or compulsory recruitment of children for use in armed conflict; 
2) 
The use, procuring or offering of a child for prostitution, for the production 
of pornography or for pornographic performances; 
3) 
The use, procuring or offering of a child for illicit activities, particularly the 
production and trafficking of drugs as defined in relevant international treaties; 
4) 
Work which, by its nature or the circumstances in which it is carried out, is 
likely to harm the health, safety or morals of children. 
Any work, undertaking or activity shall be considered hazardous if it falls under 
any of the following conditions: 
A) 
It debases, degrades or demeans the intrinsic worth and dignity of a child 
as a human being; or 
B) 
It exposes the child to physical, emotional or sexual abuse, or is found to 
be highly stressful psychologically or may prejudice morals; or 
C) 
It is performed underground, underwater or at dangerous heights; or 
47 


0) 
It involves the use of dangerous machinery, equipment and tools such as 
power-driven or explosive power-actuated tools; or 
E) 
It exposes the child to physical danger such as, but not limited to the 
dangerous feats of balancing, physical strength or contortion, or which requires the 
manual transport of heavy loads; or 
F) 
It is perfomed in an unhealthy environment exposing the child to 
hazardous working conditions, elements, substances, co-agents or processes involving 
the ionizing radiation, chemicals, fire, flammable substances, noxious components and 
the like, or to extreme temperatures, noise levels, or vibrations; or 
G) 
It is performed under particularly difficult conditions such as very long 
hours, during'the night, or without the possibility of returning home each day; or 
H) 
. It exposes the child to biological agents such as bacteria, fungi, viruses, 
protozoans, hematoads and other parasites, or to sub-human conditions; or 
I) 
It involves the manufacture or handling of explosives and other 
pyrotechnical products. 
Any employer found to be violating the provisions of paragraphs (c) and (d) 
hereof, or the employer of the subcontractor who employs, or the one who facilitates the 
employment of a child in hazardous work, shall suffer the penalty of a fine of not less 
than ten thousand pesos (p10,000.00) but not more than five hundred thousand pesos 
(p500,000.00), or imprisonment of not less than six (6) months but not more than six (6) 
years, or both such fine and imprisonment at the discretion of the court. 
If a corporation commits the violation, the board of directors/trustees and 
officers, which include the president, treasurer and secretary of the said corporation, 
shall be penalized as provided for herein. 
The 
secretary of Labor and 
Employment or his/her fully authorized 
representative may, after due notice and hearing, order the closure of any business firm 
or establishment found to have repeatedly violated any of the prOVisions hereof more 
than three (3) times. He/she may likewise order the immediate closure of any such firm 
or establishment if: 
1) The violation of any provision hereof has resulted in the death, insanity or 
serious physical injury of a child employed in such establishment; or 
2) Such firm or establishment engaged or employed a child in prostitution or in 
obscene or lewd shows. 
In case of such closure, the employer shall be required to pay his/her employees 
their separation pay and other monetary benefits provided for by law. 
Parents, biological or by legal fiction, and legal guardians found to be violating 
the provisions hereof shall pay the fine as provided herein or be required to render 
community service for not less than thirty (30) days but not more than one (1) year, or 
both such fine and community service at the discretion of the court: Provided, that a 
maximum length of community service shall be imposed on parents or legal guardians 
who have repeatedly violated the provisions hereof three (3) times; Provided, further, 
that in addition to the community service in its maximum period, the penalty of arresto 
menor shall be imposed on the parents or legal guardians who have repeatedly violated 
the provisions hereof more than three (3) times. (n) 
ARTICLE 133. 
Prohibition against child discrimination. -
No employer 
shall discriminate against any person in respect to terms and conditions of employment 
on account of his age. 
TITLE III 
48 


WORKING CONDITIONS FOR SPECIAL GROUPS OF EMPLOYEES 
CHAPTER III 
EMPLOYMENT OF HOUSEHELPERS 
ARTICLE 134. 
Coverage. -
This Chapter shall apply to all persons 
rendering services in households for compensation. 
"Domestic or household service" shall mean services in the employer's home 
which is usually necessary or desirable for the maintenance and enjoyment thereof and 
includes ministering to the personal comfort and convenience of the members of the 
employer's household, including services of family drivers. 
ARTICLE 135. 
Contract of Domestic service. -
The original contract of 
Domestic service shall not last for more than two (2) years but it may be renewed for 
such periods as may be agreed upon by the parties. 
ARTICLE. 136. Minimum wage. - (a) Househelpers shall be paid the following 
minimum wage rates: 
(1) 
One Thousand Two Hundred (Pi ,200.00) pesos a month for 
househelpers in 
(2) 
chartered cities 
(3) 
municipalities. 
the National Capital Region; 
One Thousand 
(Pi ,000.00) pesos a month for those in other 
and first-class municipalities; and 
Nine 
Hundred 
(P900.00) pesos a month for those in other 
Provided, that the employers shall review the employment contracts of their 
househelpers every three (3) years with the end in view of improving the terms and 
conditions thereof. (Art.143-a) 
ARTICLE 137. 
Minimum cash wage. -
The minimum wage rates 
prescribed under this Chapter shall be the basic cash wages which shall be paid to the 
househelper in addition to lodging. food and medical attendance. 
ARTICLE 138. Payment of wages. - Payment of wages shall be made directly 
to the househelper in cash, at least once every two (2) weeks or twice a month. No 
deductions from said wages shall be made by the employer except those provided by 
law. The express written consent of the househelper shall first be secured before any 
deduction from his/her wages is made. (N) 
ARTICLE 139. Thirteenth (13th) month pay. -
Revising for the purpose 
Guideline No.2 of the revised guidelines on the implementation of the thirteenth month 
pay law (16 November 1987). All househelpers shall be entitled to a thirteenth (13th ) 
month pay of Memorandum No. 28, said thirteenth (13th ) month pay shall be paid to a 
househelpers not later than the 16th of December of every year. (n) 
ARTICLE 140. Membership in the Social Security System (SSS). - All 
househelpers regardless of age and compensation levels, shall be covered by the 
Social Security System (SSS) and be entitled to all the benefits provided under Republic 
Act No. 1161. as amended. The employers of said househelpers shall pay for the 
49 


employer's share of the aforementioned SSS contribution without deducting the same 
from the monthly compensation of the househelpers. 
For this purpose, the Social Security System (SSS) is hereby required to 
implement an outreach program that will facilitate the remittance of SSS contributions 
by either th~ homeowners or the househelpers by whatever means deemed feasible. 
Said outreach program should be conceptualized and initiated within a period of one (1) 
year from the date of effectivity hereof. (n) 
ARTICLE 141. Membership in the Philippine Health Insurance Corporation 
(PHILHEAL TH). - All househelpers, regardless of age and compensation levels, shall 
be covered under the Philippine Health Insurance Corporation (Phil health), and be 
entitled to all the benefits provided for under the law. The employer of said househelper 
shall pay for the employer's share of the aforementioned Philhealth, without deducting 
the same from the monthly compensation of the househelper. (n) 
ARTICLE 142. Normal hours of work. - Cognizant of the peculiarities of the 
relationship between the employer and the househelper, the normal hours of work of 
kasambahays shall be set at ten (10) hours per day, exclusive of one (1) hour breaks 
each for breakfast, lunch and dinner. Any work done by the househelper beyond the 
normal hours of work per day shall be duly compensated by the employer. Furthermore, 
the house helper shall be allowed at least eight (8) hours of continuous rest period per 
day. (n) 
ARTICLE 143. Regular working days. - No househelper shall render work for 
more than six (6) days per week. While the specific day of the week set aside as rest 
day for the househelper may be stipulated in the employment contract, the same may 
be changed for another day of the week upon the mutual agreement of the employer 
and the househelper as the exigencies of the household may dictate. (n) 
ARTICLE 144. Vacation leaves. -
All househelpers shall be entitled to a 
fourteen (14) day vacation leave with pay, in addition to the one (1) day per week 
designated as the rest day. Said leave may only commence at the end of the first year 
of employment, and shall not cumulate from year to year. (n) 
ARTICLE 145. Maternity benefits. - All female househelpers shall be entitled to 
maternity benefits pursuant to article 133 of the Labor Code of the Philippines. (n) 
ARTICLE 146. 
Assignment to non-household work. -
No househelper 
shall be assigned to work in a commercial, industrial or agricultural enterprise at a wage 
or salary rate lower than that provided for agricultural or non-agricultural worker as 
prescribed herein. 
ARTICLE 147. 
Opportunity for education. -
If the househelper is under 
the age of eighteen (18) years, the employer shall give him or her an opportunity for at 
least elementary education. The cost of such education shall be part of the 
househelper's compensation, unless there is a stipulation to the contrary. 
ARTICLE 148. 
Treatment of househelpers. -
The employer shall treat 
the househelper in a just and humane manner. In no case shall physical violence be 
used upon the househelper. 
ARTICLE 149. 
Board, lodging and medical attendance. -
The employer 
shall furnish the househelper free of charge suitable and sanitary living quarters as well 
as adequate food and medical attendance. 
50 


ARTICLE 150. 
Indemnity for unjust termination of services. -
If the 
period of household service is fixed, neither the employer nor the househelper may 
terminate the contract before the expiration of the term, except for a just cause. If the 
househelper is unjustly dismissed, he or she shall be paid the compensation already 
earned plus that for fifteen (15) days by way of indemnity. 
If the househelper leaves without justifiable reason, he or she shall forfeit any 
unpaid salary due him or her not exceeding fifteen (15) days. 
ARTICLE 151. 
Service of termination notice. -
If the duration of the 
household service is not deterrnined either in stipulation or by the nature of the service, 
the employer or the househelper may give notice to put an end to the relationship five 
(5) days before the intended termination of the service. 
ARTICLE 152. 
Employment certification. -
Upon the severance of the 
household service relation, the employer shall give the househelper a written statement 
of the nature and dUration of the service and his or her efficiency and conduct as 
househelper. 
ARTICLE 153. 
Employment records. -
The employer may keep such 
records as he may deem necessary to reflect the actual terms and conditions of 
employment' of his househelper which the latter shall authenticate by signature or 
thumbmark upon request of the employer. 
TITLE III 
WORKING CONDITIONS FOR SPECIAL GROUPS OF EMPLOYEES 
CHAPTER IV 
EMPLOYMENT OF HOMEWORKERS 
ARTICLE 154. Regulation of industrial homeworkers. - The employment of 
industrial homeworkers and field personnel shall be regulated by the Government 
through. appropriate regulations issued by the Secretary of Labor and Employment to 
ensure the general welfare and protection of homeworkers and field personnel and the 
industries employing them. 
ARTICLE 155. Regulations of Secretary of Labor and Employment. - The 
regulations or orders to be issued pursuant to this Chapter shall be designed to 
assure the minimum terms and conditions of employment applicable to the industrial 
homeworkers and field personnel involved. 
ARTICLE 156. Homeworker's Contractor as the Employer. -
For purposes 
of this Chapter, the "employer" of homeworkers shall be the homeworker's contractor 
who for his account or benefit, or on behalf of any person, directly: 
(1) Delivers any goods, articles or materials to be processed or fabricated 
in 
or about a home and 
thereafter to be returned 
or to be disposed of or 
distributed in accordance with his directions; or 
(2) 
Sells any goods, articles or materials for the purpose of having the same 
processed or fabricated in or about a home and then 
rebuys 
them 
after 
such 
processing or fabrication. 
51 


For the purpose of this Chapter, the Homeworker's Contractor shall be solidarily 
liable with any person for whom he may have engaged the services of the 
Homeworkers. (Art.155-a) 
BOOK FOUR 
Health, Safety and Social Welfare Benefits 
TITLE I 
MEDICAL, DENTAL AND OCCUPATIONAL SAFETY 
CHAPTER I 
MEDICAL AND DENTAL SERVICES 
ARTICLE 157. 
First-aid treatment. -
Every employer shall keep in his 
establishment such first-aid medicines and equipment as the nature and conditions of 
work may require, in accordance with such regulations as the Department of Labor and 
Employments shall prescribe. 
The employer shall take steps for the training of a sufficient number of 
employees in first-aid treatment. 
ARTICLE 158. 
Emergency medical and dental services. -
It shall be the 
duty of every employer to furnish his employees in any locality with free medical and 
dental attendance and facilities consisting of: 
(a) 
The services of a full-time registered nurse when the number of 
employees exceeds 50 but not more than 200 except when the employer does not 
maintain hazardous work places, in which case the services of a graduate first-aider 
shall be provided for the protection of the workers, where no registered nurse is 
available. The Secretary of Labor and Employment shall provide by appropriate 
regulations the services that shall be required where the number of employees does not 
exceed fifty (50) and shall determine by appropriate order hazardous workplaces for 
purposes of this Article; 
(b) 
The services of a full-time registered nurse, a part-time physician and 
dentist, and' an emergency clinic, when the number of employees exceeds two hundred 
(200) but not more than three hundred (300) and; 
(c) 
The services of a full-time physician, dentist and a full-time registered 
nurse as well as a dental clinic, and an infirmary or emergency hospital with one bed 
capacity for everyone hundred (100) employees, when the number of employees 
exceeds three hundred (300). 
In cases of hazardous workplaces, no employer shall engage the services of a 
physician or dentist who cannot stay in the premises of the establishment for at least 
two (2) hours, in the case of those engaged on part-time basis, and not less than eight 
(8) hours in the case of those employed on full-time basis. Where the undertaking is 
non-hazardous in nature, the physician and dentist may be engaged on retained basis, 
subject to such regulations as the Secretary of Labor and Employment may prescribe to 
insure immediate availability of medical and dental treatment and attendance in case of 
emergency 
52 


ARTICLE 159. 
When 
emergency 
hospital 
not 
required. 
-
The 
requirement for an emergency hospital or dental clinic shall not be applicable in case 
there is a hospital or dental clinic which is accessible from the employer's establishment 
and he makes arrangements for the reservation therein of the necessary beds and 
dental facilities for the use of his employees. 
ARTICLE 160. 
Health program. -
The physician engaged by an employer 
shall, in addition to his duties under this Chapter, develop and implement a 
comprehensive occupational health program for the benefit of the employees of his 
employer. 
ARTICLE 161. 
Qualifications of health personnel. -
The physicians, 
dentists and nurses employed by employers pursuant to this Chapter shall have the 
necessary training in industrial medicine and occupational safety and health. The 
Secretary of Labor and Employment, in consultation with industrial, medical and 
occupational, safety and health associations, shall establish the qualifications, criteria 
and conditio.ns of employment of such health personnel. 
AR'rICLE 162. 
Assistance of employer. -
It shall be the duty of any 
employer to provide all the necessary assistance to ensure the adequate and immediate 
medical and dental attendance and treatment to an injured or sick employee in case of 
emergency. 
TITLE I 
MEDICAL, DENTAL AND OCCUPATIONAL SAFETY 
CHAPTER II 
OCCUPATIONAL HEALTH AND SAFETY 
ARTICLE 163. 
Safety and health standards. -
The Secretary of Labor 
and Employment shall by appropriate orders set and enforce mandatory occupational 
safety and health standards to eliminate or reduce occupational safety and health 
hazards in all work places and institute new and update existing programs to ensure 
safe and healthful working conditions in all places of employment. 
ARTICLE 164. 
Research. -
It shall be the responsibility of the Department 
of Labor and Employment to conduct continuing studies and researches to develop 
innovative methods, techniques and approaches for dealing with occupational safety 
and health problems; to discover latent diseases by establishing causal connections 
between diseases and work in environmental conditions; and to develop medical criteria 
which will assure insofar as practicable that no employee will suffer impairment or 
diminution in health, functional capacity or life expectancy as a result of his work and 
working conditions. 
ARTICLE 165. 
Training programs. -
The Department of Labor and 
Employment shall develop and implement training programs to increase the number 
and competence of personnel in the field of occupational safety and industrial health. 
ARTICLE 166. 
Administration of safety and health laws. -
(a) The 
Department of Labor and Employment shall be solely responsible for the administration 
and enforcement of occupational safety and health laws, regulations and standards in 
53 


all establishments and workplaces wherever they may be located; however, chartered 
cities may be allowed to conduct industrial safety inspections of establishments within 
their respective jurisdiction where they have adequate facilities and competent 
personnel for the purpose as determined by the Department of Labor Employment and 
subject to national standards established by the latter. 
(b) 
The Secretary of Labor and Employment may, through appropriate 
regulations, collect reasonable fees for the inspection of steam boilers, pressure vessels 
and piping and electrical installations, the test and approval for safe use of materials, 
equipment and other safety devices, and the approval of plans for such materials, 
equipment and deVices. The fees so collected shall be deposited in the national 
treasury to the credit of the occupational safety and health fund and shall be expended 
exclusively for the administration and enforcement of safety and other labor laws 
administered by the Department of Labor and Employment. 
(c) 
The Department of Labor and Employment shall be the principal agency in 
coordinating and monitoring the activities of all laws to promote occupational safety and 
health. 
The Secretary of Labor and Employment shall issue rules and regulations 
necessary to implement this provision for purposes of this title. The term "Occupational 
Safety and Health" shall include any matter that affects the safety and health of workers 
in all places of employment. 
(d) 
In addition to the penalties provided for by existing laws, the Department 
of Labor and Employment may, by appropriate regulations, prescribe administrative 
fines for violations of occupational safety and health standards or regulations 
promulgated thereunder which in no case shall be less than One Hundred Pesos 
(~100.00) nor more than Ten Thousand Pesos (~10,OOO.OO) a day, depending upon the 
gravity of the violation uncovered until the same has been corrected by the offender. 
The fines shall accrue to the State Investment Compensation Fund and shall be 
managed by the Employees Compensation Commission which shall be used to 
implement programs and promote research and training in occupational safety and 
health. (Art. 165-a) 
, 
TITLE II 
EMPLOYEES' COMPENSATION AND STATE INsURANCE FUND 
CHAPTER I 
POLICY AND DEFINITIONS 
ARTICLE 167. Policy. -
The State shall promote and develop a tax-exempt 
employees' compensation program whereby employees and their dependents, in the 
event of work-connected disability or death, may promptly secure medical or related 
benefits and lump-sum income benefits. 
It shall 
initiate policies and undertake 
programs on rehabilitation. ( Art.166-a) 
ARTICLE 168. Definition of Terms - As used in this Title, unless the context 
indicates otherwise: 
(a) 
"Code" means the Labor Code of the Philippines instituted under 
Presidential Decree numbered four hundred forty-two, as amended. 
(b) 
"Commission" means the Employees' Compensation Commission created 
under this Title. 
54 


