Labor Standards For Printing.docx

A. FUNDAMENTAL PRINCIPLES AND POLICIES Constitutional Provisions ====================================== 1. ARTICLE II DECLARATION OF PRINCIPLES AND STATE POLICIES STATE POLICIES Section 9 Section 10 Section 11 Section 13 Section 14 Section 18 Section 20 2. ARTICLE III BILL OF RIGHTS Section 1 Section 4 Section 8 3. ARTICLE XIII SOCIAL JUSTICE AND HUMAN RIGHTS Section 1 Section 2 The most important provision that you should take note of is Section 3 of Article XIII which is the so-called protection-to-labor clause in the Constitution. 4. ARTICLE XIII LABOR Section 3 WOMEN Section 14 1. CONSTITUTIONAL PROVISIONS NOT APPLICABLE TO LABOR CASES. The following constitutional rights and precepts may NOT be invoked in labor cases, particularly in administrative investigations leading to the termination of employment: a. Constitutional Due Process: *Serrano v. NLRC case. *Agabon v. NLRC case. b. Right to Equal Protection of the Laws. It is a settled principle that the commands of the equal protection clause are addressed only to the state or those acting under color of its authority. The equal protection clause erects no shield against merely private conduct, however, discriminatory or wrongful it may have been. *Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc., [G.R. No. 162994, September 17, 2004]. *Yrasuegui v. Philippine Airlines, Inc., [G.R. No. 168081, October 17, 2008].

c. Right to Counsel. *Manuel v. N. C. Construction Supply, [G.R. No. 127553, November 28, 1997, 282 SCRA 326]. *Punzal v. ETSI Technologies, Inc., [G.R. Nos. 170384-85, March 9, 2007]. d. Right Against Self-Incrimination. *Pascual, Jr. v. Board of Medical Examiners, [G.R. No. L-25018, May 26, 1969] *Cabal v. Kapunan, Jr., G.R. No. L-19052, December 29, 1962]. e. Right Against Unreasonable Searches and Seizures. *Waterous Drug Corporation v. NLRC, [G.R. No. 113271, October 16, 1997, 280 SCRA 735].

2. CIVIL CODE PROVISION a. Article 1700 Section 2 - Contract of Labor 3. LABOR CODE PROVISIONS i. Article 3 ii.Article 211 iii.Article 212 iv.Article 255 B. RECRUITMENT AND PLACEMENT 1. LOCAL EMPLOYMENT; RECRUITMENT AND PLACEMENT. a. Definition of important terms. The following definitions are relevant to the rules governing local employment: 1. “Employment contract” refers to the contract entered into between the employer and the recruit; 2. “License” refers to the document issued by the DOLE Regional Office authorizing a person or entity to operate an employment agency; 3. “Licensee” refers to any person or entity duly licensed and authorized by the Department of Labor and Employment (DOLE) to operate a private employment agency; 4. “Placement fee” refers to the amount charged by private employment agency from an applicant worker for its services in the recruitment and placement of said worker; 5. “Private Employment Agency” refers to any person or entity engaged in the recruitment and placement of workers for local employment for a fee, which is charged directly or indirectly to the account of the recruit and/or employers; 6. “Recruit” refers to any person who directly applied to a private employment or authorized recruiter;

7. “Recruiter” refers to a recruitment agent of a licensed private employment agency who has been duly registered and authorized by the DOLE Regional Office to recruit workers; 8. “Recruitment and placement” refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, assigning, or advertising employment locally, whether for profit or not, provided, that any person or entity which, in any manner, offers or promises employment for a fee to one or more persons shall be deemed engaged in a recruitment and placement; 9. “Recruitment contract” refers to the contract entered into between a private employment agency and the recruit. 10. “Worker” refers to any member of the labor force whether employed or unemployed. b. Licensing of local recruitment and placement agencies. 1. Coverage. The Rules apply to all persons, entities and associations engaged in the recruitment and placement of workers for local employment for a fee, whether this is charged from the worker or the employer or both. 2. Prohibition. No person, entity, or association shall engage in the recruitment and placement of workers for a fee unless it has first secured a license from the Regional Office. 3. Citizenship requirement. Only Filipino citizens or corporations, partnerships or entities at least seventy-five percent (75%) of the authorized and voting capital stock of which is owned and controlled by Filipino citizens shall be permitted to participate in the recruitment and placement of workers for local employment. 4. Qualifications of license applicants. All applicants for license to operate private recruitment and placement agencies for local employment shall possess the following qualifications: (a) Citizenship requirement; (b) Appropriate capitalization of P25,000.00 in case of single proprietors or a minimum paid-up capital or net worth of P25,000.00 in the case of partnership or corporation; and (c) Applicant should be of good moral character and not otherwise disqualified by law, rules and regulations.

5. Validity of license. The license shall be valid for one (1) year from the date of issuance unless sooner cancelled or suspended by the Director for violation of any of the conditions prescribed in the license or of any applicable provision of the Labor Code or its Implementing Rules. 6. Non-transferability of license. No license shall be transferred, conveyed or assigned to any other person or entity, or used in any place other than that stated in the license, unless authorized by the Director. Any transfer of the business address, appointment or designation of any agency or representative of the licensee or establishment or branch offices shall be subject to the prior approval of the Regional Office. c. Authority to establish or operate branch office(s). 1. Prohibition. No licensee shall establish or operate branch office(s) unless the same has been registered and its operation duly authorized by the Regional Office.

d. Grant of authority to recruiters. 1. Prohibition. No person shall act as an agent or recruiter of a private recruitment and placement agency without prior authority from the DOLE Regional Office having jurisdiction over the place where recruitment activities will be undertaken. e. Renewal of license of local private recruitment and placement agency. 1. Request for renewal of license. A licensee may apply for the renewal of his license with the Regional Office concerned within forty-five (45) days before the expiration of his current license. f. Cancellation or suspension of license. 1. Complaints against private employment agency. Complaints based on any prohibited practices enumerated under Rule IX of the Rules and Regulations Governing Private Recruitment and Placement Agencies for Local Employment against a private employment agency shall be filed with the Regional Office where the agency/branch office is located, where the prohibited act was committed or at complainant’s place of residence, at the option of the complainant: Provided, That the Regional Office which first acquires jurisdiction over the case shall do so to the exclusion of the others. 2. Conduct of investigation. The proceedings shall be summary in character where technical rules of procedure may only be applied suppletorily. The investigation shall be terminated within fifteen (15) working days from the first hearing. The Regional Director shall resolve the case within ten (10) days thereafter. 3. Suspension of license pending investigation. Pending investigation of a complaint, the Director may suspend the license of the private employment agency concerned, on any of the following grounds: (a) Failure on the part of the agency to submit its position paper/comment on the complaint within the prescribed period or where it refuses to attend the hearing called by the Regional Office;

(b) Prima facie evidence shows that the agency has violated and continue to violate the Labor Code provision on the recruitment and placement of workers, its implementing rules and other issuances by the Secretary; and (c) There exist reasonable grounds showing that the continued operation of the agency will lead to further violations of the conditions of the license or the exploitation of the workers being recruited. 4. Cancellation of license. The Director shall have the power, after due notice and hearing, to cancel the license or authority of private employment agency for any violation of the provision of the Labor Code on recruitment and placement of workers and its implementing rules, and other issuances by the DOLE Secretary. 5. Appeals. Any party aggrieved by the decision of the Regional Director may appeal the same to the DOLE Secretary within ten (10) working days from receipt of his copy of the order on grounds of: (a) grave abuse of discretion; and (b) gross incompetence. The appeal shall be filed in the DOLE Regional Office which shall transmit the records to the DOLE Secretary within five (5) days from receipt of the appeal. The DOLE Secretary shall have thirty

(30) days from receipt of the records of the case to resolve the appeal. The decision of the DOLE Secretary shall be final and inappealable. 2. OVERSEAS EMPLOYMENT; RECRUITMENT AND PLACEMENT. a. Relevant laws on recruitment for overseas employment. 1. The Labor Code; 2. Migrant Workers and Overseas Filipinos Act of 1995 [R. A. No. 8042], as amended by R.A. No. 10022 (March 8, 2010). b. Definition of relevant terms. 1. “Overseas Filipinos” refer to migrant workers, other Filipino nationals and their dependents abroad. 2. “Overseas Filipino Worker or Migrant Worker” refers to a person who is to be engaged, is engaged, or has been engaged in a remunerated activity in a state of which he or she is not a citizen or on board a vessel navigating the foreign seas other than a government ship used for military or non-commercial purposes, or on an installation located offshore or on the high seas. A "person to be engaged in a remunerated activity" refers to an applicant worker who has been promised or assured employment overseas. 3. “Regular/Documented Filipino Migrant Workers” refer to the following: (1) Those who possess valid passports and appropriate visas or permits to stay and work in the receiving country; and (2) Those whose contracts of employment have been processed by the POEA, or subsequently verified and registered on-site by the POLO, if required by law or regulation. 4. “Seafarer” refers to any person who is employed or engaged in overseas employment in any capacity on board a ship other than a government ship used for military or noncommercial purposes. The definition shall include fishermen, cruise ship personnel and those serving on mobile offshore and drilling units in the high seas. 5. “Skilled Filipino Workers” refer to those who have obtained an academic degree, qualification, or experience, or those who are in possession of an appropriate level of competence, training and certification, for the job they are applying, as may be determined by the appropriate government agency. 6. “Underage Migrant Workers” refers to those who are below 18 years or below the minimum age requirement for overseas employment as determined by the Secretary of Labor and Employment. 7. “Overseas Filipino in Distress” refers to an Overseas Filipino who has a medical, psycho-social or legal assistance problem requiring treatment, hospitalization, counselling, legal representation as specified in Rule IX of these Rules or any other kind of intervention with the authorities in the country where he or she is found. 8. “Rehires” refer to land-based workers who renewed their employment contracts with the same principal. c. Terms of an employment contract govern the employment of an OFWs. In cases involving employment of overseas Filipino workers (OFWs), the rights and obligations among and between the OFWs, the local recruiter/agent, and the foreign employer/principal are governed by the employment contract. A contract freely entered into is considered the law between the parties and, therefore, should be respected.

In formulating the contract, the parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. d. Rules affecting overseas employment make a distinction between land-based overseas workers and seafarers. The rules on overseas employment is divided into two, namely: 1. POEA Rules and Regulations Governing the Recruitment and Employment of LandBased Overseas Workers; and 2. POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers. The obvious intent for the two (2) separate issuances is to distinguish between the rules applicable to landbased overseas workers and those applicable to seafarers (formerly termed as “seamen”). This is as it should be because of the unique and peculiar distinguishing features of maritime employment.

2.1. LICENSING AND REGULATION FOR OVERSEAS RECRUITMENT AND PLACEMENT. a. Qualifications. Only those who possess the following qualifications may be permitted to engage in the business of recruitment and placement of overseas Filipino workers: 1. Filipino citizens, partnerships or corporations at least seventy five percent (75%) of the authorized capital stock of which is owned and controlled by Filipino citizens; 2. A minimum capitalization of Two Million Pesos (P2,000,000.00) in case of a single proprietorship or partnership and a minimum paid-up capital of Two Million Pesos (P2,000,000.00) in case of a corporation; Provided, that those with existing licenses shall, within four years from effectivity hereof, increase their capitalization or paid up capital, as the case may be, to Two Million Pesos (P2,000,000.00) at the rate of Two Hundred Fifty Thousand Pesos (P250,000.00) every year. 3. Those not otherwise disqualified by law or other government regulations to engage in the recruitment and placement of workers for overseas employment. b. Disqualifications. The following are not qualified to engage in the business of recruitment and placement of Filipino workers overseas: a. Travel agencies and sales agencies of airline companies; b. Officers or members of the Board of any corporation or members in a partnership engaged in the business of a travel agency; c. Corporations and partnerships, when any of its officers, members of the board or partners, is also an officer, member of the board or partner of a corporation or partnership engaged in the business of a travel agency; d. Persons, partnerships or corporations which have derogatory records, such as, but not limited to, the following: 1) Those certified to have derogatory record or information by the National Bureau of Investigation or by the Anti-Illegal Recruitment Branch of the POEA;

2) Those against whom probable cause or prima facie finding of guilt for illegal recruitment or other related cases exists; 3) Those convicted for illegal recruitment or other related cases and/or crimes involving moral turpitude; and 4) Those agencies whose licenses have been previously revoked or cancelled by the Administration for violation of RA 8042, PD 442, as amended, and their implementing rules and regulations as well as the Rules and regulations. All applicants for issuance/renewal of license shall be required to submit clearances from the National Bureau of Investigation and Anti-Illegal Recruitment Branch, POEA, including clearances for their respective officers and employees. e. Any official or employee of the DOLE, POEA, OWWA, DFA and other government agencies directly involved in the implementation of R.A. No. 8042 and/or any of his/her relatives within the fourth (4th) civil degree of consanguinity or affinity; and f. Persons or partners, officers and directors of corporations whose licenses have been previously cancelled or revoked for violation of recruitment laws.

c. Provisional license. Applicants for new license shall be issued a provisional license which shall be valid for a limited period of one (1) year within which the applicant should be able to comply with its undertaking to deploy one hundred (100) workers to its new principal. The license of a complying agency shall be upgraded to a full license entitling it to another three years of operation. Non-complying agencies will be notified of the expiration of their license. d. Validity of the license. Except in case of a provisional license, every license shall be valid for four (4) years from the date of issuance unless sooner cancelled, revoked or suspended for violation of applicable Philippine law, the Rules and other pertinent issuances. Such license shall be valid only at the place/s stated therein and when used by the licensed person, partnership or corporation. e. Non-transferability of license. No license shall be transferred, conveyed or assigned to any person, partnership or corporation. It shall not be used directly or indirectly by any person, partnership or corporation other than the one in whose favor it was issued. In case of death of the sole proprietor and to prevent disruption of operation to the prejudice of the interest of legitimate heirs, the license may be extended upon request of the heirs, to continue only for the purpose of winding up the business operations. f. Change of ownership/relationship of single proprietorship or partnership. Transfer or change of ownership of a single proprietorship licensed to engage in overseas employment shall cause the automatic revocation of the license. A change in the relationship of the partners in a partnership duly licensed to engage in overseas employment which materially interrupts the course of the business or results in the actual dissolution of the partnership shall likewise cause the automatic revocation of the license. g. Upgrading of single proprietorships or partnerships. License holders which are single proprietorships or partnerships may, subject to the guidelines of the Administration (POEA), convert into corporations for purposes of upgrading or raising their capabilities to respond adequately to developments/changes in

the international labor market and to enable them to better comply with their responsibilities arising from the recruitment and deployment of workers overseas. The approval of merger, consolidation or upgrading shall automatically revoke or cancel the licenses of the single proprietorships, partnerships or corporations so merged, consolidated or upgraded. h. Derogatory record after issuance/renewal of license. The license of a single proprietorship or a partnership shall be suspended until cleared by the Administration (POEA) should any derogatory record be found to exist against the single proprietorship or any or all of the partners, as the case may be. The appointment of any officer or employee of any licensed agency may be cancelled or revoked at any time with due notice to the agency concerned, whenever said officer or employee is found to have any derogatory record, as herein contemplated.

i. Appointment/change of officers and personnel. Every appointment of agents or representatives of a licensed agency shall be subject to prior approval or authority of the Administration (POEA). The acknowledgment or approval may be issued upon submission of or compliance with the following: a. proposed appointment or special power of attorney; b. clearances of the proposed representative or agent from the National Bureau of Investigation (NBI)/Anti-Illegal Recruitment Branch, POEA; and c. sworn or verified statement by the designating or appointing person or company assuming full responsibility for all acts of the agent or representative done in connection with the recruitment and placement of workers. Every change in the composition of the Board of Directors of a corporation, appointment or termination of officers and personnel shall be registered with the Administration (POEA) within thirty (30) calendar days from the date of such change. The agency shall be required to submit the minutes of proceedings duly certified by the SEC in case of election of new members of the Board of Directors with their bio-data, ID pictures and clearances. The Administration (POEA) reserves the right to deny the acknowledgment or appointment of officers, employees and representatives who were directly involved in recruitment irregularities. j. Publication of change of directors/other officers and personnel; revocation or amendment of appointment of representatives. In addition to the requirement of registration with and submission to the Administration (POEA), every change in the membership of the Board of Directors, termination for cause of other officers and personnel, revocation or amendment of appointment of representatives shall be published at least once in a newspaper of general circulation, in order to bind third parties. Proof of such publication shall be submitted to the Administration (POEA). k. Transfer of business address. Any transfer of business address shall be effected only with prior authority or approval of the Administration (POEA). The approval shall be issued only upon formal notice of the intention to transfer with the following attachments: a. In the case of a corporation, a Board Resolution duly registered with the SEC authorizing the transfer of business address; and b. Copy of the contract of lease or proof of building ownership.

The new office shall be subject to the regular ocular inspection procedures by duly authorized representatives of the Administration (POEA). A notice to the public of the new address shall be published in a newspaper of general circulation. l. Establishment of additional/extension offices. Additional/extension offices may be established subject to the prior approval of the Administration (POEA).38

m. Conduct of recruitment outside of registered office. No licensed agency shall conduct any provincial recruitment, jobs fair or recruitment activities of any form outside of the address stated in the license or approved additional office(s) without first securing prior authority from the Administration (POEA). n. Renewal of license. An agency shall submit an application for the renewal of its license on or before its expiration. Such application shall be supported by the following documents: a. Renewed or revalidated surety bond amounting to One Hundred Thousand Pesos (P100,000.00); b. Renewed escrow agreement in the amount of P1,000,000.00 with a commercial bank to primarily answer for valid and legal claims of recruited workers as a result of recruitment violations or money claims; c. Audited financial statements for the past two years with verified corporate or individual tax returns. In case the equity of the agency is below the minimum capitalization requirement, it shall be given thirty (30) days from release of the renewed license to submit proof(s) of capital infusion, such as SEC certification of such infusion or bank certification corresponding to the amount infused and treasurer’s affidavit duly received by the SEC. Otherwise, the license shall be suspended until it has complied with the said requirement; d. Clearances from the National Bureau of Investigation and the Anti-Illegal Recruitment Branch for the Board of Directors and responsible officers; and e. Other requirements as may be imposed by the Administration (POEA). o. Non-expiration of license. Where the license holder has made timely and sufficient application for renewal, the existing license shall not expire until the application shall have been finally determined by the Administration (POEA). For this purpose, an application shall be considered sufficient if the applicant has substantially complied with the requirements for renewal. RECRUITMENT AND PLACEMENT OF WORKERS. a. Requisites. In order for an activity to be considered as “recruitment and placement” as described in Article 13 [b] of the Labor Code, the following elements must concur: 1. A person or entity is engaged in any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, including referrals, contract services, promising or advertising for employment; 2 The recruitment and placement of workers is either for local or overseas employment; and 3. The recruitment and placement may or may not be for profit. b. Presumption of engaging in recruitment and placement.

Any person or entity which, in any manner, offers or promises for a fee, employment to two (2) or more persons is deemed engaged in recruitment and placement.

1. LABOR CODE PROVISION. Article 38 of the Labor Code provides: Article 38. Illegal Recruitment. – (a) Any recruitment activities, including the prohibited practices enumerated under Article 34 of this Code, to be undertaken by nonlicensees or nonholders of authority, shall be deemed illegal and punishable under Article 39 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, enterprise 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) The Secretary of Labor and Employment or his duly authorized representatives shall have the power to cause the arrest and detention of such non-licensee or non-holder of authority if after investigation, it is determined that his activities constitute a danger to national security and public order or will lead to further exploitation of job-seekers. The Secretary shall order the search of the office or premises and seizure of documents, paraphernalia, properties and other implements used in illegal recruitment activities and the closure of companies, establishments and entities found to be engaged in the recruitment of workers for overseas employment, without having been licensed or authorized to do so. 2. R.A. NO. 8042, AS AMENDED BY R.A. NO. 10022 (MARCH 8, 2010): Section 6 of R.A. No. 8042 (Migrant Workers and Overseas Filipinos Act of 1995) which defines illegal recruitment was amended by Section 5 of R.A. No. 10022 (March 8, 2010). Consequently, illegal recruitment is now defined as follows: SEC. 6. Definition. - For purposes of this Act, illegal recruitment shall mean any act of canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring, contract services, promising or advertising for employment abroad, whether for profit or not, when undertaken by non-licensee or non-holder of authority contemplated under Article 13(f) of Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines: Provided, That any such nonlicensee or non-holder who, in any manner, offers or promises for a fee employment abroad to two or more persons shall be deemed so engaged. It shall likewise include the following acts, whether committed by any person, whether a non-licensee, non-holder, licensee or holder of authority: (a) To charge or accept directly or indirectly any amount greater than that specified in the schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to make a worker pay or acknowledge any amount greater than that actually received by him as a loan or advance; (b) To furnish or publish any false notice or information or document in relation to recruitment or employment;

(c) To give any false notice, testimony, information or document or commit any act of misrepresentation for the purpose of securing a license or authority under the Labor Code, or for the purpose of documenting hired workers with the POEA, which include the act of reprocessing workers through a job order that pertains to nonexistent work, work different from the actual overseas work, or work with a different employer whether registered or not with the POEA; (d) To include or attempt to induce a worker already employed to quit his employment in order to offer him another unless the transfer is designed to liberate a worker from oppressive terms and conditions of employment; (e) To influence or attempt to influence any person or entity not to employ any worker who has not applied for employment through his agency or who has formed, joined or supported, or has contacted or is supported by any union or workers' organization; (f) To engage in the recruitment or placement of workers in jobs harmful to public health or morality or to the dignity of the Republic of the Philippines; (h) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment; (i) To substitute or alter to the prejudice of the worker, employment contracts approved and verified by the Department of Labor and Employment from the time of actual signing thereof by the parties up to and including the period of the expiration of the same without the approval of the Department of Labor and Employment; (j) For an officer or agent of a recruitment or placement agency to become an officer or member of the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in the management of travel agency; (k) To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations, or for any other reasons, other than those authorized under the Labor Code and its implementing rules and regulations; (l) Failure to actually deploy a contracted worker without valid reason as determined by the Department of Labor and Employment; (m) Failure to reimburse expenses incurred by the worker in connection with his documentation and processing for purposes of deployment, in cases where the deployment does not actually take place without the worker's fault. Illegal recruitment when committed by a syndicate or in large scale shall be considered an offense involving economic sabotage; and (n) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency. 3. APPLICATION OF ARTICLE 38 TO BOTH LOCAL AND OVERSEAS EMPLOYMENT. The definition of “illegal recruitment” under Article 38 of the Labor Code applies to both local and overseas employment. The law is clear in its coverage that any recruitment activities including the commission of the prohibited practices enumerated under Article 34 of the Labor Code, to be undertaken by non-licensees or non-holders of authority, shall be deemed illegal and punishable under Article 39 of this Code. 4. CONCEPT OF ILLEGAL RECRUITMENT. The term “illegal recruitment” is defined as any recruitment activities, including the prohibited practices enumerated under Article 34 of the Labor Code, to be undertaken by non-licensees or non-holders of authority. Based on paragraph [a] of Article 38, illegal recruitment as defined therein, in relation to Articles 13 [b] and 34 and penalized under Article 39 of the Labor Code, may be committed only by non-licensees or non-holders of authority.

R.A. No. 8042, as amended by R.A. No. 10022 (March 8, 2010) and its Implementing Rules, have broadened this concept of illegal recruitment as far as overseas placement and recruitment activities are concerned. Consequently, illegal recruitment for overseas employment likewise includes the acts described in Section 6 of R.A. No. 8042, as amended by Section 5 of R.A. No. 10022, whether committed by any person, whether a non-licensee, non-holder, licensee or holder of authority. 1. DISTINCTION BETWEEN A “LICENSE” AND AN “AUTHORITY.” “License” refers to the document issued by the Secretary of Labor and Employment authorizing a person, partnership or corporation to operate a private recruitment/manning agency. “Authority” refers to a document issued by the Secretary of Labor and Employment authorizing the officers, personnel, agents or representatives of a licensed recruitment/manning agency to conduct recruitment and placement activities in a place stated in the license or in a specified place. 2. PRIVATE EMPLOYMENT AGENCY. A “private fee-charging employment agency” is any person or entity engaged in recruitment and placement of workers for a fee which is charged, directly or indirectly, from the workers or employers or both. Such “entity” may be a partnership or corporation duly licensed by the Secretary of Labor and Employment to engage in the recruitment and placement of workers for overseas employment. 3. PRIVATE RECRUITMENT ENTITY. A “private recruitment entity” refers to any person or association engaged in the recruitment and placement of workers without charging, directly or indirectly, any fee from the workers or employers. 4. DISTINCTIONS BETWEEN A PRIVATE EMPLOYMENT AGENCY AND A PRIVATE RECRUITMENT ENTITY. A private employment agency technically may be distinguished from a private recruitment entity as follows: 1. A private employment agency has a right duly recognized in law to charge a fee, directly or indirectly, from the workers or the employers or from both; while a private recruitment entity does not charge any fee either directly or indirectly from the workers or employers to which they would be deployed; 2. The former is authorized to recruit only for overseas placement or deployment; while the latter is allowed to recruit for both local and overseas deployment. 3. The former derives its authority to recruit and place workers from a document denominated as a “license”; while the latter sources its authority from a document called “authority.” But under the Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipinos Act of 1995, as amended by R. A. No. 10022 (March 08, 2010), these two terms have now a common definition as follows: “Private Recruitment/Employment Agency” refers to any person, partnership or corporation duly licensed by the Secretary of Labor and Employment to engage in the recruitment and placement of workers for overseas employment for a fee which is charged, directly or indirectly, from the workers who renewed their employment contracts with the same principal.