• 
(c) 
"SSS" means the Social Security System created under Republic Act 
numbered Eleven Hundred Sixty-One, as amended. 
(d) 
"GSIS" means the Government Service Insurance System created under 
Commonwealth Act Numbered One Hundred Eighty-Six, as amended. 
(e) 
"System" means the SSS or GSIS, as the case may be. 
(f) 
"Employer" means any person, natural or juridical, employing the services 
of the employee. 
, 
(g) 
. "Employee" means any person compulsorily covered by the GSIS under 
Commonwealth Act Numbered One Hundred Eighty-Six, as amended, including 
members of the Armed Forces of the Philippines, and any person employed as casual, 
emergency, temporary, substitute or contractual; or any person compulsorily covered by 
the SSS under Republic Act Numbered Eleven Hundred Sixty-One, as amended. 
(h) 
"Person" means any individual, partnership, firm, association, trust, 
corporation or legal representative thereof. 
(i) 
"Dependent" (For SSS) - The dependents shall be the following: 
(1) 
The legal spouse entitled by law to receive support from the member; 
(2) 
The legitimate, legitimated or legally adopted, and illegitimate child who is 
unmarried, not gainfully employed and has not reached twenty-one (21) years of age, or 
if over twenty-one (21) years of age, he is congenitally or while still a minor has been 
permanently incapacitated and incapable of self-support, physically or mentally; and 
(3) 
The parent who is receiving regular support from the member. 
(For GSIS) - The dependents shall be the following: 
(a) 
Legitimate spouse dependent for support upon the member or pensioner; 
(b) The legitimate, legitimated, legally adopted child, including the illegitimate 
child, who is unmarried, not gainfully employed, and has not reached twenty-one years 
of age, or if over twenty-one years of age, he is incapacitated and incapable of self-
support due to a mental or physicial defect acquired prior to the age of twenty-one 
years; and 
(c) The parents dependent upon the member for support. 
(J) "Beneficiaries" (For the SSS). -
The dependent spouse until he or she 
remarries, the 
dependent legitimate, legitimated or legally adopted, and illegitimate children, who shall 
be the primary beneficiaries of the member: Provided, that the dependent illegitimate 
children shall be entitled to fifty percent (50%) of the share of the legitimate, legitimated 
or legally adopted children; Provided, Further, That in the absence of the dependent 
legitimate, legitimated or legally adopted children of the member, his/her dependent 
illegitimate 'children shall be entitled to one hundred percent (100%) of the benefits. In 
their absence, the dependent parents who shall be the secondary beneficiaries of the 
member. 
55 


(For the GSIS). -
Primary beneficiaries as the legal dependent spouse until 
he/she remarries and the dependent children, and secondary beneficiaries as the 
dependent parents and subject to restrictions on dependent children, the legitimate 
dependants. 
(k) "Injury" means any harmful change in the human organism from any accident 
arising out of and in the course of employment. 
(I) "Sickness" means any illness definitely accepted as an occupational disease 
listed by the Commission, or any illness arising out of or aggravated by his employment. 
Any illness, the etiology or cause of which is still undetermined or unknown, shall be 
made compensable if acquired by the employee during his employment. 
For this 
purpose, the Commission is empowered to determine and approve occupational 
diseases and work-related illnesses that may be considered compensable based on 
peculiar hazards of employment. 
(m) "Death" means loss of life resulting from injury or sickness. 
(n) 
"Disability" means loss or impairment of a physical or mental function 
resulting from injury or sickness. 
(0) 
"Compensation" means all payments made under this Title for income 
benefits and medical or related benefits. 
(p) 
"Income benefit" means all payments made under this Title to the 
employee or his dependents. 
(q) 
. "Medical benefit" means all payments made under this Title to the 
providers .of medical care, rehabilitation services and hospital care. 
(r) 
"Related benefit" means all payments made under this Title for appliances 
and supplies. 
(s) 
"Appliances" means crutches, artificial aids and other similar devices and 
their replacement or repair except when the need for such replacement or repair arises 
from the fault of the employee. 
(t) 
"Supplies" means medicine and other medical, dental or surgical items. 
(u) 
"Hospital" means any medical facility, government or private, authorized 
by law, an active member of good standing of the Philippine Hospital Association and 
accredited by the Commission. 
(v) 
"Physician" means any doctor of medicine duly licensed to practice in the 
Philippines, an active member in good standing of the Philippine Medical Association 
and accredited by the Commission. 
(w) 
"Wages" or "Salary" insofar as they refer to the computation of benefits, as 
defined in Republic Act No. 1161, as amended, for SSS and Presidential Decree No. 
1146, as amended, for GSIS, respectively, except that part in excess of Twelve 
Thousand Pesos (1212,000.00). 
(x) 
"Monthly salary credit" means the wage or salary base for contributions as 
provided in Republic Act numbered Eleven Hundred Sixty-One, as amended, or the 
wages or salary. 
56 


(For SSS) Average Monthly Salary Credit. - The result obtained by dividing the 
sum of the last sixty (60) monthly salary credit immediately preceding the semester of 
contingency by sixty (60), or the result obtained by dividing the sum of all the monthly 
salary credit paid prior to the semester of contingency by the number of monthly 
contributions'paid in the same period, whichever is greater, Provided, that if the injury or 
sickness caused the disability, it shall be deemed as 
permanent disability for the 
purpose of computing the average monthly salary credit. 
In the case of the GSIS, current daily compensation. 
(aa) 
"Quarter" means a period of three (3) consecutive months ending on the 
last day of March, June, September and December. 
(bb) 
"Semester" means a period of two consecutive quarters ending in the 
quarter of death, permanent disability, injury or sickness. 
(cc) 
"Credited years of service". -
For a member covered prior to January 
nineteen hundred eighty five (1985) minus the calendar year of coverage plus the 
number of calendar years in which six (6) or more contributions have been paid from 
January nineteen hundred eighty five (1985) up to the calendar year containing the 
semester prior to the contingency. For a member covered in or after January nineteen 
hundred eighty five (1985), the number of calendar years in which six (6) or more 
contributions have been paid from the year of coverage up to the calendar year 
containing the semester prior to the contingency: Provided, That the Commission may 
provide for a different number of contributions in a calendar year for it to be considered 
as a credited year of service. 
(dd) 
"Monthly Income Benefit" means the highest of the following amounts: 
(1) 
The sum of the following: 
(i) 
three hundred pesos (~300.00); plus 
(ii) 
twenty per cent (20%) of the average monthly salary credit; plus 
(iii) 
two per cent (2%) of the average monthly salary credit for each 
credited year of service in excess often (10) years; or 
(2) 
Forty percent (40%) of the average monthly salary credit; or 
(3) 
One thousand pesos (~1,OOO). (Art.167-a) 
TITLE II 
EMPLOYEES' COMPENSATION AND STATE INSURANCE FUND 
, 
CHAPTER II 
COVERAGE AND LIABILITY 
ARTICLE 169. 
Compulsory coverage. -
Coverage in the State Insurance 
Fund shall be compulsory upon all employers and their employees not over seventy 
(70) years of age: Provided, That an employee who is over sixty (60) years of age and 
paying contributions to qualify for the retirement or life insurance benefit administered 
by the System shall be subject to compulsory coverage. (Art. 168-a) 
57 


ARTICLE 170. 
Foreign employment. -
The Commission shall ensure 
adequate coverage of Filipino employees employed abroad, subject to regulations as it 
may prescribe. 
ARTICLE 171. 
Effective date of coverage. -
Compulsory coverage of the 
employer during the effectivity of this Title shall take effect on the first day of his 
operation, and that of the employee on the date of his employment. 
ARTICLE 172. 
Registration. -
Each employer and his employees shall 
register with the System in accordance with its regulations. 
ARTICLE 173. 
Limitation of liability. -
The State Insurance Fund shall be 
liable for compensation to the employee or his dependents, except when the disability 
or death was occasioned by the employee's intoxication, willful intention to injure or kill 
himself or another, notorious negligence, or otherwise provided under this Title. 
ARTICLE 174. - Extent of Liability. - The employee or his heirs shall have the 
right to avail themselves of the benefits under this Code and to sue the employer in the 
regular courts under the Civil Code for damages by reason. of the employer's 
negligence. The payment of compensation under this Title shall not bar the recovery of 
benefits as provided for in the Administrative Code of 1987, R.A. No. 8282, R.A. No. 
8291, 
and other laws whose benefits are administered by the System or by other 
agencies of-the government (Art.173-a) 
ARTICLE 175. 
Liability of third parties. -
(a) When the disability or death 
is caused by circumstances creating a legal liability against a third party, the disabled 
employee or the dependents in case of his death shall be paid by the System under this 
Title. In case benefit is paid under this Title, the System shall be subrogated to the 
rights of the disabled employee or the dependents in case of his death, in accordance 
with the general law. 
(b) 
Where the System recovers from such third party damages in excess of 
those paid or allowed under this Title, such excess shall be delivered to the disabled 
employee or other persons entitled thereto, after deducting the cost of proceedings and 
expenses of the System. 
ARTICLE 176. 
Deprivation of benefits. -
Except as otherwise provided 
under this Title, no contract, regulation or device whatsoever shall operate to deprive 
the employee or his dependents of any part of the income benefits and medical or 
related services granted under this Title. Existing medical services being provided by 
the employer shall be maintained and continued to be enjoyed by their employees. 
TITLE II 
EMPLOYEES' COMPENSATION AND STATE INSURANCE FUND 
CHAPTER III 
ADMINISTRATION 
ARTICLE 177. Employees' Compensation Commission.-
(a) To initiate, rationalize, and coordinate the policies of the employees' 
compensation program, the Employees' Compensation Commission is hereby created 
58 


to be comp'osed of five ex-officio members, namely: the Secretary of Labor and 
Employme'nt as Chairman, the GSIS President and 
General Manager, the SSS 
President, the Executive Director of the Occupational Safety and Health Center, and 
the Executive Director of the ECC Secretariat, and six (6) appointive members, two of 
whom shall represent the employees, two from the employers, and the other two from 
the general public, to be appointed by the President of the Philippines for a term of six 
years, 
The appointive member shall have at least five (5) years experience in 
workmen's compensation, social security or public health programs. All vacancies shall 
be filled for the unexpired term only. 
(b) 
The Vice Chairman of the Commission shall be alternated each year 
between the GSIS President and 
General Manager and the SSS President. 
The 
presence of six (6) members shall constitute a quorum. Each member shall receive a 
per diem of two thousand five hundred pesos (P-2,500.00) for every meeting that is 
actually attended by him, exclusive of actual, ordinary and necessary travel and 
representation expenses, In his absence, any member may deSignate an official of the 
institution he serves on full-time basis as his representative to act in his behalf. 
(c) The general conduct of the operations and management functions of the 
GSIS or SSS under this Title shall be vested in its respective chief executive officers, 
who shall be immediately responsible for carrying out the poliCies of the Commission. 
(Art.176-a) 
ARTICLE 178. 
Powers and duties, -
The Commission shall have the 
following powers and duties: 
(a) 
To assess and fix a rate of contribution from all employers; 
(b) 
To determine the rate of contribution payable by an employer whose 
records show a high frequency of work accidents or occupational diseases due to failure 
by the said employer to observe adequate safety measures; 
(c) 
To approve rules and regulations governing the processing of claims and 
the settlement of disputes arising therefrom as prescribed by the System; 
(d) 
,To initiate policies and programs toward adequate occupational health and 
safety and ,accident prevention in the working environment, rehabilitation other than 
those 
pr~)Vided for under ARTICLE 191 hereof, and other related programs and 
activities, and to appropriate funds therefor; 
(e) 
To make the necessary actuarial studies and calculations concerning the 
grant of constant help and income benefits for permanent disability or death, and the 
rationalization of the benefits for permanent disability and death under the Title with 
benefits payable by the System for similar contingencies: Provided, that the 
Commission may upgrade benefits and add new ones, subject to approval of the 
President; and Provided, further, That the actuarial stability of the State Insurance Fund 
shall be guaranteed: Provided, finally, that such increases in benefits shall not require 
any increases in contribution, except as provided for in paragraph (b) hereof; 
(f) 
To appoint the personnel of its staff, subject to civil service law and rules, 
but exempt from WAPCO law and regulations; 
59 


(g) 
To adopt annually a budget of expenditures of the Commission and its 
staff chargeable against the State Insurance Funds: Provided, that the SSS and GSIS 
shall advance on a quarterly basis the remittances of allotment of the loading fund for 
this Commissions operational expenses based on its annual budget as duly approved 
by the Department of the Budget and Management; 
(h) 
To have the power to administer oath and affirmation, and to issue 
subpoena and subpoena duces tecum in connection with any question or issue arising 
from appealed cases under this Title; 
(i) 
To sue and be sued in court; 
U) 
To acquire property, real or personal, which may be necessary or 
expedient for the attainment of the purposes of this Title; 
(k) 
,To enter into agreements or contracts for such services and aid as may be 
needed for t.he proper, efficient and stable administration of the program; and 
(I) 
To perform such other acts as it may deem appropriate for the attainment 
of the purposes of the Commission and proper enforcement of the provisions of this 
Title. 
ARTICLE 179. 
Management of funds. -
All revenues collected by the 
System under this Title shall be deposited, invested, administered and disbursed in the 
same manner and under the same conditions, requirements and safeguards as 
provided by Republic Act numbered eleven hundred sixty-one, as amended, and 
Commonwealth Act numbered one hundred eighty-six, as amended, with regard to such 
other funds as are thereunder being paid to or collected by the SSS and GSIS, 
respectively: Provided, That the Commission, SSS and GSIS may disburse each year 
not more than 12 per cent of the contributions and investment earnings collected for 
operational expenses, including occupational health and safety programs, incidental to 
the carrying out of this Title. 
ARTICLE 180. 
Investment of funds. -
Provisions of existing laws to the 
contrary notWithstanding, all revenues as are not needed to meet current operational 
expenses under this Title shall be accumulated in a fund to be known as the State 
Insurance Fund, which shall be used exclusively for payment of the benefits under this 
Title, and no amount thereof shall be used for any other purpose. All amounts accruing 
to the State Insurance Fund, which is hereby established in the SSS and the GSIS, 
respectively, shall be deposited with any authorized depository bank approved by the 
Commission, or invested with due and prudent regard for the liquidity needs of the 
System. 
ARTICLE 181. 
Settlement of claims. -
The System shall have original 
and exclusive jurisdiction to settle any dispute arising from this Title with respect to 
coverage, entitlement to benefits, collection and payment of contributions and penalties 
thereon, or any other matter related thereto, subject to appeal to the Commission, which 
shall decide appealed cases within 20 working days from the submission of the 
evidence. 
ARTICLE 182. 
Review. -
DeciSions, 
orders or resolutions of the 
Commission may be reviewed on certiorari by the Supreme Court only on questions of 
law upon petition of an aggrieved party within 10 days from notice thereof. 
60 


ARTICLE 183. 
Enforcement of decisions. -
(a) Any decision, order or 
resolution of the Commission shall become final and executory if no appeal is taken 
therefrom within 10 days from notice thereof. All awards granted by the Commission in 
cases appealed from decisions of the System shall be effected within 15 days from 
receipt of notice. 
(b) 
In all other cases, decisions, orders and resolutions of the Commission 
which have become final and executory shall be enforced and executed in the same 
manner as decisions of the Regional Trial Court, and the Commission shall have the 
power to issue to the city or provincial sheriff or to the sheriff whom it may appoint such 
writs of execution as may be necessary for the enforcement of such decisions, orders or 
resolutions, and any person who shall fail or refuse to comply therewith shall, upon 
application by the Commission, be punished by the proper court for contempt. 
TITLE II 
EMPLOYEES' COMPENSATION AND STATE INSURANCE FUND 
CHAPTER IV 
CONTRIBUTIONS 
ARTICLE 184. 
Employer's contributions. -
(a) Under such regulations as 
the System may prescribe, beginning as of the last day of the month when an 
employee's compulsory coverage takes effect and every month thereafter during his 
employment, his employer shall prepare to remit to the System a contribution equivalent 
to one percent of his monthly salary credit. 
(b) 
The rate of contribution shall be reviewed periodically and, subject to the 
limitations herein provided, may be revised as the experience in risk, cost of 
administration, and actual or anticipated as well as unexpected losses, may require. 
, 
(c) 
Contributions under this Title shall be paid in their entirety by the employer 
and any contract or devise for the deduction of any portion thereof from the wages or 
salaries of the employees shall be null and void. 
(d) 
When a covered employee dies, becomes disabled or is separated from 
employment, his obligation to pay the monthly contribution arising from the employment 
shall cease at the end of the month of contingency and during such months that he is 
not receiving wages or salary. 
ARTICLE 185. 
Government guarantee. -
The Republic of the Philippines 
guarantees the benefits prescribed under this Title, and accepts general responsibility 
for the solvency of the State Insurance Fund. In case of any deficiency, the same shall 
be covered by supplemental appropriations from the national government. 
TITLE II 
EMPLOYEES' COMPENSATION AND STATE INSURANCE FUND 
CHAPTER V 
MEDICAL BENEFITS 
61 


ARTICLE 186. 
Medical services. -
Immediately after an employee 
contracts sickness or sustains an injury, he shall be provided by the System during the 
subsequent period of his disability with such medical services and appliances as the 
nature of his sickness or injury and progress of his recovery may require, subject to the 
expense limitation prescribed by the Commission. 
ARTICLE 187. 
Liability. -
The System shall have the authority to choose 
or order a change of physician, hospital or rehabilitation facility for the employee, and 
shall not be liable for compensation for any aggravation of the employee's inJury or 
sickness res,ulting from unauthorized changes by the employee of medical services, 
appliances, supplies, hospitals, rehabilitation facilities or physicians. 
ARTICLE 188. 
Attending physician. -
Any physician attending an injured 
or sick employee shall comply with all the regulations of the System and submit reports 
in prescribed forms at such time as may be required concerning his condition or 
treatment. All medical information relevant to the particular injury or sickness shall on 
demand be made available to the employee or the System. 
No information developed in connection with treatment or examination for which 
compensation sought shall be considered as privileged communication. 
ARTICLE 189. 
Refusal of examination or treatment. -
If the employee 
unreasonably refuses to submit to medical examination or treatment the System shall 
stop the payment of further compensation during such time as such refusal continues. 
What constitutes an unreasonable refusal shall be determined by the System which, 
may on its own initiative determine the necessity, character, and sufficiency of any 
medical services furnished or to be furnished. 
ARTICLE 190. 
Fees and other charges. -
All fees and other charges for 
hospital services, medical care and appliances, including professional fees, shall not be 
higher than those prevailing in wards of hospitals for similar services to injured or sick 
persons in general, and shall be subject to the regulations of the Commission. 
Professional fees shall only be appreciably higher than those prescribed under Republic 
Act number sixty-one hundred eleven, as amended, otherwise known as the Philippine 
Medical Care Act of 1969. 
ARTICLE 191. 
Rehabilitation services. -
(a) The System shall establish a 
continuing program for the rehabilitation of injured and handicapped employees, who 
shall be entitled to rehabilitation services, which shall consist of medical, surgical or 
hospital treatment, including appliances if he has been handicapped by the injury, to 
help him become physically independent. 
(b) 
The System shall establish centers equipped and staffed to provide a 
balanced program of remedial treatment, vocational assessment and preparation 
designed to meet the individual needs of each handicapped employee to restore him to 
suitable employment, including assistance as may be within its resources to help each 
rehabilitee to develop his mental, vocational or social potential. (Art.190-a) 
TITLE II 
EMPLOYEES' COMPENSATION AND STATE INSURANCE FUND 
CHAPTER VI 
DISABILITY BENEFITS 
62 


ARTICLE 192 .• Temporary total disability. - (a) Under such regulations as 
the Commission may approve, any employee under this Title who sustains an injury or 
contracts sickness resulting in temporary total disability shall, for each day of such 
disability or fraction thereof, be paid by the System an income benefit equivalent to 
ninety (90) percent of his average daily salary credit, subject to the following conditions: 
the daily income benefit shall not be less than one hundred (~100.00) Pesos nor more 
than three hundred (~300.00) Pesos, nor paid for a continuous period longer than two 
hundred forty days, except as otherwise provided for in the Rules, and the System shall 
be notified of the injury or sickness. 
(b) the payment of such income benefit shall be in accordance with the 
regulations of the Commission. (Art.191-a) 
ARTICLE 193. Permanent Total Disability. -
(a) Under such rules as the 
Commission may approve, any employee under this Title who contracts sickness or 
sustains an injury resulting in his permanent total disability shall be paid by the System 
a lump sum amount equivalent to the monthly income benefit times sixty (60) but in no 
case less than sixty thousand pesos 
(~60,000.00) nor more than two hundred forty 
thousand pesos (~240,000.00), over and above whatever lump sum or pension benefits 
he may have received under other applicable social security programs 
(b) The following disabilities shall be deemed total and permanent: 
(1) Temporary total disability lasting continuously for more than two hundred 
forty (240) days, except as otherwise provided for in the Rules; 
(2) Complete loss of sight of both eyes; 
(3). Loss of two (2) limbs at or above the ankle or wrist; 
(4) Permanent complete paralysis of two (2) limbs; 
(5) Brain injury resulting in incurable imbecility or insanity; and 
(6) Such cases as determined by the Medical Director of the System and 
approved by the Commission. (Art.192-a) 
ARTICLE 194. Permanent Partial Disability. -
(a) Under such regulations as 
the System may approve, any employee under this Title who contracts sickness or 
sustains an injury resulting in permanent partial disability shall be paid by the System a 
lump-sum amount equivalent to the percentage of the permanent loss times the lump-
sum amount for total permanent disability. 
(b) The benefit shall be paid in accordance with the following schedule-
Complete and Permanent 
Loss of the use of 
One thumb 
One index finger 
One middle finger 
One ring finger 
One little finger 
One big toe 
63 
Benefit 
PERCENTAGE 
17% 
13 
10 
8 
5 
10 


Any toe 
5 
One arm 
83 
One hand 
65 
One foot 
52 
One leg 
77 
One ear 
17 
Both ears 
34 
Hearing of one ear 
17 
Hearing of both ears 
34 
Sight of one eye 
42 
(c) A loss of a wrist shall be considered as loss of the hand, and a loss of an 
elbow shall be considered as a loss of the arm. A loss of an ankle shall be considered 
as a loss of the foot, and a loss of a knee shall be considered as a loss of the leg. A 
loss of more than one (1) joint shall be considered as a loss of the whole finger or toes, 
and a loss of only the first joint shall be considered as loss of one-half (1/2) of the whole 
finger or toe: Provided, that such a loss shall be either the functional loss of the use or 
physical loss of the member. 
(d) In cases of injuries or illnesses resulting in a permanent partial disability not 
listed in the preceding schedule, the benefit shall be an income benefit equivalent to the 
percentage of the permanent loss of the capacity to work times the lump sum amount 
for permanent total disability. 
(Art.193-a) 
TITLE II 
EMPLOYEES' COMPENSATION AND STATE INSURANCE FUND 
CHAPTER VII 
DEATH BENEFITS 
ARTICLE 
195. Death - (a) Under such regulation as the Commission may 
approve, The System shall pay to the primary beneficiaries upon the death of the 
covered employee under this Title the lump sum benefit for permanent total disability 
as specified in Art. 192 Provided, however, that if he has no primary beneficiary, the 
System shall pay to his secondary beneficiaries fifty (50) percent of the lump sum 
benefit for permanent total disability as specified in Art. 193. 
(b) The 
Lump-Sum benefit provided herein shall be the new amount of the 
income benefit for the surviving beneficiaries upon the approval of this Act. 
(c) 
f:uneral Benefit. - A funeral benefit in an amount as the 
System may 
approve, but not less than twenty thousand (P-20,000) pesos, shall be paid upon the 
death of a covered employee or a permanently totally disabled pensioner. (Art.194-a) 
TITLE II 
EMPLOYEES' COMPENSATION AND STATE INSURANCE FUND 
CHAPTER VIII 
64 


PROVISIONS COMMON TO INCOME BENEFITS 
ARTICLE 196. 
Relationship and dependency. -
All 
questions of 
relationship and dependency shall be determined as of the time of death. 
ARTICLE 
197. 
Delinquent contributions. -
(a) An employer who is 
delinquent in his contributions shall be liable to the System for the benefits which may 
have been paid by the System to his employees or their dependents and any benefit 
and expenses to which such employer is liable shall constitute a lien on all his property, 
real or personal, which is hereby declared to be preferred to any credit except taxes. 
The payment by the employer of the lump sum equivalent of such liability shall absolve 
him from the payment of the delinquent contribution and penalty thereon with respect to 
the employee concerned. 
(b) 
Failure or refusal of the employer to payor remit the contributions herein 
prescribed shall not prejudice the right of the employee or his dependents to the 
benefits under this Title. If the sickness, injury, disability or death occurs before the 
System receives any report of the name of his employee, the employer shall be liable to 
the System for the lump sum equivalent of the benefits to which such employee or his 
dependents ,may be entitled. 
ARTICLE 198. 
Second injuries. -
If any employee under permanent partial 
disability 'suffers another injury which results in a compensable disability greater than 
the previous injury, the State Insurance Fund shall be liable for the income benefit of the 
new disability: Provided, That if the new disability is related to the previous disability, the 
System shall be liable only for the difference in income benefits. 
ARTICLE 199. 
Assignment of benefits. -
No claim for compensation under 
this Title is transferable, or liable to tax, attachment, garnishment, levy or seizure by or 
under any legal process whatsoever, either before or after receipt by the person or 
persons entitled thereto, except to pay any debt of the employee to the System. 
ARTICLE 200. 
Earned benefits. -
Income benefits shall, with respect to any 
period of disability, be payable in accordance with this Title to an employee who is 
entitled to receive wages, salaries or allowances for holidays, vacation or sick leaves, 
and any award or benefit under a collective bargaining or other agreement. 
ARTICLE 201. 
Safety devices. -
In case the employee's injury or death was 
due to the failure of the employer to comply with any law, or to install and maintain 
safety devices, or take other precautions for the prevention of injury, said employer shall 
pay to the State Insurance Fund a penalty of 25 per cent of the lump sum equivalent of 
the income benefit payable by the System to the employee. All employers, especially 
those who should have been paying a rate of contribution higher than that required of 
them under this Title, are enjoined to undertake and strengthen measures for the 
occupational health and safety of their employees. 
ARTICLE 202. 
Prescriptive Period. -
No claim shall be given due course 
unless said claim is filed with the System within ten (10) years from the time the cause 
of action accrued. (Art. 201-a) 
ARTICLE 203. 
Erroneous payment. -
(a) If the System in good faith pays 
income benefit to a dependent who is inferior in right to another dependent or with 
whom another dependent is entitled to share, such payments shall discharge the 
65 


System from liability, unless and until such other dependent notifies the System of his 
claim prior to the payments. 
(b) 
In case of doubt as to the respective rights of rival claimants, the System 
is hereby empowered to determine as to whom payment should be made in accordance 
with such regulations as the Commission may approve. If the money is payable to a 
minor or incompetent, payment shall be made by the System to such person or persons 
as it may consider to be best qualified to take care and dispose of the minor's or 
incompetent's property for his benefit. 
ARTICLE 204. 
Prohibition. -
No agent, attorney or other person pursuing 
or in charge of the preparation or filing of any claim for benefit under this Title shall 
demand or charge for his services any fee, and any stipulation to the contrary shall be 
null and void. The retention or deduction of any amount from any benefit granted under 
this Title for the payment of fees of such services is prohibited. Violation of any 
provision of this Article shall be punished by a fine of not less than five hundred pesos 
nor more than five thousand pesos, or imprisonment for not less than six months nor 
more than one year, or both, at the discretion of the court. 
ARTICLE 205. 
Exemption from levy, tax, etc. -
All laws to the contrary 
notwithstanding, the State Insurance Fund and all its assets shall be exempt from any 
tax, fee, charge, levy or customs or import duty, and no law hereafter enacted shall 
apply to the State Insurance Fund unless it is provided therein that the same is 
applicable by expressly stating its name. 
TITLE II 
EMPLOYEES' COMPENSATION AND STATE INSURANCE FUND 
CHAPTER IX 
RECORDS, REPORTS AND PENAL PROVISIONS 
ARTICLE 206. 
Records of death or disability. -
(a) All employers shall 
keep a logbook to record chronologically the sickness, injury or death of their 
employees, setting forth therein their names, dates and places of the contingency, 
nature of the contingency and absences. Entries in the logbook shall be made within 
five days from notice or knowledge of the occurrence of the contingency. Within five 
days after the entry in the logbook, the employer shall report to the System only those 
contingencies it deems to be work connected. 
(b) 
All entries in the employer's logbook shall be made by the employer or any 
of his authorized official after verification of the contingencies or the employee's 
absences for a period of a day or more. Upon request by the System, the employer 
shall furnish the necessary certificate regarding information about any contingency 
appearing in the logbook, citing the entry number, page number and date. Such logbook 
shall be made available for inspection to the duly authorized representative of the 
System. 
(c) 
Should any employer fail to record in the logbook an actual sickness, 
injury or death of any of his employees within the period prescribed herein, give false 
information or withhold material information already in his possession, he shall be held 
liable for 50 per cent of the lump sum equivalent of. the income benefit to which the 
66 


employee may be found to be entitled, the payment of which shall accrue to the State 
Insurance Fund. 
(d) 
In case of payment of benefits for any claim which is later determined to 
be fraudulent and the employer is found to be a party to the fraud, such employer shall 
reimburse the System the full amount of the compensation paid. 
ARTICLE 207. 
Notice of sickness, injury or death. -
Notice of sickness, 
injury or death shall be given to the employer by the employee or by his dependents or 
anybody on his behalf within five days from the occurrence of the contingency. No 
notice to the employer shall be required if the contingency is known to the employer or 
his agents or representatives. 
ARTICLE 208. 
Penal provisions. -
(a) The penal provisions of Republic 
Act numbered eleven hundred sixty-one, as amended, and Commonwealth Act 
numbered one hundred eighty-six, as amended, with regard to the funds as are 
thereunder .being paid to, collected or disbursed by the System, shall be applicable to 
the collec.tion, administration and disbursement of the funds under this Title. The penal 
provisions on coverage shall also be applicable. 
(b) 
Any person, who for the purpose of securing entitlement to any benefit or 
payment under this Title or the issuance of any certificate or document for any purpose 
connected with this Title, whether for him or for some other person, commits fraud, 
collusion, falsification, misrepresentation of facts or any other kind of anomaly shall be 
punished with a fine of not less than five hundred pesos nor more than five hundred 
thousand pesos and an imprisonment for not less than six months nor more than one 
year, at the discretion of the court. 
(c) 
If the act penalized by this Article is committed by any person who has 
been or is employed by the Commission or System, or a recidivist, the imprisonment 
shall not be less than one year; if committed by a lawyer, physician or other 
professional, he shall in addition to the penalty prescribed herein be disqualified from 
the practice of his profession; and if committed by any official, employee or personnel of 
the Commission, System or any government agency, he shall in addition to the penalty 
prescribed herein be dismissed with prejudice to reemployment in the government 
service. 
ARTICLE. 209. Applicability. - Settlement of employees' compensation 
claims - All employees' claims for medical and related benefits and for income benefits 
shall be processed, determined and settled in accordance with such laws, rules and 
regulations existing at the time their cause of action accrued. (Art.208-a) 
ARTICLE 210. Implementing rules and regulations. 
The rules and 
regulations to implement the provisions of this Title shall be adopted and promulgated 
by the Commission not later than three (3) months after the approval of this Act. 
TITLE III 
PHILHEALTH 
ARTICLE 211. 
Medical Care. -
The Philippine Medical Care Plan shall be 
implemented as provided under Republic Act numbered sixty-one hundred eleven, as 
amended. 
67 


TITLE IV 
ADULT EDUCATION 
ARTICLE 212. 
Adult education. -
Every employer shall render assistance 
in the establishment and operation of adult education programs for their workers and 
employees as prescribed by regulations approved by the Technical Education and Skills 
Development Authority (TESDA). (Art.210-a) 
BOOK FIVE 
LABOR RELATIONS 
TITLE I 
POLICY AND DEFINITIONS 
CHAPTER I 
POLICY 
ARTICLE 213. Declaration of policy: a. The State shall ensure the fullest 
possible exercise of the rights of all workers to self-organization, collective bargaining 
and negotiations, and peaceful concerted activities, including the right to strike in 
accordance with law. 
b. All workers shall participate in policy and decision-making processes affecting 
their rights and benefits as may be provided by law. 
c. The State shall promote the principle of shared responsibility between workers 
and employers and the preferential use of voluntary modes in settling disputes, 
including conciliation, and shall enforce their mutual compliance therewith to foster 
industrial peace. 
No labor dispute arising from employer-employee relationship shall be under 
the jurisdiction of the National Labor Relations Commission until all the efforts to 
resolve such labor dispute at the work place by the grievance machinery or by 
conciliation in accordance with the rules and regulations promulgated by the Secretary 
of Labor and Employment have failed. 
d. To encourage a truly democratic method of regulating the relations between 
the employers and employees by means of agreements freely entered into through 
collective bargaining, no court or administrative agency or official shall have the power 
to set or fix wages, rates of pay, hours of work or other terms and conditions of 
employment, except as otherwise provided under this Code. (Art.211-a) 
ARTICLE 214. Tripartism and tripartite conferences •• (a) Tripartism in 
labor relations is hereby declared a State policy. Towards this end, workers and 
employers shall, as far as practicable, be represented in decision and policy-making 
bodies of the government. 
(b) 
The Secretary of Labor and Employment or his duly authorized 
representatives may from time to time call a national, regional, or industrial tripartite 
conference of representatives of government, workers and employers for the 
68 


consideration and adoption of voluntary codes of principles designed to promote 
industrial peace based on social justice or to align labor movement relations with 
established priorities in economic and social development. In calling such conference, 
the Secretary of Labor and Employment may consult with accredited representatives of 
workers and employers. (Art.275-a) 
TITLE I 
POLICY AND DEFINITIONS 
CHAPTER II 
DEFINITIONS 
ARTICLE 215. 
Definitions. -
(a) "Department" means the Department of Labor and Employment. "Secretary" 
refers to the Head of the Department. 
(b) "Commission" means the National Labor Relations Commission or any of its 
divisions. 
(c) "Bureau" means the Bureau of Labor Relations and/or the Labor Relations 
Divisions in the regional offices of the Department. 
(d) "Board" means the National Conciliation and Mediation Board established 
under Executive Order No. 126. 
(e) "Council" means the Tripartite Voluntary Arbitration Advisory Council 
established under Executive Order No. 126, as amended. 
(f) "Code" means the New Labor Code of the Philippines. 
(g) 
"Employer" includes any person acting in the interest of an employer, 
directly or indirectly. The term shall not include any labor organization or any of its 
officers or agents except when acting as employer. 
(h) "Employee" includes any person in the employ of an employer. The term shall 
not be limited to the employees of a particular employer, unless this Code so explicitly 
. states. It shall include any individual whose work has ceased as a result of or in 
connection with any current labor dispute or because of any unfair labor practice if he 
has not obtained any other substantially equivalent and regular employment. 
(i) "Labor Organization" means any union or association of employees which 
exists in whole or in part for the purpose of collective bargaining or for dealing with 
employers conceming terms and conditions of employment. 
Q) ''\:-egitimate Labor Organization" means any labor organization defined under 
letter (i). hereof which is duly registered with the Department. The term includes a 
local/chapter directly chartered by a federation or national union which has been duly 
reported to the Department. 
69 


• 
• 
(k) "Workers Association" means any association of workers organized for the 
mutual aid and protection of its members or for any legitimate purpose other than 
collective bargaining. 
(I) "Independent Union" means any labor organization operating at the enterprise 
level whose legal personality is derived through an independent action for registration 
prescribed under Article 234 of the Code. An independent union may be affiliated with a 
federation, national or industry union, in which case it may also be referred to as an 
affiliate. 
(m) 
"Local UnionfChapter" means any labor organization operating at the 
enterprise level whose legal personality is derived through the issuance of a charter by 
a duly registered federation or national union. 
(n) 
"National UnionfFederation" means any labor organization with localsf 
chapters or affiliates each of which is a duly recognized or certified collective bargaining 
agent. 
(0) "Legitimate Workers' Association" means any workers association defined 
under letter (K) hereof which is duly registered with the Department. 
(p) "Industry Union" means any group of legitimate labor organizations operating 
within an identified industry organized for collective bargaining or for dealing with 
employers concerning terms and conditions of employment within an industry, or for 
participating in the formulation of social and employment policies, standards and 
programs in such industry, which is duly registered with the Department. 
(q) . "Trade Union Center" means any group of registered national unions or 
federations organized for the mutual aid and protection of its members, for assisting 
such members in collective bargaining, or for participating in the formulation of social 
and employment policies, standards and programs, which is duly registered with the 
Department. 
(r) 
"Company union" means any labor organization whose formation, function 
or administration has been assisted by any act defined as unfair labor practice by this 
Code. 
(s) "Bargaining Unit" refers to a group of employees sharing mutual interest 
within a given employer unit, comprised of all or less than all of the entire body of 
employees in the employer unit or any specific occupational or geographical grouping 
within such employer unit. 
(t) 
"Exclusive 
Bargaining 
Representative" 
means 
any 
legitimate 
labor 
organization duly recognized or certified as the sale and exclusive bargaining agent of 
all the employees in a bargaining unit. 
(u)"Unfair labor practice" means any unfair labor practice as expressly defined by 
this Code. 
(v) 
"Labor or industrial dispute" includes any controversy or matter concerning 
terms or conditions of employment or the association or representation of persons in 
negotiating, fixing, maintaining, changing or arranging the terms and conditions of 
employment, regardless of whether the disputants stand in the proximate relation of 
employer and employee. 
70 