5. ENTITIES AUTHORIZED TO ENGAGE IN RECRUITMENT AND PLACEMENT OF WORKERS. The following are authorized to engage in recruitment and placement of workers: a. Public employment offices; b. Philippine Overseas Employment Administration (POEA); c. Private recruitment entities; d. Private employment agencies; e. Shipping or manning agents or representatives; f. Such other persons or entities as may be authorized by the Secretary of Labor and Employment; and g. Construction contractors. 6. OTHER RELEVANT TERMS. “Filipino Service Contractor” refers to any person, partnership or corporation duly licensed as a private recruitment agency by the Secretary of Labor and Employment to recruit workers for its accredited projects or contracts overseas. “Manning Agency” refers to any person, partnership or corporation duly licensed by the Secretary of Labor and Employment to engage in the recruitment and placement of seafarers for ships plying international waters and for related maritime activities. “Non-Licensee” refers to any person, partnership or corporation with no valid license to engage in recruitment and placement of overseas Filipino workers or whose license is revoked, cancelled, terminated, expired or otherwise delisted from the roll of licensed recruitment/manning agencies registered with the POEA. “Placement Fees” refer to any and all amounts charged by a private recruitment agency from a worker for its recruitment and placement services as prescribed by the Secretary of Labor and Employment. 1. ELEMENTS OF SIMPLE ILLEGAL RECRUITMENT. The essential elements of simple illegal recruitment without the attendant qualifying circumstances, are: 1. The person charged with the crime must have undertaken recruitment and placement activities under Article 13 [b] or any of the activities enumerated in Article 34 of the Labor Code, as amended; and 2. Said person does not have a license or authority to do so or more specifically, that he has not complied with such guidelines, rules and regulations issued by the Secretary of Labor and Employment, particularly with respect to the securing of license or authority to recruit and deploy workers, either locally or overseas. *People v. De Leon, [G.R. No. 104995, August 26, 1993, 225 SCRA 651 2. FIRST ELEMENT: RECRUITMENT AND PLACEMENT ACTIVITIES. a. Recruitment and placement activities, defined. The phrase “recruitment and placement” refers to the acts described in paragraph [b] of Article 13 of the Labor Code, viz.: “[b] ‘Recruitment and placement’ refers to any act of canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring workers, and includes referrals, 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.” 3. SECOND ELEMENT: NON-LICENSEE OR NON-HOLDER OF AUTHORITY. The phrase “non-licensee” or “non-holder of authority” refers to any person, corporation or entity which has not been issued a valid license or authority to engage in recruitment and placement by the Secretary of Labor and Employment, or whose license or authority

has been suspended, revoked or cancelled by the POEA or the Secretary of Labor and Employment. The acts mentioned in Article 13 [b] of the Labor Code can lawfully be undertaken only by licensees or holders of authority to engage in the recruitment and placement of workers. As far as agents or representatives appointed by licensees or holders of authority are concerned, they shall be considered as falling within the ambit of the term “non-licensee” or “non-holder of authority” if their appointments were not previously authorized by the POEA. Consequently, their activities shall be considered illegal recruitment. Non-possession of a license to recruit is, under the law, an essential ingredient of the crime of illegal recruitment penalized under the Labor Code. A person who promised a job placement abroad to another, for a consideration, when he is not duly licensed nor authorized to engage in recruitment, is criminally liable for illegal recruitment. 4. ANY PERSON, WHETHER A NON-LICENSEE, NON-HOLDER, LICENSEE OR HOLDER OF AUTHORITY MAY BE HELD LIABLE FOR ILLEGAL RECRUITMENT. a. Under R.A. No, 8042, license or authority of the illegal recruiter is immaterial. Under R.A. No. 8042, the crime of illegal recruitment may be committed by any person, whether a nonlicensee, non-holder, licensee or holder of authority. It is clear that under this law, in order to prove illegal recruitment, there is no need to establish whether the accused is a licensee or holder of authority or not because it is no longer an element of the crime. b. Recruiter may be a natural or juridical person. *People v. Saulo, [G.R. No. 125903. November 15, 2000]

1. ILLEGAL RECRUITMENT, WHEN CONSIDERED ECONOMIC SABOTAGE. Illegal recruitment is considered a crime involving economic sabotage when the commission thereof is attended by the following qualifying circumstances: 1. when committed by a syndicate; or 2. when committed in large scale. 2. ILLEGAL RECRUITMENT COMMITTED BY A SYNDICATE. a. When committed by a syndicate. Illegal recruitment is deemed committed by a syndicate if it is carried out by a group of three (3) or more persons conspiring or confederating with one another. b. Elements of illegal recruitment by a syndicate. The essential elements of the crime of illegal recruitment committed by a syndicate are as follows: 1. There are at least three (3) persons who, conspiring and/or confederating with one another, carried out any unlawful or illegal recruitment and placement activities as defined under Article 13 [b] or in any prohibited activities under Article 34 of the Labor Code; and

2. Said persons are not licensed or authorized to do so, either locally or overseas. The law, it must be noted, does not require that the syndicate should recruit more than one (1) person in order to constitute the crime of illegal recruitment by a syndicate. Recruitment of one (1) person would suffice to qualify the illegal recruitment act as having been committed by a syndicate. 3. ILLEGAL RECRUITMENT IN LARGE SCALE. a. When committed in large scale. Illegal recruitment is deemed committed in large scale if committed against three (3) or more persons individually or as a group. b. Elements of illegal recruitment in large scale. The essential elements of illegal recruitment in large scale, as distinguished from simple illegal recruitment, are as follows: 1. The accused engages in the recruitment and placement of workers as defined under Article 13 [b] or in any prohibited activities under Article 34 of the Labor Code; 2. The accused has not complied with the guidelines issued by the Secretary of Labor and Employment, particularly with respect to the securing of license or an authority to recruit and deploy workers, either locally or overseas; and 3. The accused commits the same against three (3) or more persons, individually or as a group. c. Distinguished from illegal recruitment by a syndicate. As distinguished from illegal recruitment committed by a syndicate, illegal recruitment in large scale may be committed by only one (1) person. What is important as qualifying element is that there should be at least three (3) victims of such illegal recruitment, individually or as a group.

1. A PERSON, FOR THE SAME ACT, MAY BE CHARGED AND CONVICTED SEPARATELY FOR ILLEGAL RECRUITMENT AND ESTAFA. a. Conviction under the Labor Code does not preclude conviction under other laws. In cases where some other crimes or felonies are committed in the process of illegal recruitment, conviction under the Labor Code does not preclude punishment under other statutes. Illegal recruitment is penalized under the Labor Code which is a special law, and not under the Revised Penal Code.87 Not all acts which constitute the felony of estafa under the Revised Penal Code necessarily establish the crime of illegal recruitment under the Labor Code. Estafa is wider in scope and covers deceits whether related or not related to recruitment activities. 1. NATURE OF LIABILITY OF LOCAL RECRUITMENT AGENCY AND FOREIGN PRINCIPAL. The nature of liability is as follows: 1. Local Agency is solidarily liable with foreign principal. 2. Severance of relations between local agent and foreign principal does not affect liability of local recruiter. 2. PERSONS CRIMINALLY LIABLE FOR ILLEGAL RECRUITMENT. a. Persons who may be criminally held liable for illegal recruitment. The persons criminally liable for illegal recruitment are: 1. In case of natural persons a. Principals; b. Accomplices; and

c. Accessories. 2. In case of juridical persons a. Officers having ownership, control, management or direction of their business who are responsible for the commission of the offense; and b. Responsible employees/agents thereof. 3. ADMINISTRATIVE LIABILITY OF LICENSEE OR HOLDER OF AUTHORITY, SEPARATE AND DISTINCT FROM THE CRIMINAL LIABILITY FOR ILLEGAL RECRUITMENT. The institution of the criminal action is without prejudice to any administrative action against the licensee or holder of authority cognizable by the POEA which could proceed independently of the criminal action. 4. THEORY OF IMPUTED KNOWLEDGE. *Sunace International Management Services, Inc. v. NLRC, [G.R. No. 161757, January 25, 2006]. 5. PRETERMINATION OF CONTRACT OF MIGRANT WORKERS. a. Termination of employment of OFWs. Termination of employment may mean any of the following: 1. The worker has requested for an early termination of employment; 2. The worker and employer mutually agreed on an early termination of employment; 3. The contract of employment has expired;

4. The worker has been discharged for just cause or disciplinary reasons; 5. the employer terminated the worker’s employment; 6. The worker suffered injury or illness; or 7. The worker has died. Whichever ground, the migrant worker has the right to insist that he be repatriated to the Philippines. The only exception is when the migrant worker is charged for certain crimes or charges in foreign courts and thus may not be allowed to go home until the case is terminated in his/her favor. b. Effect of unauthorized substitution or alteration of POEA-approved employment contract. R.A. No. 8042 explicitly prohibits the substitution or alteration to the prejudice of the worker, of employment contracts already approved and verified by the POEA from the time of actual signing thereof by the parties up to and including the period of their expiration without the approval of the POEA. Consequently, it was held in Chavez v. Bonto-Perez, [G.R. No. 109808, March 1, 1995, 242 SCRA 73, 82; 312 Phil. 88], that the subsequently executed side agreement of an overseas contract worker with her foreign employer which reduced her salary below the amount approved by the POEA is void because it is against our existing laws, morals and public policy. The said side agreement cannot supersede her standard employment contract approved by the POEA. Following the same rule, the unauthorized alteration in the employment contract of the OFW in the case of Placewell International Services Corp. v. Camote, [G.R. No. 169973, June 26, 2006], particularly the diminution in his salary from US$370.00 to SR800.00 per month, was declared void for violating the POEA-approved contract which set the minimum standards, terms, and conditions of his employment. Thus, the original POEA-

approved employment contract of the OFW subsists despite the so-called new agreement with the foreign employer at the Kingdom of Saudi Arabia, to which he was deployed by petitioner. Consequently, the solidary liability of petitioner with the foreign employer for the OFW’s money claims continues in accordance with Section 10 of R.A. No. 8042. c. Repatriation When a Seafarer Requests for Early Termination. A seafarer who requests for early termination of his contract shall be liable for his repatriation cost as well as the transportation cost of his replacement. 6. DIRECT HIRING. “Direct Hiring” refers to the process of directly hiring workers by employers for overseas employment as authorized by the DOLE Secretary and processed by the POEA, including: 1. Those hired by international organizations 2. Those hired by members of the diplomatic corps. 3. Name hires or workers who are able to secure overseas employment opportunity with an employer without the assistance or participation of any agency.

1. REMITTANCE OF FOREIGN EXCHANGE EARNINGS. a. Remittance of foreign exchange earnings is mandatory. 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. b. Reason why obligation is mandatory. Remittance to the Philippines of foreign exchange earnings of Filipino workers abroad is necessary to protect the welfare of their families, dependents and beneficiaries and to ensure that their foreign exchange earnings are remitted through authorized financial institutions of the Philippine government in line with the country’s economic development program. Non-compliance with the laws and regulations on remittance of foreign exchange earnings and recourse to the use of unauthorized and unofficial financing institutions had led to the detriment of the country’s balance of payments and economic development program. Consequently, it is imperative that the mandatory remittance requirement be fully complied with by all concerned through the institution of appropriate remittance facilities and the imposition of effective sanctions. c. Coverage. This mandatory requirement applies to every contract worker and seamen recruited and placed in overseas employment. They also apply to licensed agencies and authority holders. d. Mandatory obligation to remit. It is mandatory for a worker or seaman to remit regularly a portion of his foreign exchange earnings abroad to his beneficiary through the Philippine banking system. The obligation to remit is required to be stipulated in the following documents: (1) Contract of employment and/or service between a foreign-based employer and a worker; (2) Affidavit of undertaking whereby a worker obligates himself to remit a portion of his earnings to his beneficiaries; (3) Application for a license or authority to recruit workers;

(4) Recruitment agreement and/or service contract between a licensed agency or authority holder and its foreign employer or principal; and (5) Application for accreditation of a principal or project. e. Amount of foreign exchange remittances. The percentage of foreign remittance shall be as follows: 1. Seamen and mariners: Eighty percent (80%) of the basic salary; 2. Workers of Filipino contractors and construction companies: Seventy percent (70%) of the basic salary; 3. Doctors, engineers, teachers, nurses and other professional workers whose employment contracts provide for free board and lodging facilities: Seventy percent (70%) of the basic salary; 4. All other professionals whose employment contracts do not provide free board and lodging facilities: Fifty percent (50%) of the basic salary; 5. Domestic and other service workers: Fifty percent (50%) of the basic salary;

6. All other workers not falling under the afore-mentioned categories: Fifty percent (50%) of the basic salary. 7. Performing artists overseas are required to remit at least fifty percent (50%) of their monthly salary to the Philippines. f. Form of remittance. Remittance of foreign exchange may be done individually by a worker or collectively through an employer under a payroll deduction scheme, to be approved by the Department of Labor and Employment. g. Procedure of remittance. (a) The worker, prior to departure, is required to open a deposit account for his mandatory remittance in favor of his beneficiary in any Philippine bank. A foreign currency account may also be opened by the worker to be funded by savings in excess of the mandatory remittance. The applicant should inform the POEA of his deposit account number. (b) In the case of seamen, construction workers and other organized work crews involving at least twenty five (25) workers, the foreign currency/peso account should be opened by the employee with any Philippine bank upon the signing of the employment contract. The account shall be accompanied by a covering letter of nomination of beneficiaries and the date of payment of the allotment to the beneficiaries as may be stipulated by the employee and the licensed agency, manning agency or construction contractor. (c) At the end of every period as may be stipulated in the notice as payment, the licensed agency, construction contractor or manning agent shall prepare a payroll sheet indicating the names of the workers covered by the scheme, their beneficiaries, their individual bank account numbers, the amount of foreign currency remitted and the peso equivalent thereof. This payroll sheet, together with the peso check representing the remittance, shall be forwarded to the bank concerned with instructions to credit the account of the worker or beneficiaries. A copy of the payroll sheet shall be furnished the POEA on a monthly basis. (d) No local agent or representative shall pay directly the beneficiaries of the worker. The agent or representative shall submit to the POEA copies of the reports which the bank may require him to submit and payroll sheets on or before the end of the succeeding month of the payroll period together with the bank credit advice evidencing remittance of foreign exchange.

h. Failure or refusal to remit and trafficking in foreign currency. A licensed agency, authority holder, or manning agent or a worker who willfully fails or refuses to remit the assigned portion of his foreign exchange earnings or is found to have engaged or is engaging in the illegal traffic or black market of foreign exchange, shall be liable under the Labor Code and existing Central Bank rules. i. Responsibility of employer or his representative. The employer or his representative shall undertake the proper implementation of the relevant provisions of the Rules to Implement the Labor Code by providing facilities to effect the remittance and monitoring of foreign exchange earnings. Failure to do so shall be subject to appropriate sanctions specified in the Labor Code and Central Bank regulations. j. Obligation to report. Agencies shall submit periodic reports to the Central Bank of the Philippines (now Bangko Sentral ng Pilipinas) on their foreign exchange earnings, copies of which shall be furnished the POEA. k. Non-compliance with the mandatory remittance requirement; effect on issuance, renewal and extension of passport. Under Executive Order No. 857 [December 13, 1982] as well as its Implementing Rules, it is declared that no passport shall be issued, renewed or extended by the Department of Foreign Affairs unless proof of applicant’s substantial compliance with the mandatory remittance requirement in the percentages provided under the law, is submitted. Passports issued to Filipino contract workers shall have an initial period of validity of one (1) year. The Department of Foreign Affairs may, however, adjust, as circumstances may require, the initial passport validity period. The passport shall be renewable every year upon submission of usual requirements and presentation of documentary proof of compliance to the remittance requirement. l. “Substantial compliance,” explained. The Inter-Agency Committee of the Central Bank Ministry (now Department) of Labor and Ministry (now Department) of Foreign Affairs for the Implementation of Executive Order No. 857, in its Resolution No. 1-83 passed on February 9, 1983, clarified the foregoing effect of non-compliance with the mandatory remittance requirement on the issuance, renewal and extension of passport. Said Committee declared that in accordance with the normal duration of contracts of employment and taking into account the provisions of both Executive Orders Nos. 855 and 857 mandating the Department of Foreign Affairs to adjust, as circumstances may require, the initial validity period, passports issued to contract workers shall be valid for two (2) years, renewable for another two (2) years, subject to compliance with the mandatory remittance requirement. Clarifying the definition of the phrase “substantial compliance,” the Committee declared that, as a general rule, compliance with the percentages of mandatory remittance defined in Section 2 of Executive Order No. 857 shall be required. However, during the initial period of the implementation of the Executive Order which is from February 1, 1983, consular officers may renew old passports or issue new passports and officials of the Ministry (now Department) of Labor and Employment may renew employment contracts if the contract workers concerned are able to submit proof of “substantial compliance” with the mandatory remittance requirements. A contract worker shall be deemed to have substantially complied with the mandatory requirement if, at the time he applies for renewal of passport or renewal of his employment contract during the period cited above, he can show proof that he has remitted and sold for pesos at least one-half (1/2) of the amount of foreign exchange corresponding to the mandatory remittance required of him.

The requirement to remit on a monthly basis need not be strictly applied during the initial period of implementation provided that the amount remitted and sold for pesos through authorized financing institutions shall at least be equal to one-half of the amount corresponding to the mandatory percentage requirement defined under the Executive Order. For example, if the salary of a contract worker is US$200 a month or US$2,400 a year, such worker is required to remit 50% thereof or US$1,200 annually under Executive Order No. 857. Pursuant to the substantial compliance formula, a contract worker needs only to show proof that he has at least remitted and sold for pesos 50% of US$1,200 thereof or US$600.00 a year. The “substantial compliance” as defined, applies to contract workers remitting on an individual basis. It does not apply to those contract workers already remitting or who will be remitting under the payroll system, or on a monthly basis. m. Non-compliance with the mandatory remittance requirement; effect on accreditation of employer, issuance of license or authority and approval/renewal of contracts of employment. No accreditation shall be issued to an employer, and no license or authority shall be granted to an agency or entity by the Department of Labor and Employment unless they submit proof that they have provided facilities to effect the remittance of foreign exchange earnings of Filipino workers under their employ. No contracts of employment and/or service agreement shall be approved or renewed by the Department of Labor and Employment unless proof of compliance with the mandatory remittance requirement is submitted. A contract worker who fails to comply with the mandatory remittance requirement shall be suspended or excluded from the list of eligible workers for overseas employment and in case of subsequent violations, he shall be repatriated at his own expense or at the expense of his employer, as the case may be. Filipino or foreign employers and/or their representatives who fail to comply with the law shall be excluded from the overseas employment program. In the case of local private employment agencies and other similar entities, their failure to comply with the mandatory remittance requirement shall be a ground for cancellation of their authority to recruit workers for overseas employment without prejudice to their liabilities under existing laws and regulations. n. Conflict in mandatory remittance requirement and host country’s regulations on the matter. Should there be conflict in complying with the mandatory remittance requirement in view of the host country’s regulations on the matter, the percentages of remittance shall be, within allowable limits, set down by local laws. o. Beneficiaries living with contract workers abroad. A contract worker whose immediate family members, dependents or beneficiaries are residing with him abroad, is not compelled to comply with the mandatory remittance requirement except if the dependents themselves are contract workers, subject to verification of his family status by the Ministries (now Departments) of Foreign Affairs and/or Labor and Employment. He should be encouraged, nevertheless, to remit a portion of his foreign earnings to the Philippines.

p. Punitive provisions of Executive Order No. 857, repealed. Executive Order No. 1021 [On Encouraging the Inward Remittances of Contract Workers Earnings Through Official Channels] issued on May 1, 1985 by President Ferdinand E. Marcos, repealed the punitive provisions of Executive Order No. 857. q. Role of embassy as channel for remittance. The role of the Embassy as defined in Section 7 of Rule III of the Implementing Rules of Executive Order No. 857 is only temporary, in the absence of banking facilities in the jobsite and pending the establishment of appropriate arrangements by the Central Bank (now Bangko Sentral ng Pilipinas). In exercising this function, the Embassy shall abide by customary local laws and regulations of the host country. r. Remittances of contract workers, not deemed personal deductions for income taxation purposes. Obligations of contract workers to remit portions of their foreign exchange earnings under Executive Order No. 857 are separate and distinct from the personal deductions defined under gross income taxation laws. 2. PROHIBITED ACTIVITIES. Besides illegal recruitment, Section 6 of R.A. No. 8042, as amended by Section 5 of R.A. No. 10022 (March 8, 2010), additionally provides that it shall also be unlawful for any person or entity to commit the following prohibited acts: (1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which will be used for payment of legal and allowable placement fees and make the migrant worker issue, either personally or through a guarantor or accommodation party, postdated checks in relation to the said loan; (2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a loan only from specifically designated institutions, entities or persons; (3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the latter's employment contract has been prematurely terminated through no fault of his or her own; (4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo health examinations only from specifically designated medical clinics, institutions, entities or persons, except in the case of a seafarer whose medical examination cost is shouldered by the principal/shipowner; (5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo training, seminar, instruction or schooling of any kind only from specifically designated institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners where the latter shoulder the cost of such trainings; (6) For a suspended recruitment/manning agency to engage in any kind of recruitment activity including the processing of pending workers' applications; and

(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino worker or deduct from his or her salary the payment of the cost of insurance fees, premium or other insurance related charges, as provided under the compulsory worker's insurance coverage.

3. REGULATORY AND VISITORIAL POWERS OF THE LABOR SECRETARY. a. 2 separate provisions in the Labor Code. As far as recruitment and placement of workers for local and overseas employment are concerned, the Labor Code contains two (2) separate provisions on the regulatory and visitorial powers of the DOLE Secretary, namely: 1. Article 36 - Regulatory Power; and 2. Article 37 – Visitorial Power. 3.1. REGULATORY POWER. Article 36. 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. a. Nature of regulatory power. The power to regulate and restrict the recruitment and placement activities of all agencies conferred by Article 36 to the Secretary of Labor and Employment is a valid grant of police power. Being regulatory, the DOLE Secretary may validly issue rules and regulations restricting or otherwise regulating the recruitment and placement activities of persons and entities engaged in the recruitment and placement of workers locally or overseas. b. Exercise of the regulatory power. Pursuant to Article 36 and in accordance with other pertinent and related provisions of the Labor Code, the DOLE Secretary has issued several implementing rules, guidelines and regulations such as, among others, the following: 1. Rules and Regulations Governing Private Recruitment and Placement Agencies for Local Employment issued by Secretary Ruben D. Torres on April 4, 1991; 2. Rules and Regulations Governing Overseas Employment issued by Secretary Ruben D. Torres on May 31, 1991; and 3. Policy Instructions such as Policy Instructions No. 22, Series of 1977 [Guidelines Governing the Employment of Construction Workers Overseas by April 1, 1977] and its Implementing Rules and Regulations; Policy Instructions No. 34, Series of 1978 [Omnibus Instructions Governing the Deployment of Construction Workers Overseas]; and Policy Instructions No. 45, Series of 1981 [Directing the OEDB to Monitor, Develop and Administer the Hiring and Employment of Filipinos in Foreign Households]; 4. Circulars such as Circular No. 01-91 issued by Secretary Ruben D. Torres on November 20, 1991 prescribing additional requirements, conditions and procedures for the deployment of performing artists; 5. DOLE Order No. 35, Series of 1994, issued on October 14, 1994 by Secretary Ma. Nieves Confesor regarding the Comprehensive Welfare Program for Artists Overseas. 6. POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers issued on February 4, 2002. 7. POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers issued on May 23, 2003. 3.2. VISITORIAL POWER. Article 37. 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 violation of any provisions of this Title. a. Distinctions of the visitorial powers of the DOLE Secretary under Articles 27 and 128 of the Labor Code. The visitorial power of the DOLE Secretary or his duly authorized representatives described in Article 37 of the Labor Code should be

distinguished from the other visitorial powers granted to him by other provisions of the Labor Code such as the ones provided for under Article 128 and Article 274 thereof. Here, the visitorial power pertains to the inspection of the premises, books of accounts and records of persons and entities engaged in the recruitment and placement of workers for local or overseas employment. It also includes the power to require the submission of reports regularly on certain prescribed forms and to act on any violation of Title I, Book I of the Labor Code. The visitorial and enforcement power of the DOLE Secretary or his duly authorized representatives, including labor regulation officers, treated in Article 128 pertains to the inspection of premises, books of accounts and records of employers to determine violations of the Labor Code or which may aid in the enforcement thereof and of any labor laws, wage orders or rules and regulations issued pursuant thereto. Article 274 dwells on the visitorial power of the DOLE Secretary to inquire into the financial activities of legitimate labor organizations. b. Effect of obstruction of exercise of visitorial power. The act of any person, whether a non-licensee, non-holder, licensee or holder of authority, in obstructing or attempting to obstruct inspection by the DOLE Secretary or by his duly authorized representative under Article 37 of the Labor Code is one of the prohibited practices and unlawful acts which constitutes “illegal recruitment.” Also constitutive of illegal recruitment is the act of furnishing or publishing any false notice or information or document in relation to recruitment or employment; or giving any false notice, testimony, information or document; or committing any act of misrepresentation for the purpose of securing a license or authority under the Labor Code; or failing to submit reports on the status of employment, placement vacancies, remittance of foreign exchange earnings, separation from jobs, departures and such other matters or information as may be required by the Secretary of Labor and Employment. 4. PENALTIES FOR ILLEGAL RECRUITMENT. a. Penalties for illegal recruitment separate and distinct from penalties for commission of prohibited acts. Republic Act No. 8042, as amended by R.A. No. 10022, provides separate penalties for illegal recruitment and commission of prohibited acts. The penalties for illegal recruitment are as follows: (a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less than twelve (12) years and one (1) day but not more than twenty (20) years and a fine of not less than One million pesos (P1,000,000.00) nor more than Two million pesos (P2,000,000.00). (b) The penalty of life imprisonment and a fine of not less than Two million pesos (P2,000,000.00) nor more than Five million pesos (P5,000,000.00) shall be imposed if illegal recruitment constitutes economic sabotage; Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is less than eighteen (18) years of age or committed by a non-licensee or nonholder of authority. The penalties for commission of prohibited acts are as follows: (a) Any person found guilty of any of the prohibited acts shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than twelve (12) years and a fine of not less than Five hundred thousand pesos (P500,000.00) nor more than One million pesos (P1,000,000.00).