• 
(w) "Managerial employee" is one who is vested with powers or prerogatives to 
lay down and execute management policies and/or to hire, transfer, suspend, lay-off, 
recall, discharge, assign or discipline employees. Supervisory employees are those 
who, in the interest of the employer, effectively recommend such managerial actions if 
the exercise' of such authority is not merely routinary or clerical in nature but requires 
the use of independent judgment. All employees not falling within any of the definitions 
of managerial or supervisory employee are considered rank-and-file employees for 
purposes of this Book. 
(x) "Voluntary Arbitrator" means any person accredited by the Board as such, or 
any person named or designated in the Collective Bargaining Agreement by the parties 
to act as their Voluntary Arbitrator, or one chosen, with or without the assistance of the 
Board, pursuant to a selection procedure agreed upon in the collective bargaining 
agreement. 
(y) "Strike" means any temporary stoppage of work by the concerted action of 
employees as a result of an industrial or labor dispute. 
(z) "Lockout" means the temporary refusal of an employer to furnish work as a 
result of an industrial or labor dispute. 
(aa) "Intra union dispute" refers to any conflict between and among union 
members and includes all disputes or grievances arising from any violation of or 
disagreement over any provision of the constitution and by-laws of a union, including 
cases arising from chartering or affiliation of labor organizations or from any violation of 
the rights and conditions of union membership provided for in this Code. 
(bb) "Inter-Union Dispute" refers to any conflict between and among legitimate 
labor organizations involving questions of representation for purposes of collective 
bargaining. It also includes all other conflicts which legitimate labor organizations may 
have against each other based on any violations of their rights as labor organizations. 
(cc) "Strike breaker" means any person who obstructs, impedes, or interferes 
with by force, violence, coercion, threats or intimidation any peaceful picketing by 
employees during any labor controversy affecting wages, hours or conditions of work or 
in the exercise of the right of self-organization or collective bargaining. 
(dd) "Strike area" means the establishment, warehouses, depots, plants or 
offices, including the sites or premises used as run-away shops, of the employer struck 
against, as well as the immediate vicinity actually used by picketing strikers in moving to 
and fro before all points of entrance to and exit from said establishment. (Art.212-a) 
TITLE II 
NATIONAL LABOR RELATIONS COMMISSION 
CHAPTER I 
CREATION AND COMPOSITION 
ARTICLE 216. 
National Labor Relations Commission. -
There shall be 
a National Labor Relations Commission which shall be attached to the Department of 
Labor and Employment for program and policy coordination only, composed of a 
Chairman and twenty three (23) members. 
71 


Eight (8) members each shall be chosen equally from among the nominees of 
the workers and employers organizations. The Chairman and the seven (7) remaining 
members shall come from the public sector, with the latter to be chosen preferably from 
among the incumbent Labor Arbiters as recommended by the Secretary of Labor and 
Employment. 
Upon assumption into office, the members nominated by the workers and 
employers organizations shall divest themselves of any affiliation with or interest in the 
federation or association to which they belong. 
The Commission may sit en bane or in eight (8) divisions, each composed of 
three (3) members. The Commission shall sit en bane only for purposes of promulgating 
rules and regulations governing the hearing and disposition of cases before any of its 
divisions and regional branches and formulating policies affecting its administration and 
operations. The Commission shall exercise its adjudicatory and all other powers, 
functions, and duties through its divisions. Of the eight (8) divisions, the first, second, 
third, fourth, fifth and sixth divisions shall handle cases coming from the National Capital 
Region and other parts of Luzon and the seventh and eighth divisions, cases from the 
Visayas and Mindanao, respectively: Provided, That the Commission sitting en banc 
may, on temporary and emergency basis, allow cases within the jurisdiction of any 
division to be heard and decided by any other division whose docket allows the 
, 
additional workload and such transfer will not expose litigants to unnecessary additional 
expense. The divisions of the Commission shall have exclusive appellate jurisdiction 
over cases within their respective territorial jurisdiction. 
The concurrence of two (2) Commissioners of a division shall be necessary for 
the pronouncement of a judgment or resolution. Whenever the required membership in 
a division is not complete and the concurrence of two (2) Commissioners to arrive at a 
judgment or resolution cannot be obtained, the Chairman shall designate such number 
of additional Commissioners from the other divisions as may be necessary. 
The conclusions of a division on any case submitted to it for decision shall be 
reached in consultation before the case is assigned to a member for the writing of the 
opinion. It shall be mandatory for the division to meet for purposes of the conSUltation 
ordained therein. A certification to this effect signed by the Presiding Commissioner of 
the division shall be issued, and a copy thereof attached to the record of the case and 
served upon the parties. 
The Chairman shall be the Presiding Commissioner of the first division, and the 
seven (7) other members from the public sector shall be the Presiding Commissioners 
of the second, third, fourth, fifth, sixth, seventh and eighth divisions, respectively. In 
case of the effective absence or 'incapacity of the Chairman, the Presiding 
Commissioner of the second division shall be the Acting Chairman. 
The Chairman, aided by the Executive Clerk of the Commission, shall have 
administrative supervision over the Commission and its regional branches and all its 
personnel, including the Labor Arbiters. 
The Commission, when sitting en banc, shall be assisted by the same Executive 
Clerk, and, when acting thru its divisions, by said Executive Clerk for its first division and 
seven (7) 
other Deputy Executive Clerks for the second, third, fourth, fifth, sixth, 
seventh and eighth diviSions, respectively, in the performance of such similar or 
equivalent functions i3nd duties as are discharged by the Clerk of Court and Deputy 
Clerks of Court of the Court of Appeals. 
72 


The Commission and its eight (8) divisions shall be assisted by the Commission 
Attorneys' in its appel/ate and adjudicatory functions whose term shall be co-terminus 
with the Commissioners with whom they are assigned. The Commission Attorneys shall 
be members of the Philippine Bar with at least one (1) year experience or exposure in 
the field of labor-management relations. They shall receive annual salaries and shall be 
entitled to the same allowances and benefits as those falling under salary grade of 
twenty six (SG 26). 
There shall be as many Commission Attorneys as may be 
necessary for the effective and efficient operation of the Commission but in no case less 
than two (2) assigned to the Office of the Chairman and each Commissioner. (Art.213-
a) 
ARTICLE 217. 
Headquarters, branches and provincial extension units. 
-
The Commission and its first, second, third, fourth, fifth and sixth divisions shall have 
their main offices in Metropolitan Manila, and the seventh and eighth divisions in the 
cities of Cebu and Cagayan de Oro, respectively. The Commission shall establish as 
many regional branches as there are regional offices of the Department of Labor and 
Employment, sub-regional branches or provincial extension units. There shall be as 
many labor Arbiters as may be necessary for the effective and efficient operation of the 
Commission. (Art.214-a) 
ARTICLE 218. 
Appointment and qualifications. -
The Chairman and 
other Commissioners shall be members of the Philippine Bar and must have been 
engaged in the practice of law in the Philippines for at least fifteen (15) years, with at 
least five (5) years experience or exposure in the field of labor-management relations, 
and shall preferably be residents of the region where they are to hold office. The Labor 
Arbiters shall likewise be members of the Philippine Bar and must have been engaged 
in the practice of law in the Philippines for at least ten (10) years, with at least three (3) 
years experience or exposure in the field of labor-management relations, Provided, 
however, that incumbent Executive Labor Arbiters and Labor Arbiters who have been 
engaged in the practice of law for at least five (5) years may be considered as already 
qualified for purposes of reappointment as such under this Act. 
The Chairman, the other Commissioners, and Labor Arbiters shall hold office 
during good behavior until they reach the age of sixty-five (65) years, unless sooner 
removed for cause as provided by law or become incapacitated to discharge the duties 
of their office. 
The Ghairman, the Division Presiding Commissioners and other Commissioners 
shall all be. appointed by the President. Appointment to any vacancy shall come from 
the nomi!1ees of the sector which nominated the predecessor. The Labor Arbiters shall 
also be appointed by the President, upon recommendation of the Secretary of Labor 
and Employment, to specific Arbitration Branches preferably in the regions where they 
are residing and shall be subject to the Civil Service Law, rules and regulations. 
Provided, however, that the incumbent Executive Labor Arbiters and Labor Arbiters who 
are presently holding office in the regions where they are residents shall be given 
preference to be appointed thereat. 
The Secretary of Labor and Employment shall, in consultation with the Chairman 
of the Commission, appoint the staff and employees of the Commission, and its regional 
branches as the needs of the service may require, subject to the Civil Service Law, 
rules and regulations, and upgrade their current salaries, benefits and other 
emoluments in accordance with law. (Art.215-a) 
ARTICLE 219. 
Ranks, salaries, benefits and other emoluments. -
The 
Chairman and members of the Commission shall have the same rank , receive an 
73 


annual salary equivalent to, and be entitled to the same allowances, retirement and 
other benefits and privileges as those of the Presiding Justice and Associate Justices of 
the Court of Appeals, respectively. The Labor Arbiters shall have the same rank, receive 
an annual salary equivalent to and shall be entitled to the same allowances, retirement 
and other benefits and privileges as that of a Judge of the Regional Trial Court In no 
case, however, shall the provision of this Article result in the diminution of existing 
salaries, allowances and benefits of the aforementioned officials. (Art.216-a) 
TITLE II 
NATIONAL LABOR RELATIONS COMMISSION 
CHAPTER II 
POWERS AND DUTIES 
ARTICLE 220. 
Jurisdiction of Labor Arbiters and the Commission. -
(a) Except as otherwise provided under this Code, the Labor Arbiters shall have original 
and exclusive jurisdiction to hear and decide, within thirty (30) calendar days after the 
submission of the case by the parties for decision without extension, even in the 
absence of stenographic notes, the following cases involving all workers, whether 
agricultural or non-agricultural: 
(1) 
Unfair labor practice cases; 
(2) 
Termination disputes except those in organized establishments which 
shall be subject to the grievance machinery and voluntary arbitration; 
(3) 
If accompanied with a claim for reinstatement, those cases that workers 
may file involving wages, rate of pay, hours of work and other terms and conditions of 
employment; 
(4) 
Claims for actual, moral, exemplary and other forms of damages arising 
from the employer-employee relations; 
(5) 
Cases arising from any violation of Article 272 of this Code, including 
questions involving the legality of strikes and lockouts; 
(6) Inter-union disputes; and 
(7) 
Except claims for Employees Compensation, Social Security, Medicare 
and maternity benefits, all other claims arising from employer-employee relations, 
including those of persons in domestic or household service, involving an amount 
exceeding fifty thousand pesos (~50,000.OO), whether or not accompanied with a claim 
for reinstatement. 
(b) 
The Commission shall have exclusive appellate jurisdiction over all cases 
decided by Labor Arbiters. 
(c) 
Cases arising from the interpretation or implementation of collective 
bargaining agreements and those arising from the interpretation or enforcement of 
company personnel policies shall be disposed of by the Labor Arbiter by referring the 
same to th~ grievance machinery and voluntary arbitration as may be provided in said 
agreements. (Art.217 -a) 
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ARTICLE 221. 
the power and authority: 
Powers of the Commission. -
The Commission shall have 
(a) 
To promulgate rules and regulations governing the hearing and disposition 
of cases before it and its regional branches, as well as those pertaining to its internal 
functions and such rules and regulations as may be necessary to carry out the purposes 
of this Code; 
(b) 
To administer oaths, summon the parties to a controversy, issue 
subpoenas requiring the attendance and testimony of witnesses or the production of 
such books, papers, contracts, records, statements of accounts, agreements, and 
others as may be material to a just determination of the matter under investigation, and 
to testify in any investigation or hearing conducted in pursuance of this Code; 
(c) 
To conduct investigation for the determination of a question, matter or 
controversy within its jurisdiction, proceed to hear and determine the disputes in the 
absence of any party thereto who has been summoned or served with notice to appear, 
adjourn its hearings to any time and place, refer technical matters or accounts to an 
expert and to accept his report as evidence after hearing of the parties upon due notice, 
direct parties to be joined in or excluded from the proceedings, correct, amend, or waive 
any error, defect or irregularity, whether in substance or in form, give all such directions 
as it may deem necessary or expedient in the determination of the dispute before it, and 
dismiss any matter or refrain from further hearing or from determining the dispute or 
part thereof, where it is trivial or where further proceedings by the Commission are not 
necessary or desirable; and 
(d) 
To hold any person in contempt direct or indirectly and impose appropriate 
penalties therefor in accordance with law. 
A person guilty of misbehavior in the presence of or so near the Chairman or any 
member of the Commission or any Labor Arbiter as to obstruct or interrupt the 
proceedings before the same, including disrespect toward said officials, offensive 
personalitie~ toward others, or refusal to be sworn or to answer as a witness, or to 
subscribe an affidavit or deposition when lawfully required to do so, may summarily 
adjudged iti direct contempt by said officials and punished by fine not exceeding five 
hundred pesos (j;!500) or imprisonment not exceeding five (5) days, or both if it be the 
Commission or a member thereof, or by a fine not exceeding one hundred pesos (j;!100) 
or imprisonment not exceeding one (1) day, or both if it be a Labor Arbiter. 
The person adjudged in direct contempt by a Labor Arbiter may appeal to the 
Commission and the execution of the judgment shall be suspended pending the 
resolution of the appeal upon the filing of subject person of a bond on condition that he 
will abide by and perform the judgment of the Commission should the appeal be 
decided against him. Judgment of the Commission on direct contempt is immediately 
executory and unappealable. Indirect contempt shall be dealt with by the Commission or 
Labor Arbiter in the manner prescribed under Rule 71 of the Revised Rules of Court. (A, 
Art.218 (e)) 
ARTICLE 222. 
Ocular Inspection. -
The Chairman, any Commissioner, 
Labor Arbiter or their duly authorized representatives may at any time during working 
hours conduct an ocular inspection on any establishment, building, ship or vessel, place 
or premises, including any work, material, implement, machinery, appliance or any 
object therein, and ask any employee, laborer or any person as the case may be for any 
information or data concerning any matter or question relative to the object of the 
investigation. 
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ARTICLE 223. 
Technical rules not binding and prior resort to amicable 
settlement. -
In any proceeding before the Commission or any of the Labor Arbiters, 
the rules of evidence prevailing in courts of law or equity shall not be controlling, and it 
is the spirit and intention of this Code that the Commission and its members and the 
Labor Arbiters shall use every and all reasonable means to ascertain the facts in each 
case speedily and objectively, without regard to technicalities of law or procedure, all in 
the interest of due process. In any proceeding before the Commission or any Labor 
Arbiter, the parties may be represented by legal counsel but it shall be the duty of the 
Chairman, any Presiding Commissioner or Commissioner or any Labor Arbiter to 
exercise cOrTjplete control of the proceedings at all stages. 
Any provision of law to the contrary notwithstanding, the Labor Arbiter shall exert 
all efforts towards the amicable settlement of a labor dispute within his jurisdiction on or 
before the first hearing. The same rule shall apply to the Commission in the exercise of 
its original jurisdiction. 
ARTICLE 224. 
Appearances and fees. -
(a) Non-lawyers may appear 
before the Commissioner or any Labor Arbiter only: 
1. 
If they represent themselves; or 
2. 
If they represent their organization or members thereof. 
(b) 
No attorney's fees, negotiation fees or similar charges of any kind arising 
from any collective bargaining negotiations or conclusion of the collective agreement 
shall be imposed on any individual member of the contracting union: Provided, however, 
That attorney's fees may be charged against union funds in an amount to be agreed 
upon by the parties. Any contract, agreement or arrangement of any sort to the contrary 
shall be null and void. 
(c) 
No docket fee shall be assessed in labor standards disputes. In all other 
disputes, docket fees may be assessed against the filing party, provided that in 
bargaining deadlocks, such fees shall be shared equally by the negotiating parties. 
(Art.277(d)) 
TITLE II 
NATIONAL LABOR RELATIONS COMMISSION 
CHAPTER III 
APPEAL 
ARTICLE 225. 
Appeal. -, Decisions, awards, or orders of the Labor Arbiter 
are final and executory unless appealed to the Commission by any or both parties within 
ten (10) calendar days from receipt of such decisions, awards, or orders. Such appeal 
may be entertained only on any of the following grounds: 
(a) 
If there is prima facie evidence of abuse of discretion on the part of the 
Labor Arbiter; 
(b). 
If the decision, order or award was secured through fraud or coercion, 
including graft and corruption; 
(c) 
If made purely on questions of law; and 
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(d) 
If serious errors in the findings of facts are raised which would cause 
grave or irreparable damage or injury to the appellant. 
In case of a judgment involving a monetary award, an appeal by the employer 
may be perfected only upon the posting of a cash or surety bond issued by a reputable 
bonding company duly accredited by the Commission in the amount equivalent to the 
monetary award in the judgment appealed from. 
In any event, the decision of the Labor Arbiter reinstating a dismissed or 
separated employee, insofar as the reinstatement aspect is concerned, shall 
immediately be executory, even pending appeal. The employee shall either be admitted 
back to work under the same terms and conditions prevailing prior to his dismissal or 
separation or, at the option of the employer, merely reinstated in the payroll. The 
posting of a bond by the employer shall not stay the execution for reinstatement 
provided herein. 
To discourage frivolous or dilatory appeals, the Commission or the Labor Arbiter 
shall impose reasonable penalty, including fines or censures, upon the erring parties. 
In all cases, the appellant shall furnish a copy of the memorandum of appeal to 
the other party who shall file an answer not later than ten (10) calendar days from 
receipt thereof. 
The Commission shall decide all cases within twenty (20) calendar days from 
receipt of the answer of the appellee. The decision of the Commission shall be final and 
executory after ten (10) calendar days from receipt thereof by the parties. 
Any law enforcement agency may be deputized by the Secretary of Labor and 
Employment or the Commission in the enforcement of decisions, awards, or orders. 
To ensure speedy labor justice, the periods provided in this Code within which 
decisions or resolutions of labor relations cases or matters should be rendered shall be 
mandatory. For this purpose, a case or matter shall be deemed submitted for decision 
or resolution upon the filing of the last pleading or memorandum required by the rules of 
the Commission or by the Commission itself, or the Labor Arbiter or the Director of the 
Bureau of Labor Relations or Med-Arbiter, or the Regional Director. 
Upon expiration of the corresponding period, a certification stating why a decision 
or resolution has not been rendered within the said period shall be issued forthwith by 
the Chairman of the Commission, the Executive Labor Arbiter, or the Director of the 
Bureau of Labor Relations or Med-Arbiter, or the Regional Director, as the case may be, 
and a copy thereof served upon the parties. 
Despite the expiration of the applicable mandatory period, the aforesaid officials 
shall, without prejudice to any liability which may have been incurred as a consequence 
thereof, see to it that the case or matter shall be decided or resolved without any further 
delay. (Art.223 added 277(i)-a) 
ARTICLE 226. 
Execution of decisions, orders, or awards. -
(a) The 
Secretary of Labor and Employment or any Regional Director, the Commission or any 
Labor Arbiter or the voluntary arbitrator or panel of voluntary arbitrators may, motu 
propio or on motion of any interested party, issue a writ of execution on a judgment 
within five (5) years from the date it becomes final and executory, requiring a sheriff or a 
duly deputized officer to execute or enforce final decisions, orders or awards of the 
Secretary of Labor and Employment or Regional Director, the Commission, or the Labor 
Arbiter or voluntary arbitrator or panel of voluntary arbitrators. In any case, it shall be the 
77 


• 
duty of the responsible officer to separately furnish imrnediately the counsel of record 
and the parties with copies of said decisions, orders or awards. Failure to comply with 
the duty prescribed herein shall subject such responsible officer to appropriate 
administrative sanctions. 
(b) 
. The Secretary of Labor and Employment, and the Chairman of the 
Commission may designate special sheriffs and take any measure under existing laws 
to ensure compliance with their decisions, orders or awards and those of Labor Arbiters 
and voluntary arbitrators or panel of voluntary arbitrators, including the imposition of 
administrative fines which shall not be less than five hundred pesos (P,500.00) nor more 
than ten thousand pesos (P,1O,OOO.OO). 
ARTICLE 227. 
Contempt powers of the Secretary of Labor and 
Employment. -
In the exercise of his powers under this Code, the Secretary of Labor 
and Employment may hold any person in direct or indirect contempt and impose the 
appropriate penalties therefor. 
TITLE III 
BUREAU OF LABOR RELATIONS 
ARTICLE 228. 
Bureau of Labor Relations. -
The Bureau of Labor 
Relations and the Labor Relations Divisions in the regional offices of the Department of 
Labor and Employment shall have original and exclusive authority to act, at their own 
initiative or upon request of an interested party, on all intra-union conflicts. 
Employment shall have original and exclusive authority to act, at their own initiative or 
upon request of an interested party, on all ultra-union conflicts. 
The Bureau shall have fifteen (15) calendar days to act on labor cases before it, 
subject to extension by agreement of the parties. (Art.226-a) 
ARTICLE 229. 
Conciliation and compromise agreements. - The National 
Conciliation and Mediation Board shall implement the preferential use of voluntary 
modes of settling labor disputes through conciliation in accordance with such rules and 
regulations as the Secretary of Labor and Employment may promulgate. 
Any 
compromise settlement, including those involving labor standard laws, voluntarily 
agreed upon by the parties with the assistance of the Board and its Regional Branches, 
shall be final and binding upon the parties. The National Labor Relations Commission or 
any court shall not assume jurisdiction over issues involved therein except in case of 
non-compliance thereof or if there is prima facie evidence that the settlement was 
obtained through fraud, misrepresentation, or coercion. (Art.227-a) 
ARTI~LE 230. 
Issuance of subpoenas. -
The Bureau shall have the 
power to require the appearance of any person or the production of any paper, 
document dr matter relevant to a labor dispute under its jurisdiction either at the request 
of any interested party or at its own initiative. 
ARTICLE 231. 
Registry of unions. - The Bureau shall keep a registry of 
legitimate labor organizations. (Art.231-a) 
ARTICLE 232. Registry of collective bargaining agreements - The Board 
shall maintain a registry of all collective bargaining agreements and other related 
agreements and records of the compromise settlements of labor disputes, and copies 
of orders, and decisions of voluntary arbitrators or panel or voluntary arbitrators. The file 
shall be open and accessible to interested parties under conditions prescribed by the 
78 


Secretary of Labor and Employment, Provided that no specific information submitted in 
confidence shall be disclosed unless authorized by the Secretary, or when it is at issue 
in any judicial litigation or when public interest or national security so requires. 
Within thirty (30) days from the execution of a collective bargaining agreement, 
the parties shall submit copies of the same directly to the Board 
for registration 
accompanied with verified proofs of its posting in two conspicuous places in the place of 
work and ratification by the majority of all the workers in the bargaining unit. The Board 
shall act upon the application for registration of such collective bargaining agreement 
within five (5) calendar days from receipt thereof. 
The Board shall assess the employer for every collective bargaining agreement a 
registration fee of not less than two thousand pesos (P2,000.00) or in any other amount 
as may be deemed appropriate and necessary by the Secretary of Labor and 
Employment for the effective and efficient administration of the voluntary arbitration 
program. Any amount collected under this provision shall accrue to the Special 
Voluntary Arbitration Program. (A, Art.231-A) 
ARTICLE 233. 
Privileged communication. -
Information and statements 
made at conciliation proceedings shall be treated as privileged communication and shall 
not be used ,as evidence in the Commission. Conciliators and similar officials shall not 
testify in any court or body regarding any matters taken up at conciliation proceedings 
conducted by them. 
TITLE IV 
LABOR ORGANIZATIONS 
CHAPTER I 
REGISTRATION AND CANCELLATION 
ARTICLE 234. Types of labor organizations; requirements of registration. 
- A labor organization may consist of workers employed by a particular employer, or of 
employees in an appropriate occupational grouping of workers organized for mutual aid 
and protection. It includes an organization operating at the enterprise level or in an 
appropriate bargaining unit within an enterprise, as well as a national or industry union, 
federation confederation or trade union center. 
Any applicant labor organization, a federation, national union or industry or 
trade union center or an independent union shall acquire legal personality and shall be 
entitled to the rights and privileges granted by law to legitimate labor organizations upon 
compliance with the following requirements: 
(a) The names of its officers, their addresses, and the principal address of the 
labor organization 
(b) In case the applicant is an independent union, the names of all its members 
comprising at least twenty percent (20%) of all the employees in the bargaining unit 
where it seeks to operate, 
(c) Four copies of its constitution and by-laws as the rules promulgated by the 
Secretary of Labor and Employment may require; 
79 


(d) A verified statement by the head of the organization concerned that all the 
facts and proceedings in the foregoing documents are true and correct, and that the 
constitution and by-laws of the organization has been deliberated upon and ratified by 
the members in the appropriate organizational or general membership meeting; and 
(e) Payment of registration fee to be prescribed by the Secretary of Labor and 
Employment from time to time, but which shall only be in an amount necessary to cover 
the costs of processing and maintaining the documents submitted. 
Upon submission of all the foregoing documents, the Bureau shall issue in favor 
of the labor organization concemed a certificate of registration evidencing its inclusion in 
the roster of legitimate labor organizations, which shall be kept by the Bureau. (Art.234-
a) 
ARTICLE 
235. Chartering and creation of a local chapter. -
A duly 
registered federation or national union may directly create a local chapter by issuing a 
charter certificate indicating the establishment of the local chapter. The chapter shall 
acquire legal personality only for purposes of filing a request for certification election 
from the date it was issued a charter certificate. 
The chapter shall be entitled to all other rights and privileges of a legitimate 
labor organization only upon the submission of the following documents in addition to its 
charter certificate: 
(a) 
The names of the chapter's officers, their addresses, and the principal 
office of the chapter; and 
(b) The chapter's constitution and by-laws: Provided, that where the chapter's 
constitution and by-laws is the same as that of the federation or the national union, this 
fact shall be indicated accordingly. 
The additional supporting requirements shall be certified under oath by the 
secretary or treasurer of the chapter and attested to by its President. 
Any form of misrepresentation, false statement or fraud committed by individual 
officers or members shall not be a ground for cancellation but shall subject the erring 
officers or members to suspension, expUlsion from membership, or any other 
appropriate 'penalty. (n) 
.ARTICLE 236. 
Action on application. -
The Bureau shall act on all 
applications for registration within ten (10) days from filing. If no action is taken by the 
Bureau within that period after complete submission of the requirements, the labor 
organization is deemed registered. 
All requisite documents and papers shall be certified under oath by the secretary 
or the treasurer of the organization, as the case may be, and attested to by its 
president. (Art.235-a) 
ARTICLE 237. 
Denial of registration; appeal. -
The decision of the Labor 
Relations Division in the regional office denying registration may be appealed by the 
applicant union to the Bureau within ten days from receipt of notice thereof. 
ARTICLE 238. 
Additional requirements for federations or national 
unions. -
If the applicant for registration is a federation or a national union, it shall, in 
addition to the requirements of the preceding Articles, submit the following: 
80 


(a) 
Proof of the affiliation of at least ten locals or chapters, each of which must 
be a duly recognized collective bargaining agent supporting the registration of such 
applicant federation or national union; 
(b) 
The names and addresses of the companies where the locals or chapters 
operate and the list of all the members in each company involved. (Art.237-a) 
ARTICLE. 239. Cancellation of registration. - The certificate of registration of 
any legitimate labor organization may be cancelled by the Bureau after due hearing only 
on the grounds specified in Article 242 hereof. (Art.238-a) 
ARTICLE 240. Effect of a petition for cancellation of registration. - A petition 
for cancellation of union registration shall not suspend the proceedings for certification 
election nor shall it prevent the filing of a petition for certification election. 
In case of cancellation, nothing herein shall restrict the right of the union to seek 
just and equitable remedies in the appropriate courts. (n) 
ARTICLE 241. Effect of inclusion as members of employees outside the 
bargaining unit. -
The inclusion as union members of employees outside the 
bargaining unit shall not be a ground for the cancellation of the registration of the union. 
Said employees are automatically deemed removed from the list of membership of said 
union. (n) 
ARTICLE 242. Grounds for cancellation of union registration. - (a) Failure 
to comply with reporting requirements. Every legitimate labor organization shall submit 
periodic reports to the Bureau, as follows: 
(1) 
A copy of its amended constitution and by-laws and proof of its ratification, 
within 30 days from such ratification; 
(2) 
An updated list of its officers, their addresses, and their terms of office, 
within 30 days from their assumption of office; 
(3) 
An annual financial report prepared by its accountable officers, including a 
statement indicating the number of its current members, locals, chapters or affiliates as 
the case may be, within 30 days after the close of its fiscal year; and 
(4) 
In the case of federations, national or industry unions; confederations or 
trade union centers, an updated list of the employers, including their addresses, with 
which such organizations have existing collective bargaining agreements. 
(b) 
Misrepresentation, false statement or fraud vitiating the consent or free 
choice of the members in forming the labor organization; Provided, that any other form 
of misrepresentation, false statement or fraud committed by individual officers or 
members shall not be a ground for cancellation but shall subject the erring officers or 
members to suspension, expulsion from membership, or any 
appropriate penalty as 
may be imposed by the organization's constitution and by-laws, or as the membership 
may decide. 
(c) 
Using the union as a guise to engage in any activity prohibited by law, 
such as but not limited to: 
(1) Acting as a labor contractor or engaging in the "cabo" system, or otherwise 
engaging in any activity prohibited by law; 
81 


(2) 
Entering into collective bargaining agreements which provide terms and 
conditions of employment below minimum standard established by lew; 
(3) Asking for or accepting Attorney's fees or negotiation fees from employers; 
(4) 
Other than for mandatory activities under this code, checking off special 
assessments or any other fees without duly signed individual written authorizations of 
the members; 
(d) De facto or voluntary dissolution by the members. 
In case of cancellation, nothing herein shall restrict the right of the organization to 
seek redress in the appropriate courts. (Art.239-a) 
TITLE IV 
LABOR ORGANIZATIONS 
CHAPTER II 
RIGHTS AND CONDITIONS OF MEMBERSHIP 
ARTICLE 243. 
Rights and conditions of membership in a labor 
organization. -
The following are the rights and conditions of membership in a labor 
organization: 
(a) 
No arbitrary or excessive initiation fees shall be required of the members 
of a legitimate labor organization nor shall arbitrary, excessive or oppressive fine and 
forfeiture be imposed; 
(b) 
The members shall be entitled to full and detailed reports from their 
officers and representatives of all financial transactions as provided for in the 
constitution' and by-laws of the organization; 
(c) The members shall elect their officers by secret ballot at intervals of not more 
than three (3) years. 
The election shall be done directly unless circumstances 
otherwise require and as provided for in the constitution and by-laws of the organization. 
No qualification requirement for candidacy to any position shall be imposed other than 
membership in good standing in subject labor organization. The Secretary or any other 
responsible union officer shall furnish the Secretary of Labor and Employment with a list 
of the newly-elected officers, together with the appointive officers or agents who are 
entrusted with the handling of funds within thirty (30) calendar days after the election of 
officers or from the occurrence of any change in the list of officers of the labor 
organization. 
(d) 
The members shall determine by secret ballot, after due deliberation, any 
question of major policy affecting the entire membership of the organization, unless the 
nature of the organization or force majeure renders such secret balloting impractical, in 
which case the board of directors of the organization may make the decision in behalf of 
the general membership. 
(e) 
No labor organization shall knowingly admit as member or continue in 
membership any individual who belongs to a subversive organization or who is engaged 
directly or indirectly in any subversive activity; 
82 


(f) 
No person who has been convicted of a crime involving moral turpitude 
shall be eligible for election as a union officer or for appointment to any position in the 
union; 
(g) 
No officer, agent or member of a labor organization shall collect any fees, 
dues, or other contributions in its behalf or make any disbursement of its moneys or 
funds unless he is duly authorized pursuant to its constitution and by-laws; 
(h) 
Every payment of fees, dues or other contributions by a member shall be 
evidenced bX a receipt signed by the officer or agent making the collection and entered 
into the record of the organization to be kept and maintained for the purpose; 
(i)' 
The funds of the organization shall not be applied for any purpose or 
object other than those expressly provided by its constitution and by-laws or those 
expressly authorized by written resolution adopted by the majority of the members at a 
general meeting duly called for the purpose; 
U) Every income or revenue of the organization shall be evidenced by a record 
showing its source, and every expenditure of its funds shall be evidenced by a receipt 
from the person to whom the payment is made, which shall state the date, place and 
purpose of such payment. Such record or receipt shall form part of the financial records 
of the organization. 
Any action involving the funds of the organization shall prescribe three (3) years 
from the date of submission of the annual financial report to the Department of Labor 
and Employment or from the date the same should have been submitted, whichever 
comes earlier. 
(k) 
The officers of any labor organization shall not be paid any compensation 
other than the salaries and expenses due to their positions as specifically provided for in 
its constitution and by-laws or in a written resolution duly authorized by a majority of all 
the members at a general membership meeting duly called for the purpose. The 
minutes of the meeting and the list of participants and ballots cast shall be subject to 
inspection by the Secretary of Labor and Employment or his duly authorized 
representatives. Any irregularities in the approval of the resolutions shall be a ground for 
impeachment or expulsion from the organization; 
(I) 
The treasurer of any labor organization and every officer thereof who is 
responsible for the accounts of such organization or for the collection, management, 
disbursement, custody or control of the funds, moneys and other properties of the 
organization, shall render to the organization and to its members a true and correct 
account of all moneys received and paid by him since he assumed office or since the 
last date on which he rendered such account and of the balance remaining in his hands 
at the time of rendering such account, and of all bonds, securities and other properties 
of the organization entrusted to his custody or under his control. The rendering of such 
account shall be made: 
(1) 
At least once a year within thirty (30) days after the close of its fiscal year; 
(2) . At such other times as may be required by a resolution of the majority of 
the members of the organization; and 
(3) 
Upon vacating his office. 
83 


The account shall be duly audited and verified by affidavit and a copy thereof 
shall be furnished the Secretary of Labor and Employment; 
(m) 
The books of accounts and other records of the financial activities of any 
labor organization shall be opened to inspection by any officer or member thereof during 
office hours; 
(n) 
No special assessment or other extraordinary fees may be levied upon the 
members of a labor organization unless authorized by a written resolution of a majority 
of all the members at a general membership meeting duly called for the purpose. The 
secretary of the organization shall record the minutes of the meeting including the list of 
all members present, the votes cast, the purpose of the special assessment or fees and 
the recipient of such assessment or fees. The record shall be attested to by the 
president; 
(0) 
Other than for mandatory activities under the Code, no special 
assessment, attorney's fees, negotiation fees or any other extraordinary fees may be 
checked off from any amount due an employee without an individual written 
authorization duly signed by the employee. The authorization should specifically state 
the amount, purpose and beneficiary of the deduction; and 
(p) 
It shall be the duty of any labor organization and its officers to inform its 
members on the provisions of its constitution and by-laws, collective bargaining 
agreement, the prevailing labor relations system and all their rights and obligations 
under existing labor laws. 
For this purpose, registered labor organizations may assess reasonable dues to 
finance labor relations seminars and other labor education activities. 
Any violation of the rights and conditions of membership shall be a ground for 
subjecting the erring officer or member to suspension, expulsion or other, disciplinary 
action in accordance with the organization's constitution and by-laws. 
A member may 
file with the Bureau a complaint based on violations of the rights and conditions of 
membership only if there is no appropriate internal administrative mechanism in the 
organization's constitution and by-laws, or if such mechanism exists but the remedies 
therein have been exhausted or rendered inavailing to the member through no fault of 
his or her own. In such case, the Bureau shall have the power to hear and decide any 
reported violation and to mete the appropriate penalty, Provided that the penalty of 
suspension or expulsion may not be imposed unless approved by a majority vote of the 
membership. 
Criminal and civil liabilities arising from violations of above rights and conditions 
of membership shall continue to be under the jurisdiction of ordinary courts. (Art.241-a) 
The Secretary of Labor and Employment or his duly authorized representative is 
hereby empowered to inquire into the financial activities of legitimate labor organizations 
upon the filing of a complainant under oath and duly supported by the written consent of 
at least twenty percent (20%) of the total membership of the labor organization 
concerned and to examine their books of accounts and other records to determine 
compliance or non-compliance with the law and to prosecute any violations of the law 
and the union constitution and by-laws: Provided, That such inquiry or examination shall 
not be conducted during the sixty (60) day freedom period nor within thirty (30) days 
immediately preceding the date of election of union officials. (Art.274-a) 
TITLE IV 
84 