If the offender is an alien, he or she shall, in addition to the penalties above, be deported without further proceedings. C. LABOR STANDARDS 1. PROVISIONS OF THE LABOR CODE ON WORKING CONDITIONS. The provisions on working conditions in the Labor Code are as follows. Article 83 - Normal hours of work; Article 84 - Hours worked; Article 85 - Meal periods; Article 86 - Night shift differential; Article 87 - Overtime work; Article 88 - Undertime not offset by overtime; Article 89 - Emergency overtime work; Article 90 - Computation of additional compensation; Article 91 - Right to weekly rest period; Article 92 - When employer may require work on a rest day; Article 93 - Compensation for rest day, Sunday or holiday work; Article 94 - Right to holiday pay; Article 95 - Right to service incentive leave; and Article 96 - Service charges. 2. COVERAGE 3. EXCLUSIONS 4. NORMAL HOURS OF WORK. 4.1. EXCEPTIONS: a. Reduction of 8-hour working day by employer. b. Broken hours c. Staggered working time d. Work in different shifts. e. Reduction of workdays on account of losses. f. Flexible work schedule under R.A. No. 8972. g. Flexible work arrangements during economic difficulties and national emergencies. h. Part-time work. 4.2. HOURS OF WORK OF HOSPITAL AND CLINIC PERSONNEL. a. Coverage The second paragraph of Article 83 of the Labor Code enunciates the rule on hours of work of hospital and clinic personnel. Its provision as well as the corresponding provisions in the Rules to Implement the Labor Code, apply to: a. All hospitals and clinics, including those with a bed capacity of less than one hundred (100) which are situated in cities or municipalities with a population of one (1) million or more; and b. All hospitals and clinics with a bed capacity of at least one hundred (100), irrespective of the size of the population of the city or municipality where they may be situated b. Definition of terms. c. Regular working hours of hospital or clinic personnel. d. Regular working days of hospital or clinic personnel. e. Overtime work of hospital or clinic personnel. f. Hours worked of hospital or clinic personnel. POLICY INSTRUCTIONS NO. 54.

a. Working hours and compensation of hospital/clinic personnel. Policy Instructions No. 54 [April 12, 1988] provides that personnel in subject hospitals and clinics are entitled to a full weekly wage for seven (7) days if they have completed the 40-hour/5-day workweek in any given workweek. b. Policy Instructions No. 54, declared void. The Supreme Court, however, has voided Policy Instructions No. 54 in the case of San Juan de Dios Hospital Employees Association v. NLRC, [G.R. No. 126383, November 28, 1997]. Consequently, the rule that hospital employees who worked for only 40 hours/5 days in any given workweek should be compensated for full weekly wage for seven (7) days is no longer applicable. The Supreme Court ratiocinated that “the Secretary of Labor exceeded his authority by including a two days off with pay in contravention of the clear mandate of the statute. Such act the Court shall not countenance. Administrative interpretation of the law, we reiterate, is at best merely advisory, and the Court will not hesitate to strike down an administrative interpretation that deviates from the provision of the statute.” 5. COMPRESSED WORKWEEK (CWW). a. Compressed workweek allowed. * Philippine Graphic Arts, Inc. v. NLRC, [G.R. No. L-80737, September 29, 1988, 166 SCRA 118]. * Linton Commercial Co., Inc. v. Hellera, [G.R. No. 163147, October 10, 2007]. b. Department Order No. 02, Series of 2004. Department Order No. 02, Series of 2004, was issued by the Secretary of Labor and Employment on December 2, 2004 implementing compressed workweek schemes to guide employers and workers who may opt to adopt a mutually acceptable compressed workweek (CWW) scheme suitable to the requirements of the establishment As a matter of policy, and taking into account the emergence of new technology and the continuing restructuring and modernization of the work process, the Department of Labor and Employment (DOLE) encourages employers and workers to enter into voluntary agreements adopting CWW schemes based on the following objectives 1. To promote business competitiveness and productivity, improve efficiency by lower operating costs, and reduce work-related expenses of employees; 2. To give employers and workers flexibility in fixing hours of work compatible with business requirements and the employees’ need for a balanced work life; and 3. To ensure the safety and health of employees at the workplace at all times. A CWW scheme is an alternative arrangement whereby the normal workweek is reduced to less than six (6)days but the total number of normal work hours per week shall remain at forty-eight (48) hours. The normal workday is thus increased to more than eight (8) hours without corresponding overtime premium. This concept can be adjusted accordingly in cases where the normal workweek of the firm is five (5) days. Conditions. DOLE shall recognize CWW schemes adopted in accordance with the following: 1. The CWW scheme is undertaken as a result of an express and voluntary agreement of majority of the covered employees or their duly authorized representatives. This agreement may be expressed through collective bargaining or other legitimate workplace mechanisms of participation such as labor-management councils, employee assemblies or referenda.

2. In firms using substances, chemicals and processes or operating under conditions where there are airborne contaminants, human carcinogens or noise prolonged exposure to which may pose hazards to the employees’ health and safety, there must be a certification from an accredited health and safety organization or practitioner or from the firm’s safety committee that work beyond eight (8) hours is within threshold limits or tolerable levels of exposure, as set in the OSHS. 3. The employer shall notify the DOLE, through its Regional Office having jurisdiction over the workplace, of the adoption of the CWW scheme. The notice should be made in DOLE CWW Report Form. Effects. A CWW scheme which complies with the foregoing conditions shall have the following effects: 1. Unless there is a more favorable practice existing in the firm, work beyond eight (8) hours will not be compensable by overtime premium provided the total number of hours worked per day shall not exceed twelve (12) hours. In any case, any work performed beyond twelve (12) hours a day or forty-eight (48) hours a week shall be subject to overtime premium. 2. Consistent with Articles 85 of the Labor Code, employees under a CWW scheme are entitled to meal periods of not less than sixty (60) minutes. Nothing, however, shall impair the right of employees to rest days as well as to holiday pay, rest day pays or leaves in accordance with law or applicable collective bargaining agreement (CBA) or company practice.

3. Adoption of the CWW scheme shall in no case result in diminution of existing benefits. Reversion to the normal eight-hour workday shall not constitute a diminution of benefits. The reversion shall be considered a legitimate exercise of management prerogative provided that the employer shall give the employees prior notice of such reversion within a reasonable period of time. * Bisig Manggagawa sa Tryco v. NLRC, [G.R. No. 151309, October 15, 2008]. 6. WORK INTERRUPTION DUE TO BROWNOUTS. 7. MEAL BREAKS (ARTICLE 85, LABOR CODE). a. General rule on meal period. b. Shortening of meal time to not less than 20 minutes, when compensable. c. Shortening of meal time to not less than 20 minutes, when not compensable. d. Shortening of meal time to less than 20 minutes, effect. e. Changing from 30-minute paid “on call” lunch break to 1 hour meal time without pay, effect. * Sime Darby Pilipinas, Inc. v. NLRC, [G.R. No. 119205, April 15, 1998, 289 SCRA 86], f. Meal time involving several shifts. 8. IDLE TIME, WAITING TIME, COMMUTING TIME, TRAVEL TIME, WHETHER PART OF HOURS OF WORK OR NOT. (ARTICLE 84, LABOR CODE). a. Compensable hours worked. 8.1. IDLE TIME. 8.2. WAITING TIME. a. When waiting time is compensable.

* Arica v. NLRC, [G.R. No. 78210, February 28, 1989, 170 SCRA 776] b. On Duty. c. Off Duty 8.3. COMMUTING TIME AND TRAVEL TIME. a. Travel from home to work. b. Travel that is all in the day’s work. c. Travel away from home. 9. OVERTIME WORK (ARTICLE 87, LABOR CODE). 9.1. EMERGENCY OVERTIME WORK (ARTICLE 89, LABOR CODE). a. General rule. The general rule remains that no employee may be compelled to render overtime work against his will b. Exceptions when employee may be compelled to render overtime work: 1. When the country is at war or when any other national or local emergency has been declared by the National Assembly or the Chief Executive;

2. When overtime work is necessary to prevent loss of life or property or in case of imminent danger to public safety due to actual or impending emergency in the locality caused by serious accident, fire, floods, typhoons, earthquake, epidemic or other disasters or calamities; 3. When there is urgent work to be performed on machines, installations or equipment, or in order to avoid serious loss or damage to the employer or some other causes of similar nature; 4. When the work is necessary to prevent loss or damage to perishable goods; 5. When the completion or continuation of work started before the 8th hour is necessary to prevent serious obstruction or prejudice to the business or operations of the employer; and 6. When overtime work is necessary to avail of favorable weather or environmental conditions where performance or quality of work is dependent thereon. c. May an employee validly refuse to render overtime work under any of the aforesaid circumstances? An employee cannot validly refuse to render overtime work if any of the aforementioned circumstances is present. When an employee refuses to render emergency overtime work under any of the foregoing conditions, he may be dismissed on the ground of insubordination or willful disobedience of the lawful order of the employer. 9.2. UNDERTIME NOT OFFSET BY OVERTIME (ARTICLE 88, LABOR CODE). 9.3. WAIVER OF OVERTIME PAY. 10. NIGHT WORK (ARTICLE 86, LABOR CODE). a. Night-shift differential. Night shift differential is equivalent to 10% of employee's regular wage for each hour of work performed between 10:00 p.m. and 6:00 a.m. of the following day. b. Night shift differential and overtime pay, distinguished When the work of an employee falls at nighttime, the receipt of overtime pay shall not preclude the right to receive night differential pay. The reason is, the payment of the night differential pay is for the work done during the night; while the payment of the overtime pay is for work in excess of the regular eight (8) working hours.

c. Computation of Night Shift Differential Pay: 1. Where night shift (10 p.m. to 6 a.m.) work is regular work. a. On an ordinary day: Plus 10% of the basic hourly rate or a total of 110% of the basic hourly rate. b. On a rest day, special day or regular holiday: Plus 10% of the regular hourly rate on a rest day, special day or regular holiday or a total of 110% of the regular hourly rate. 2. Where night shift (10 p.m. to 6 a.m.) work is overtime work. a. On an ordinary day: Plus 10% of the overtime hourly rate on an ordinary day or a total of 110% of the overtime hourly rate on an ordinary day. b. On a rest day or special day or regular holiday: Plus 10% of the overtime hourly rate on a rest day or special day or regular holiday.

3. For overtime work in the night shift. Since overtime work is not usually eight (8) hours, the compensation for overtime night shift work is also computed on the basis of the hourly rate. a. On an ordinary day. Plus 10% of 125% of basic hourly rate or a total of 110% of 125% of basic hourly rate. b. On a rest day or special day or regular holiday. Plus 10% of 130% of regular hourly rate on said days or a total of 110% of 130% of the applicable regular hourly rate. 11. CBA PROVISION VIS-À-VIS OVERTIME WORK. a. Validity of stipulated overtime rates. Generally, the premium pay for work performed on the employee’s rest days or on special days or regular holidays is included as part of the regular rate of the employee in the computation of overtime pay for any overtime work rendered on said days, especially if the employer pays only the minimum overtime rates prescribed by law. The employees and employer, however, may stipulate in their collective bargaining agreement (CBA) the payment of overtime rates higher than those provided by law and exclude the premium payments in the computation of overtime pay. Such agreement may be considered valid only if the stipulated overtime pay rates will yield to the employees not less than the minimum prescribed by law.26 b. Built-in overtime pay. In case the employment contract stipulates that the compensation includes built-in overtime pay and the same is duly approved by the Director of the Bureau of Employment Services (now Bureau of Local Employment), the nonpayment by the employer of any overtime pay for overtime work is justified and valid. *PAL Employees Savings and Loan Association, Inc. [PESALA] v. NLRC, [G.R. No. 105963, August 22, 1996], 2. Wages 1. “NO WORK, NO PAY” PRINCIPLE. a. Actual work, the basis of claim for wages. 2. COVERAGE/EXCLUSIONS (ARTICLE 97, LABOR CODE). a. Coverage. The minimum wage rates prescribed by law shall be the basic cash wages without deduction therefrom of whatever benefits, supplements or allowances which the employees enjoy free of charge aside from the basic pay. b. Exclusions. * Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, [G.R. No. 145561, June 15, 2005, 460 SCRA 187],

3. FACILITIES VS. SUPPLEMENTS. a. Facilities, defined/ Supplements, defined b. Facilities and supplements, distinguished 4. WAGES VS. SALARIES. a. “Wage and ” “salary,” distinguished.

5. WAGE DISTORTION (ARTICLE 124, LABOR CODE). a. Wage distortion, as defined in the law and implementing rules As defined by law and implementing rules, “wage distortion” contemplates a situation where an increase in prescribed wage rates results in either of the following: 1. Elimination of the quantitative differences in the rates of wages or salaries; or 2. 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 the following criteria: a. skills; b. length of service; or c. other logical bases of differentiation. Elaborating on this statutory definition, the Supreme Court ruled: “Wage distortion presupposes a classification of positions and ranking of these positions at various levels. One visualizes a hierarchy of positions with corresponding ranks basically in terms of wages and other emoluments. Where a significant change occurs at the lowest level of positions in terms of basic wage without a corresponding change in the other level in the hierarchy of positions, negating as a result thereof the distinction between one level of position from the next higher level, and resulting in a parity between the lowest level and the next higher level or rank, between new entrants and old hires, there exists a wage distortion. xxx. The concept of wage distortion assumes an existing grouping or classification of employees which establishes distinctions among such employees in some relevant or legitimate basis. This classification is reflected in a differing wage rate for each of the existing classes of employees.” b. Four elements of wage distortion. The four (4) elements of wage distortion are as follows: (1) An existing hierarchy of positions with corresponding salary rates; (2) A significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one; (3) The elimination of the distinction between the two levels; and (4) The existence of the distortion in the same region of the country. Normally, a company has a wage structure or method of determining the wages of its employees. In a problem dealing with “wage distortion,” the basic assumption is that there exists a grouping or classification of employees that establishes distinctions among them on some relevant or legitimate bases. Involved in the classification of employees are various factors such as the degrees of responsibility, the skills and knowledge required, the complexity of the job, or other logical basis of differentiation. The differing wage rate for each of the existing classes of employees reflects this classification. c. Formula for resolving wage distortion. * Metropolitan Bank and Trust Company Employees Union-ALU-TUCP v. NLRC, [G.R. No. 102636,September 10, 1993]

6. CBA VIS-À-VIS WAGE ORDERS – CBA CREDITABILITY (ARTICLE 125, LABOR CODE). a. Wage increases and benefits from CBA different from those granted by law. Wage increases and benefits derived from law and wage order and those from the CBA or company policy or practice are separate and distinct from each other, unless otherwise provided by the agreement itself or by law. The CBA-mandated wage increases are granted after serious bargaining negotiations between the employer and the employees through their duly recognized or certified bargaining agent. The legally-mandated wage increases and benefits are imposed by the government, through the Regional Tripartite Wages and Productivity Boards (RTWPBs) without the benefit of any bargaining negotiations although public hearings are conducted prior to the promulgation of any wage order they issue. Once granted, both CBA-mandated and legislated wage increases and benefits should be fully complied with by the employers under pain of being penalized under the law. b. Materiality of the intention of the parties to the CBA. A CBA, just like any contract, is subject to interpretation or construction if there is ambiguity in its provisions or stipulations. If no such ambiguity exists, its provisions which must be read together with its other stipulations and not in isolation from one another, should be given their literal meaning, following the basic rules of legal hermeneutics. The purpose of applying the rules of legal hermeneutics is to ascertain the intention of the parties to the agreement. Once determined, such intention should be given full effect and force as between them, it being understood that such CBA is their law. The principle that the CBA is the law between the contracting parties stands strong and true. Hence, it is well-settled that if the purpose of the parties in entering into a stipulation on wage increases is to grant the same separate and distinct from whatever wage increases as may be granted by law or wage order, then the workers are entitled, no doubt, to both the CBA-mandated and legally-mandated wage increases during the period when both increases are concurrently effective. The manifest will and intent of the parties to treat the legislated increases as equivalent pro tanto to those stipulated in their bargaining agreement must be respected and given effect. c. Creditability of CBA increases to Wage Order increases. Chargeability or creditability clause is a provision in the CBA or in the law or wage order allowing CBA mandated increases to be charged or credited as compliance with the statutory wage increases mandated or ordered by law or wage order. This is a valid provision in the CBA or in the law or wage order mandating wage increases, provided that after charging or crediting thereof, the amount of wages of the employees shall remain equivalent to or over and above the prevailing minimum wage set by law or wage order. Where the increases are less than the applicable amount provided in the law or wage order, the employer is required to pay the difference.

d. Wage Orders issued by RTWPBs.

Wage Orders issued by the various Regional Tripartite Wages and Productivity Boards (RTWPBs) throughout the Philippines usually, although not in every case, contain a provision on chargeability. For instance, in Wage Order No. NCR-15 [effective July 01, 2010], the following provision on creditability or chargeability is found in its Section 10, to wit: “Section 10. CREDITABLE WAGE INCREASE. Any increase granted by an employer in an organized establishment within three (3) months prior to the effectivity of this Order shall be credited as compliance with the prescribed increase set forth herein, provided that an agreement to this effect has been forged between the parties or a collective bargaining agreement provision allowing creditability exists. In the absence of such an agreement or provision in the CBA, any increase granted by the employer shall not be credited as compliance with the wage increase prescribed in this Order. In unorganized establishments, any increase granted by the employer within five (5) months prior to the effectivity of this Order shall be credited as compliance therewith. In case the increases given are less than the prescribed Minimum Wage, the employer shall pay the difference. Such increases shall not include anniversary increases, merit wage increases and those resulting from the regularization or promotion of employees.” Rule IV of the Implementing Rules of said Wage Order expounds this further in more details, thus: RULE IV CREDITABLE INCREASE “Section 1. ORGANIZED ESTABLISHMENTS. Wage increases granted by an employer in an organized establishment within three (3) months prior to the effectivity of the Order may be credited as compliance with the prescribed increase set forth therein; Provided that an agreement to this effect has been forged between the parties or a provision in the collective bargaining agreement allowing creditability exists. In the absence of such an agreement or provision in the CBA, any increase granted by the employer shall not be credited as compliance with the increase prescribed in this Order. “Section 2. UNORGANIZED ESTABLISHMENTS. In unorganized establishments, wage increases granted by the employer within five (5) months prior to the effectivity of the Order may be credited as compliance. “Section 3. CREDITABLE INCREASES GIVEN IN THE FORM OF ALLOWANCES. Where the increase given by the employer is in the form of allowances, the employer shall integrate the same into the basic wage of the workers to comply with the P404.00 or P 367.00 per day minimum basic pay whichever is applicable, prescribed under the Order. However, if the amount of the increase is greater than the increase granted under the Wage Order, the employer has the option to integrate partially or in full the allowances earlier given. In the event of partial integration, any excess maybe retained as allowances.

“Section 4. CREDITABLE INCREASES GIVEN LESS THAN THE PRESCRIBED ADJUSTMENTS. In case the increases given are less than the prescribed adjustments, the employer shall pay the difference. Such increases shall not include anniversary increases, merit wage increases, and those resulting from the regularization or promotion of employees.” e. Validity of chargeability/creditability clause.

The validity of chargeability or creditability clause had long been upheld by the Supreme Court. In earlier Wage Orders containing chargeability clauses, such as Wage Orders Nos. 5 [June 11, 1984] and 6 [October 26, 1984], it was ruled that such clause is grounded on public policy to encourage employers to grant wage and allowance increases prescribed by the statute or administrative regulation. Moreover, according to Filipinas Golf & Country Club, Inc. v. NLRC, [G.R. No. 61918, August 23, 1989, 176 SCRA 625], stipulations which subordinate contractual wage increases to those imposed or prescribed by law are not contrary to law, customs, public order or public policy. In Philippine Telegraph and Telephone Corporation v. NLRC, [G.R. No. 99858, June 1995], the CBA provisions in question reveal quite sufficiently the parties' intention to consider salary increases provided in the CBA to be creditable to wage increases that are or may be mandated within the applicable period by law. In holding that there is nothing sinister in this kind of stipulation, the High Court cited the said case of Filipinas Golf and Country Club, Inc., vs. NLRC, where it was stated that such agreements merely create an equivalence between legal and contractual imperatives, rendering both obligations susceptible of performance by compliance with either, subject only to the condition that where the increases given under the agreement fall short in amount of those fixed by law, the difference must be made up by the employer. f. Law is presumed part of the CBA. The provisions of existing laws form part of a valid contract. This is a well-settled rule. There is no need for the parties to make any express reference thereto. The law is presumed to be part of the contract. g. Prohibition on CBA stipulations below minimum legal standards. The parties to a CBA are not allowed to stipulate below the minimum standards provided under the law. Entering into a CBA which contains terms and conditions of employment below minimum standards established by law will not constitute a bar to the conduct of a certification election despite the registration of the CBA with the Department of Labor and Employment. Previously, entering into a CBA providing benefits below the minimum standards set by law is one of the grounds for cancellation of union registration under Article 239 [f] of the Labor Code. This ground, however, has been deleted by the amendatory provision of Republic Act No. 9481, which took effect on June 14, 2007.

7. NON-DIMINUTION OF BENEFITS (ARTICLE 100, LABOR CODE). a. Principle under Article 100. Article 100 of the Labor Code ordains two (2) principles, namely, [1] the non-elimination and (2) the nondiminution of the supplements or other benefits of employees being enjoyed by them at the time of the promulgation of the Labor Code on May 1, 1974. Therefore, the reduction or diminution or withdrawal by employers of any such benefits, supplements or payments as provided in existing laws, individual agreements or collective bargaining agreements between workers and employers or voluntary employer practice or policy, is not allowed. b. The non-elimination or non-diminution principle applied even to benefits granted after the promulgation/effectivity of the Labor Code.

Albeit Article 100 is clear that the twin principles of non-elimination and non-diminution of benefits apply only to the benefits being enjoyed “at the time of the promulgation” of the Labor Code, the Supreme Court, however, has consistently cited Article 100 as being applicable even to benefits granted after said promulgation. It has, in fact, been treated as the legal anchor for the declaration of the invalidity of so many acts of employers deemed to have eliminated or diminished the benefits of employees. c. When elimination or diminution of benefits constitutes demotion. The illegal and unjustified elimination or diminution of certain benefits may result in illegal demotion. Under established jurisprudence, there is demotion where the act of the employer results in the lowering in position or rank or reduction in salary of the employee. It involves a situation where an employee is relegated to a subordinate or less important position constituting a reduction to a lower grade or rank with a corresponding decrease in duties and responsibilities and usually accompanied by a decrease in salary. d. When elimination or diminution of benefits constitutes constructive dismissal. Elimination or diminution of certain benefits may result in the constructive dismissal of an employee. Constructive dismissal is an involuntary resignation resorted to when continued employment is rendered impossible, unreasonable or unlikely; when there is a demotion in rank and/or a diminution in pay; or when a clear discrimination, insensibility or disdain by an employer becomes unbearable to the employee that it could foreclose any choice by him except to forego his continued employment. 8. WORKER’S PREFERENCE IN CASE OF BANKRUPTCY (ARTICLE 110, LABOR CODE). a. Rule under Article 110. Article 110,58enunciates the concept of “worker preference” to cover not only unpaid “wages” but also “other monetary claims” to which even claims of the government must be deemed subordinate. Thus, it is explicitly provided that “(s)uch unpaid wages and monetary claims shall be paid in full before claims of the government and other creditors may be paid.”

Its implementing rule59 states: “Section 10. Payment of Wages and Other Monetary Claims in Case of Bankruptcy. - In case of bankruptcy or liquidation of the employer’s business, the unpaid wages and other monetary claims of the employees shall be given first preference and shall be paid in full before the claims of government and other creditors may be paid.” [Underlining supplied] Despite the clear letter of the law and its implementing rule, the Supreme Court consistently held in a plethora of cases that the right to preference given to workers under Article 110 cannot exist in any effective way prior to the time of its presentation in distribution proceedings. In other words, there should first be a declaration of bankruptcy or judicial liquidation. It is beyond dispute that employees indeed enjoy first preference in the event of bankruptcy or liquidation of an employer’s business. But Article 110 applies only in case of bankruptcy or judicial liquidation of the employer. Judicial proceedings in rem is required for creditors’ claims against debtors to become operative. In this jurisdiction, bankruptcy, insolvency and general judicial liquidation proceedings provide the only

proper venue for the enforcement of a creditor's preferential right such as that established in Article 110 of the Labor Code, for these are in rem proceedings binding against the whole world where all persons having any interest in the assets of the debtor are given the opportunity to establish their respective credits. To contend that Article 110 of the Labor Code is applicable also to extrajudicial proceedings would be putting the worker in a better position than the State which could only assert its own prior preference in case of a judicial proceeding. b. Preference of taxes and claims of government. By way of underscoring this point on preference of taxes, worth reiterating is the ruling in Commissioner of Internal Revenue v. NLRC, [G.R. No. 74965, November 9, 1994, 238 SCRA 42], that there is no merit in the contention that taxes are absolutely preferred claims only with respect to movable and immovable properties on which they are due. The claim of the government predicated on a tax lien is superior to the claim of a private litigant predicated on a judgment. The tax lien attaches not only from the service of the warrant of distraint of personal property but from the time the tax became due and payable. c. Preference of mortgage credit. A mortgage credit is a special preferred credit under Article 2241 of the Civil Code while workers’ preference is an ordinary preferred credit. The statement in Development Bank of the Philippines v. NLRC, [G.R. Nos. 100264-81, January 29, 1993, 218 SCRA 183], that under the new Article 110 of the Labor Code, mortgage credits are subordinate to workers’ claim is merely an obiter. Thus, it is grave abuse of discretion on the part of the Labor Arbiter in ruling that the employees may enforce their first preference in the satisfaction of their claims over those of the mortgagor in the absence of a declaration of bankruptcy or judicial liquidation of the employer. There is nothing that prevents the employees from instituting involuntary insolvency or any other appropriate proceeding against their employer where their claims can be asserted with respect to their employer’s assets.

The 2005 case of Barayoga v. Asset Privatization Trust, [GR No. 160073, October 24, 2005], continues to affirm the same principles enunciated in the cases mentioned earlier. In this case, Philippine National Bank (PNB) was a mortgage creditor of Bicolandia Sugar Development Corp. (BISUDECO). The claim of PNB was later transferred to the Asset Privatization Trust (APT) which was created to conserve, provisionally manage and dispose of non-performing assets of the Philippine government identified for privatization or disposition. APT subsequently acquired ownership of BISUDECO’s assets following foreclosure proceedings. A complaint for underpayment of wages and other labor standards benefits was filed by the workers of BISUDECO. APT later sold BISUDECO’s assets to the Bicol-Agro Industrial Cooperative (BAPCI). The workers sought to enforce their claim against APT and BAPCI. Both the Labor Arbiter and the NLRC ruled in favor of the workers for their unpaid benefits. APT, having been held liable therefor, raised the issue of whether, as mortgagee of their employer’s assets, it can be held liable for the workers’ claims. The Supreme Court ruled that the mortgageetransferee of its debtor’s assets does not automatically acquire the liabilities of the debtormortgagor, such as the workers’ claims for benefits. Hence, APT as mortgagee of BISUDECO, cannot be held liable for the monetary claims of the latter’s workers. Citing DBP v. NLRC, [G.R. Nos. 82763-64, March 19, 1990, 183 SCRA 328], it further held that the worker’s preference of credit is not a lien that attaches to specific properties of their insolvent employer. A mortgagee’s lien, on the other hand, creates a charge on the debtor company’s particular property and, hence, should prevail over the workers’ preference of credit. The Supreme Court reiterated the rule that the benefit of Article 110

cannot be invoked outside bankruptcy or judicial proceedings where the claims of all creditors may be inventoried and determined. d. Meaning of “wages” in Article 110. The term “wages” under Article 110 of the Labor Code may be regarded as embracing within its scope, severance pay or termination or separation pay. 9. LABOR CODE PROVISION FOR WAGE PROTECTION (ARTICLES 112 TO 119, LABOR CODE). The following provisions of the Labor Code are meant to protect wage: ART. 112. 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 any other person, or otherwise make use of any store or services of such employer or any other person. ART. 113. Wage deduction. - No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his employees, except: (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 checkoff 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 and Employment. ART. 114. Deposits for loss or damage. - No employer shall require his worker to make deposits from which deductions 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 or desirable as determined by the Secretary of Labor and Employment in appropriate rules and regulations. ART. 115. 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. ART. 116. 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 any other means whatsoever without the worker’s consent. ART. 117. 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. ART. 118. Retaliatory measures. - It shall be unlawful for an employer to refuse to pay or 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.