LABOR ORGANIZATIONS 
CHAPTER III 
RIGHTS OF LEGITIMATE LABOR ORGANIZATIONS 
ARTICLE 244. 
Rights of legitimate labor organizations. -
A legitimate 
labor organization shall have the right: 
(a) 
To act as the representative of its members for the purpose of collective 
bargaining or for mutual aid and protection; 
(b) 
To be certified as the exclusive representative of all the employees in an 
appropriate collective bargaining unit for purposes of collective bargaining; 
(c) 
To be furnished by the employer, upon written request, with his annual 
audited financial statements, including the balance sheet and the profit and loss 
statement, within thirty (30) calendar days from the date of receipt of the request, after 
the union has been duly recognized by the employer or certified as the sole and 
exclusive bargaining representative of the employees in the bargaining unit, or within 
sixty (60) calendar days before the expiration of the existing collective bargaining 
agreement, or during the collective bargaining negotiation; 
(d) 
To own property, real or personal, for the use and benefit of the labor 
organization and its members; 
(e) 
To sue and be sued in its registered name; and 
(f) 
To undertake all other activities designed to benefit the organization and 
its members, including cooperative, housing welfare and other projects not contrary to 
law. 
Notwithstanding any provision of a general or special law to the contrary, the 
income, and the properties of legitimate labor organizations, including grants, 
endowments, gifts, donations and contributions they may receive from fraternal and 
similar organizations, local or foreign, which are actually, directly and exclusively used 
for their lawful purposes, shall be free from taxes, duties, and other assessments. The 
exemptions provided herein may be withdrawn only by a special law expressly repealing 
this provision. (Art.242-a) 
All unions are authorized to collect reasonable membership fees, union dues, 
assessments and fines and other contributions for labor education and research, mutual 
death and hospit~lization benefits, welfare fund, strike fund and credit and cooperative 
undertaking,s. (A, Art.277 (a)) 
TITLE V 
COVERAGE 
RIGHT TO SELF-ORGANIZATION 
ARTICLE 245. 
Coverage and employees' right to self-organization. -
All Employees shall have the right to self-organization and to form, join or assist labor 
organizations of their own choosing for purposes of collective bargaining. (Art. 243-a) 
85 


ARTICLE 246. Workers associations. -
Ambulant, intermittent and itinerant 
workers, self-employed people, rural workers and those without any definite employers 
may form workers associations 
for the purpose of enhancing and defending their 
interests and for their mutual aid and protection. (A, Art.243) 
Any employee, whether employed for a definite period or not, shall, beginning on 
his first day of service, be considered an employee for purposes of membership in any 
labor union. (A, Art.277 ( c)) 
ARTICLE 247. 
Right 
of employees 
of 
government 
owned 
and 
controlled corporations 
-
Employees of government owned and controlled 
corporations established under the Corporation Code shall have the right to organize 
and to bargain collectively with their respective employers. Under this Code the 
employees of all branches, subdivisions, instrumentalities and agencies of the 
government, including government owned and controlled corporation with original 
charters 
shall have the right to organize and to have collective negotiation in 
accordance with civil service law, rules and regulations. (Art.244-a) 
ARTICLE 248. 
Ineligibility of managerial employees to join any labor 
organization; right of supervisory employees. -
Managerial employees are not 
eligible to jOin, assist or form any labor organization. Supervisory employees shall not 
be eligible fqr membership in collective bargaining units of the rank-and-file employees 
but may join, assist or form separate collective bargaining units and/or legitimate labor 
organizations of their own. The rank-and-file union and the supervisors' union may join 
the same 'federation or national union. (Art,245-a) 
ARTICLE 249. 
Non-abridgement of right to self-organization. -
It shall 
be unlawful for any person to restrain, coerce, discriminate against or unduly interfere 
with employees and workers in their exercise of the right to self-organization. Such right 
shall include the right to form, join, or assist labor organizations for the purpose of 
collective bargaining through representatives of their own choosing and to engage in 
lawful aid and protection, subject to the provisions of this Code, (A, Art.246) 
TITLE VI 
UNFAIR LABOR PRACTICES 
CHAPTER I 
CONCEPT 
ARTICLE 250. 
Concept of unfair labor practice and procedure for 
prosecution thereof 
-
Unfair labor practices violate the constitutional right of 
workers and employees to self-organization, are inimical to the legitimate interests of 
both labor and management, including their right to bargain collectively and otherwise 
deal with each other in an atmosphere of freedom and mutual respect, disrupt industrial 
peace and hinder the promotion of healthy and stable labor-management relations. 
Consequently, unfair labor practices are not only violations of the civil rights of 
both labor and management but are also criminal offenses against the State, which 
shall be subject to prosecution and punishment as herein provided. 
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Subject to the exercise by the President or by the Secretary of Labor and 
Employment of the powers vested in them by Articles 271 and 272 of this Code, the civil 
aspects of a'lI cases involving unfair labor practices, which may include claims for actual, 
moral, exemplary and other forms of damages, attorney's fees and other affirmative 
relief, shall be under the jurisdiction of the Labor Arbiters. The Labor Arbiters shall give 
utmost priority to the hearing and resolution of all cases involving unfair labor practices. 
They shall resolve such cases within thirty (30) calendar days from the time they are 
submitted for decision. 
Recovery of civil liability in the administrative proceedings shall bar recovery 
under the Civil Code. 
No criminal prosecution under this Title may be instituted without a final 
judgment, finding that an unfair labor practice was committed, having been first obtained 
in the administrative proceeding referred to in the preceding paragraph. During the 
pendency of such administrative proceeding, the running of the period of prescription of 
the criminal offense herein penalized shall be considered interrupted: Provided, 
however, That the final judgment in the administrative proceedings shall not be binding 
in the criminal case nor be considered as evidence of guilt but merely as proof of 
compliance with the requirements herein set forth. 
Notwithstanding the provision of the immediately preceding paragraph, any 
employer, including any person acting in the interest of an employer who unjustly 
dismisses union officers duly elected in accordance with the constitution and by-laws 
which constitutes union busting where the existence of the union is threatened commits 
not only an unfair labor practice but also a criminal offense which may be the subject of 
an immediate criminal prosecution. (Art.247-a) 
TITLE VI 
UNFAIR LABOR PRACTICES 
CHAPTER II 
UNFAIR LABOR PRACTICES OF EMPLOYERS 
ARTICLE 251. 
Unfair labor practices of employers. -It shall be unlawful 
for an employer to commit any of the following unfair labor practices: 
, 
(a) . To interfere with, restrain or coerce employees in the exercise of their right 
to self-organization; 
(b) 
To require as a condition of employment that a person or an employee 
shall not join a labor organization or shall withdraw from one to which he belongs; 
(c) 
To contract out services or functions being performed by union members 
when such will interfere with, restrain or coerce employees in the exercise of their right 
to self-organization; 
(d) 
To initiate, dominate, assist or otherwise interfere with the formation or 
administration of any labor organization, including the giving of financial or other support 
to it or its organizers or officers; 
87 


(e) 
To discriminate in regard to wages, hours of work, and other terms and 
conditions of employment in order to encourage or discourage membership in any labor 
organization. Nothing in this Code or in any other law shall stop the parties from 
requiring membership in a recognized collective bargaining agent as a condition for 
employment, except of those employees who are already members of another union at 
the time of the signing of the collective bargaining agreement. Employees of an 
appropriate collective bargaining unit who are not members of the recognized collective 
bargaining agent may be assessed a reasonable fee equivalent to the dues and other 
fees paid by members of the recognized collective bargaining agent, if such non-union 
members accept the benefits under the collective agreement: Provided, That the 
individual authorization required under Article 244, paragraph (c), of this Code shall not 
apply to the non-members of the recognized collective bargaining agent; 
(f) 
To dismiss, discharge or otherwise prejudice or discriminate against an 
employee for having given or being about to give testimony under this Code; 
(g) 
To violate the duty to bargain collectively as prescribed by this Code; 
(h) . To pay negotiation or attorney's fees to the union or its officers or agents 
as part of.the settlement of any issue in collective bargaining or any other dispute; or 
(i) 
To violate a collective bargaining agreement. 
The provision of the preceding paragraph notwithstanding, only the officers and 
agents of corporations, associations, or partnerships who have actually participated in, 
authorized or ratified unfair labor practices shall be held criminally or civilly liable. 
(Art.248-a) 
TITLE VI 
UNFAIR LABOR PRACTICES 
CHAPTER III 
UNFAIR LABOR PRACTICES OF LABOR ORGANIZATIONS 
ARTICLE 252. 
Unfair labor practices of labor organizations. -
It shall 
be unfair labor practice for a labor organization, its officers, agents, or representatives: 
(a) 
To restrain or coerce employees in the exercise of their right to self-
organization. However, a labor organization shall have the right to prescribe its own 
rules with respect to the acquisition or retention of membership; 
(b) 
To cause or attempt to cause an employer to discriminate against an 
employee, including discrimination against an employee with respect to whom 
membership in such organization has been denied or to terminate an employee on any 
ground other than the usual terms and conditions under which membership or 
continuation of membership is made available to other members; 
(c) 
To violate the duty or refuse to bargain collectively with the employer, 
provided that it is the representative of the employees; 
(d) 
To cause or attempt to cause an employer to payor deliver or agree to 
payor deliver any money or other things of value, in the nature of an exaction, for 
88 


services which are not performed or not to be performed, including the demand for a fee 
for union negotiations; 
(e ) 
To ask for or accept negotiation or attorney's fees from employers as part 
of the settlement of any issue in collective bargaining or any other dispute; or 
(f) 
To violate a collective bargaining agreement. 
(g) 
To violate the duty of fair representation, including entering into collective 
bargaining agreements which provide terms and conditions of employment below 
minimum standards established by law. 
The provision of the preceding paragraph notwithstanding, only the officers, 
members of governing boards, representatives or agents or members of labor 
associations or organizations who have actually participated in, authorized or ratified 
unfair labor practices shall be held criminally or civilly liable. (Art.249-a) 
TITLE VII 
COLLECTIVE BARGAINING AND ADMINISTRATION OF AGREEMENTS 
ARTICLE 253. 
Procedure in collective bargaining. -
The following 
procedures shall be observed in collective bargaining: 
(a) 
When a party desires to negotiate an agreement, it shall serve a written 
notice upon the other party with a statement of its proposals. The other party shall make 
a reply thereto not later than ten (10) calendar days from receipt of such notice; 
(b) 
Should differences arise on the basis of such notice and reply, either party 
may request for a conference which shall begin not later than ten (10) calendar days 
from the date of request; 
(c) 
If the dispute is not settled, the Board shall intervene upon request of 
either or both parties or at its own initiative and immediately call the parties to 
conciliation meetings. The Board shall have the power to issue subpoenas requiring the 
attendance' of the parties to such meetings. It shall be the duty of the parties to 
participaie fully and promptly in the conciliation meetings the Board may call; 
(d) 
During the conciliation proceedings in the Board, the parties are prohibited 
from doing any act which may disrupt or impede the early settlement of the disputes; 
and 
(e) 
The Board shall exert all efforts to settle disputes amicably and encourage 
the parties to submit their case to a voluntary arbitrator. 
ARTICLE 254. 
Duty to bargain collectively in the absence of collective 
bargaining agreements. -
In the absence of an agreement or other voluntary 
arrangement providing for a more expeditious manner of collective bargaining, it shall 
be the duty of the employer and the representatives of the employees to bargain 
collectively in accordance with the provisions of this Code. 
ARTICLE 255. 
Meaning of duty to bargain collectively. -
The duty to 
bargain collectively means the performance of a mutual obligation to meet and convene 
promptly and expeditiously in good faith for the purpose of negotiating an agreement 
with respect to wages, hours of work and all other terms and conditions of employment 
including proposals for adjusting any grievances or questions arising under such 
89 


agreement and executing a contract incorporating such agreements if requested by 
either party, but such duty does not compel any party to agree to a proposal or to make 
any concession. 
ARTICLE 256. 
Duty to bargain collectively when there exists a 
collective bargaining agreement. -
When there is a collective bargaining agreement, 
the duty to bargain collectively shall also mean that neither party shall terminate or 
modify such agreement during its lifetime. However, either party can serve a written 
notice to terminate or modify the agreement at least sixty (60) days prior to its expiration 
date. It shall be the duty of both parties to keep the status quo and to continue in full 
force and effect the term and conditions of the existing agreement during the 60-day 
period and/or until a new agreement is reached by the parties. 
ARTICLE 257. 
Terms of a collective bargaining· agreement. -
Any 
collective bargaining agreement that the parties may enter into shall be for a term of 
three (3) years. The majority status of the incumbent bargaining agent shall not be 
questioned and no certification election shall be conducted by the Bureau outside of 
the sixty-day period immediately before the date of expiry of such three year term of the 
collective bargaining agreement. Any subsequent 
collective bargaining agreement 
entered into by the parties shall retroact to the date of expiration of the previous 
collective bargaining agreement. ( Art.253-a) 
ARTICLE 258. 
Injunction prohibited. -
No temporary or permanent 
injunction or restraining order in any case involving or growing. out of labor disputes 
shall be issued by any court or other entity, except as otherwise provided in Articles 221 
and 272 of this Code. 
ARTICLE 259. 
Exclusive 
bargaining 
representation 
and 
workers' 
participation in policy and decision-making. -
The labor organization designated or 
selected by the majority of the employees in an appropriate collective bargaining unit 
shall be the exclusive representative of the employee in such unit for the purpose of 
collective bargaining. However, an individual employee or group of employees shall 
have the right at any time to present grievances to their employer. 
Any provision of law to the contrary notwithstanding, workers shall have the right, 
subject to such rules and regulations as the Secretary of Labor and Employment may 
promulgate, to participate in policy and decision-making processes of the establishment 
where they are employed insofar as said processes will directly affect their rights, 
benefits and welfare. For this purpose, workers and employers may form labor-
management councils: Provided, That the representatives of the workers in such labor-
management councils shall be elected by at least the majority of all employees in said 
establishment. 
ARTICLE 260. 
Representation issue in an organized establishment. -
In an organized establishment when any legitimate labor organization including a 
national union or federation which has already issued a charter certificate to its local 
chapter participating in the certification election or a local chapter which has been 
issued a charter certificate by the national union or federation questions the majority 
status of. the incumbent bargaining agent within the sixty-day period 
before the 
expiration of a collective bargaining agreement, the former may 
90 


request the Bureau to conduct a certification election as long as the request 
is 
supported by the written consent of at least twenty-five percent (25%) of all the 
employees in the appropriate bargaining unit. To have a valid election, at least a 
majority of all eligible voters in the unit must have cast their votes. The labor union 
receiving the majority of the valid votes cast shall be certified as the exclusive 
bargaining agent of all the workers in the unit. When an election which provides for 
three or more choices results in no choice receiving a majority of the valid votes cast, a 
run-off election shall be conducted between the labor unions receiving the two highest 
number of votes: Provided, That the total number of votes for all contending unions is at 
least fifty percent (50%) of the number of votes cast. In cases where the request was 
filed by a national union or federation, it shall not be required to disclose the names of 
the local chapter's officers and members. 
At the expiration of the freedom period, the employer shall continue to recognize 
the majority status of the incumbent bargaining agent where no request by any 
legitimate labor organization or a national union or federation for a certification election 
has been duly made. (Art.256-a) 
ARTICLE 261. 
Representation issue in an unorganized establishment. 
- (a) 
In any establishment where there is no 
bargaining agent, a legitimate labor 
organization which is the only legitimate labor organization in said establishment may 
voluntarily be recognized by the employer as the bargaining representative of the 
employees in a bargaining unit of the establishment. If the employer does not extend 
said recognition, the legitimate labor organization may request the Bureau to conduct a 
certification election to determine if the legitimate labor organization shall be certified as 
the bargaining representative because it has the support of a majority of the employees 
of the bargaihing unit. (Art.257 -a) 
ARTICLE 262. Representation issue where there is a bargaining agent but 
no collective bargaining agreement. 
- Any legitimate labor organization, national 
union or federation may question the status of a bargaining agent if there is still no 
collective bargaining agreement after one year from the date the bargaining unit was 
recognized or certified, in which case, the former may request the Bureau to conduct a 
certification election as long as the request is supported by the written consent of at 
least twenty-five percent (25%) of all employees in the appropriate bargaining unit. (n) 
ARTICLE 263. 
Action on request for certification election. -
After receipt 
of a proper request the Bureau shall conduct the requested certification election within 
15 days in accordance with the rules and regulations prescribed by the Secretary of 
Labor and Employment. (Art.258-a) 
ARTICLE 264. Employer as by-stander. - in all cases, whether the request for 
certification election is filed by an employer or a legitimate labor organization, national 
union or federation, the employer shall not be considered a party thereto with a 
concomitant right to oppose a request for certification election. The employer's 
participation in such proceedings shall be limited to: (1) being notified or informed of 
requests of such nature, and (2) submitting the list of employees during the pre-election 
conference should the med-arbiter act favorable on the request. (n) 
ARTICLE 265. 
Appeal of certification election results -
Any legitimate 
labor organization which is a party to a certification election may appeal the results of 
the election to the Bureau on the ground that the rules and regulations or parts thereof 
established by the Secretary of Labor and Employment for the conduct of the election 
91 


have been violated. Such appeal shall be decided within fifteen (15) calendar days. The 
decision of the Bureau shall be final and executory. (Art.259-a) 
TITLE VII-A 
GRIEVANCE MACHINERY AND VOLUNTARY ARBITRATION 
ARTICLE 266. 
Grievance machinery and voluntary arbitration. -
The 
parties to a collective bargaining agreement shall include therein provisions that will 
ensure the mutual observance of its terms and conditions. They shall establish a 
machinery for the adjustment and resolution of grievances arising from the interpretation 
or implementation of their collective bargaining agreement and those arising from the 
interpretation or enforcement of company personnel policies. 
All grievances submitted to the grievance machinery which are not settled within 
seven (7) calendar days from the date of its submission shall automatically be referred 
to voluntary arbitration prescribed in the collective bargaining agreement. 
For this purpose, parties to a collective bargaining agreement shall name and 
designate in advance a voluntary arbitrator or panel of voluntary arbitrators, or include in 
the agreement a procedure for the selection of such voluntary arbitrator or panel of 
voluntary arbitrators, preferably from the listing of qualified Voluntary Arbitrators duly 
accredited by the Board, In case the parties fail to select a Voluntary Arbitrator or panel 
of Voluntary Arbitrators, the Board shall designate the Voluntary Arbitrator or panel of 
Voluntary Arbitrators, as may be necessary, pursuant to the selection procedure agreed 
upon in the collective bargaining agreement, which shall act with the same force and 
effect as if the voluntary arbitrator or panel of voluntary arbitrators have been selected 
by the parties as described above, 
ARTICLE 267. 
Jurisdiction of voluntary arbitrators and panel of 
voluntary arbitrators. -
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall 
have original and exclusive jurisdiction to hear and decide all unresolved grievances 
arising from the interpretation or implementation of the Collective Bargaining Agreement 
and those arising from the interpretation or enforcement of company personnel policies 
referred to in the immediately preceding Article. Accordingly, violations of a Collective 
Bargaining Agreement, except those which are gross in character, shall no longer be 
treated as unfair labor practice and shall be resolved as grievances under the Collective 
Bargaining Agreement. For purposes of this Article, gross violations of a Collective 
Bargaining Agreement shall mean flagrant and/or malicious refusal to comply with the 
economic provisions of such agreement. 
The Commission, its Regional Offices and the Regional Directors of the 
Department of Labor and Employment shall not entertain disputes, grievances or 
matters under the exclusive and original jurisdiction of the voluntary arbitrator or panel 
of voluntary arbitrators and shall immediately dispose and refer the same to the 
grievance 'machinery or voluntary arbitration provided in the collective bargaining 
agreeme'nt. (n) 
ARTICLE 268. 
Jurisdiction over other labor disputes. -
The voluntary 
arbitrator or panel of voluntary arbitrators, upon agreement of the parties, shall also 
hear and decide all other labor disputes including unfair labor practices and bargaining 
deadlocks, 
92 


ARTICLE 269. 
Procedures. -
The voluntary arbitrator or panel of 
voluntary arbitrators shall have the power to hold hearings, receive evidences and take 
whatever action is necessary to resolve the issue or issues subject of the dispute, 
including efforts to effect a voluntary settlement between parties. 
All parties to the dispute shall be entitled to attend the arbitration proceedings. 
The attendance of any third party or the exclusion of any witness from the proceedings 
shall be determined by the voluntary arbitrator or panel of voluntary arbitrators. 
Hearings may be adjourned for cause or upon agreement by the parties. 
Unless the parties agree otherwise, it shall be mandatory for the voluntary 
arbitrator or panel of voluntary arbitrators to render an award or decision within twenty 
(20) calendar days from the date of submission of the dispute to voluntary arbitration. 
The award or decision of the Voluntary Arbitrator or panel of Voluntary. Arbitrators 
shall contain the facts and the law on which it is based. It shall be final and executory 
after ten (10) calendar days from receipt of the copy of the award or decision by the 
parties. 
Upon motion of any interested party, the voluntary arbitrator or panel of voluntary 
arbitrators or the Labor Arbiter in the region where the movant resides, in case of the 
absence or incapacity of the voluntary arbitrator or panel of voluntary arbitrators for any 
reason, may issue a writ of execution requiring either the sheriff of the Commission or 
regular courts or any public official whom the parties may designate in the submission 
agreement to execute the final decision, order or award. 
ARTICLE 270. 
Cost of Voluntary Arbitration and Voluntary Arbitrator's 
fee. -
The cost of Voluntary Arbitration including the Voluntary Arbitrator's fee shall be 
borne by the special voluntary arbitration fund to be supplemented by the appropriations 
of the budget of the Board, if necessary. The fixing of the fee of Voluntary Arbitrators or 
panel of Voluntary Arbitrators, to be determined by the Board shall take into account 
the following factors: 
(a) 
Nature of the case; 
(b) 
Time consumed in hearing the case; 
(c) 
Professional standing of the voluntary arbitrator; and 
(d) 
Fees provided for in the Revised Rules of Court. (A, Art.262-B) 
TITLE VIII 
STRIKES AND LOCKOUTS AND FOREIGN INVOLVEMENT 
IN TRADE UNION ACTIVITIES 
ARTICLE 271. 
policy of the State to 
bargaining. 
CHAPTER I 
STRIKES AND LOCKOUTS 
Strikes, picketing and lockouts. -
(a) It is the 
encourage free trade unionism and free collective 
93 


(b) 
'Workers shall have the right to engage in concerted activities for 
purposes of, collective bargaining or for their mutual benefit and protection. The 
right of legitimate labor organizations to strike and picket and of employers to 
lockout, consistent with the national interest, shall continue to be recognized and 
respected. However, no labor union may strike and no employer may declare a 
lockout on grounds involving inter-union and intra-union disputes. 
(c) 
In cases of bargaining deadlocks, the duly certified or recognized 
bargaining agent may file a notice of strike or the employer may file a notice of 
lockout with the Department at least thirty (30) days before the intended date 
thereof. In cases of unfair labor practice, the period of notice shall be fifteen (15) 
days and in the absence of a duly certified or recognized bargaining agent, the 
notice of strike may be filed by any legitimate labor organization in behalf of its 
members. However, in case of dismissal from employment of union officers duly 
elected in accordance with the union constitution and by-laws, which may 
constitute union busting where the existence of the union is threatened, the 15-
day cooling-off period shall not apply and the union may take action immediately. 
(d) 
The notice must be in accordance with such implementing rules 
and regulations as the Secretary of Labor and Employment may promulgate. 
(e) 
During the cooling-off period, it shall be the duty of the Department 
to exert all efforts at mediation and conciliation to effect a VOluntary settlement. 
Should the dispute remain unsettled until the lapse of the requisite number of 
days from the mandatory filing of the notice, the labor union may strike or the 
employer may declare a lockout. 
(f) 
A decision to declare a strike must be approved by a majority of the 
total union membership in the bargaining unit concemed, obtained by secret 
ballot in meetings or referenda called for that purpose. A decision to declare a 
lockout must be approved by majority of the board of directors of the corporation 
or association or of the partners in a partnership, obtained by secret ballot in a 
meeting called for that purpose. The decision shall be valid for the duration of the 
dispute based on substantially the same grounds considered when the strike or 
lockout vote was taken, The Department may, at its own initiative or upon the 
request of any affected party, supervise the conduct of the secret balloting, In 
every case, the union or the employer shall fumish the Department the results of 
the voting at least seven days before the intended strike or lockout, subject to the 
cooling-off period herein provided. 
, 
(g) , When there exists a labor dispute causing or likely to cause a strike 
or lockout in an enterprise engaged in providing essential services such as, 
hospital, electrical services, water supply and communication and transportation, 
the Secretary of Labor and Employment may assume jurisdiction over the 
dispute and decide it or certify the same to the Commission for compulsory 
arbitration. Such assumption or certification shall have the effect of automatically 
enjoining the intended or impending strike or lockout as specified in the 
assumption or certification order. If one has already taken place at the time of 
assumption or certification, all striking or locked out employees shall immediately 
retum to work and the employer shall immediately resume operations and 
readmit all workers under the same terms and conditions prevailing before the 
strike or lockout. The Secretary of Labor and Employment or the Commission 
may seek the assistance of law enforcement agencies to ensure compliance with 
this provision as well as with such orders as he may issue to enforce the same. 
94 


In line with the national concern for and the highest respect accorded to 
the right of patients to life and health, strikes and lockouts in hospitals, clinics and 
similar medical institutions shall, to every extent possible, be avoided, and all 
serious efforts, not only by labor and management but government as well, be 
exhausted to substantially minimize, if not prevent, their adverse effects on such 
life and health, through the exercise, however legitimate, by labor of its right to 
strike and by management to lockout. In labor disputes adversely affecting the 
continued operation of such hospitals, clinics or medical institutions, it shall be 
the duty of the striking union or locking-out employer to provide and maintain an 
effective skeletal workforce of medical and other health personnel, whose 
movement and services shall be unhampered and unrestricted, as are necessary 
to insure the proper and adequate protection of the life and health of its patients, 
most especially emergency cases, for the duration of the strike or lockout. In 
such cases, therefore, tlie Secretary of Labor and Employment may immediately 
assume, within twenty four (24) hours from knowledge of the occurrence of such 
a strike or lockout, jurisdiction over the same or certify it to the Commission for 
compulsory arbitration. For this purpose, the contending parties are strictly 
enjoined to comply with such orders, prohibitions and/or injunctions as are issued 
by the Secretary of Labor and Employment or the Commission, under pain of 
immediate disciplinary action, including dismissal or loss of employment status or 
payment by the locking-out employer of backwages, damages and other 
affirmative relief, even criminal prosecution against either or both of them. 
The foregoing notwithstanding, the President of the Philippines shall not 
be precluded from determining the enterprises that, in his opinion, are engaged 
in providing essential services and from intervening at any time and assuming 
jurisdiction over any labor dispute in such enterprises in order to settle or 
terminate the same. 
(h) 
Before or at any stage of the compulsory arbitration process, the 
parties may opt to submit their dispute to voluntary arbitration. At the instance of 
a union or an employer who has taken all the required steps for the declaration of 
a strike or a lockout respectively, in lieu of said union actually going on strike or 
such employer actually declaring a lockout, either party may request the 
Secretary of labor and Employment to assume jurisdiction over the labor dispute. 
(i) 
The Secretary of Labor and Employment, the Commission or the 
VOluntary arbitrator or panel of voluntary arbitrators shall decide or resolve the 
dispute within thirty (30) calendar days from the date of the assumption of 
jurisdiction or the certification or submission of the dispute, as the case may be. 
The decision of the President, the Secretary of Labor and Employment, the 
Commission or the voluntary arbitrator or panel of voluntary arbitrators shall be 
final and executory ten (10) calendar days after receipt thereof by the parties. 
(Art.263-a) 
ARTICLE 272. 
Prohibited activities. -
(a) No labor organization or 
employer shall declare a strike or lockout without first having bargained collectively in 
accordance with Title VII of this Book or without first having filed the notice required in 
the preceding Article or without the necessary strike or lockout vote first having been 
obtained and reported to the Department. 
No strike or lockout shall be declared after assumption of jurisdiction by the 
President or the Secretary or after certification or submission of the dispute to 
compulsory or voluntary arbitration or during the pendency of cases involving the same 
grounds for the strike or lockout. 
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Any worker whose employment has been terminated as a consequence of an 
unlawful lockout shall be entitled to reinstatement with full backwages. Any union officer 
who knowingly participates in an illegal strike and any worker or union officer who 
knowingly participates in the commission of illegal acts during a strike may be declared 
to have lost his employment right: Provided, That mere participation of a worker in a 
lawful strike shall not constitute sufficient ground for termination of his employment, 
even if a replacement had been hired by the employer during such lawful strike. 
(b) 
No person shall obstruct, impede or interfere with by force, violence, 
coercion, threats or intimidation any peaceful picketing by employees during any labor 
controversy or in the exercise of the right of self-organization or collective bargaining or 
shall aid or abet such obstruction or interference. 
(c) 
No employer shall use or employ any strike-breaker nor shall any person 
be employed as a strike-breaker. 
(d) 
No public official or employee, including officers and personnel of the New 
Armed Forces of the Philippines or the Integrated National Police, or armed persons, 
shall bring in, introduce or escort in any manner, any individual who seeks to replace 
strikers in entering or leaving the premises of a strike area, or work in place of the 
strikers. The police force shall keep out of the picket lines unless actual violence or 
other criminal acts occur therein: Provided, That nothing herein shall be interpreted to 
prevent any public officers from taking any measure necessary to maintain peace and 
order, protect life and property, and/or enforce the law and legal order. 
(e) 
No person engaged in picketing shall commit any act of violence, coercion 
or intimidation or obstruct the free ingress to or egress from the employer's premises for 
lawful purposes, or obstruct public thoroughfares. Provided, however, that the exercise 
of free ingress to or egress from the employers' premises shall not be used to take out 
company's products, machineries and equipment or to bring in new employees for the 
operation of the company. 
(f) The National Labor Relations Commission shall have the power to enjoin or 
restrain any~ctual or threatened commission of any or all prohibited or unlawful acts or 
to require the performance of a particular act in any labor dispute Which, if not restrained 
or perforrped forthwith, may cause grave or irreparable damage to any party: Provided, 
That no temporary or permanent injunction in any case involving or growing out of a 
labor dispute as defined in this Code shall be issued except after hearing the testimony 
of witnesses, with opportunity for cross-examination, in support of the allegations of a 
complaint made under oath, and testimony in opposition thereto, if offered, and only 
after a finding of fact by the Commission, to the effect: 
(1) 
That prohibited or unlawful acts have been threatened and will be 
committed and will be continued unless restrained, or have been committed and will be 
continued unless restrained, but no injunction or temporary restraining order shall be 
issued on account of any threat, prohibited or unlawful act, except against the person or 
persons, association or organization making the threat or committing the prohibited or 
unlawful act or actually authorizing or ratifying the same after actual knowledge thereof; 
(2) 
That SUbstantial and irreparable injury to complainant's property will follow; 
(3) 
That, as to each item of relief to be granted, greater injury will be inflicted 
upon complainant by the denial of relief than will be inflicted upon defendants by the 
granting of relief; 
(4) 
That complainant has no adequate remedy at law; and 
96 


(5) 
That the public officers charged with the duty to protect complainant's 
property are unable or unwilling to furnish adequate protection. 
Such hearing shall be held after due and personal notice thereof has been 
served, in such manner as the Commission shall direct, to all known persons against 
whom relief is sought, and also to the Chief Executive and other public officials of the 
province or city within which the unlawful acts have been threatened or committed 
charged with the duty to protect complainant's property: Provided, however, That if a 
complainant shall also allege that, unless a temporary restraining order shall be issued 
without notice, a substantial and irreparable injury to complainant's property will be 
unavoidable,' such a temporary restraining order may be issued upon testimony under 
oath, sufficient, if sustained, to justify the Commission in issuing a temporary injunction 
upon hearing after notice. Such a temporary restraining order shall be effective for no 
longer than twenty (20) days and shall become void at the expiration of said twenty (20) 
days. No such temporary restraining order or temporary injunction shall be issued 
except on condition that complainant shall first file an undertaking with adequate 
security in an amount to be fixed by the Commission sufficient to recompense those 
enjoined for any loss, expense or damage caused by the improvident or erroneous 
issuance of such order or injunction, including all reasonable costs, together with a 
reasonable attorney's fee, and expense of defense against the order or against the 
granting of any injunctive relief sought in the same proceeding and subsequently denied 
by the Commission. 
The undertaking herein mentioned shall be understood to constitute an 
agreement entered into by the complainant and the surety upon which an order may be 
rendered in the same suit or proceeding against said complainant and surety, upon a 
hearing to assess damages, of which hearing complainant and surety shall have 
reasonable notice, the said complainant and surety submitting themselves to the 
jurisdiction of the Commission for that purpose. But nothing herein contained shall 
deprive any party having a claim or cause of action under or upon such undertaking 
from electing to pursue his ordinary remedy by suit at law or in equity: Provided, further, 
That the reception of evidence for the application of a writ of injunction may be 
delegated by the Commission to any of its Labor Arbiters who shall conduct such 
hearings in such places as he may determine to be accessible to the parties and their 
witnesses and shall submit thereafter his recommendation to the Commission. (Art.264-
a) 
ARTICLE 273. 
Improved offer balloting. -
In an effort to settle a strike, 
the Department of Labor and Employment shall conduct a referendum by secret 
balloting on the improved offer of the employer on or before the 15th day of the strike. 
When at least a majority of the union members vote to accept the improved offer, the 
striking workers shall immediately return to work and the employer shall thereupon 
readmit them upon the signing of the agreement. 
In case of a lockout, the Department of Labor and Employment shall also 
conduct a referendum by secret balloting on the reduced offer of the union on or before 
the 30th day of the lockout. When at least a majority of the board of directors or trustees 
or the partners holding the controlling interest in the case of a partnership vote to accept 
the reduced offer, the workers shall immediately return to work and the employer shall 
thereupon readmit them upon the signing of the agreement. 
TITLE VIII 
97 


STRIKES AND LOCKOUTS AND FOREIGN INVOLVEMENT 
IN TRADE UNION ACTIVITIES 
CHAPTER II 
ASSISTANCE TO LABOR ORGANIZATIONS 
ARTICLE 274. 
Assistance 
by 
the 
Department 
of 
Labor 
and 
Employment. -
The Department of Labor and Employment, at the initiative of the 
Secretary of Labor and Employment, shall extend special assistance to the organization 
for purposes of collective bargaining of the most underprivileged workers who, for 
reasons of occupation, organizational structure or insufficient incomes are not normally 
covered by major labor organizations or federations. 
ARTICLE 275. 
Assistance by the Institute for Labor and Manpower 
Studies. -
The Institute for Labor and Manpower Studies shall render technical and 
other forms of assistance to labor organizations and employer organizations in the field 
of labor education, especially pertaining to collective bargaining, arbitration, labor 
standards and the Labor Code of the Philippines in general. (Section 20 of E.O.126-a) 
TITLE VIII 
STRIKES AND LOCKOUTS AND FOREIGN INVOLVEMENT 
IN TRADE UNION ACTIVITIES 
CHAPTER III 
FOREIGN ACTIVITIES 
ARTICLE 276. 
Prohibition against aliens; exceptions. -
All alien, natural 
or juridical, as well as all foreign organizations are strictly prohibited from engaging 
directly or indirectly in all forms of trade union activities without prejudice to normal 
contacts between Philippine labor unions and recognized international labor centers: 
Provided, however, That aliens working in the country with valid permits issued by the 
Department of Labor and Employment may exercise the right to self-organization and 
join or assist labor organizations. of their own choosing for purposes of collective 
bargaining: Provided, further, That said aliens are nationals of a country which grants 
the same or similar rights to Filipino workers. 
ARTICLE 277. 
Regulation offoreign assistance. -
(a) 
No 
foreign 
individual, organization or entity may give any donations, grants or other forms of 
assistance, in cash or in kind, directly or indirectly, to any labor organization, group of 
workers or any auxiliary thereof, such as cooperatives, credit unions and institutions 
engaged in research, education or communication, in relation to trade union activities 
without prior permission by the Secretary of Labor and Employment. 
"Trade union activities" shall mean: 
(1) 
organization, formation and administration of labor organizations; 
(2) 
negotiation and administration of collective bargaining agreements; 
(3) 
all forms of concerted union action; 
98 