ART. 119. 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. All the foregoing provisions are considered prohibitions regarding wages. 10. ALLOWABLE DEDUCTIONS WITHOUT EMPLOYEE’S CONSENT (ARTICLE 113, LABOR CODE). a. General rule. The general rule is that an employer, by himself or through his representative, is prohibited from making any deductions from the wages of his employees. The employer is not allowed to make unnecessary deductions without the knowledge or authorization of the employees. b. Deductions allowed under Article 113. Article 113 allows only three (3) kinds of deductions, namely: (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 checkoff 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 and Employment. c. Deductions allowed under other provisions of the Labor Code and other laws. Deductions from the wages of employees may be made by the employer in any of the following cases: 1. Deductions for loss or damage under Article 114 of the Labor Code; 2. Deductions made for agency fee from non-union members who accept the benefits under the CBA negotiated by the recognized or certified bargaining union. This form of deduction does not require the written authorization of the non-union member concerned; 3. Union service fee; 4. When the deductions are with the written authorization of the employee for payment to a third person and the employer agrees to do so, provided that the latter does not receive any pecuniary benefit, directly or indirectly, from the transaction; 5. Deductions for value of meal and other facilities; 6. Deductions for premiums for SSS, PhilHealth, employees’ compensation and Pag-IBIG; 7. Withholding tax mandated under the National Internal Revenue Code (NIRC); 8. Withholding of wages because of the employee’s debt to the employer which is already due; 9. Deductions made pursuant to a court judgment against the worker under circumstances where the wages may be the subject of attachment or execution but only for debts incurred for food, clothing, shelter and medical attendance; 10. When deductions from wages are ordered by the court; 11. Salary deductions of a member of a legally established cooperative. 11. ATTORNEY’S FEES AND UNION SERVICE FEE IN LABOR CASES (ARTICLE 111, LABOR CODE). I. ON ATTORNEY’S FEES. a Non-lawyers are not entitled to attorney’s fees. Albeit the law allows, under certain circumstances, non-lawyers to appear before the Labor Arbiter, National Labor Relations Commission or other labor tribunals,

this does not mean, however, that they are entitled to attorney’s fees. Their act of representing, appearing or defending a party litigant in a labor case does not, by itself, confer upon them any legal right to claim for attorney’s fees. Entitlement to attorney’s fees presupposes the existence of attorney-client relationship. This relationship cannot exist unless the client’s representative is a lawyer. b. Attorney’s fees cannot be shared with non-lawyers. * Amalgamated Laborers Association v. CIR, [G.R. No. L-23467, March 27, 1968, 22 SCRA 1266] II. ON UNION SERVICE FEES. a. Entitlement to union service fees. * Radio Communications of the Phils., Inc. v. Secretary of Labor and Employment, [G.R. No. 77959, January 9, 1989, 169 SCRA 38].

12. CRITERIA/FACTORS FOR WAGE SETTING (ARTICLE 124, LABOR CODE). a. Latest NWPC Guidelines No. 01, Series of 2007. NWPC Guidelines No. 01, Series of 2007 was issued by the NWPC on June 19, 2007, promulgating the “Amended Rules of Procedure on Minimum Wage Fixing” governing the proceedings in the Commission and the RTWPBs in the fixing of minimum wage rates by region, province or industry. By virtue of this latest issuance, the previous NWPC Guidelines No. 001-95 and the June 4, 1990 Rules are now deemed repealed pursuant to Section 1, Rule XII thereof which declares that “(a)ll existing rules, regulations or orders or any part thereof inconsistent with this Amended Rules are hereby, repealed, amended or modified accordingly.” b. Conduct of wage and productivity studies. The Board (RTWPB) shall, subject to the guidelines issued by the Commission (NWPC), conduct continuing studies of wage rates, productivity and other conditions in the region, provinces or industries therein. The Board shall investigate and study all pertinent facts, and based on standards and criteria (see below) shall determine whether a wage order should be issued.84 c. Standards/Criteria for minimum wage fixing. The minimum wage rates to be established by the 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 workers within the framework of national economic and social development goals. In the determination of regional minimum wages, the Board shall, among other relevant factors, consider the following: (a) Needs of workers and their families 1) Demand for living wages 2) Wage adjustment vis-à-vis the consumer price index 3) Cost of living and changes therein 4) Needs of workers and their families 5) Improvements in standards of living (b) Capacity to pay 1) Fair return on capital invested and capacity to pay of employers 2) Productivity

(c) Comparable wages and incomes 1) Prevailing wage levels (d) Requirements of economic and social development 1) Need to induce industries to invest in the countryside 2) Effects on employment generation and family income 3) Equitable distribution of income and wealth along the imperatives of economic and social development. (Section 2, Rule II, Ibid.).

1. RIGHT TO WEEKLY REST DAY (ARTICLE 91, LABOR CODE). a. Coverage. b. Weekly rest period. c. Schedule of rest day. 2. PREFERENCE OF THE EMPLOYEE (ARTICLE 91, LABOR CODE). a. Employee’s preference of rest day based on religious grounds. 3. WHEN WORK ON REST DAY AUTHORIZED (ARTICLE 92, LABOR CODE). a. General rule. b. Compulsory work on scheduled rest day. 1. RIGHT TO HOLIDAY PAY IN CASE OF ABSENCES (ARTICLE 94, LABOR CODE). a. Effect of absences on entitlement to holiday pay. 2. RIGHT TO HOLIDAY PAY IN CASE OF TEMPORARY CESSATION OF WORK. a. Temporary or periodic shutdown or cessation of work not due to business reverses. b. Temporary cessation of operation due to business losses or reverses. 3. RIGHT TO HOLIDAY PAY OF TEACHERS, PIECE WORKERS, SEAFARERS, SEASONAL WORKERS, ETC. ON RIGHT TO HOLIDAY PAY OF TEACHERS. ON RIGHT TO HOLIDAY PAY OF PIECE WORKERS. a. Holiday pay of piece workers or employees paid by results. b. Workers paid by results classified into supervised and unsupervised ON RIGHT TO HOLIDAY PAY OF SEAFARERS. ON RIGHT TO HOLIDAY PAY OF SEASONAL WORKERS. 4. EXCLUSIONS FROM COVERAGE OF HOLIDAY PAY. a. Coverage; exceptions.

1. SERVICE INCENTIVE LEAVE PAY (ARTICLE 95, LABOR CODE). a. Right to service incentive leave. b. Exclusions from coverage. c. Commutable nature of benefit. Illustration: To illustrate the computation of the service incentive leave (SIL) cash commutation, an employee who is hired on January 1, 2010 and resigned on March 1, 2011, assuming he has not used or commuted any of his accrued SIL, is entitled upon his resignation to the commutation of his accrued SIL as follows: SIL earned as of December 31,2010

~ Five (5) days Proportionate SIL for Jan. and Feb. 2011 (2/12 x 5 days) ~ 0.833 day Total accrued SIL as of March 1, 2011 ~ 5.833 days

2. MATERNITY LEAVE. (ARTICLE 133, LABOR CODE; SECTION 14-A, SOCIAL SECURITY LAW [R.A. NO. 8282). a. Coverage. “Maternity leave” is the period of time which may be availed of by a woman employee, married or unmarried, to undergo and recuperate from childbirth, miscarriage or complete abortion during which she is permitted to retain her rights and benefits flowing from her employment. Section 14-A113 of the Social Security Law now provides as follows: “Sec. 14-A. Maternity Leave Benefit. - A female member who has paid at least three (3) monthly contributions in the twelve-month period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to one hundred percent (100%) of her average daily salary credit for sixty (60) days or seventyeight (78) days in case of caesarian delivery, subject to the following conditions: “(a) That the employee shall have notified her employer of her pregnancy and the probable date of her childbirth, which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide; “(b) The full payment shall be advanced by the employer within thirty (30) days from the filing of the maternity leave application; “(c) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided by this Act for the same period for which daily maternity benefits have been received; “(d) That the maternity benefits provided under this section shall be paid only for the first four (4) deliveries or miscarriages; “(e) That the SSS shall immediately reimburse the employer of one hundred percent (100%) of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof; and “(f) That if an employee member should give birth or suffer miscarriage without the required contributions having been remitted for her by her employer to the SSS, or without the latter having been previously notified by the employer of the time of the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits which said employee member would otherwise have been entitled to.” b. Conditions to entitlement. The following are the qualifications for entitlement to maternity benefits: 1. The female member should be employed at the time of delivery, miscarriage or abortion. 2. She must have given the required notification to the SSS thru her employer.

3. Her employer must have paid at least three (3) months of maternity contributions within the 12-month period immediately before the semester of contingency.

c. Availment. 1. Pregnant women, whether married or unmarried, are entitled to maternity leave benefits. Entitlement to maternity leave benefits is not dependent on the civil status of the pregnant woman. Every pregnant woman in the private sector, whether married or unmarried, is entitled to the maternity leave benefits. 2. Maternity benefits, not part of 13th-month pay computation. Maternity benefits, like other benefits granted by the SSS, are granted to employees in lieu of wages and, therefore, may not be included in computing the employee’s 13th-month pay for the calendar year. 3. Voluntary or self-employed members not entitled to maternity benefits. Voluntary or self-employed members are not entitled to maternity benefits because to be entitled thereto, corresponding maternity contributions should be paid by employers. Voluntary or self-employed members have no employers so they do not have maternity contributions. 4. Computation of maternity benefits. The maternity benefits shall be computed as follows: a. Exclude the semester of contingency (delivery, miscarriage or abortion). A semester refers to two consecutive quarters ending in the quarter of contingency. A quarter refers to three (3) consecutive months ending in March, June, September or December. b. Count twelve (12) months backwards starting from the month immediately before the semester of contingency. c. Identify the six (6) highest monthly salary credits within the 12-month period. “Monthly salary credit” means the compensation base for contributions and benefits related to the total earnings for the month. d. Add the six (6) highest monthly salary credits to get the total monthly salary credit. e. Divide the total monthly salary credit by 180 days to get the average daily salary credit. This is equal to the daily maternity allowance. f. Multiply the daily maternity allowance by sixty (60) days (or 78 days) to get the total maternity allowance. 5. Entitlement to maternity benefit forecloses entitlement to sickness benefit. A female member of the SSS who has availed of maternity benefit cannot claim for sickness benefit for a period of sixty (60) days (or 78 days) within which she was already paid the maternity benefit. As a rule, no member can be entitled to two (2) benefits for the same period. 6. Notification to SSS in case of pregnancy. It is a requirement to notify the SSS. As soon as a female member becomes pregnant, she must immediately inform her employer of such pregnancy by accomplishing the Maternity Notification Form. The employer must, in turn, notify the SSS thru the submission of said form.

7. Payment of maternity benefit; how made. The benefit is advanced by the employer to the qualified employee in full or in two (2) equal installments. The first installment will be paid upon receipt of the maternity leave application. The second will be paid not later than thirty (30) days after payment of the first installment. Upon receipt of satisfactory proof of such payment, the SSS will pay back the employer the amount of maternity benefit it legally advanced to the employee. 3. PATERNITY LEAVE. (R.A. NO. 8187, “THE PATERNITY LEAVE ACT OF 1996” [JUNE 11, 1996]. a. Coverage. “Paternity leave” covers a married male employee allowing him not to report for work for seven (7) calendar days but continues to earn the compensation therefor, on the condition that his spouse has delivered a child or suffered miscarriage for purposes of enabling him to effectively lend support to his wife in her period of recovery and/or in the nursing of the newly-born child. “Delivery” includes childbirth or any miscarriage. “Spouse” refers to the lawful wife. For this purpose, “lawful wife” refers to a woman who is legally married to the male employee concerned. “Cohabiting” refers to the obligation of the husband and wife to live together. b. Conditions to entitlement. Every married employee in the private and public sectors is entitled to a paternity leave of seven (7) calendar 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 should notify his employer of the pregnancy of his legitimate spouse and the expected date of such delivery. Paternity leave benefits are granted to the qualified employee after the delivery by his wife, without prejudice to an employer allowing an employee to avail of the benefit before or during the delivery, provided that the total number of days should not exceed seven (7) calendar days for each delivery. In the event that the paternity leave benefit is not availed of, said leave shall not be convertible to cash. c. Availment. The employee is entitled to his full pay, consisting of basic salary, for the seven (7) calendar days during which he is allowed not to report for work provided that his pay shall not be less than the mandated minimum wage.124

4. PARENTAL LEAVE. (R.A. NO. 8972, “THE SOLO PARENTS’ WELFARE ACT OF 2000” (NOVEMBER 7, 2000). a. Coverage.

“Parental leave” is the leave benefits granted to a male or female solo parent to enable him/her to perform parental duties and responsibilities where physical presence is required. The parental leave shall not be more than seven (7) working days every year to a solo parent who has rendered service of at least one (1) year, to enable him/her to perform parental duties and responsibilities where his/her physical presence is required. The seven-day parental leave shall be non-cumulative. It bears noting that this leave privilege is an additional leave benefit which is separate and distinct from any other leave benefits provided under existing laws or agreements. The term "solo parent" refers to any individual who falls under any of the following categories: (1) A woman who gives birth as a result of rape and other crimes against chastity even without a final conviction of the offender: Provided, That the mother keeps and raises the child; (2) Parent left solo or alone with the responsibility of parenthood due to death of spouse; (3) Parent left solo or alone with the responsibility of parenthood while the spouse is detained or is serving sentence for a criminal conviction for at least one (1) year; (4) Parent left solo or alone with the responsibility of parenthood due to physical and/or mental incapacity of spouse as certified by a public medical practitioner; (5) Parent left solo or alone with the responsibility of parenthood due to legal separation or de facto separation from spouse for at least one (1) year, as long as he/she is entrusted with the custody of the children; (6) Parent left solo or alone with the responsibility of parenthood due to declaration of nullity or annulment of marriage as decreed by a court or by a church as long as he/she is entrusted with the custody of the children; (7) Parent left solo or alone with the responsibility of parenthood due to abandonment of spouse for at least one (1) year; (8) Unmarried mother/father who has preferred to keep and rear her/his child/children instead of having others care for them or give them up to a welfare institution; (9) Any other person who solely provides parental care and support to a child or children; (10) Any family member who assumes the responsibility of head of family as a result of the death, abandonment, disappearance or prolonged absence of the parents or solo parent. A change in the status or circumstance of the parent claiming benefits under this Act, such that he/she is no longer left alone with the responsibility of parenthood, shall terminate his/her eligibility for these benefits.

"Children" refer to those living with and dependent upon the solo parent for support who are unmarried, unemployed and not more than eighteen (18) years of age, or even over eighteen (18) years but are incapable of self-support because of mental and/or physical defect/disability. "Parental responsibility" with respect to their minor children shall refer to the rights and duties of the parents as defined in Article 220 of Executive Order No. 209, as amended, otherwise known as the "Family Code of the Philippines" and hereunder enumerated as follows:

(1) To keep them in their company, to support, educate and instruct them by right precept and good example and to provide for their upbringing in keeping with their means; (2) To give them love and affection, advice and counsel, companionship and understanding; (3) To provide them with moral and spiritual guidance, inculcate in them honesty, integrity, self-discipline, self-reliance, industry and thrift, stimulate their interest in civic affairs, and inspire in them compliance with the duties of citizenship; (4) To furnish them with good and wholesome educational materials, supervise their activities, recreation and association with others, protect them from bad company, and prevent them from acquiring habits detrimental to their health, studies and morals; (5) To represent them in all matters affecting their interest; (6) To demand from them respect and obedience; (7) To Impose discipline on them as may be required under the circumstances; and (8) To perform such other duties as are imposed by law and upon parents and guardians. b. Conditions to entitlement. A solo parent shall be entitled to parental leave provided that: (a) He/She has rendered at least one (1) year of service whether continuous or broken at the time of the affectivity of the Act; (b) He/She has notified his/her employer of the availment thereof within a reasonable time period; and (c) He/She has presented a Solo Parent Identification Card to his/her employer. c. Availment. 1. Non-conversion of parental leave. In the event that the parental leave is not availed of, said leave shall not be convertible to cash unless specifically agreed upon previously. However, if said leave were denied an employee as a result of non-compliance with the provisions of these Rules by an employer, the aforementioned leave may be used a basis for the computation of damages. 2. Crediting of existing leave. If there is an existing or similar benefit under a company policy, or a collective bargaining agreement or collective negotiation agreement the same shall be credited as such. If the same is greater than the seven (7) days provided for in the Act, the greater benefit shall prevail. Emergency or contingency leave provided under a company policy or a collective bargaining agreement shall not be credited as compliance with the parental leave provided for under the Act and these Rules.

3. Benefits. Any solo parent whose income in the place of domicile falls below the poverty threshold as set by the National Economic and Development Authority (NEDA) and subject to the assessment of the DSWD worker in the area shall be eligible for assistance: Provided, however, That any solo parent whose income is above the poverty threshold shall enjoy the benefits mentioned in Sections 6, 7 and 8 of R.A. No. 8972, to wit: Section 6. Flexible Work Schedule. - The employer shall provide for a flexible working schedule for solo parents: Provided, That the same shall not affect individual and companyproductivity: Provided, further, That any employer may request exemption from the above requirements from the DOLE on certain meritorious grounds.

Section 7. Work Discrimination. - No employer shall discriminate against any solo parent employee with respect to terms and conditions of employment on account of his/her status. Section 8. Parental Leave. - In addition to leave privileges under existing laws, parental leave of not more than seven (7) working days every year shall be granted to any solo parent employee who has rendered service of at least one (1) year. 4. Other benefits under the R.A. No. 8972. Other benefits consist of the following: Section 9. Educational Benefits. - The DECS, CHED and TESDA shall provide the following benefits and privileges: (1) Scholarship programs for qualified solo parents and their children in institutions of basic, tertiary and technical/skills education; and (2) Non-formal education programs appropriate for solo parents and their children. The DECS, CHED and TESDA shall promulgate rules and regulations for the proper implementation of this program. Section 10. Housing Benefits. - Solo parents shall be given allocation in housing projects and shall be provided with liberal terms of payment on said government low-cost housing projects in accordance with housing law provisions prioritizing applicants below the poverty line as declared by the NEDA. Section 11. Medical Assistance. - The DOH shall develop a comprehensive health care program for solo parents and their children. The program shall be implemented by the DOH through their retained hospitals and medical centers and the local government units (LGUs) through their provincial/district/city/municipal hospitals and rural health units (RHUs). 5. LEAVES FOR VICTIMS OF VIOLENCE AGAINST WOMEN. (R.A. NO. 9262, “ANTI-VIOLENCE AGAINST WOMEN AND THEIR CHILDREN ACT OF 2994” [MARCH 8, 2004).

a. Coverage. R.A. No. 9262, grants to victims a total of ten (10) days of paid leave of absence, in addition to other paid leaves under the Labor Code and Civil Service Rules and Regulations. It is extendible when the necessity arises as specified in the protection order. This is afforded to the woman employee to enable her to attend to the medical and legal concerns relative to said law. This leave is not convertible to cash. Any employer who shall prejudice the right of the person under this law shall be penalized in accordance with the provisions of the Labor Code and Civil Service Rules and Regulations. Likewise, an employer who shall prejudice any person for assisting a co-employee who is a victim under this Act shall likewise be liable for discrimination. b. Conditions of entitlement. At any time during the application of any protection order, investigation, prosecution and/or trial of the criminal case, a victim of Violence Against Women and their Children (VAWC) who is employed shall be entitled to a paid leave of up to ten (10) days in addition to other paid leaves under the Labor Code and Civil Service Rules and

Regulations and other existing laws and company policies, extendible when the necessity arises as specified in the protection order. The Punong Barangay/kagawad or prosecutor or the Clerk of Court, as the case may be, shall issue a certification at no cost to the woman that such an action is pending, and this is all that is required for the employer to comply with the 10-day paid leave. For government employees, in addition to the aforementioned certification, the employee concerned must file an application for leave citing as basis R.A. 9262. The administrative enforcement of this leave entitlement shall be considered within the jurisdiction of the Regional Director of the DOLE under Article 129 of the Labor Code of the Philippines, as amended, for employees in the private sector, and the Civil Service Commission, for government employees. c. Availment. The availment of the ten (10) day-leave shall be at the option of the woman employee, which shall cover the days that she has to attend to medical and legal concerns. Leaves not availed of are non-cumulative and not convertible to cash. The employer/agency head who denies the application for leave, and who shall prejudice the victim/survivor or any person for assisting a co-employee who is a victim-survivor under the Act shall be held liable for discrimination and violation of R.A. No. 9262. The provision of the Labor Code and the Civil Service Rules and Regulations shall govern the penalty to be imposed on the said employer/agency head. 6. SERVICE CHARGES (ARTICLE 96, LABOR CODE). a. Coverage. 1. Establishments covered. The rules on service charges apply only to establishments collecting service charges, such as hotels, restaurants, lodging houses, night clubs, cocktail lounges, massage clinics, bars, casinos and gambling houses, and similar enterprises, including those entities operating primarily as private subsidiaries of the government.

2. Employees covered. The same rules on service charges apply to all employees of covered employers, regardless of their positions, designations or employment status, and irrespective of the method by which their wages are paid. except those receiving more than P2,000.00 a month. b. Exclusion. Specifically excluded from coverage are employees who are receiving wages of more than P2,000.00 a month. However, it must be pointed out that the P2,000.00 ceiling is no longer realistic considering the applicable minimum wages prevailing in the country. Hence, it must be disregarded. Instead, the rule now is that the 85% should be distributed to the covered employees except managerial employees; while the remaining 15% should be retained by management to answer for losses and breakages and for distribution to managerial employees, at the discretion of management in the latter case. c. Distribution. 1. Percentage of sharing. All service charges collected by covered employers are required to be distributed at the following rates: a. 85% to be distributed equally among the covered employees; and b. 15% to management to answer for losses and breakages and distribution to employees receiving more than P2,000.00 a month, at the discretion of the management.

2. Frequency of distribution. The share of the employees referred to above should be distributed and paid to them not less often than once every two (2) weeks or twice a month at intervals not exceeding sixteen (16) days. d. Integration. In case the service charge is abolished, the share of covered employees should be considered integrated in their wages, in accordance with Article 96 of the Labor Code. The basis of the amount to be integrated is the average monthly share of each employee for the past twelve (12) months immediately preceding the abolition or withdrawal of such charges. 7. THIRTEENTH (13TH) MONTH PAY AND OTHER BONUSES. (P.D. NO. 851 [DECEMBER 16, 1975; MEMORANDUM ORDER NO. 28 [AUGUST 13, 1986]; REVISED GUIDELINES ON THE IMPLEMENTATION OF THE 13TH MONTH PAY LAW [NOVEMBER 16, 1987]. a. Coverage. All employers are required to pay all their rank-and-file employees, a 13th-month pay not later than December 24 of every year. b. Exclusions/Exemptions from coverage. The following employers are not covered by P.D. No. 851, as amended: 1. The government and any of its political subdivisions, including government-owned and controlled corporations, except those corporations operating essentially as private subsidiaries of the government.

2. Employers already paying their employees 13th-month pay or more in a calendar year or its equivalent at the time of the issuance of the Revised Guidelines. 3. Employers of household helpers and persons in the personal service of another in relation to such workers. 4. Employers of those who are paid on purely commission, boundary, or task basis, and those who are paid a fixed amount for performing a specific work, irrespective of the time consumed in the performance thereof, except where the workers are paid on piece-rate basis, in which case, the employer shall be covered by the Revised Guidelines insofar as such workers are concerned. Workers paid on piece-rate basis shall refer to those who are paid a standard amount for every piece or unit of work produced that is more or less regularly replicated without regard to the time spent in producing the same. c. Nature of 13th month pay. 13th month pay is in the nature of additional income granted to employees who are not receiving the same. P.D. No. 851 is undoubtedly a labor standards law whose purpose is to increase the real wages of the workers. It is based on wage but not part of the wage. The minimum 13th-month pay required by law should not be less than one-twelfth (1/12) of the total basic salary earned by an employee within a calendar year. d. Commissions vis-a-vis 13th month pay. In order to be considered part of 13th month pay, the commission should be part of the basic salary of the employee. However, whether or not a commission forms part of the basic salary depends upon the circumstances or conditions for its payment which indubitably are factual in nature for they will require a re-examination and calibration of the evidence on record. If the commission paid in addition to the basic salary is in the nature of a productivity bonus or profit-sharing benefit which is dependent on and generally tied to the

productivity or capacity for revenue production of a company, it should not be considered as part of basic salary. But if the commission paid in addition to the basic salary has a clear direct or necessary relation to the amount of work actually done by the employee, it should be considered as part of basic salary. If the employee is paid on commission basis only, he is excluded from receiving the 13thmonth pay benefit. e. CBA vis-a-vis 13th month pay. For purposes of computing the 13th month pay, “basic salary” includes all remunerations or earnings paid by the employer for services rendered but does not include allowances and monetary benefits which are not considered or integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits, maternity leave, overtime, premium, night differential and holiday pay, premiums for work done on rest days and special holidays and cost-of-living allowances. However, these salary-related benefits should be included as part of the basic salary in the computation of the 13th-month pay if by individual or collective bargaining agreement, company practice or policy, the same are treated as part of the basic salary of the employees.

1. DISCRIMINATION (ARTICLE 135, LABOR CODE). a. Acts of discrimination. Article 135 considers as unlawful the act of an employer to discriminate against any woman employee with respect to terms and conditions of employment solely on account of her sex. More specifically, it enumerates the following acts of discrimination: (a) 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; and (b) Favoring a male employee over a female employee with respect to promotion, training opportunities, study and scholarship grants solely on account of their sexes. b. Criminal liability under Article 135. The willful commission of any of the specific unlawful acts described in Article 135 has a criminal consequence. Consequently, the offender will be penalized under Articles 288 and 289 of the Labor Code. c. Money claims, a separate and distinct action. The institution of any criminal action under Article 135 will not bar the aggrieved employee from filing an entirely separate and distinct action for money claims, which may include claims for damages and other affirmative reliefs. c. Criminal action may proceed independently from the money claims case. The criminal and money claims actions authorized to be prosecuted under Article 135 shall proceed independently of each other. 2. STIPULATION AGAINST MARRIAGE (ARTICLE 136, LABOR CODE). a. Invalidity of stipulation against marriage. Article 136 considers as an unlawful act of the employer to require as a condition for 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.

It is likewise an unlawful act of the employer, to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee merely by reason of her marriage. b. Relevant jurisprudence. The following cases are relevant: *1. Zialcita v. Philippine Airlines, Inc., [Case No. RO4-3-398-76, February 20, 1977 *2. Philippine Telegraph and Telephone Company v. NLRC, [G.R. No. 118978, May 23, 1997, 272 SCRA 596, 605 *3. Star Paper Corp. v. Simbol, Comia and Estrella, [G.R. No. 164774, April 12, 2006]. *4. Duncan Association of Detailman-PTGWO v. Glaxo Welcome Philippines, Inc., [G.R. No. 162994, September 17, 2004].

3. PROHIBITED ACTS. (ARTICLE 137, LABOR CODE). a. Prohibited acts under Article 137 and its implementing rules. The corresponding provisions in the Rules to Implement the Labor Code provide for a broader enumeration of prohibited acts than those found in Article 137. It is provided thereunder that it shall be unlawful for any employer: 1. To discharge any woman employed by him for the purpose of preventing such woman from enjoying maternity leave, facilities and other benefits provided under the Labor Code; 2. To discharge such woman on account of her pregnancy, or while on leave or in confinement 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; 4. To discharge any woman or any other employee for having filed a complaint or having testified or being about to testify under the Labor Code; or 5. To require as a condition for 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 marriage. b. Denial of benefits or dismissal of a woman employee to deprive her of benefits. Paragraph [a] (1) of Article 137 speaks of two separate prohibited acts, namely: 1. To deny any woman employee the benefits provided in Chapter I (Employment of Women), Title III (Working Conditions for Special Groups of Employees) of Book III of the Labor Code, namely: a. Facilities for women under Article 132; b. Maternity leave benefits under Article 133; and c. Family planning services and incentives for family planning under Article 134. 2. To discharge any woman employee for the purpose of preventing her from enjoying any of the benefits provided under the Labor Code. Under No. 1 above, mere denial of the afore-described benefits would already constitute a violation of Article 137. Under No. 2 above, it is required that there must not only be denial but actual discharge or dismissal of the woman employee meant to prevent her from enjoying any of the

benefits under the Labor Code and not only of the benefits under Chapter I, Title III of Book III of the Labor Code. c. Discharging a woman due to pregnancy. Paragraph [a] (2) and (3) of Article 137 contemplates the following prohibited acts in connection with the pregnancy of a woman employee: 1. To discharge her on account of her pregnancy; or 2. To discharge her while she is on leave due to her pregnancy; or 3. To discharge her while she is in confinement due to her pregnancy; or 4. To discharge her upon returning to her work for fear that she may again be pregnant; or 5. To refuse her admission upon returning to her work for fear that she may again be pregnant.