• 
(4) 
organizing, managing or assisting union conventions, meetings, rallies, 
referenda, teach-ins, seminars, conferences and institutes; 
(5) 
any form of participation or involvement in representation proceedings, 
representation elections, consent elections, union elections; and 
(6) 
, 
other activities or actions analogous to the foregoing. 
(b)' 
This prohibition shall equally apply to foreign donations, grants or other 
forms of assistance, in cash or in kind, given directly or indirectly to any employer or 
employer's organization to support any activity or activities affecting trade unions. 
(c) 
The Secretary of Labor and Employment shall promulgate rules and 
regulations to regulate and control the giving and receiving of such donations, grants, or 
other forms of assistance, including the mandatory reporting of amounts of donations or 
grants, the specific recipients thereof, the projects or activities proposed to be supported 
and their duration. 
ARTICLE 278. Applicability to farm tenants and rural workers --- The 
provisions of this Title pertaining to foreign organizations and activities shall be deemed 
applicable to all organizations of farm tenants, rural workers and the like, provided that 
in appropriate cases the Secretary of Agrarian Reform shall exercise the powers and 
responsibilities vested by this Title in the Secretary of Labor and Employment. 
TITLE VIII 
STRIKES AND LOCKOUTS AND FOREIGN INVOLVEMENT 
IN TRADE UNION ACTIVITIES 
CHAPTER IV 
PENALTIES FOR VIOLATION 
ARTICLE 279. 
Penalties. -
(a) Any person violating any of the provisions 
of Article 264 of this Code shall be punished by a fine of not less than ten thousand 
pesos (~1 0, 000.00) nor more than one hundred thousand pesos (~1 00, 000.00) and/or 
imprisonment for not less than three (3) years nor more than six (6) years, or both such 
fine and imprisonment, at the discretion of the court. Prosecution under this provision 
shall preclude prosecution for the same act under the Revised Penal Code, and vice 
versa. 
(b) 
Upon the recommendation of the Secretary of Labor and Employment and 
the Secretary of National Defense, foreigners who violate the provisions of this Title 
shall be subject to immediate and summary deportation by the Commission on 
Immigration and Deportation and shall be permanently barred from re-entering the 
country without the special permission of the President of the Philippines. 
TITLE IX 
SPECIAL PROVISIONS 
ARTICLE 280. 
Study of labor-management relations. -
The Secretary of 
Labor and Employment shall have the power and it shall be his duty to inquire into: 
99 


(a) 
The existing relations between employers and employees in the 
Philippines; 
(b) 
The growth of associations of employees and the effect of such 
associations upon employer-employee relations; 
(c) 
The extent and results of the methods of collective bargaining in the 
determination of terms and conditions of employment; 
(d) 
The methods, which have been tried by employers and associations of 
employees for maintaining mutually satisfactory relations; 
(e) 
Desirable industrial practices which have been developed through 
collective bargaining for settling differences; 
(f) 
The possible ways of increasing the usefulness and efficiency of collective 
bargaining for settling differences; 
(g) 
The possibilities for the adoption of practical and effective methods of 
labor-management cooperation; 
(h) 
Any other aspects of employer-employee relations concerning the 
promotion of harmony and understanding between the parties; and 
(i) . 
The relevance of labor laws and labor relations to national development. 
The Secretary of Labor and Employment shall also inquire into the causes of 
industrial unrest and take all the necessary steps within his powers as may be 
prescribed by law to alleviate the same, and shall from time to time recommend the 
enactment of such remedial legislation as in his judgment may be desirable for the 
maintenance and promotion of industrial peace. 
ARTICLE 281. 
Miscellaneous provisions. -
(a) The Secretary of Labor 
and Employment and the Secretary of the Budget shall cause to be created or 
reclassified in accordance with law such positions as may be necessary to carry out the 
objectives of this Code and cause the upgrading of the salaries of the personnel 
involved in the Labor Relations System of the Department. Funds needed for this 
purpose shall be provided out of the Special Activities Fund appropriated by Batas 
Pambansa Big. 80 and from annual appropriation thereafter. 
(b) 
A Special Voluntary Arbitration Fund is hereby established in the Board to 
subsidize the cost of voluntary arbitration in cases involving the interpretation and 
implementation of the Collective Bargaining Agreement, including the Arbitrator's fees, 
and for such other related purposes to promote and develop voluntary arbitration. The 
Board shall administer the Special Voluntary Arbitration Fund in accordance with the 
guidelines it may adopt upon the recommendation of the Council, which guidelines shall 
be subject to the approval of the Secretary of Labor and Employment. Continuing funds 
needed for this purpose in the initial yearly amount of fifteen million pesos (~15, 
000,000.00) shall be provided in the 1989 and subsequent annual General 
Appropriations Acts. 
The amount of subsidy in appropriate cases shall be determined by the Board in 
accordance with established guidelines issued by it upon the recommendation of the 
Council. 
100 


The Pund shall also be utilized for the operation of the Council, the training and 
education of Voluntary Arbitrators, and the Voluntary Arbitration Program. 
(c) 
The Department of Labor and Employment shall help promote and 
gradually develop, with the agreement of labor organizations and employers, labor-
management cooperation programs at appropriate levels of the enterprise based on 
shared responsibility and mutual respect in order to ensure industrial peace and 
improvement in productivity, working conditions and the quality of working life. 
(d) 
In establishments where no legitimate labor organization exists, labor-
management committees may be formed voluntarily by workers and employers for the 
purpose of promoting industrial peace. The Department of Labor and Employment shall 
endeavor to enlighten and educate the workers and employees on their rights and 
responsibilities through labor education with emphasis on the policy thrusts of this 
Code. (Art.277 -a) 
SECTION 7. 
BOOK SIX 
POST EMPLOYMENT 
TITLE I 
TERMINATION OF EMPLOYMENT 
ARTICLE 282. 
Coverage. -
The provisions of this Title shall apply to all 
establishments or undertakings, whether for profit or not. 
ARTICLE 283. 
Security of Tenure. --
No employer shall terminate the 
services of an employee except for a just cause or when authorized by this Title. A 
regular employee who is dismissed from work without just or authorized cause shall 
be entitled to reinstatement without loss of seniority rights and other privileges and 
to his full backwages, inclusive of allowances, and to his other benefits or their 
monetary equivalent computed from the time his 
compensation was withheld 
from him up to the time of his actual reinstatement. If the employee illegally dismissed 
is temporary, he shall be entitled to a full salary for the unexpired portion of the agreed 
period and unpaid benefits. 
In every case of illegal dismissal or termination the 
employer is liable for damages and litigation costs. 
, 
The term "employer" includes a contractor or subcontractor. (Art.279-a) 
ARTICLE 284. 
Regular and Temporary Employment. -- The provisions of 
written 
agreement 
to 
the 
contrary notwithstanding and regardless of the oral 
agreement of the parties, an employment shall be deemed to be regular or for an 
indefinite period where the employee has been engaged to perform activities which are 
usually necessary or desirable in the usual business or trade of the employer. 
Employment is temporary or for a definite period and may be terminated at the 
end of the period, where the employment has been fixed for a specific project or 
undertaking the completion or termination of which has been determined at the time of 
the engagement of the employee; where the work or services to be performed is 
seasonal in nature and the employment is for the duration of the season; or where both 
the employer and the employee freely and knowingly enter into a term employment 
contract in view of the temporary nature of the task or job. 
101 


• 
The requirements of law intended to protect security of tenure and the exercise of 
the right to self-organization are applicable to regular as well as temporary employees 
for the duration of their employment. (Art.280-a) 
ARTICLE. 285. Probationary employment. -- Regardless of the nature of the 
work to be performed, probationary employment shall not exceed six (6) months from 
the first day of service for all workers, including teachers in both the public and private 
schools. Any stipulation to the contrary shall be void. 
The services of an employee 
who has been engaged on a probationary basis may be terminated for a just cause or 
when he fails to qualify as a regular employee in accordance with reasonable standards 
made known by the employer to the employee at the time of his engagement. 
An 
employee who is allowed to work after a probationary period whether broken or not shall 
be considered a regular employee. (Art.281-a) 
ARTICLE 286. Termination by employer.-- An employer may terminate an 
employment for any of the following causes: 
, 
(a) Serious misconduct or willful disobedience by the employee of the lawful 
orders of his employer or representative in connection with his work; 
(b) Gross and habitual neglect by the employee of his duties; 
(c) Fraud or willful breach by the employee of the trust reposed in him by his 
employer or duly authorized representative; 
(d) Commission of a crime or offense by the employee against the person of 
his 
employer 
or 
any immediate 
member of his family or his duly 
authorized 
representative; and 
Subject to the constitutional right of workers to security of tenure and their right 
to be protected against dismissal except for a just and authorized cause and 
without prejudice to the requirement of notice under Article 287 of this Code the 
employer shall furnish the worker whose employment is sought to be terminated a 
written notice containing a statement of the causes for termination and shall afford 
the latter ample opportunity to be heard and to defend himself with the assistance of 
his 
representative 
if he 
so 
desires in accordance with 
company 
rules 
and 
regulations promulgated pursuant to guidelines set by the Department of Labor and 
Employment. Any decision taken by the employer shall be without prejudice to the right 
of the worker to contest the validity or legality of his dismissal by filing a complaint with 
the regional branch of the National Labor Relations Commission. The burden of proving 
that the termination was for a valid or authorized cause shall rest on the employer. 
The Secretary of the Department of Labor and Employment may suspend the effects of 
the termination pending resolution of the dispute in the event of a prima facie finding 
by the appropriate official of the Department of Labor and Employment before whom 
such dispute is pending that the termination may cause a serious labor dispute or is in 
implementation of a mass lay-off. (Art.282-A) 
ARTICLE 287. Closure of establishment and reduction of personnel. -- The 
employer may also terminate the employment of any employee due to the installation 
of labor saving devices, redundancy, retrenchment. to prevent losses or the closing or 
cessation of operation of the establishment or undertaking unless the closing is for the 
purpose of circumventing the provisions of this Title, by serving a written notice on the 
workers and the Department of Labor and Employment at least two (2) months before 
the intended date thereof. 
In any of these cases, the worker affected thereby shall be 
102 


• 
entitled to a separation pay equivalent to at least one (1) month payor to at least one (1) 
month pay for every year of service, whichever is higher. In case of retrenchment to 
prevent losses and in cases of closures or cessation of operations of establishment or 
undertaking not due to serious business losses or financial reverses, the separation 
pay shall be equivalent to a minimum of one (1) month pay for every year of service. A 
fraction of at least six (6) months shall be considered one (1) whole year. 
Retrenchment requires proof of actual losses or declining revenues of substantial 
proportion. (Art.283-a) 
ARTICLE. 288. 
Disease as ground for termination. -
An employer may 
terminate the services of an employee who has been found to be suffering from any 
disease and whose continued employment is prohibited by law or is prejudicial to his 
health as well as to the health of his co-employees, as certified to by the company 
physician or a physician of the Employee's Compensation Commission or the Social 
Security System; Provided, That he is paid separation pay equivalent to at least one (1) 
month salary or to one-half (1/2) month salary for every year of service, whichever is 
greater, a fraction of at least six (6) months being considered as one (1) whole year. 
(Art.284-a) 
ARTICLE 289. 
Termination by employee. -
(a) An employee may terminate 
without just cause the employee-employer relationship by serving a written notice on the 
employer at least one month in advance. The employer upon whom no such notice was 
served may hold the employee liable for damages. 
(b) 
An employee may put an end to the relationship without serving any notice 
on the employer for any of the following just causes: 
(1) 
Serious insult by the employer or his representative on the honor and 
person of the employee; 
(2) 
Inhuman and unbearable treatment accorded the employee by the 
employer or his representative; 
(3) 
'Commission of a crime or offense by the employer or his representative 
against the. person of the employee or any of the immediate members of his family; and 
(4) 
Other causes analogous to any of the foregoing. 
ARTICLE 290. 
When employment not deemed terminated. -
The bona 
fide suspension of the operation of a business or undertaking for a period not exceeding 
six months, or the fulfillment by the employee of a military or civic duty shall not 
terminate employment. In all such cases, the employer shall reinstate the employee to 
his former position without loss of seniority rights if he indicates his desire to resume his 
work not later than one month from the resumption of operations of his employer or from 
his relief from the military or civic duty. 
ARTICLE 291. 
Merger or consolidation of employer corporations. 
Where two (2) or more corporations merge or consolidate into a single corporation, the 
surviving or consolidated corporation shall be responsible ,for all the liabilities and 
obligations of each of the constituent corporations in the same manner as if such 
surviving or consolidated corporation had itself incurred such liabilities or obligations, 
Any pending claim, action or proceeding brought by the employees against any of such 
constituent corporations may be prosecuted against the surviving or consolidated 
corporation. The rights of employees, including those arising from collective bargaining 
agreements, their security of tenure and seniority rights, or any of such constituent 
103 


corporations shall continue to be respected by the surviving or consolidated corporation, 
and not be impaired by such merger or consolidation. 
In the case of a merger of corporations, each of which has an exclusive 
bargaining agent, the exclusive bargaining agent of the surviving corporation shall be 
the exclusive bargaining agent of all the employees of the merged bargaining units. In 
the case of a consolidation of corporations, each of which has an exclusive bargaining 
agent, the exclusive bargaining agent at the consolidated bargaining units shall be 
determined by certification elections. (n) 
TITLE II 
RETIREMENT FROM THE SERVICE 
ARTICLE 292. 
Retirement. -
Any employee may be retired upon reaching 
the retirement age established in the collective bargaining agreement or other 
applicable employment contract. 
In case of retirement, the employee shall be entitled to receive SUGh retirement 
benefits as he may have earned under existing laws and any collective bargaining or 
other agreements: Provided, however, That an employee's retirement benefits under 
any collective bargaining and other agreements shall not be less than those provided 
herein. 
In the absence of a retirement 
plan or agreement providing for retirement 
benefits of employees in the establishment, an employee upon reaching the age of sixty 
(60) years or more, but not beyond sixty-five (65) years which is hereby declared the 
compulsory retirement age, who has served at least five (5) years in the said 
establishment, may retire and shall be entitled to retirement pay equivalent to at least 
one-half (1/2) month salary for every year of service, a fraction of at least six (6) months 
being considered as one whole year. 
Unless the parties provide for broader inclusions, the term "one half (1/2) month" 
salary shall mean fifteen (15) days plus one-twelfth (1/12) of the 13th month pay and the 
cash equivalent of not more than five (5) days of service incentive leaves. 
Retail, service and agricultural establishments or operations employing not more 
than ten (10) employees or workers are exempted from the coverage of this provision. 
Violation of this provision is hereby declared unlawful and subject to the penal 
provisions under Article 293 of this Code. 
SECTION 8. 
BOOK SEVEN 
Transitory and Final Provisions 
TITLE I 
Penal Provisions and Liabilities 
ARTICLE 293. 
Penalties. -
Except as otherwise provided in this Code, or 
unless the act complained of hinges on a question of interpretation or implementation of 
ambiguous provisions of an existing collective bargaining agreement any violation of the 
104 


provisions of this Code declared to be unlawful or penal in nature shall be punished with 
a fine of not less than One Thousand Pesos (~1 ,000.00) nor more than Ten Thousand 
Pesos (~1 0,000.00), or imprisonment of not less than three months nor more than three 
years, or both such fine and imprisonment at the discretion of the court. 
In addition to such penalty, any alien found guilty shall be summarily deported 
upon completion of service of sentence. 
Any provision of law to the contrary notwithstanding, any criminal offense 
punished in this Code shall be under the concurrent jurisdiction of the Municipal or 
Regional Trial Court. 
ARTICLE 294. 
Who are liable when committed by other than natural 
person. -
If the offense is committed by a corporation, trust, firm, partnership, 
association or any other entity, the penalty shall be imposed upon the guilty officer or 
officers of such corporation, trust, firm, partnership, association or entity. 
TITLE II 
Prescription of Offenses and Claims 
ARTICLE 295. 
Offenses. -
Offenses penalized under this Code and the 
rules and regulations issued pursuant thereto shall prescribe in three years. 
All unfair labor practices arising from Book V shall be filed with the appropriate 
agency within one year from accrual of such unfair labor practice; otherwise, they shall 
be forever bprred. 
ARTICLE. 296. Money Claims. - All money claims 
arising from 
employer-
employee relations shall be filed within five (5) years from the time the cause of action 
accrued, otherwise they shall forever be barred. 
Employee dismissal actions shall prescribe in four (4) years. (Art.291-a) 
ARTICLE 297. 
Institution of money claims. -
Money claims specified in 
the immediately preceding Article shall be filed before the appropriate entity 
independently of the criminal action that may be instituted in the proper courts. 
Pending the final determination of the merits of money claims filed with the 
appropriate entity, no civil action arising from the same cause of action shall be filed 
with any court. This provision shall not apply to employees' compensation cases, which 
shall be processed and determined strictly in accordance with the pertinent provisions of 
this Code. 
TITLE III 
Transitory and Final Provisions 
ARTICLE 298. 
Application of law enacted prior to this Code. -
All 
actions or claims accruing prior to the effectivity of this Code shall be determined in 
accordance with the laws in force at the time of their accrual. 
105 


SECTION 
9. 
Authority to Issue Rules 
--
The Department of Labor and 
Employment shall promulgate the necessary rules and regulations to implement the 
provisions of this Code. 
SECTION 10. Separability clause --- If any provision or part thereof, or the 
application ttJereof to any person or circumstances, is held invalid, the remainder, or the 
application of such provision or part to other persons or circumstances, shall not be 
affected the"reby. 
SECTION 11. Repealing clause --- Presidential Decree No. 442, otherwise 
known as the Labor Code of the Philippines is hereby repealed. All provisions of 
existing laws, executive orders, decrees, rules and regulations or any part thereof, 
which are contrary to or inconsistent with the provisions of this Code are hereby 
repealed, amended or modified accordingly. 
Approved. 
106