* Del Monte Philippines, Inc. v. Velasco, [G.R. No. 153477, March 6, 2007]. * Lakpue Drug, Inc. v. Belga, [G.R. No. 166379, October 20, 2005 d. Discharging a woman employee for having filed a case or for testifying or being about to testify in a case. Cited as additional prohibited act in Section 13, Rule XII, Book III of the Rules to Implement the Labor Code is the act of discharging any woman or any other employee for having filed a complaint or having testified or being about to testify under the Labor Code. Of relevance to this prohibited act are the parallel provisions in Articles 118 and 248 [f] of the Labor Code. Under Article 118, it is considered unlawful for an employer to discharge or in any manner discriminate against any employee who has filed any complaint or instituted any proceeding under Title II (Wages) of Book III or has testified or is about to testify in such proceedings. Under Article 248 [f], it is considered an unfair labor practice (ULP) to dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under the Labor Code. This is the only ULP act of the employer which need not be related to the exercise by the employee of his right to self-organization and collective bargaining. e. Penalty for commission of the prohibited acts under Article 137. Having been declared unlawful, the commission of any of the prohibited acts under Article 137 would subject the offender to the penalties provided under Article 288 of the Labor Code. 4. CLASSIFICATION OF CERTAIN WOMAN WORKERS (ARTICLE 138, LABOR CODE). a. Women working in night clubs and similar establishments. Article 138 enunciates the rule applicable to women employees who work regularly during nighttime in places of entertainment. The situation herein contemplated, because of its peculiar feature, constitutes an exception to the prohibition against nighttime work prescribed in Article 130, although the same was never included in the enumeration of the excepted instances under Article 131. b. Regularity of employment. Any woman who is permitted or suffered to work, with or without compensation, in any night club, cocktail lounge, massage clinic, bar or similar establishments may be

considered an employee of such establishment for purposes of labor and social legislation if the following requisites concur: 1. She works under the effective control or supervision of the employer; and 2. She has worked therein for a substantial period of time as determined by the Secretary of Labor and Employment. In accordance with Article 138, in relation to Article 280, of the Labor Code, such women working in night clubs and similar establishments are considered regular employees thereof considering that they are made to perform activities that are usually necessary or desirable in the usual business or trade of their employer. It bears noting that under Article 135 of the Labor Code, it is considered unlawful for any employer to discriminate against any woman employee with respect to terms and conditions of employment solely on account of her sex. c. Hospitality girls are not regular employees.. In an opinion of the Department of Justice dated October 27, 1954, it was opined that hospitality girls are not considered employees when the night club operator does not control nor direct the details and manner of their work in the entertainment of nightclub patrons and, having no fixed hours of work, they may come and go as they please. 5. ANTI-SEXUAL HARASSMENT ACT (R.A. NO. 7877, FEBRUARY 14, 1995). a. Three (3) situations only. R.A. No. 7877 declares sexual harassment unlawful only in three (3) situations, namely: (1) employment, (2) education, or (3) training environment. It must be underscored at the outset that sexual harassment is not the sole domain of women as men may also be subjected to the same despicable act. Said law does not limit the victim of sexual harassment to women. b. Specific acts penalized. The law punishes sexual harassment if the same is: 1. work-related; or 2. education-related; or 3. training-related. d. Persons who may be liable for sexual harassment. Work, education or training-related sexual harassment is committed by any employer, employee, manager, supervisor, agent of the employer, teacher, instructor, professor, coach, trainor, or any other person who, having authority, influence or moral ascendancy over another in a work or training or education environment, demands, requests or otherwise requires any sexual favor from another, regardless of whether the demand, request or requirement for submission is accepted by the object of said act. Further, any person who directs or induces another to commit any act of sexual harassment as defined in the law, or who cooperates in the commission thereof by another without which it would not have been committed, shall also be held liable under the law. e. Sexual harassment in a work-related or employment environment. In a work-related or employment environment, sexual harassment is committed when: 1. The sexual favor is made a condition in the hiring or in the employment, reemployment or continued employment of said individual or in granting said

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

2. The above acts would impair the employee’s rights or privileges under existing labor laws; or 3. The above acts would result in an intimidating, hostile, or offensive environment for the employee. * Libres v. NLRC, [G.R. No. 123737, May 28, 1999]. * Domingo v. Rayala, [G.R. No. 155831, February 18, 2008]. f. Sexual harassment in an education or training environment. In an education or training environment, sexual harassment is committed: 1. against one who is under the care, custody or supervision of the offender; 2. against one whose education, training, apprenticeship or tutorship is entrusted to the offender; 3. when the sexual favor is made a condition to the giving of a passing grade, or the granting of honors and scholarships, or the payment of a stipend, allowance or other benefits, privileges, or considerations; or 4. when the sexual advances result in an intimidating, hostile or offensive environment for the student, trainee or apprentice. g. Duty of the employer or head of office. It is the duty of the employer or the head of the work-related, educational or training environment or institution, to prevent or deter the commission of acts of sexual harassment and to provide the procedures for the resolution or prosecution of acts of sexual harassment. Towards this end, the employer or head of office is required to: 1. promulgate appropriate rules and regulations in consultation with and jointly approved by the employees or students or trainees, through their duly designated representatives, prescribing the procedure for the investigation of sexual harassment cases and the administrative sanctions therefor. The said rules and regulations issued shall include, among others, guidelines on proper decorum in the workplace and educational or training institutions. 2. create a committee on decorum and investigation of cases on sexual harassment. The committee shall conduct meetings, as the case may be, with officers and employees, teachers, instructors, professors, coaches, trainors and students or trainees to increase understanding and prevent incidents of sexual harassment. It shall also conduct the investigation of alleged cases constituting sexual harassment. In the case of work-related environment, the committee is composed of at least one (1) representative each from the management, the union, if any, the employees from the supervisory rank and from the rank-and-file employees. In the case of educational or training institution, the committee is composed of at least one (1) representative from the administration, the trainors, teachers, instructors, professors, or coaches and students or trainees, as the case may be. * Dr. Rico S. Jacutin v. People of the Philippines, [G.R. No. 140604, March 6, 2002].

6. MINOR WORKERS (R.A. NO. 7678, R.A. NO. 9231). a. “Child,” “working child.” meaning. For legal purposes, the term “child” refers to any person less than eighteen (18) years of age. A “working child” refers to any child engaged as follows: i. when the child is below eighteen (18) years of age, in work or economic activity that is not “child labor;” and ii. when the child below fifteen (15) years of age: (a) in work where he/she is directly under the responsibility of his/her parents or legal guardian and where only members of the child’s family are employed; or (b) in “public entertainment or information” which refers to artistic, literary, and cultural performances for television show, radio program, cinema or film, theater, commercial advertisement, public relations activities or campaigns, print materials, internet, and other media. b. Regulation of working hours of a child. The term “hours of work” includes (1) all time during which a child is required to be at a prescribed workplace, and (2) all time during which a child is suffered or permitted to work. Rest periods of short duration during working hours shall be counted as hours worked. The following hours of work shall be observed for any child allowed to work under R.A. No. 9231 and its Implementing Rules: (a) For a child below fifteen (15) years of age, the hours of work shall not be more than twenty (20) hours per week, provided that the work shall not be more than four (4) hours at any given day; (b) For a child fifteen (15) years of age but below eighteen (18), the hours of work shall not be more than eight (8) hours a day, and in no case beyond forty (40) hours a week; and (c) No child below fifteen (15) years of age shall be allowed to work between eight (8) o’clock in the evening and six (6) o’clock in the morning of the following day and no child fifteen (15) years of age but below eighteen (18) shall be allowed to work between ten (10) o’clock in the evening and six (6) o’clock in the morning of the following day. c. Employment of the child in public entertainment. Sleeping time as well as travel time of a child engaged in public entertainment or information from his/her residence to his/her workplace shall not be included as hours worked without prejudice to the application of existing rules on employees’ compensation. d. Prohibition of employing minors in certain undertakings and in certain advertisements No child below eighteen (18) years of age is allowed to be employed as a model in any advertisement directly or indirectly promoting alcoholic beverages, intoxicating drinks, tobacco and its by-products, gambling or any form of violence or pornography.

e. Prohibition on the employment of children below 15 years of age; exceptions and conditions. 1. General rule. The general rule is that no child below fifteen (15) years of age shall be employed, permitted or suffered to work in any public or private establishment.

2. Exceptions. The following shall be the only exceptions to the prohibition on the employment of a child below fifteen (15) year of age: (a) When the child works under the sole responsibility of his/her parents or guardian, provided that only members of the child’s family are employed. (b) When the child’s employment or participation in public entertainment or information is essential, regardless of the extent of the child’s role. 3. Conditions to the prohibition. Such employment shall be strictly under the following conditions: i. The total number of hours worked shall be in accordance with Section 15 [Hours of Work of a Working Child] of the Rules [infra]; ii. The employment does not endanger the child’s life, safety, health and morals, nor impair the child’s normal development; iii. The child is provided with at least the mandatory elementary or secondary education; and iv. The employer secures a work permit for the child in accordance with Sections 8 to 12 of the Rules. “Normal development of the child” refers to the physical, emotional, mental, and spiritual growth of a child within a safe and nurturing environment where he/she is given adequate nourishment, care and protection and the opportunity to perform tasks appropriate at each stage of development. 1. EMPLOYMENT OF HOUSEHELPERS (ARTICLES 141 TO 152, LABOR CODE). *Look for new Kasambahay Law or Republic Act No. 10361 Relevant Provisions: Articles 153 to 155, Labor Code; Department Order No. 5, [February 4, 1992] enunciating the regulations governing the employment of homeworkers. This Department Order is now known as Rule XIV, Book III of the Rules to Implement the Labor Code. 1. DEFINITIONS. a. Industrial homeworker, defined. An “industrial homeworker” is a worker who is engaged in industrial homework.208 b. Industrial homework, defined. “Industrial homework” is a system of production under which work for an employer or contractor is carried out by a homeworker at his/her home. Materials may or may not be furnished by the employer or contractor.

It differs from regular factory production principally in that, it is a decentralized form of production where there is ordinarily very little supervision or regulation of methods of work. c. Home, defined. “Home” means any nook, house, apartment or other premises used regularly, in whole or in part, as a dwelling place, except those situated within the premises or compound of an employer, contractor/subcontractor and the work performed therein is under the active or personal supervision by or for the latter. d. Field personnel, defined.

A “field personnel” is a non-agricultural employee who regularly performs his 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. e. Employer, defined. “Employer” means any natural or artificial person who, for his own account or benefit, or on behalf of any person residing outside the Philippines, directly or indirectly, or through any employee, agent, contractor, subcontractor or any other person: 1. delivers or causes to be delivered 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 direction; or 2. sells any goods, articles or materials for the purpose of having such goods or articles processed in or about a home and then repurchases them himself or through another after such processing. f. Contractor or subcontractor, defined. “Contractor” or “subcontractor” means any person who, for the account or benefit of an employer, delivers or causes to be delivered to a homeworker, goods or articles to be processed in or about his home and thereafter to be returned, disposed of or distributed in accordance with the direction of the employer. g. Processing, defined. “Processing” means manufacturing, fabricating, finishing, repairing, altering, packing, wrapping or handling in any way connected with the production or preparation of an article or material. 2. RIGHTS AND BENEFITS ACCORDED HOMEWORKERS. a. Duties of employer, contractor or subcontractor. Whenever an employer contracts with another for the performance of the employer’s work, it shall be the duty of such employer to provide in such contract that the employees or homeworkers of the contractor and the latter’s subcontractor shall be paid in accordance with the provisions of Rule XIV of the Rules to Implement the Labor Code. In the event that such contractor or subcontractor fails to pay the wages or earnings of his employees or homeworkers as specified in said Rules, such employer shall be jointly and

severally liable with the contractor or subcontractor to the workers of the latter, to the extent that such work is performed under such contract, in the same manner as if the employees or homeworkers were directly engaged by the employer. The employer, contractor or subcontractor shall assist the homeworkers in the maintenance of basic safe and healthful working conditions at the homeworkers’ place of work. b. Payment for homework. Immediately upon receipt of the finished goods or articles, the employer is required to pay the homeworker or the contractor or subcontractor, as the case may be, for the work performed less the corresponding homeworker’s share of SSS, PhilHealth and ECC premium contributions which should be remitted by the contractor or subcontractor or employer to the SSS with the employer’s share. However, where payment is made to a contractor or subcontractor, the homeworker should likewise be paid immediately after the goods or articles have been collected from the workers. c. Prohibitions on certain kinds of homework. No homework shall be performed on the following: 1. Explosives, fireworks and articles of like character;

2. Drugs and poisons; and 3. other articles, the processing of which requires exposure to toxic substances.216 3. CONDITIONS FOR DEDUCTION FROM HOMEWORKER’S EARNINGS. a. Deductions for lost, destroyed, soiled or damaged materials. No employer, contractor or subcontractor shall make any deduction from the homeworker’s earnings for the value of materials which have been lost, destroyed, soiled or otherwise damaged unless the following conditions are met: a. The homeworker concerned is clearly shown to be responsible for the loss or damage; b. The homeworker is given reasonable opportunity to show cause why deduction should not be made; c. The amount of such deduction is fair and reasonable and shall not exceed the actual loss or damage; and d. The deduction is made at such rate that the amount deducted does not exceed twenty percent (20%) of the homeworker’s earnings in a week. Relevant Provisions: 1. Apprentices – covered by Articles 57 to 72, Labor Code 2. Learners – covered by Articles 73 to 77, Labor Code 3. Republic Act No. 7796 (Technical Education and Skills Development Act of 1994) and its Implementing Rules and Regulations 1. DISTINCTIONS BETWEEN LEARNERSHIP AND APPRENTICESHIP. The following are the distinctions: 1. Practical training. Both learnership and apprenticeship involve practical training onthe-job. 2. Training agreement. Learnership is governed by a learnership agreement; while apprenticeship is governed by an apprenticeship agreement.

3. Occupation. Learnership involves learnable occupations consisting of semi-skilled and other industrial occupations which are non-apprenticeable; while apprenticeship concerns apprenticeable occupations or any trade, form of employment or occupation approved for apprenticeship by the DOLE Secretary. 4. Theoretical instructions. Learnership may or may not be supplemented by related theoretical instructions; while apprenticeship should always be supplemented by related theoretical instructions. 5. Ratio of theoretical instructions and on-the-job training. For both learnership and apprenticeship, the normal ratio is one hundred (100) hours of theoretical instructions for every two thousand (2,000) hours of practical or on-the-job training. Theoretical instruction time for occupations requiring less than two thousand (2,000) hours for proficiency should be computed on the basis of such ratio.218 6. Competency-based system. Unlike in apprenticeship, it is required219 in learnership that it be implemented based on the TESDA-approved competency-based system.220

7. Duration of training. Learnership involves practical training on the job for a period not exceeding three (3) months; while apprenticeship requires for proficiency, more than three (3) months but not over six (6) months221 of practical training on the job.

8. Qualifications. The law does not expressly mention any qualifications for learners; while the following qualifications are required to be met by apprentices under Article 59 of the Labor Code: (a) Be at least fourteen (14) years of age; (b) Possess vocational aptitude and capacity for appropriate tests; and (c) Possess the ability to comprehend and follow oral and written instructions. 9. Circumstances justifying hiring of trainees. Unlike in apprenticeship, in learnership, the law, Article 74 of the Labor Code, expressly prescribes the pre-requisites before learners may be validly employed, to wit: a. When no experienced workers are available; b. The employment of learners is necessary to prevent curtailment of employment opportunities; and c. The employment does not create unfair competition in terms of labor costs or impair or lower working standards.

10. Limitation on the number of trainees. In learnership, a participating enterprise is allowed to take in learners only up to a maximum of twenty percent (20%) of its total regular workforce.223 No similar cap is imposed in the case of apprenticeship. 11. Option to employ. In learnership, the enterprise is obliged to hire the learner after the lapse of the learnership period; while in apprenticeship, the enterprise is given only an “option” to hire the apprentice as an employee. 12 Wage rate. The wage rate of a learner or an apprentice is set at seventy-five percent (75%) of the statutory minimum wage. Relevant Provisions: -Handicapped workers – covered by Articles 78 to 81, Labor Code -R.A. No. 7277 [March 24, 1992] (“Magna Carta for Disabled Persons”) [now to be known as “Magna Carta for Persons with Disability” per Section 4 of R.A. No. 9442 (effective April 30, 2007)], 1. DEFINITION OF “HANDICAPPED WORKERS” (UNDER R.A. NO. 7277). a. Important clarification of terms. The term “handicapped workers” should no longer be used to describe persons with disability as this is no longer legally correct. Handicapped persons should not be called “disabled persons” but “persons with disability.” The term “disabled persons” has been changed to “persons with disability” not only in the title of R.A. No. 7277 but in all references in the said law to “disabled persons” by virtue of R.A. No. 9442. b. Definition of important terms. The following terms are specifically defined in the law: 1. “Persons with Disability” are those suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being.

2. “Impairment” refers to any loss, diminution or aberration of psychological, physiological, or anatomical structure or function. 3. “Disability” means (1) a physical or mental impairment that substantially limits one or more psychological, physiological or anatomical functions of an individual or activities of such individual; (2) a record of such an impairment; or (3) being regarded as having such an impairment. 4. “Handicap” refers to a disadvantage for a given individual, resulting from an impairment or a disability that limits or prevents the function or activity that is considered normal given the age and sex of the individual. 5. “Reasonable Accommodations” include: (1) improvement of existing facilities used by employees in order to render these readily accessible to and usable by persons with disability; and (2) modification of work schedules, reassignment to a vacant position, acquisition or modification of equipment or devices, appropriate adjustments or modifications of examinations, training materials or company policies, rules and regulations, the provision of auxiliary aids and services, and other similar accommodations for persons with disability.

6. “Marginalized Disabled Persons” or more appropriately, “Marginalized Persons with Disability” refer to persons with disability who lack access to rehabilitative services and opportunities to be able to participate fully in socio-economic activities and who have no means of livelihood and whose incomes fall below the poverty threshold. 7. “Qualified Individual with a Disability” means an individual with a disability who, with or without reasonable accommodations, can perform the essential functions of the employment position that such individual holds or desires. However, consideration shall be given to the employer’s judgment as to what functions of a job are essential, and if an employer has prepared a written description before advertising or interviewing applicants for the job, this description shall be considered evidence of the essential functions of the job. 8. “Covered Entity” means an employer, employment agency, labor organization or joint-labor management committee. 2. RIGHTS OF PERSONS WITH DISABILITY (DISABLED WORKERS). a. Equal opportunity for persons with disability. Under the law, persons with disability are entitled to equal opportunity for employment. Consequently, no person with disability shall be denied access to opportunities for suitable employment. A qualified employee with disability shall be subject to the same terms and conditions of employment and the same compensation, privileges, benefits, fringe benefits, incentives or allowances as a qualified able-bodied person. Five percent (5%) of all casual emergency and contractual positions in the Departments of Social Welfare and Development, Health, Education and other government agencies, offices or corporations engaged in social development shall be reserved for persons with disability. b. Sheltered employment for persons with disability. “Sheltered Employment” refers to the provision of productive work for persons with disability through workshops providing special facilities, income-producing projects or homework schemes with a view to giving them the opportunity to earn a living thus enabling them to acquire a working capacity required in open industry. If suitable employment for persons with disability cannot be found through open employment, the State shall endeavor to provide it by means of sheltered employment. In

the placement of persons with disability in sheltered employment, it shall accord due regard to the individual qualities, vocational goals and inclinations to ensure a good working atmosphere and efficient production. c. Vocational rehabilitation. Consistent with the principle of equal opportunity for workers with disability and workers in general, the State shall take appropriate vocational rehabilitation measures that shall serve to develop the skills and potentials of persons with disability and enable them to compete favorably for available productive and remunerative employment opportunities in the labor market.

The State shall also take measures to ensure the provision of vocational rehabilitation and livelihood services for persons with disability in the rural areas. In addition, it shall promote cooperation and coordination between the government and non-governmental organizations and other private entities engaged in vocational rehabilitation activities. The Department of Social Welfare and Development (DSWD) shall design and implement training programs that will provide persons with disability with vocational skills to enable them to engage in livelihood activities or obtain gainful employment. The Department of Labor and Employment (DOLE) shall likewise design and conduct training programs geared towards providing persons with disability with skills for livelihood. d. Vocational guidance and counselling. The DSWD shall implement measures providing and evaluating vocational guidance and counselling to enable persons with disability to secure, retain and advance in employment. It shall ensure the availability and training of counsellors and other suitably qualified staff responsible for the vocational guidance and counselling of persons with disability. e. Persons with disability are eligible for apprenticeship and learnership. Under R.A. No. 7277,231 it is provided that subject to the provisions of the Labor Code, as amended, persons with disability shall be eligible as apprentices or learners; provided that their handicap is not as much as to effectively impede the performance of job operations in the particular occupation for which they are hired and provided further that after the lapse of the period of apprenticeship, if found satisfactory in the job performance, they shall be eligible for employment. f. Wage rate. Under Article 80 of the Labor Code, handicapped workers are entitled to not less than seventy-five percent (75%) of the applicable adjusted minimum wage. In view, however, of R.A. No. 7277,233 the wage rate of persons with disability is 100% of the applicable minimum wage. Wage orders issued by the Regional Tripartite Wages and Productivity Boards (RTWPBs) normally reflect this principle. To cite an example, Section 7 of Wage Order No. NCR-15 [effective July 01, 2010] issued by RTWPB-National Capital Region states: “All qualified handicapped workers shall receive the full amount of the minimum wage rate prescribed herein pursuant to Republic Act No. 7277, otherwise known as the Magna Carta for Disabled Persons.”

Moreover, in case of legally-mandated wage increases enunciated in wage orders issued by the RTWPBs, the employment agreements with persons with disability are deemed automatically modified insofar as their wage clauses are concerned to reflect the said increases.

g. Wage rate as apprentice or learner. A person with disability hired as an apprentice or learner shall be paid not less than seventy-five percent (75%) of the applicable minimum wage. If the person with disability, however, is hired as a learner and employed in piece or incentive-rate jobs during the training period, he shall be paid one hundred percent (100%) of the applicable minimum wage. 3. PROHIBITIONS ON DISCRIMINATION AGAINST PERSONS WITH DISABILITY (DISABLED PERSONS). a. Discrimination on employment prohibited. No entity, whether public or private, shall discriminate against a qualified person with disability by reason of disability in regard to job application procedures, the hiring, promotion, or discharge of employees, employee compensation, job training, and other terms, conditions and privileges of employment. The following constitute acts of discrimination: (a) Limiting, segregating or classifying a job applicant with disability in such a manner that adversely affects his work opportunities; (b) Using qualification standards, employment tests or other selection criteria that screen out or tend to screen out a person with disability unless such standards, tests or other selection criteria are shown to be job-related for the position in question and are consistent with business necessity; (c) Utilizing standards, criteria, or methods of administration that: (1) have the effect of discrimination on the basis of disability; or (2) perpetuate the discrimination of others who are subject to common administrative control. (d) Providing less compensation, such as salary, wage or other forms of remuneration and fringe benefits, to a qualified employee with disability, by reason of his disability, than the amount to which a non-disabled person performing the same work is entitled; (e) Favoring a non-disabled employee over a qualified employee with disability with respect to promotion, training opportunities, study and scholarship grants, solely on account of the latter’s disability; (f) Re-assigning or transferring an employee with a disability to a job or position he cannot perform by reason of his disability; (g) Dismissing or terminating the services of an employee with disability by reason of his disability unless the employer can prove that he impairs the satisfactory performance of the work involved to the prejudice of the business entity; provided,

however, that the employer first sought to provide reasonable accommodations for persons with disability;

(h) Failing to select or administer in the most effective manner employment tests which accurately reflect the skills, aptitude or other factor of the applicant or employee with disability that such tests purports to measure, rather than the impaired sensory, manual or speaking skills of such applicant or employee, if any; and (i) Excluding persons with disability from membership in labor unions or similar organizations. 4. INCENTIVES FOR EMPLOYERS. a. Incentives for employers who employ persons with disability. To encourage the active participation of the private sector in promoting the welfare of persons with disability and to ensure gainful employment for qualified persons with disability, adequate incentives shall be provided to private entities which employ persons with disability. Private entities that employ persons with disability who meet the required skills or qualifications, either as a regular employee, apprentice or learner, shall be entitled to an additional deduction from their gross income equivalent to twenty-five percent (25%) of the total amount paid as salaries and wages to persons with disability; provided, however, that such entities could present proof as certified by the Department of Labor and Employment that persons with disability are under their employ and provided further that the employee with disability is accredited with the Department of Labor and Employment and the Department of Health as to his disability, skills and qualifications.

Private entities that improve or modify their physical facilities in order to provide reasonable accommodation for persons with disability shall also be entitled to an additional deduction from their net taxable income equivalent to fifty percent (50%) of the direct costs of the improvements or modifications. This Section, however, does not apply to improvements or modifications of facilities required under Batas Pambansa Bilang 344 [February 25, 1983], entitled “An Act to Enhance the Mobility of Disabled Persons by Requiring Certain Buildings, Institutions, Establishments, and Public Utilities to Install Facilities and Other Devices.” SOCIAL LEGISLATION 1. SSS Law (RA 8282) a. Coverage b. Exclusions from coverage c. Benefits d. Beneficiaries =========================== 1. COVERAGE. a. Compulsory coverage. 1. All employees - not over sixty (60) years of age and their employers. 2. Domestic helpers - monthly income shall not be less than P1,000.00 per month b. Compulsory coverage of self-employed. Coverage in the SSS shall also be compulsory upon such self-employed persons as may be determined by the SS Commission under such rules and regulations as it may prescribe, including but not limited to the following:

1. All self-employed professionals; 2. Partners and single proprietors of businesses; 3. Actors and actresses, directors, scriptwriters and news correspondents who do not fall within the definition of the term "employee" in Section 8 (d) of this Act; 4. Professional athletes, coaches, trainers and jockeys; and 5. Individual farmers and fishermen. Unless otherwise specified herein, all provisions of this Act applicable to covered employees shall also be applicable to the covered self-employed persons. c. Voluntary coverage. 1. Spouses who devote full time to managing the household and family affairs, unless they are also engaged in other vocation or employment which is subject to mandatory coverage, may be covered by the SSS on a voluntary basis. 2. Filipinos recruited by foreign-based employers for employment abroad may be covered by the SSS on a voluntary basis. d. Effective date of coverage. 1. EMPLOYEES: Compulsory coverage of the employer shall take effect on the first day of his operation and that of the employee on the day of his employment 2. SELF-EMPLOYED: The compulsory coverage of the self-employed person shall take effect upon his registration with the SSS. e. Effect of separation from employment. When an employee under compulsory coverage is separated from employment, his employer’s contribution on his account and his obligation to pay contributions arising from that employment shall cease at the end of the month of separation, but said employee shall be credited with all contributions paid on his behalf and entitled to benefits according to the provisions of this Act. He may, however, continue to pay the total contributions to maintain his right to full benefit. f. Effect of interruption of business or professional income. If the self-employed realizes NO income in any given month, he shall not be required to pay contributions for that month. He may, however, be allowed to continue paying contributions under the same rules and regulations applicable to a separated employee member. 2. BENEFITS. The following are the benefits provided under the SSS Law: a. Monthly pension b. Dependents’ pension c. Retirement benefits d. Death benefits e. Permanent disability benefits f. Funeral benefit g. Sickness benefit h. Maternity leave benefit

2.1. MONTHLY PENSION. A. Monthly Pension. The monthly pension shall be the highest of the following amounts: (1) The sum of the following: (i) P300.00; plus

(ii) 20% of the average monthly salary credit; plus (iii) 2% of the average monthly salary credit for each credited year of service in excess of 10 years; or (2) 40% of the average monthly salary credit; or (3) P1,000.00: Provided, That the monthly pension shall in no case be paid for an aggregate amount of less than 60 months. B. Minimum Pension. The minimum pension shall be: (1) P1,200.00 for members with at least 10 credited years of service; and (2) P2,400.00 for those with 20 credited years of service. 2.2. DEPENDENTS’ PENSION. Where monthly pension is payable on account of death, permanent total disability or retirement, dependents’ pension equivalent to 10% of the monthly pension or P250.00, whichever is higher, shall also be paid for each dependent child conceived on or before the date of the contingency but not exceeding 5, beginning with the youngest and without substitution: Provided, That where there are legitimate or illegitimate children, the former shall be preferred. 2.3. RETIREMENT BENEFITS. A. MONTHLY PENSION. B. LUMP SUM BENEFIT. A covered member who is sixty 60 years old at retirement and who does not qualify for pension benefits under paragraph (a) above, shall be entitled to a lump sum benefit equal to the total contributions paid by him and on his behalf: Provided, That he is separated from employment and is not continuing payment of contributions to the SSS on his own. C. SUSPENSION OF MONTHLY PENSION. The monthly pension shall be suspended upon the reemployment or resumption of self-employment of a retired member who is less than 65 years old. He shall again be subject to deduction for SSS contributions and his employer shall pay its corresponding SSS contribution. D. DEATH OF RETIRED MEMBER. Under Section 12-B [d] of R.A. No. 8282, it is provided that upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension:

Provided, That if he has no primary beneficiaries and he dies within 60 months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the 5-year guaranteed period, excluding the dependents’ pension. (NOTE: The Supreme Court, in its en banc decision in Dycaico v. SSS, [G.R. No. 161357, Nov. 30, 2005], declared the proviso “as of the date of his retirement” in Section 12-B [d] of R.A. No. 8282, (See above) which qualifies the term “primary beneficiaries,” as unconstitutional for it violates the due process and equal protection clauses of the Constitution.)

2.4. DEATH BENEFITS. Upon the death of a member who has paid at least 36 monthly contributions prior to the semester of death, his primary beneficiaries shall be entitled to the monthly pension: Provided, That if he has no primary beneficiaries, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to 36 times the monthly pension. If he has not paid the required 36 monthly contributions, his primary or secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or 12 times the monthly pension, whichever is higher. 2.5. PERMANENT DISABILITY BENEFITS. A. MONTHLY PENSION. Upon the permanent total disability of a member who has paid at least 36 monthly contributions prior to the semester of disability, he shall be entitled to the monthly pension: Provided, That if he has not paid the required 36 monthly contributions, he shall be entitled to a lump sum benefit equivalent to the monthly pension times the number of monthly contributions paid to the SSS or 12 times the monthly pension, whichever is higher. B. WHEN TREATED AS NEW MEMBER. A member who: (1) has received a lump sum benefit; and (2) is reemployed or has resumed self-employment not earlier than 1 year from the date of his disability shall again be subject to compulsory coverage and shall be considered a new member. C. SUSPENSION OF MONTHLY PENSION. The monthly pension and dependents’ pension shall be suspended upon the: 1. reemployment; or 2. resumption of self-employment; or 3. recovery of the disabled member from his permanent total disability; or 4. failure to present himself for examination at least once a year upon notice by the SSS. D. DEATH OF PENSIONER. Upon the death of the permanent total disability pensioner, his primary beneficiaries as of the date of disability shall be entitled to receive the monthly pension:

Provided, That if he has no primary beneficiaries and he dies within 60 months from the start of his monthly pension, his secondary beneficiaries shall be entitled to a lump sum benefit equivalent to the total monthly pensions corresponding to the balance of the five-year guaranteed period excluding the dependents’ pension. E. DISABILITIES CONSIDERED PERMANENT TOTAL. The following disabilities shall be deemed permanent total: 1. Complete loss of sight of both eyes; 2. Loss of two limbs at or above the ankle or wrists; 3. Permanent complete paralysis of two limbs; 4. Brain injury resulting to incurable imbecility or insanity; and 5. Such cases as determined and approved by the SSS. F. PERMANENT PARTIAL DISABILITY. If the disability is permanent partial, and such disability occurs before 36 monthly contributions have been paid prior to the semester of disability, the benefit shall be

such percentage of the lump sum benefit described in the preceding paragraph with due regard to the degree of disability as the SS Commission may determine. G. PERMANENT TOTAL DISABILITY. (f) If the disability is permanent total and such disability occurs after 36 monthly contributions have been paid prior to the semester of disability, the benefit shall be the monthly pension for permanent total disability payable not longer than the period designated in accordance with the schedule provided under the SSS Law. H. ADDITIVES. The percentage degree of disability which is equivalent to the ratio that the designated number of months of compensability bears to 75, rounded to the next higher integer, shall not be additive for distinct, separate and unrelated permanent partial disabilities, but shall be additive for deteriorating and related permanent partial disabilities to a maximum of 100%, in which case, the member shall be deemed as permanently totally disabled. I. WHEN LUMP SUM PAYMENT PROPER. In case of permanent partial disability, the monthly pension benefit shall be given in lump sum if it is payable for less than 12 months. J. WHEN PENSIONER RETIRES OR DIES. Should a member who is on partial disability pension retire or die, his disability pension shall cease upon his retirement or death. 2.6. FUNERAL BENEFIT. A funeral grant of P12,000.00 shall be paid, in cash or in kind, to help defray the cost of funeral expenses upon the death of a member, including permanently totally disabled member or retiree. 2.7. SICKNESS BENEFIT.

A. ENTITLEMENT. A member who has paid at least 3 monthly contributions in the 12-month period immediately preceding the semester of sickness or injury and is confined therefor for more than 3 days in a hospital or elsewhere with the approval of the SSS, shall, for each day of compensable confinement or a fraction thereof, be paid by his employer, or the SSS, if such person is unemployed or self-employed, a daily sickness benefit equivalent to 90% of his average daily salary credit, subject to the following conditions: (1) In no case shall the daily sickness benefit be paid longer than 120 days in one (1) calendar year, nor shall any unused portion of the 120 days of sickness benefit be carried forward and added to the total number of compensable days allowable in the subsequent year; (2) The daily sickness benefit shall not be paid for more than 240 days on account of the same confinement; and (3) The employee-member shall notify his employer of the fact of his sickness or injury within 5 calendar days after the start of his confinement unless such confinement is in a hospital or the employee became sick or was injured while working or within the premises of the employer in which case, notification to the employer is not necessary: Provided, That if the member is unemployed or selfemployed, he shall directly notify the SSS of his confinement within 5 calendar

days after the start thereof unless such confinement is in a hospital in which case notification is also not necessary: Provided, further, That in cases where notification is necessary, the confinement shall be deemed to have started not earlier than the 5th day immediately preceding the date of notification. B. COMPENSABLE CONFINEMENT. The compensable confinement shall begin on the first day of sickness, and the payment of such allowances shall be promptly made by the employer every regular payday or on the 15th and last day of each month, and similarly in the case of direct payment by the SSS, for as long as such allowances are due and payable: Provided, That such allowance shall begin only after all sick leaves of absence with full pay to the credit of the employee member shall have been exhausted. C. PAYMENT OF SICK BENEFIT BY SSS. 100% of the daily benefits shall be reimbursed by the SSS to said employer upon receipt of satisfactory proof of such payment and legality thereof: Provided, That the employer has notified the SSS of the confinement within 5 calendar days after receipt of the notification from the employee member: Provided, further, That if the notification to the SSS is made by the employer beyond 5 calendar days after receipt of the notification from the employee-member, said employer shall be reimbursed only for each day of confinement starting from the tenth calendar day immediately preceding the date of notification to the SSS: Provided, finally, That the SSS shall reimburse the employer or pay the unemployed member only for confinement within the one-year period immediately preceding the date the claim for benefit or reimbursement is received by the SSS, except confinement in a hospital in which case the claim for benefit or reimbursement must be filed within one (1) year from the last day of confinement.

2.8. MATERNITY LEAVE BENEFIT. A. FEMALE MEMBER ENTITLED. A female member who has paid at least 3 monthly contributions in the 12-month period immediately preceding the semester of her childbirth or miscarriage shall be paid a daily maternity benefit equivalent to 100% of her average daily salary credit for 60 days or 78 days in case of caesarian delivery, subject to the following conditions: (a) That the employee shall have notified her employer of her pregnancy and the probable date of her childbirth, which notice shall be transmitted to the SSS in accordance with the rules and regulations it may provide; (b) The full payment shall be advanced by the employer within 30 days from the filing of the maternity leave application; (c) That payment of daily maternity benefits shall be a bar to the recovery of sickness benefits provided under the SSS Law for the same period for which daily maternity benefits have been received; (d) That the maternity benefits shall be paid only for the first 4 deliveries or miscarriages; (e) That the SSS shall immediately reimburse the employer of 100% of the amount of maternity benefits advanced to the employee by the employer upon receipt of satisfactory proof of such payment and legality thereof; and

(f) That if an employee member should give birth or suffer miscarriage without the required contributions having been remitted for her by her employer to the SSS, or without the latter having been previously notified by the employer of the time of the pregnancy, the employer shall pay to the SSS damages equivalent to the benefits which said employee member would otherwise have been entitled to. 3. BENEFICIARIES. a. Dependency rule under the SSS Law. Under the SSS Law, the dependent shall refer to: (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 21 of age, or if over 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. b. Beneficiaries under the SSS Law. I. PRIMARY BENEFICIARIES. The following are primary beneficiaries: 1. The dependent spouse until he or she remarries; 2. The dependent legitimate, legitimated or legally adopted, and illegitimate children

[Note: The dependent illegitimate children shall be entitled to 50% of the share of the legitimate, legitimated or legally adopted children: Provided, further, That in the absence of the dependent legitimate, legitimated children of the member, his/her dependent illegitimate children shall be entitled to 100% of the benefits.] II. SECONDARY BENEFICIARIES. The following are secondary beneficiaries: 1. The dependent parents, in the absence of the primary beneficiaries. 2. Any other person designated by the member as his/her secondary beneficiary, in the absence of all the foregoing (primary beneficiaries and dependent parents), Signey v. SSS, [G.R. No. 173582, January 28, 2008] This case involves the issue of dependency involving conflicting claims over death benefits provided under R.A. No. 8282. The petitioner’s husband, Rodolfo Signey, Sr., was a member of the SSS. He died on 21 May 2001. In his member’s records, he had designated Yolanda Signey (petitioner) as primary beneficiary and his four children with her as secondary beneficiaries. On 6 July 2001, petitioner filed a claim for death benefits with the public respondent SSS. She revealed in her SSS claim that the deceased had a common-law wife, Gina Servano (Gina), with whom he had two minor children, namely: Ginalyn Servano (Ginalyn), born on 13 April 1996, and Rodelyn Signey (Rodelyn), born on 20 April 2000. Petitioner’s declaration was confirmed when Gina herself filed a claim for the same death benefits on 13 July 2001 in which she also declared that both she and petitioner were common-law wives of the deceased and that Editha Espinosa (Editha) was the legal wife. In addition, in October 2001, Editha also filed an application for death benefits with the SSS stating that she was the legal wife of the deceased. In resolving the issue of which of the parties have a right over the death benefits, the Supreme Court affirmed the factual findings of the SSC and the Court of Appeals. In the

case at bar, the existence of a prior subsisting marriage between the deceased and Editha is supported by substantial evidence. Petitioner, who has fully availed of her right to be heard, only relied on the waiver of Editha and failed to present any evidence to invalidate or otherwise controvert the confirmed marriage certificate registered under LCR Registry No. 2083 on 21 November 1967. She did not even try to allege and prove any infirmity in the marriage between the deceased and Editha. The Supreme Court further ruled: “As to the issue of who has the better right over the SSS death benefits, Section 8 [e] and [k] of R.A. No. 8282 is very clear. Hence, we need only apply the law. “Whoever claims entitlement to the benefits provided by law should establish his or her right thereto by substantial evidence. Since petitioner is disqualified to be a beneficiary and because the deceased has no legitimate child, it follows that the dependent illegitimate minor children of the deceased shall be entitled to the death benefits as primary beneficiaries. The SSS Law is clear that for a minor child to qualify as a ‘dependent,’ the only requirements are that he/she must be below 21 years of age, not married nor gainfully employed. “In this case, the minor illegitimate children Ginalyn and Rodelyn were born on 13 April 1996 and 20 April 2000, respectively. Had the legitimate child of the deceased and Editha survived and qualified as a dependent under the SSS Law, Ginalyn and Rodelyn would have been entitled to a share equivalent to only 50% of the share of the said legitimate child. Since the legitimate child of the deceased predeceased him, Ginalyn and Rodelyn, as the only qualified primary beneficiaries of the deceased, are entitled to 100% of the benefits.” Dycaico v. SSS, [G.R. No. 161357, Nov. 30, 2005] (Proviso in Section 12-B of R.A. No. 8282 declared unconstitutional). In this case, Bonifacio S. Dycaico, the deceased husband of petitioner, became a member of the SSS on January 24, 1980. In his self-employed data record (SSS Form RS-1), he named the petitioner, Elena P. Dycaico, and their eight children as his beneficiaries. At that time, Bonifacio and Elena lived together as husband and wife without the benefit of marriage. In June 1989, Bonifacio was considered retired and began receiving his monthly pension from the SSS. He continued to receive the monthly pension until he passed away on June 19, 1997. A few months prior to his death, however, Bonifacio married the petitioner on January 6, 1997. Shortly after Bonifacio’s death, the petitioner filed with the SSS an application for survivor’s pension. Her application, however, was denied on the ground that under Section 12-B [d] of R.A. No. 8282 or the Social Security Law, she could not be considered a primary beneficiary of Bonifacio as of the date of his retirement. The said proviso reads: “SEC. 12-B. Retirement Benefits. – “(d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension. …” The Supreme Court declared the above proviso “as of the date of his retirement” which qualifies the term “primary beneficiaries,” as unconstitutional for it violates the due process and equal protection clauses of the Constitution. As illustrated by the petitioner’s case, the said proviso “as of the date of his retirement” which qualifies the term “primary beneficiaries” results in the classification of dependent spouses as primary beneficiaries into two (2) groups: (1) Those dependent spouses whose respective marriages to SSS members were contracted prior to the latter’s retirement; and

(2) Those dependent spouses whose respective marriages to SSS members were contracted after the latter’s retirement. Underlying these two (2) classifications of dependent spouses is that their respective marriages are valid. In other words, both groups are legitimate or legal spouses. The distinction between them lies solely on the date the marriage was contracted. The petitioner belongs to the second group of dependent spouses, i.e., her marriage to Bonifacio was contracted after his retirement. As such, she and those similarly situated do not qualify as “primary beneficiaries” under Section 12-B [d] of R.A. No. 8282 and, therefore, are not entitled to survivor’s pension under the same provision by reason of the subject proviso.

It is noted that the eligibility of “dependent children” who are biological offsprings of a retired SSS member to be considered as his primary beneficiaries under Section 12-B [d] of R.A. No. 8282 is not substantially affected by the proviso “as of the date of his retirement.” A biological child, whether legitimate, legitimated or illegitimate, is entitled to survivor’s pension upon the death of a retired SSS member so long as the said child 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 or she is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally. On the other hand, the eligibility of legally adopted children to be considered “primary beneficiaries” under Section 12-B [d] of R.A. No. 8282 is affected by the proviso “as of the date of his retirement” in the same manner as the dependent spouses. A legally adopted child who satisfies the requirements in Section 8 [e] (2) thereof is considered a primary beneficiary of a retired SSS member upon the latter’s death only if the said child had been legally adopted prior to the member’s retirement. One who was legally adopted by the SSS member after his or her retirement does not qualify as a primary beneficiary for the purpose of entitlement to survivor’s pension under Section 12-B [d] of R.A. No. 8282. The Supreme Court further declared that classifying dependent spouses and determining their entitlement to survivor’s pension based on whether the marriage was contracted before or after the retirement of the other spouse, regardless of the duration of the said marriage, bears no relation to the achievement of the policy objective of the law, i.e., ‘provide meaningful protection to members and their beneficiaries against the hazard of disability, sickness, maternity, old age, death and other contingencies resulting in loss of income or financial burden.’ The nexus of the classification to the policy objective is vague and flimsy. Put differently, such classification of dependent spouses is not germane to the aforesaid policy objective.

SOCIAL LEGISLATION 2. GSIS (RA 8291) a. Coverage b. Exclusions from coverage c. Benefits d. Beneficiaries =========================== 1. COVERAGE. a. Compulsory coverage. Membership in the GSIS shall be compulsory for all employees receiving compensation who have not

reached the compulsory retirement age, irrespective of employment status. 2. EXCLUSIONS FROM COVERAGE. a. Excluded employees under the GSIS Law. Excepted from its coverage are: 1. Members of the Armed Forces of the Philippines (AFP) 2. Members of the Philippine National Police (PNP) 3. Contractuals who have no employer and employee relationship with the agencies they serve. b. Members of the judiciary and constitutional commissions. Members of the judiciary and constitutional commissions shall have life insurance only. c. Effect of separation from the service. A member separated from the service shall continue to be a member, and shall be entitled to whatever benefits he has qualified to in the event of any contingency compensable under the GSIS Law. 3. BENEFITS. a. Benefits under the GSIS Law. All members of the GSIS shall have the following benefits: 1. Monthly pension 2. Separation benefits 3. Unemployment or involuntary separation benefits 4. Retirement benefits 5. Permanent disability benefits a. Total and permanent disability benefits b. Permanent and partial disability benefits 6. Temporary disability benefits 7. Non-scheduled disability 8. Survivorship benefits 9. Funeral benefits 10. Life insurance benefits a. Compulsory life insurance b. Optional insurance 3.1. MONTHLY PENSION. A. BASIC MONTHLY PENSION. The basic monthly pension is equal to: (1) 37.5% of the revalued average monthly compensation; plus (2) 2.5% of said revalued average monthly compensation for each year of service in excess of 15 years: Provided, That the basic monthly pension shall not exceed 90% of the average monthly compensation. The basic monthly pension shall not be less than P1,300.00: Provided, further, That the basic monthly pension for those who have rendered at least 20 years of service shall not be less than P2,400.00 a month. B. COMPUTATION OF SERVICE.

The computation of service for the purpose of determining the amount of benefits shall be from the date of original appointment/election, including periods of service at different times under one or more employers, those performed overseas under the authority of the Republic of the Philippines, and those that may be prescribed by the GSIS in coordination with the Civil Service Commission. The term “service” shall include full time service with compensation: Provided, That part-time and other services with compensation may be included under such rules and regulations as may be prescribed by the GSIS. C. EXCLUDED SERVICE. All service credited for retirement, resignation or separation for which corresponding benefits have been awarded under the GSIS Law or other laws shall be excluded in the computation of service in case of reinstatement in the service of an employer and subsequent retirement or separation which is compensable under this Act. 3.2. SEPARATION BENEFITS. The separation benefits shall consist of: (a) a cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than P12,000 payable upon reaching 60 years of age or upon separation, whichever comes later: Provided, That the member resigns or separates from the service after he has rendered at least 3 years of service but less than 15 years; or (b) a cash payment equivalent to 18 times his basic monthly pension payable at the time of resignation or separation, plus an old-age pension benefit equal to the basic monthly pension payable monthly for life upon reaching the age of 60: Provided, That the member resigns or separates from the service after he has rendered at least 15 years of service and is below 60 years of age at the time of resignation or separation. 3.3. UNEMPLOYMENT OR INVOLUNTARY SEPARATION BENEFITS. Unemployment benefits in the form of monthly cash payments equivalent to 50% of the average monthly compensation shall be paid to a permanent employee who is involuntarily separated from the service due to the abolition of his office or position usually resulting from reorganization: Provided, That he has been paying integrated contributions for at least 1 year prior to separation. 3.4. RETIREMENT BENEFITS. A. AMOUNT OF RETIREMENT BENEFITS. Retirement benefit shall be: (1) the lump sum payment payable at the time of retirement plus an old-age pension benefit equal to the basic monthly pension payable monthly for life, starting upon expiration of the five-year (5) guaranteed period covered by the lump sum; or (2) cash payment equivalent to 18 months of his basic monthly pension plus monthly pension for life payable immediately with no five-year (5) guarantee.

B. COMPULSORY RETIREMENT AGE.

Unless the service is extended by appropriate authorities, retirement shall be compulsory for an employee at 65 years of age with at least 15 years of service: Provided, That if he has less than 15 years of service, he may be allowed to continue in the service in accordance with existing civil service rules and regulations. C. CONDITIONS FOR ENTITLEMENT. A member who retires from the service shall be entitled to the retirement benefits provided that: (1) he has rendered at least 15 years of service; (2) he is at least 60 years of age at the time of retirement; and (3) he is not receiving a monthly pension benefit from permanent total disability. 3.5. PERMANENT DISABILITY BENEFITS. There are 2 kinds of permanent disability benefits under the GSIS Law: (1) Total and permanent disability (2) Permanent and partial disability 3.6. TOTAL AND PERMANENT DISABILITY BENEFITS. A. WHEN DISABILITY CONSIDERED TOTAL AND PERMANENT. The following disabilities shall be deemed total and permanent: (1) complete loss of sight of both eyes; (2) loss of two (2) limbs at or above the ankle or wrist; (3) permanent complete paralysis of two(2) limbs; (4) brain injury resulting in incurable imbecility or insanity; and (5) such other cases as may be determined by the GSIS. B. GENERAL CONDITIONS FOR ENTITLEMENT. A member who suffers permanent disability for reasons not due to his grave misconduct, notorious negligence, habitual intoxication, or willful intention to kill himself or another, shall be entitled to the retirement benefits. C. PERMANENT TOTAL DISABILITY BENEFITS. If the permanent disability is total, he shall receive a monthly income benefit for life equal to the basic monthly pension effective from the date of disability provided that: (1) he is in the service at the time of disability; or (2) if separated from the service, he has paid at least 36 monthly contributions within the 5-year period immediately preceding his disability, or has paid a total of at least 180 monthly contributions, prior to his disability: Provided, further, That if at the time of disability, he was in the service and has paid a total of at least 180 monthly contributions, in addition to the monthly income benefit, he shall receive a cash payment equivalent to 18 times his basic monthly pension: Provided, finally, That a member cannot enjoy the monthly income benefit for permanent disability and the old-age retirement simultaneously.

If a member who suffers permanent total disability does not satisfy conditions (1) and (2) above, but has rendered at least 3 years service at the time of his disability, he shall be advanced the cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than P12,000 which should have been his separation benefit.

Unless the member has reached the minimum retirement age, disability benefit shall be suspended when: (1) he is reemployed or (2) he recovers from disability as determined by the GSIS, whose decision shall be final and binding; or (3) he fails to present himself for medical examination when required by the GSIS. 3.7. PERMANENT AND PARTIAL DISABILITY BENEFITS. A. WHEN DISABILITY CONSIDERED PERMANENT AND PARTIAL. The following disabilities shall be deemed permanent and partial: (1) complete and permanent loss of the use of: (i) any finger (ii) any toe (iii) one arm (iv) one hand (v) one foot (vi) one leg (vii) one or both ears (viii) hearing of one or both ears (ix) sight of one eye (2) such other cases as may be determined by the GSIS. B. PERMANENT AND PARTIAL DISABILITY BENEFITS. If the disability is partial, he shall receive a cash payment in accordance with a schedule of disabilities to be prescribed by the GSIS: Provided, That he satisfies either conditions (1) or (2) as follows: (1) he is in the service at the time of disability; or (2) if separated from the service, he has paid at least 36 monthly contributions within the 5-year period immediately preceding his disability, or has paid a total of at least 180 monthly contributions, prior to his disability: Provided, further, That if at the time of disability, he was in the service and has paid a total of at least 180 monthly contributions, in addition to the monthly income benefit, he shall receive a cash payment equivalent to 18 times his basic monthly pension: Provided, finally, That a member cannot enjoy the monthly income benefit for permanent disability and the oldage retirement simultaneously. 3.8. TEMPORARY DISABILITY BENEFITS. A. AMOUNT OF BENEFIT. A member who suffers temporary total disability for reasons not due to any of the conditions enumerated in Section 15 of the GSIS Law1 shall be entitled to 75% of his current daily compensation for each day or fraction thereof of temporary disability

benefit not exceeding 120 days in one calendar year after exhausting all his sick leave credits and collective bargaining agreement sick leave benefits, if any, but not earlier than the 4th day of his temporary total disability provided that any of the following conditions is not attendant: (1) he is in the service at the time of his disability; or (2) if separated, he has rendered at least three (3) years of service and has paid at least six (6) monthly contributions in the twelve-month period immediately preceding his disability. The temporary total disability benefit shall in no case be less than P70.00 a day. B. PROHIBITION.

A member cannot enjoy the temporary total disability benefit and sick leave pay simultaneously. C. EXTENSION OF PAYMENT OF BENEFIT. If the disability requires more extensive treatment that lasts beyond 120 days, the payment of the temporary total disability benefit may be extended by the GSIS but not to exceed a total of 240 days. 3.9. NON-SCHEDULED DISABILITY. For injuries or illnesses resulting in a disability not listed in the schedule of partial/total disability, as provided in the GSIS Law, the GSIS shall determine the nature of the disability and the corresponding benefits therefor. 3.10. SURVIVORSHIP BENEFITS. A. COMPONENTS OF THE SURVIVORSHIP BENEFITS. Under Section 20 of the GSIS Law, when a member or pensioner dies, the beneficiaries shall be entitled to survivorship benefits provided in Sections 21 (Death of a Member) and 22 (Death of a Pensioner) hereunder subject to the conditions therein provided for. The survivorship pension shall consist of: (1) the basic survivorship pension which is 50% of the basic monthly pension; and (2) the dependent children's pension not exceeding 50% of the basic monthly pension. B. DEATH OF A MEMBER. Under Section 21 of the GSIS Law, upon the death of a member, the primary beneficiaries shall be entitled to: (1) survivorship pension: Provided, That the deceased: (i) was in the service at the time of his death; or (ii) if separated from the service, has at least 3 years of service at the time of his death and has paid 36 monthly contributions within the 5-year period immediately preceding his death; or has paid a total of at least 180 monthly contributions prior to his death; or (2) the survivorship pension plus a cash payment equivalent to 100% of his average monthly compensation for every year of service: Provided, That the deceased was in the service at the time of his death with at least 3 years of service; or

(3) a cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than P12,000.00: Provided, That the deceased has rendered at least 3 years of service prior to his death but does not qualify for the benefits under the item (1) or (2) above of this paragraph. Under Paragraph (b) of Section 21, the survivorship pension shall be paid as follows: (1) when the dependent spouse is the only survivor, he/she shall receive the basic survivorship pension for life or until he/she remarries; (2) when only dependent children are the survivors, they shall be entitled to the basic survivorship pension for as long as they are qualified, plus the dependent children's pension equivalent to 10% of the basic monthly pension for every dependent child not exceeding five (5), counted from the youngest and without substitution; (3) when the survivors are the dependent spouse and the dependent children, the dependent spouse shall receive the basic survivorship pension for life or until he/she remarries, and the dependent children shall receive the dependent children's pension mentioned in the immediately preceding paragraph (2) hereof.

In the absence of primary beneficiaries, the secondary beneficiaries shall be entitled to: (1) the cash payment equivalent to 100% of his average monthly compensation for each year of service he paid contributions, but not less than P12,000: Provided, That the member is in the service at the time of his death and has at least 3 years of service; or (2) in the absence of secondary beneficiaries, the benefits under this paragraph shall be paid to his legal heirs. For purposes of the survivorship benefits, legitimate children shall include legally adopted and legitimate children. C. DEATH OF A PENSIONER. Under Section 22 of the GSIS Law, upon the death of an old-age pensioner or a member receiving the monthly income benefit for permanent disability, the qualified beneficiaries shall be entitled to the survivorship pension defined in Section 20 of the GSIS Law (See above), subject to the provisions of paragraph (b) of Section 21 hereof (See above). When the pensioner dies within the period covered by the lump sum, the survivorship pension shall be paid only after the expiration of the said period. 3.11. FUNERAL BENEFITS. The amount of funeral benefit shall be determined and specified by the GSIS in the rules and regulations but shall not be less than P12,000.00: Provided, That it shall be increased to at least P18,000.00 after five (5) years and shall be paid upon the death of: (a) an active member as defined under Section 2(e) of this Act; or (b) a member who has been separated from the service, but who may be entitled to future benefit pursuant to Section 4 of this Act; or (c) a pensioner, as defined in Section 2(o) of this Act; or (d) a retiree who at the time of his retirement was of pensionable age under this Act but who opted to retire under Republic Act No. 1616. 3.12. LIFE INSURANCE BENEFITS. A. COMPULSORY LIFE INSURANCE. All employees except for Members of the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP) shall, under such terms and conditions as may be promulgated by the GSIS, be compulsorily covered with life insurance, which shall automatically take effect as follows: (1) for those employed after the effectivity of the GSIS Law, their insurance shall take effect on the date of their employment; (2) for those whose insurance will mature after the effectivity of the GSIS Law, their insurance shall be deemed renewed on the day following the maturity or expiry date of their insurance; (3) for those without any life insurance as of the effectivity of the GSIS Law, their insurance shall take effect following said effectivity. Dividends. - An annual dividend may be granted to all members of the GSIS whose life insurance is in force for at least 1 year in accordance with a dividend allocation formula to be determined by the GSIS. B. OPTIONAL INSURANCE. Subject to the rules and regulations prescribed by the GSIS, a member may apply for insurance and/or pre-need coverage embracing life, health, hospitalization, education, memorial plans, and such other plans as may be designed by the GSIS, for himself and/or his dependents. Any employer may likewise apply for group insurance coverage for its

employees. The payment of the premiums/installments for optional insurance and preneed products may be made by the insured or his employer and/or any person acceptable to the GSIS. 4. BENEFICIARIES. a. Dependents. Dependents shall be the following: (a) the 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, not over the age of majority, or is over the age of majority but incapacitated and incapable of self-support due to a mental or physical defect acquired prior to age of majority; and (c) the parents dependent upon the member for support. Gainful Occupation — Any productive activity that provided the member with income at least equal to the minimum compensation of government employees. b. Beneficiaries. There are 2 kinds of beneficiaries under the GSIS Law as follows: 1. Primary beneficiaries — The legal dependent spouse until he/she remarries and the dependent children. 2. Secondary beneficiaries — The dependent parents and, subject to the restrictions on dependent children, the legitimate descendants.

SOCIAL LEGISLATION 3. Limited Portability Law (RA 7699) ================================ [R.A. No. 7699 [An Act Instituting Limited Portability Scheme in the Social Security Insurance System by Totalizing the Workers’ Creditable Services or Contributions in Each of the Systems] approved on May 1, 1994.] 1. LIMITED PORTABILITY SCHEME - TOTALIZING THE WORKERS’ CREDITABLE SERVICES OR CONTRIBUTIONS TO BOTH SSS AND GSIS. a. Declared policy is to establish a unitary social security system. It is the declared policy of the State to institute a scheme for totalization and portability of social security benefits with the view of establishing within a reasonable period, a unitary social security system. b. Totalization, defined. The term “totalization” refers to the process of adding up the periods of creditable services or contributions under each of the Systems, for the purpose of eligibility and computation of benefits. c. Portability, defined. On the other hand, the term “portability” refers to the transfer of funds for the account and benefit of a worker who transfers from one system to the other. d. Applicability of limited portability scheme. The benefits provided under R.A. No. 7699 apply to active or inactive members of either System (GSIS/SSS) as of the date of its effectivity on May 20, 1994. e. Coverage.

R.A. No. 7699 and its implementing rules apply to all worker-members of the GSIS and/or SSS who transfer from the public sector to the private sector or vice-versa, or who wish to retain their membership in both Systems. f. Creditability and totalization of contributions and benefits in SSS and GSIS. Under Section 3 of R.A. No. 7699, it is enunciated that provisions of any general or special law or rules and regulations to the contrary notwithstanding, a covered worker who transfers employment from one sector to another (i. e., from private sector to public sector, or vice versa), or is employed in both sectors, shall have his creditable services or contributions in both Systems (GSIS and SSS) credited to his service or contribution record in each of the Systems and shall be totalized for purposes of old-age, disability, survivorship and other benefits in case the covered member does not qualify for such benefits in either or both Systems without totalization provided, however, that overlapping periods of membership shall be credited only once for purposes of totalization. g. Limited portability of funds. The processes involved in the prompt payment of money benefits to eligible members is the joint responsibility of the GSIS and SSS. (Section 1, Rule IV, Rules and Regulations Implementing R.A. No. 7699).

The System or Systems responsible for the payment of money benefits due a covered worker shall release the same within fifteen (15) working days from receipt of the claim, subject to the submission of the required documents and availability of complete employee/employer records in the System or Systems. h. Totalization of contributions and benefits; how processed. 1. Contributions. All contributions paid by such member personally and those that were paid by his employers to both Systems (GSIS and SSS) shall be considered in the processing of benefits which he can claim from either or both Systems, provided, however, that the amount of benefits to be paid by one System shall be in proportion to the number of contributions actually remitted to that System. The term “contributions” refers to the contributions paid by the employee or worker to either the GSIS or the SSS on account of the worker’s membership. 2. Creditable services or periods of contributions. All creditable services or periods of contributions made continuously or in the aggregate of a worker under either of the sectors shall be added up and considered for purposes of eligibility and computation of benefits. (Section 1, Rule V, Rules and Regulations Implementing Republic Act No. 7699). The term “creditable services” insofar as the public sector is concerned, refers to the following: 1. All previous services rendered by an official/employee pursuant to an appointment, whether permanent, provisional or temporary; 2. All previous services rendered by an official/employee pursuant to a duly-approved appointment to a position in the Civil Service with compensation or salary; 3. The period during which an official or employee was on authorized sick leave of absence without pay not exceeding one (1) year;

4. The period during which an official or employee was out of the service as a result of illegal termination of his services as finally decided by the proper authorities; and 5. All previous services with compensation or salary rendered by elective officials. The term “periods of contributions” for the private sector refers to the periods during which a person renders services for an employer with compensation or salary, and during which contributions were paid to the SSS. A “self-employed person” is considered an employee and employer at the same time. The term “eligibility” means that the worker has satisfied the requirements for entitlement to the benefits provided for under R.A. No. 7699. 3. Benefits. All services rendered or contributions paid by a member personally and those that were paid by the employers to either System shall be considered in the computation of benefits which may be claimed from either or both Systems.

However, the amount of benefits to be paid by one System shall be in proportion to the services rendered or periods of contributions made to that System. Under Section 1 [j], Rule III of the Rules and Regulations Implementing R.A. No. 7699, “benefits” refer to the following: 1. Old-age benefit; 2. Disability benefit; 3. Survivorship benefit; 4. Sickness benefit; 5. Medicare benefit, provided that the member shall claim said benefit from the System where he was last a member; and 6. Such other benefits common to both Systems that may be availed of through totalization. i. Totalization; when applicable. Totalization applies in the following instances: a. if a worker is not qualified for any benefits from both Systems; or b. if a worker in the public sector is not qualified for any benefits from the GSIS; or c. if a worker in the private sector is not qualified for any benefits from the SSS. For purposes of computation of benefits, totalization applies in all cases so that the contributions made by the worker-member in both Systems shall provide maximum benefits which otherwise will not be available. In no case shall the contribution be lost or forfeited. Gamogamo v. PNOC Shipping and Transport Corp., [G.R. No. 141707, May 7, 2002] Following the concept of totalization, the High Court in this case pronounced that obviously, totalization of service credits is only resorted to when the retiree does not qualify for benefits in either or both of the Systems. In case the employee is qualified to receive benefits granted by the GSIS or the SSS, as the case may be, he cannot avail of the benefits under R.A. No. 7699. j. Effect if worker is not qualified after totalization.

If after totalization, the worker-member still does not qualify for any benefit listed in Rule III, Section 1 [j] [supra] of the Rules and Regulations Implementing R.A. No. 7699, the member will then get whatever benefits correspond to his/her contributions in either or both Systems. k. Effect if worker qualifies for benefits in both Systems. If a worker qualifies for benefits in both Systems, totalization shall not apply. l. Processes of totalization; joint responsibility of GSIS and SSS. The processes of totalization of creditable services or periods of contributions and computation of benefits provided under R.A. No. 7699 are the joint responsibility of the GSIS and the SSS. m. Effect of overlapping periods of creditable services. Overlapping periods of creditable services or contributions in both Systems shall be credited only once for purposes of totalization. “Overlapping of periods” refers to the periods during which a worker simultaneously contributes to both Systems. Employee’s Compensation – Coverage and when compensable ================================ Relevant legal provisions : Articles 166 to 208-A, Title II, Book IV of the Labor Code. 1. BACKGROUND ON THE STATE INSURANCE FUND [SIF]. a. SIF created from contributions of employers. 12 Section 1 [h], Rule III, Ibid.. 13 Section 2, Rule V, Ibid.. 14 Section 3, Rule V, Rules and Regulations Implementing R.A. No. 7699 15 Section 4, Rule V, Rules and Regulations Implementing R.A. No. 7699. 16 Section 5, Rule V, Ibid.. 17 Section 6, Rule V, Ibid.. 18 Section 7, Rule V, Ibid.. 19 Section 1 [i], Rule III, Ibid.. The State Insurance Fund (SIF) is built up by the contributions of employers based on the salaries of their employees as provided under the Labor Code. b. Two (2) separate SIFs. There are two (2) separate and distinct State Insurance Funds: one established under the SSS for private sector employees; and the other, under the GSIS for public sector employees. The management and investment of the Funds are done separately and distinctly by the SSS and the GSIS. It is used exclusively for payment of the employees’ compensation benefits and no amount thereof is authorized to be used for any other purpose. c. Three (3) agencies involved in the implementation of the ECP. There are three (3) agencies involved in the implementation of the Employees’ Compensation Program (ECP). These are: The Employees’ Compensation Commission (ECC) which is mandated to initiate, rationalize and coordinate policies of the ECP and to review appealed cases from the Government Service Insurance System (GSIS) and the Social Security System (SSS), the administering agencies of the ECP. d. Role of the GSIS and SSS. As administering agencies of the ECP, both GSIS and SSS are tasked to:

1. Evaluate all employees compensation (EC) claims filed within a given period and pay the corresponding EC benefits; 2. Collect EC premiums remitted by employers; and 3. Manage the State Insurance Fund. Both the GSIS and the SSS invest the funds in profitable ventures to generate earnings which will form part of the State Insurance Fund (SIF) from which payments for employees’ compensation claims are sourced. e. Role of the ECC. The law applies the social security principle in the handling of workmen’s compensation. Towards this end, the Employees’ Compensation Commission (ECC) administers and settles claims from a fund under its exclusive control. The employer does not intervene in the compensation process and it has no control, as in the past, over payment of benefits. The open-ended Table of Occupational Diseases requires no proof of causation. A covered claimant suffering from an occupational disease is automatically paid benefits. f. Role of the employer. On the part of the employer, its duty is only to pay the regular monthly premiums to the System (GSIS/SSS). It does not look for insurance companies to meet sudden demands for compensation payments or set up its own funds to meet those contingencies. It does not have to defend itself from spuriously documented or long past claims. g. Role of the employee. The injured worker does not have to litigate his right to compensation. There is no notice of injury nor requirement of controversion. The sick worker is simply required to file a claim with the ECC which determines, on the basis of the employee’s supporting papers and medical evidence, whether or not compensation should be paid. The payment of benefits is more prompt ad the cost of administration is low. The employer no longer opposes or fights a claim for compensation by the employee. Resultantly, the lop-sided situation of an employer against one employee is absent. 2. SCOPE OF COVERAGE OF THE ECP. a. General coverage. The following shall be covered by the Employees’ Compensation Program (ECP): 1. All employers; 2. Every employee not over sixty (60) years of age; 3. An employee over 60 years of age who had been paying contributions to the System (GSIS/SSS) prior to age sixty (60) and has not been compulsorily retired; and 4. Any employee who is coverable by both the GSIS and SSS and should be compulsorily covered by both Systems. b. Sectors of employees covered by the ECP. The following sectors are covered under the ECP: 1. All public sector employees including those of government-owned and/or controlled corporations and local government units covered by the GSIS; 2. All employees in the private sector covered by the SSS; and 3. Overseas Filipino workers (OFWs), namely: a. Filipino seafarers compulsorily covered under the SSS. b. Land-based contract workers provided that their employer, natural or juridical, is engaged in any trade, industry or business undertaking in the Philippines; otherwise, they shall not be covered by the ECP. c. Start of coverage of employees under the ECP.

The coverage under the ECP of employees in the private and public sectors starts on the first day of their employment. c. Nature of coverage. The coverage is compulsory in nature. 3. EMPLOYEES’ COMPENSATION BENEFITS. The following are the benefits provided under the Labor Code: a. Medical Benefits b. Disability Benefits 1. Temporary total disability 2. Permanent total disability 3. Permanent partial disability c. Death Benefit d. Funeral Benefit 3.1. MEDICAL BENEFITS. a. Conditions for entitlement to medical services, appliances and supplies. Any employee is entitled to such medical services, appliances and supplies as the nature of his disability and the progress of his recovery may require, subject to the expense limitation as contained in Annex “C” of the Amended Rules on Employees’ Compensation, if all of the following conditions are satisfied: 1. He has been duly reported to the System (GSIS/SSS); 2. He sustains an injury or contracts sickness; and 3. The System has been duly notified of the injury or sickness. b. Period of entitlement. The medical services, appliances and supplies are required to be provided to the afflicted employee beginning on the first day of injury or sickness, during the subsequent period of his disability, and as the progress of his recovery may require. The obligation of the SIF to provide medical services shall continue for as long as the employee is sick. This duty is not ended even if employment was terminated. c. Extent of services. The employee is entitled to the benefits only for the ward services of an accredited hospital and accredited physician. However, if the employee chooses accommodations better than ward services, the excess of the total amount of expenses incurred over the benefits provided under Annex “C” of the Amended Rules on Employees’ Compensation (infra), shall be borne by the employee. The hospital shall provide all the medicines, drugs or supplies necessary for the treatment of the employee at a cost not exceeding the retail prices prevailing in local drug stores. Payments shall be made directly to the providers of such services in such amount as are prevailing in the community for similar services or provided under the schedule set forth in said Annex “C,” whichever is less. The right of the employee to seek reimbursement for medical expenses does not only pertain to those incurred for the principal or primary ailment but extends to those incurred for complications arising therefrom even if the same occurred after the employee had already retired.

d. Loss of wages or earning capacity not required.

It is worthy to note that Article 185 does not impose as a pre-requisite for the grant of medical benefits, that the injured or sick employee should show proof that he suffered loss of wages or earning capacity as a result of such injury or sickness. The law is clear that the injured or sick employee is “immediately” entitled to be provided 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. 3.2. TEMPORARY TOTAL DISABILITY. a. Total disability, when temporary. A total disability is temporary if, as a result of the injury or sickness, the employee is unable to perform any gainful occupation for a continuous period of not exceeding 120 days, except when such disability still requires medical attendance beyond 120 days, but not to exceed 240 days. If the disability is the result of an injury or sickness, the period of compensability shall be counted from the first day of such injury or sickness. An employee who later had to stop working due to a compensable illness is also entitled to temporary total disability benefits. b. Conditions to entitlement in case of temporary total disability. An employee shall be entitled to an income benefit for temporary total disability if all of the following conditions are satisfied: 1. He has been duly reported to the System (GSIS/SSS); 2. He sustains the temporary total disability as a result of the injury or sickness; and 3. The System has been duly notified of the injury or sickness which caused his disability. His employer shall be liable for the benefit if such illness or injury occurred before the employee is duly reported for coverage to the System (GSIS/SSS).40 c. When to commence payment of benefits. The income benefit in the case of temporary total disability should be paid beginning on the first day of such disability. If caused by an injury or sickness, it should not be paid longer than 120 consecutive days except where such injury or sickness still requires medical attention beyond 120 days but not to exceed 240 days from the onset of the disability, in which case, benefit for temporary total disability shall be paid. However, the System (GSIS/SSS) may declare the total and permanent status at any time after 120 days of continuous temporary total disability as may be warranted by the degree of actual loss or impairment of physical or mental functions as determined by the System (GSIS/SSS). d. Cash payment of temporary total disability benefit. Temporary total disability resulting from the injury or sickness is compensable by cash payments and not the injury or sickness itself.

e. Income benefit for temporary total disability. Any employee entitled to the benefit for temporary total disability shall be paid an income benefit equivalent to ninety percent (90%) of his average daily salary credit as determined by the System (GSIS/SSS), subject to the following conditions:

1. The income benefit shall not be more than P200.00 per day for private sector workers and P90.00 per day for public sector employees and shall not be paid longer than 120 days for the same disability unless the injury or sickness requires more extensive treatment that lasts beyond 120 days but not to exceed 240 days from the onset of the disability, in which case, he shall be paid benefit for temporary total disability during the extended period. 2. The monthly income benefit shall be suspended if the employee fails to submit a monthly medical report certified by his attending physician as required under Section 5 of Rule IV of the Amended Rules on Employees’ Compensation. [See ECC Resolution No. 3682 dated July 21, 1987]. Said Section 5 of Rule IV of the Amended Rules on Employees’ Compensation requires that an employee enjoying temporary total disability benefits shall submit to the System (GSIS/SSS) a monthly medical report on his disability certified by his attending physician; otherwise, his benefit shall be suspended until such time that he complies with this requirement. Further, he must also submit himself for examination upon being notified by the System (GSIS/SSS), at least once a year. 3.3. PERMANENT TOTAL DISABILITY. a. Permanent disability, defined. “Permanent disability” is the inability of a worker to perform his job for more than 120 days, regardless of whether or not he loses the use of any part of his body. b. Total disability, defined. “Total disability,” on the other hand, means disablement of an employee to earn wages in the same kind of work, or work of a similar nature that he was trained for, or accustomed to perform, or any kind of work which a person of his mentality and attainment could do. Total disability is lack of ability to follow continuously some substantial gainful occupation without serious discomfort or pain and without material injury to health and danger to life. Total disability does not mean a state of absolute helplessness. A total disability does not require that the employee be absolutely disabled or totally paralyzed. What is necessary is that the injury must be such that the employee cannot pursue his usual work and earn therefrom. c. Disability, when total and permanent. A disability is total and permanent if, as a result of the injury or sickness, the employee is unable to perform any gainful occupation for a continuous period exceeding 120 days.

Moreover, the fact that the permanently and totally disabled employee continues to work after such disability does not deprive him of the benefits provided under the law. (Makabali v. ECC, G.R. No. L-51533, Nov. 29, 1983). For what is important consideration is the inability to do substantially all material acts necessary for the prosecution of a gainful occupation without serious discomfort or pain and without material injury or danger to life. In disability compensation, it is not the injury per se which is compensated but the incapacity to work. Disability is intimately related to one’s earning capacity. The test to determine its gravity is the impairment or loss of one’s capacity to earn and not its mere medical significance.

Seagull Maritime Corp. v. Dee, [G.R. No. 165156, April 2, 2007] It was held in this case that although private respondent’s injury was undeniably confined to his left foot only, however, the inescapable impact of private respondent’s injury on his capacity to work as a seaman cannot be disregarded. In their desire to escape liability from private respondent’s rightful claim, petitioners denigrated the fact that even if private respondent insists on continuing to work as a seaman, no profit-minded employer will hire him. His injury erased all these possibilities. GSIS v. Cadiz, [G.R. No. 154093, July 8, 2003] It was declared in this case that the fact that the employee did not lose the use of any part of his body does not justify the denial of his claim for permanent total disability. GSIS v. CA, [G.R. No. 132648, March 4, 1999, 363 Phil. 585, 592] The High Court held here that while permanent total disability invariably results in an employee’s loss of work or inability to perform his usual work, permanent partial disability occurs when an employee loses the use of any particular anatomical part of his body which disables him to continue with his former work. Stated otherwise, the test of whether or not an employee suffers from permanent total disability is the capacity of the employee to continue performing his work notwithstanding the disability he incurred. If by reason of the injury or sickness he sustained, the employee is unable to perform his customary job for more than 120 days and he does not come within the coverage of Rule X of the Amended Rules on Employees Compensation (which, in a more detailed manner, describes what constitutes temporary total disability), then the said employee undoubtedly suffers from a permanent total disability regardless of whether or not he loses the use of any part of his body. Permanent total disability does not mean a state of absolute helplessness, but means disablement of an employee to earn wages in the same kind of work, or work of similar nature that he was trained for, or any work which a person of similar mentality and attainment could do. d. Total disabilities considered permanent. The following total disabilities are considered permanent: 1. Temporary total disability lasting continuously for more than 120 days and prevents an employee from pursuing his usual work and earning therefrom. 2. Complete loss of sight of both eyes; 3. Loss of two limbs at or above the ankles or wrists; 4. Permanent and complete paralysis of two limbs; 5. Brain injury resulting in incurable imbecility or insanity; and 6. Such cases as determined by the System (GSIS/SSS) and approved by the ECC.

Palisoc v. Easways Marine, Inc., [G.R. No. 152273, September 11, 2007] The petitioner here was unable to perform his job for more than 120 days from the time of his repatriation which entitles him to permanent disability benefits. Thus, even in the absence of an official finding by a company-designated physician that petitioner is unfit for sea duty, he is deemed to have suffered permanent disability because of his inability to work for more than 120 days. The Court of Appeals erred in ruling that petitioner’s operation involving the removal of his gallbladder is not a compensable injury, disease, or illness under Appendix 1 of the POEA-SEC. Permanent disability refers to the inability of a worker to perform his job for more than 120 days, regardless of whether he loses the use of any part of his body. What determines petitioner’s entitlement to permanent disability benefits is his inability to work for more than 120 days. e. Litmus test and distinction between permanent total disability and permanent partial disability.

In Vicente v. ECC, [G.R. No. 85024, January 23, 1991, 193 SCRA 190], the Supreme Court laid down the litmus test and distinction between Permanent Total Disability and Permanent Partial Disability, to wit: “[W]hile ‘permanent total disability’ invariably results in an employee’s loss of work or inability to perform his usual work, ‘permanent partial disability,’ on the other hand, occurs when an employee loses the use of any particular anatomical part of his body which disables him to continue with his former work. Stated otherwise, the test of whether or not an employee suffers from ‘permanent total disability’ is a showing of the capacity of the employee to continue performing his work notwithstanding the disability he incurred. Thus, if by reason of the injury or sickness he sustained, the employee is unable to perform his customary job for more than 120 days and he does not come within the coverage of Rule X of the Amended Rules on Employees Compensability (which, in a more detailed manner, describes what constitutes temporary total disability), then the said employee undoubtedly suffers from ‘permanent total disability’ regardless of whether or not he loses the use of any part of his body.” (See also Social Security Commission, v. CA, G.R. No. 152058, Sept. 27, 2004; Ijares v. Court of Appeals, G.R. No. 105854, Aug. 26, 1999, 313 SCRA 141). f. Requisites for entitlement to income benefit for permanent total disability. An employee is entitled to an income benefit for permanent total disability if all of the following conditions are satisfied: 1. He has been duly reported to the System (GSIS/SSS); 2. He sustains the permanent total disability as a result of the injury or sickness; and 3. The System has been duly notified of the injury or sickness which caused his disability. His employer shall be liable for the benefit if such injury or sickness occurred before the employee is duly reported for coverage to the System (GSIS/SSS).

g. ECC Board Resolution No. 98-09-0563 [September 25, 1998]. ECC Board Resolution No. 98-09-0563 issued on September 25, 1998, enunciated the following conditions that should be taken into account in considering disability as permanent, in addition to the existing rules and regulations relative to permanent total disability, and in consonance with the Supreme Court’s pronouncement on liberal construction in disability claims cases: 1. If the disability results to disablement of an employee or worker to earn wages in the same kind of work, or work of similar nature that he/he was trained for; 2. If the disability results to disablement of an employee or worker to earn wages in any kind of work which a person of his mentality and attainment could do; 3. If the disability results to the inability of an employee or worker to do substantially all material acts necessary to the prosecution of an occupation for remuneration or profit in substantially customary and usual manner; 4. If the disability results to the lack of ability of an employee or worker to follow continuously the same substantial gainful occupation without serious discomfort or pain and without injury or danger to life; 5. If an employee or worker is compelled to retire or cease from employment before reaching the age of compulsory retirement by reason of work-related contingency;

6. If, after retirement, an employee or worker dies within a reasonable period of time, and the cause of his death is the disability ailment or injury, in which event, his disability shall be considered permanent and total; 7. If the temporary and total disability shall last continuously for more than 120 days, except as otherwise provided in Rule X of the existing implementing rules and regulations of P.D. No. 626, as amended. Garcia v. Compensation Appeals and Review Staff, [G.R. No. L-59651, December 6, 1985, 140 SCRA 376] The denial of permanent total disability benefits to the claimant in this case, who was a school teacher with thirty-eight (38) years of dedicated service, would render inutile and meaningless, the social justice precept guaranteed by the Constitution. The claimant is entitled not only to partial disability but to full compensation because her illness rendered her incapable of teaching. That claimant’s employment had contributed even in a small degree to the development of the disease is enough for compensability of claim. h. Payment for all compensable months of disability. In case of permanent total disability, the full monthly income benefits should be paid for all compensable months of disability. i. Effect of cessation of grant of employees’ compensation benefits to entitlement to benefits for the same disability in another law being administered by the System. After the benefit under the Employees’ Compensation Program (ECP) has ceased, and if the employee is otherwise qualified for benefit for the same disability under another law administered by the System (GSIS/SSS), he should be paid such benefit in accordance with the provisions of that law. This rule applies to contingencies which occurred prior to May 1, 1978.

j. 5-year guaranteed monthly income benefits; grounds for suspension of grant of benefits. Except as otherwise provided in other laws, decrees, orders or letters of instructions, the monthly income benefit is guaranteed for five (5) years and shall be suspended under any of the following conditions: 1. Failure to present himself for examination at least once a year upon notice by the System; 2. Failure to submit a quarterly medical report certified by his attending physician as required under Section 5, Rule IV of the Amended Rules on Employees’ Compensation; 3. Complete or full recovery from his permanent disability; or 4. Upon being gainfully employed. Said Section 5 of Rule IV of the Amended Rules provides that an employee enjoying permanent disability benefit where the disability resulted from a disease should submit to the System (GSIS/SSS) a quarterly medical report on his disability certified by his physician; otherwise his benefit shall be suspended until such time that he complies with this requirement. k. Cash payment of permanent total disability benefit. Permanent total disability resulting from the injury or sickness is compensable by cash payments and not the injury or sickness itself. l. Monthly income benefit.

Any employee entitled to permanent total disability benefits shall be paid by the System (GSIS/SSS) a monthly income as defined in Section 9, Rule VI of the Amended Rules on Employees’ Compensation. 1. In the case of the SSS. In the case of the SSS, the monthly income benefit is the amount equivalent to one hundred fifteen percent (115%) of the sum of the average monthly salary credit multiplied by the replacement ratio and one and a half percent (1-1/2%) of the average monthly salary credit for each credited year of service in excess of ten (10) years; provided, that the monthly income benefit shall in no case be less than P250.00; provided, however, that the monthly pension of surviving pensioners shall be increased automatically and simultaneously to the extent that the fifteen percent (15%) difference in monthly income benefit between EC and SS and the twenty percent (20%) difference in monthly income benefit between EC and GSIS, should be maintained. 2. In the case of the GSIS. In the case of the GSIS, the monthly income benefit shall be the basic monthly pension as defined in P, D. No. 1146 [May 31, 1977] plus twenty percent (20%) thereof, but shall not be less than P250.00 nor more than the actual salary at the time of contingency. m. Amount of benefit for dependent children. Under Section 4, Rule XI of the Amended Rules on Employees’ Compensation, it is provided that each dependent child, but not exceeding five (5), counted from the youngest and without substitution, shall be entitled to ten percent (10%) of the monthly income benefit of the employee. The Amended Rules on Employees Compensation, however, shall not apply to causes of action which accrued before May 1, 1978. Except the benefit to dependent children under said Section 4 of Rule XI of the Amended Rules on Employees’ Compensation, the aggregate monthly benefit payable, in the case of the GSIS, shall in no case exceed the monthly wage or salary actually received by the employee as of the date of his permanent total disability per ECC Resolution No. 2819 dated August 9, 1984. 3.4. PERMANENT PARTIAL DISABILITY. a. Disability, when partial and permanent. A disability is partial and permanent if, as a result of the injury or sickness, the employee suffers a permanent artial loss of the use of any part of his body. b. Requisites for entitlement. An employee shall be entitled to an income benefit for permanent partial disability (PPD) if all of the following conditions are satisfied: 1. He has been duly reported to the System (GSIS/SSS); 2. He sustains the permanent partial disability as a result of the injury or sickness; and 3. The System has been duly notified of the injury or sickness which caused his disability. His employer shall be liable for the benefit if such injury or sickness occurred before the employee is duly reported for coverage to the System (GSIS/SSS). c. Effect of gainful employment. For purposes of entitlement to income benefits for permanent partial disability, a covered employee shall continue to receive the benefits provided thereunder even if he is gainfully employed and receiving his wage or salary.

d. Income benefit in case of permanent partial disability (PPD). Permanent partial disability is the exception to the rule that disability resulting from the injury or sickness is compensable by cash payments and not the injury or sickness itself. Consequently, in the case where the period covered for payment of income benefit for PPD does not exceed twelve (12) months, the System (GSIS/SSS) may pay in lump sum; otherwise the income benefit shall be paid in monthly pension. In other words, if the indicated number of months exceeds twelve (12), the income benefit should be paid in monthly pension; otherwise, the System may pay the income benefit in lump sum or in monthly pension. Under ECC Board Resolution 93-08-0068 issued on August 5, 1993, permanent partial disability benefit is granted up to a maximum of two hundred forty (240) days if the claimant's disability persist exceeding the 120-day limit. Any employee entitled to PPD benefit shall be paid by the System (GSIS/SSS) a monthly income benefit for the number of months indicated in Section 2, Rule XII of the Amended Rules on Employees’ Compensation [See Schedule below]. e. Schedule of income benefit payment. Under said Section 2, Rule XII of the Amended Rules on Employees’ Compensation, the income benefit shall be paid beginning with the first month of such disability, but no longer than the designated number of months in 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 any toe one hand one arm one foot one leg one ear both ears hearing of one ear hearing of both ears sight of one eye

No. of Months - 10 -8 -6 -5 -3 -6 -3 - 39 - 50 - 31 - 46 - 10 - 20 - 10 - 50 - 25

In case of permanent partial disability less than the total loss of the member, the same monthly income shall be paid for a portion of the period established for the total loss of the member in accordance with the proportion that the partial loss bears to the total loss. If the result is a decimal fraction, the same shall be rounded off to the next higher integer. In case of simultaneous loss of more than one member or a part thereof, the same monthly income shall be paid for a period equivalent to the sum of the periods established for the loss of the member or part thereof but not exceeding seventy-five (75). If the result is a decimal fraction, the same shall be rounded off to the higher integer. The degree of permanent disability shall be equivalent to the ratio that the designated number of months of compensability bears to seventy-five (75).

f. Consequence of loss of a part of body. The following rules shall apply in case of loss of a part of the employee’s body: 1. A loss of a wrist is considered a loss of the hand; 2. A loss of an elbow is considered a loss of the arm; 3. A loss of an ankle is considered a loss of the leg; 4. A loss of more than one joint is considered a loss of the whole finger or toe; and 5. A loss of only the first joint shall be considered a loss of one-half of the whole finger or toe. Other permanent partial disabilities shall be determined by the Medical Officer of the System (GSIS/SSS).

g. Unlisted injuries and illnesses (non-scheduled disabilities). In cases of injuries or illnesses not listed in the schedule under Section 2, Rule XII of the Amended Rules on Employees’ Compensation [supra], the benefit shall be an income benefit equivalent to the percentage of the permanent loss of the capacity for work. 3.5. DEATH BENEFIT. a. Death, meaning. Within the context of the employees’ compensation program, the term “death” means loss of life resulting from an injury or sickness. b. Compensable death. “Compensable death” refers to death which is the result of a work-related injury or sickness. c. Proof required in order for death to be compensable. Death compensation benefit cannot be awarded unless there is substantial evidence showing that: (a) The cause of the employee’s death was reasonably connected with his work; or (b) The sickness for which he died is an accepted occupational disease; or (c) His working conditions increased the risk of contracting the disease for which he died. d. Income benefit in case of death. Death resulting from the injury or sickness is compensable by cash payments and not the injury or sickness itself. The monthly income benefit provided under Article 194 of the Labor Code is the new amount of the monthly income benefit for the surviving beneficiaries upon the approval of P.D. No. 1368 [May 1, 1978] which introduced amendments to Title II, Book IV of the Labor Code. e. Requisites for entitlement to death benefit. The beneficiaries of a deceased employee shall be entitled to an income benefit if all of the following conditions are satisfied: 1. The employee had been duly reported to the System (GSIS/SSS); 2. He died as a result of an injury or sickness; and 3. The System has been duly notified of his death, as well as the injury or sickness which caused his death. His employer shall be liable for the benefit if such death occurred before the employee is duly reported for coverage to the System (GSIS/SSS).

f. Death to be compensable must occur while in the performance of job; exception. Under the law on employees’ compensation, death is compensable only when it results from a work-connected injury or sickness. In Lu v. WCC, [G.R. No. L-43181, October 27, 1986, 145 SCRA 170], it was ruled that the death of the employee, not having occurred while in the performance of his duties as a gasoline attendant, the claimant cannot be extended the benefits of the Workmen’s Compensation Act. In another case, Tolosa v. ECC, [G.R. No. 60509, May 8, 1985, 136 SCRA 335], it was pronounced that the employee’s widow is not entitled to death benefits because her husband had stopped working when he became physically disabled to do his work at the time of his retirement in 1975 and died on February 14, 1984, or almost nine (9) years after, which is clearly not within the two-year period required by the old Workmen’s Compensation Act. But in Manuzon v. ECC, [G.R. No. 88573, June 25, 1990], where the employee died about 4 ½ years after retiring from the service due to a stroke, a cardiovascular accident caused by thrombosis, the Supreme Court, in reversing the denial of the claim by the ECC, ruled that the dependents are entitled to the benefits, although the death occurred after the retirement, because the cause of death, myocardial infarction, is closely related to the cause of his compulsory retirement. In the 2004 case of GSIS v. Cuanang, [G.R. No. 158846, June 3, 2004], where the employee died a year after retirement, the Supreme Court, following the ruling in Manuzon v. ECC, [supra] held that “(i)ndeed, if a death which occurred almost four and one half years after retirement was held to be within the coverage of the death benefits under P.D. 626, as in the Manuzon case, with more reason should a death which occurred within one year after retirement be considered as covered under the same law. A claim for benefit for such death cannot be defeated by the mere fact of separation from service. (Citing Ijares v. CA, G.R. No. 105854, Aug. 26, 1999, 313 SCRA 141). g. Death of a member while under permanent partial disability. Upon the death of a covered member during the period that he/she was receiving permanent partial disability (PPD) benefits, the remainder of his PPD benefits shall be paid to his primary beneficiaries. However, the beneficiaries shall be entitled to the same benefits enjoyed by the beneficiaries of a permanent total disability (PTD) pensioner upon his death, provided that the cause of death was the same illness or injury for which he/she was awarded PPD benefits. h. Additional requisites; proof of marriage. If the employee has been receiving monthly income benefit for permanent total disability at the time of his death, the surviving spouse must show that the marriage has been validly subsisting at the time of his disability. i. Material date to determine the amount of death compensation benefits. It is well-settled that the material date to determine the amount of death compensation benefits is the date of the death of the employee and not the amount provided by law at the time of payment. j. Period of entitlement to death benefit. 1. For primary beneficiaries. The income benefit for primary beneficiaries shall be paid beginning at the month of death and shall continue to be paid for as long as the beneficiaries are entitled thereto.

The monthly income benefit shall be guaranteed for 5 years which in no case shall be less than P15,000.00. Thereafter, the beneficiaries shall be paid the monthly income benefit for as long as they are entitled thereto. This is in accordance with ECC Resolution No. 2799 dated July 25, 1984. 2. For secondary beneficiaries. The income benefit for secondary beneficiaries shall be sixty (60) times the monthly income benefit of a primary beneficiary which in no case shall be less than P15,000.00 which shall likewise be paid as monthly pension per ECC Resolution No. 2799 dated July 25, 1984.84

k. Presumptive death. 1. When death benefits should be paid. Under ECC Board Resolution 93-08-0068 issued on August 5, 1993, payment of death benefits shall be reckoned from the date a worker was declared presumptively dead after he/she had been reported missing for sometime, by proper authority, in accordance with law; except when the declaration of death specified another date, in such a case, payment of death benefits shall start from the latter date. 2. Entitlement to funeral benefits. The beneficiaries shall be entitled to funeral benefits as provided for under the law, even though the body of a missing person had not been recovered and that no burial activities had been undertaken. l. Death benefit, not part of the estate of the deceased. The death benefits being paid under the law are not part of the deceased’s estate. They are not in the nature of inheritance. They are granted by operation of law as financial compensation and aid for the death of the employee. It must be noted that the dependents mentioned in the law are not referred to as the “heirs” but rather as “beneficiaries.” It may be further observed that the dependents are not necessarily the “heirs” of the deceased, as this term is understood in civil law. 3.6. FUNERAL BENEFIT UNDER THE LABOR CODE. a. Entitlement to funeral benefit. A funeral benefit of P3,000.00 shall be paid upon the death of a covered employee or a permanently totally disabled pensioner to one of the following: 1. The surviving spouse; or 2. The legitimate child who spent for the funeral services; or 3. Any other person who can show incontrovertible proof of his having borne the funeral expenses, in accordance with ECC Resolution No. 3682 dated July 21, 1987 and ECC Resolution No. 2799 dated July 25, 1984.

b. Increases in the amount of funeral benefit.

1. By virtue of ECC Resolution No. 3903 [May 1, 1988] passed by the Employees’ Compensation Commission (ECC), the amount of funeral benefit was increased from P3,000.00 as provided in the Labor Code and its implementing rules, to P6,000.00. 2. Subsequently, in 1992, the amount of funeral benefit to private sector employees was increased to P8,000.00 effective May 1, 1992 pursuant to ECC Resolution No. 92-07-0032 dated July 8, 1992. 3. Effective May 1, 1994, the funeral benefit was increased to P10,000.00 for the private sector and P3,000.00 for the public sector. c. Effect of denial of death benefit on entitlement to funeral benefit. The denial of the death benefit being claimed has an adverse effect on the claim for funeral benefit. The Supreme Court in the case of Tolosa v. ECC, [G.R. No. 60509, May 8, 1985, 136 SCRA 335], held that the widow is not entitled to funeral benefit in view of its ruling that she is not entitled to death benefit. 4. DEPENDENCY. a. Dependency, meaning. The term “dependency” does not mean absolute dependency for the necessities of life but rather, that the dependent looked to and relied on the contribution of the claimant, in whole or in part, as a means of supporting and maintaining himself in accordance with his station in life. Under this concept, a person may be considered a dependent although he is able to maintain himself without any assistance from the decedent. (Castillo v. Cadwallader & Gibson Lumber Company, G.R. No. 41267, Sept. 26, 1934). For instance, the legitimate spouse may be gainfully employed himself or herself but he/she is considered a dependent for as long as he/she is living with the deceased employee at the time of the occurrence of death. b. Test of dependency. There is no uniform test to ascertain dependency. What the law imposes is that the dependency relationship should exist at the time of the occurrence of the injury. What would be ordinary necessity and comfort for one person may not necessarily apply to another. However, such factors as standards of living, station in life, the necessity and comfort required and the like, may prove helpful in determining dependency. Total or partial dependency is a question of fact which may be established by appropriate evidence. In Paragatos v. Barredo, [31 O. G. 97], the Supreme Court ruled that based on the evidence presented, the plaintiff-parent was partially dependent upon his son for support, taking into account the circumstances and conditions prevailing in the country where any amount sent by a son to his father who lives in the rural area and who can hardly provide for the needs of his minor children is sufficient evidence of partial dependency.

c. Classification of dependency. Dependency may be classified as follows: 1. As to the amount - partial or total; or 2. As to status - legal or actual. 1. Partial dependency.

A partial dependent is a person who has some means or income of his own and who receives less than all of his support from the employee. If the contributions from the employee enable him to live in accordance with his station in life, without which he could not live in accordance therewith, such person is a partial dependent. 2. Total dependency. A total dependent is one who has no means of support and entirely depends for support upon the contribution from the employee or one who may have an income from other sources but the amount of which is too small and insignificant as would enable him to support himself without the major support from the employee. 3. Legal dependency. Legal dependency proceeds from the mandate or operation of the law, irrespective of the ability of the dependent to support himself. This type of dependency, having been established by operation of law, is conclusive. 4. Actual dependency. Under this type of dependency, the reasonable expectation of continuing support appears to be the general and important criterion to consider. An actual dependent, therefore, is one who looked to the employee for support, partially or wholly. d. Specific dependents under the Labor Code. 1. Dependents provided under the Labor Code. Under the Labor Code, the term “dependent” refers to the following: a. The legitimate, legitimated or legally adopted or acknowledged natural child who is unmarried, not gainfully employed, and not over twenty-one (21) years of age or over twenty-one (21) years of age provided he is incapacitated and incapable of self-support due to a physical or mental defect which is congenital or acquired during minority; b. The legitimate spouse living with the employee; and c. The parents of said employee wholly dependent upon him for regular support. 2. Children as dependents. The children referred to as dependents under the law are: 1. Legitimate children; 2. Legitimated children; 3. Legally-adopted children; and 4. Acknowledged natural children. As a general rule, minor children of the deceased employee are conclusively presumed to be dependents.

As far as children of majority age are concerned, they should prove their dependency in accordance with the requirements of the law. Thus, a child who is over 21 years of age may still be considered dependent if he satisfies the two (2) requirements as follows: i. He is incapacitated; and ii. Incapable of self-support due to a physical or mental defect which is congenital or acquired during minority. Under the old Workmen’s Compensation Act, as amended, stepchildren as well as brothers and sisters of the deceased employee are considered dependents. However, under the Labor Code, reference to them is absent. Therefore, they should no longer be considered as dependents.

As far as illegitimate children are concerned, paragraph [i] of Article 167 of the Labor Code defining the term “dependent” does not mention or make reference to them as dependents. However, paragraph [j] thereof and Section 1 [c], Rule XV of the Amended Rules on Employees’ Compensation treat illegitimate children as secondary beneficiaries. Legally-adopted children, to be considered dependents, must have been judiciallydecreed as such prior to the occurrence of the injury and death of the deceased employee. Without judicial pronouncement on the adoption, as when the child was merely taken into the home and treated as a member of the family, would not be sufficient for purposes of entitlement to the benefits. 3. Legitimate spouse as dependent. At the outset, it bears stressing the fact that, unlike the old Workmen’s Compensation Act where Sections 9 and 10 thereof explicitly made a distinction between “widow” and “widower” in terms of entitlement to benefits, the Labor Code uses the generic term “spouse” which may refer either to a widow (wife) or a widower (husband). In order for the widowed spouse of the deceased employee to be entitled to compensation benefits, the law imposes the following requirements: 1. He/she is a legitimate spouse; and 2. He/she should be living with the deceased employee at the time of death. A widowed spouse is, as a general rule, conclusively presumed to be a dependent when living with the deceased at the time of the latter’s death, irrespective of whether he/she is gainfully employed. The only time when this conclusive presumption does not attach is when the surviving spouse is not the legitimate spouse or is voluntarily living apart from the deceased employee at the time of death. In case there are two (2) wives claiming the benefits under the law, the Workmen’s (now Employees’) Compensation Commission, according to the Supreme Court, is empowered to rule on the issue of who is the legitimate spouse who shall be awarded the benefits. The Commission may act as referee and arbitrator to help the two (2) claimants reach an amicable settlement.

In case the legitimate surviving spouse was living separately from the deceased employee at the time of death, he/she may be treated as dependent if such separation was necessary and justified as when the same was caused by health or business reasons or because of the fault of the deceased spouse. Under these situations, it is believed that the conclusive presumption of dependency should still apply. In Vda. de Makabenta v. Davao Stevedore Terminal Company, [G.R. No. L-27489, April 30, 1970], a marriage celebrated in a hospital where the deceased employee was confined after the fatal accident where he sustained the injury but before his death, was held sufficient for purposes of determining the dependency of the wife. For three (3) months prior to such marriage, they were already living together as common-law husband and wife. 4. Policy on surviving spouse. Under ECC Board Resolution No. 97-09-0500 issued on September 4, 1997, a policy has been enunciated as regards surviving spouse found not to be living with the covered

employee at the time the employee died. Said surviving spouse is entitled to employees' compensation benefits provided that the separation occurred owing to any of the following circumstances: 1. Refusal of the covered employee to continue living with the surviving spouse; or the employee's abandonment of the said spouse, without justifiable or valid cause;

2. Attempt of the covered employee against the life of the surviving spouse, common child/children of the spouse; 3. Commission of an act of sexual abuse against the surviving spouse, common child/children of the spouse; 4. The covered employee's recurrent commission of physical violence, or grossly, abusive conduct, against the surviving spouse, common child/children of the spouse; 5. The covered employee's infliction of physical violence, or imposition of moral duress, to compel the surviving spouse, common child/children or child/children of the spouse to change their religious or political affiliation; 6. Attempt of the covered employee to corrupt or induce the surviving spouse, common child/children or child/children of the spouse to engage in prostitution, or to make them connive with the employee in such an act of corruption or inducement; 7. Drug addiction or habitual alcoholism of the covered employee; 8. Lesbianism or homosexuality of the covered employee;

9. Contraction of bigamous marriages by the covered employee, whether in the Philippines or abroad; 10. Sexual infidelity or perversion of the covered employee; 11. The covered employee's act of allowing the surviving spouse, common child/ children or child/children of the spouse to be subjected to acts of lasciviousness; and 12. The covered employee's contraction of serious sexually transmitted disease extra-maritally. 5. Parents of deceased employee as dependents. In order for the parents of the deceased employee to qualify as dependents, the law simply imposes one (1) requirement, i.e., that they are wholly and not partially, dependent upon the latter for regular support. Living with the deceased employee is not a requirement. The conclusive presumption applicable to the other dependents is not followed in the case of parents. Consequently, the burden of proof is upon such parents to prove dependency. As to what is meant by “regular support,” the law and the implementing rules failed to define or describe it. However, such regularity of support which is certainly a question of fact may be inferred from the peculiar facts of a case.

In Malate Taxicab v. Del Villar, [G.R. No. L-7489, February 29, 1956], the parents were considered dependents despite the substantial income of the father who is an accountant earning P300.00 per month. The test of dependency, according to the High Court, is not merely whether the contributions were necessary to bare subsistence. Dependency may exist although the dependents could have subsisted without the assistance he received, if such contributions were relied on by the claimant for his means of living as determined by his position in life. So, it is immaterial that claimant could have so reduced his living expenses that he could have been supported independently from the earnings of the employee. One need not be actually a part of the deceased employee’s household in order to be a dependent. There may be dependency notwithstanding the fact that the employee did not work steadily or was absent from the home at the time of his accidental death, and notwithstanding the employee’s unlawful acts or his statement in his application for employment that he had no dependents. 5. BENEFICIARIES. a. Beneficiaries, defined. The term “beneficiaries” means the dependent spouse until he/she remarries and dependent children who are the primary beneficiaries. In their absence, the dependent parents and subject to the restrictions imposed on dependent children, the illegitimate children and legitimate descendants, who are the secondary beneficiaries, provided that the dependent acknowledged natural child shall be considered as a primary beneficiary when there are no other dependent children who are qualified and eligible for monthly income benefit.

b. General classification. Beneficiaries under the Labor Code may be classified as follows: 1. Primary; or 2. Secondary. c. Primary beneficiaries. The following beneficiaries shall be considered primary: 1. The legitimate spouse living with the employee at the time of the employee’s death until he/she remarries; and 2. The legitimate, legitimated or legally adopted or acknowledged natural children who are unmarried, not gainfully employed, not over 21 years of age, or over 21 years of age, provided that he is incapacitated and incapable of self-support due to a physical or mental defect which is congenital or acquired during minority. A dependent acknowledged natural child shall be considered as a primary beneficiary only when there are no other dependent children who are qualified and eligible for monthly income benefit. If there are two or more acknowledged natural children, they shall be counted from the youngest and without substitution, but not exceeding five (5). This rule is in accordance with ECC Resolution No. 2799 dated July 25, 1984. d. Secondary beneficiaries. The following beneficiaries shall be considered secondary: 1. The legitimate parents wholly dependent upon the employee for support; 2. The legitimate descendants and illegitimate children who are unmarried, not gainfully employed and over 21 years of age, or over 21 years of age provided that he is incapacitated and incapable of self-support due to a physical or mental defect which is congenital or acquired during minority.

e. When to determine beneficiaries. Beneficiaries shall be determined at the time of the employee’s death. Consequently, although in other jurisdictions, posthumous children who died before the employee’s death are considered as dependents (King v. Peninsulas Portland Cement Co., 216 Mich. 335), however, under the laws of the Philippines, they cannot, as a general rule, be so considered since beneficiaries are determined at the time of the death of the employee. However, in Vda. de Makabenta v. Davao Stevedore Terminal Company, [G.R. No. L27489, April 30, 1970], the daughter born after the death of the employee and, therefore, a posthumous child, was considered a legal dependent of the deceased employee. f. Rule on priority of beneficiaries. 1. Priority of primary beneficiaries; secondary beneficiaries excluded.

Primary beneficiaries have priority claim to death benefits over secondary beneficiaries. Whenever there are primary beneficiaries, no death benefit should be paid to secondary beneficiaries. 2. In the absence of primary beneficiaries, death benefits should be paid to secondary beneficiaries. If the deceased employee has no primary beneficiaries at the time of his death, the death benefits should be paid to his secondary beneficiaries. 3. In the absence of both primary and secondary beneficiaries, death benefits shall accrue to the Employees’ Compensation Fund. If the deceased employee has no primary or secondary beneficiaries at the time of his death, the death benefit shall accrue to the Employees’ Compensation Fund. g. Benefits payable. Primary beneficiaries shall be entitled to a monthly income benefit. In their absence, the secondary beneficiaries shall be entitled to a monthly income benefit not to exceed sixty (60) months and the death benefit shall not be less than P15,000.00 per ECC Resolution No. 2799 dated July 25, 1984. h. Monthly income benefit, how distributed. The ECC passed Resolution No. 90-03-0022 [March 23, 1990] adopting and promulgating the Suppletory Rules to the Amended Rules on Employees’ Compensation. These Suppletory Rules provide for the distribution of monthly income benefits as follows: 1. Monthly income benefits shall be shared equally by all the primary beneficiaries including dependent children who were not considered in the determination of dependent pensions. Upon emancipation or otherwise disqualification to entitlement to the dependent pension of a dependent child, only ten percent (10%) shall be deducted from the benefits and the remaining income benefits shall, once again, be divided equally by the qualified primary beneficiaries.

2. If there are no primary beneficiaries, the secondary beneficiaries shall also share equally in the monthly income benefits. i. Evidence to prove relationship and dependency. A marriage certificate issued by the parish priest who solemnized the marriage between the surviving spouse and the deceased is sufficient to establish marriage relationship. The baptismal certificates and birth certificates of the children are also sufficient evidence to prove the relationship of the dependents with the deceased. Strict observance of the technical rules of evidence is not properly demanded in employees’ compensation cases.