2023 BAR REVIEW Handout No.

5
Labor Law
LAST MINUTE

FUNDAMENTAL PRINCIPLES AND CONCEPTS

1. Do employees in the public service enjoy the right to self-organization?

Yes. However, the concept of the government employees’ right to self-organization differs
significantly from that of employees in the private sector. The right of government employees
to “form, join, or assist employees organizations of their own choosing” is governed by
Executive Order No. 180 (June 1, 1987). According to EO No. 180, the right of government
employees’ to self-organize is not regarded as existing or available for “purposes of collecting
bargaining”, but simply “for the furtherance and protection of their interests.” Section 2, EO
No. 180

2. Can alien employees exercise their right to self-organization and join or assist labor unions
in the Philippines?

Yes. Alien employees with valid working permits issued by the Department may exercise the
right to self-organization and join or assist labor unions for purposes of collective bargaining
if they are nationals of a country which grants the same or similar rights to Filipino workers,
as certified by the Department of Foreign Affairs, or which has ratified either ILO Convention
No. 87 and ILO Convention No. 98. Section 2, Rule II, DOLE DO No. 40, series of 2003, as
amended

3. Define “managerial employees”, “supervisory employees”, and “rank-and-file employees”.

“Managerial employee” is one who is vested with the powers or prerogatives to lay down and
execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge,
assign or discipline employees.

“Supervisory employee” is one who, in the interest of the employer, effectively recommend
such managerial actions if the exercise of such authority is not merely routinary or clerical in
nature but requires the use of independent judgment.

All employees not falling within any of the above definitions are considered “rank-and-file
employees”. Section 219(m), Labor Code of the Philippines

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PRE-EMPLOYMENT

4. Is intentional concealment of a preexisting illness or injury a ground for disqualification for

compensation and benefits under the Philippine Overseas Employment Administration-
Standard Employment Contract (POEA-SEC)?

Yes. While our laws give ample protection to our seafarers, this protection does not condone
fraud and dishonesty. Petitioner cannot feign ignorance and downplay the concealment of
his medical condition. Clearly, petitioner knew that he had a recurring shoulder dislocation.
He never denied this fact. Hence, his disability claim must be denied. Joey Rontos Clemente
v. Status Maritime Corporation, et al., G.R. No. 238933, July 1, 2020

5. What are the elements of Illegal Recruitment in Large Scale?

The essential elements of illegal recruitment in large scale are:

i. that the accused engaged in acts of recruitment and placement of workers as defined
under Article 13(b) of the Labor Code, or in any prohibited activities listed under the
Labor Code;
ii. that he/she had not complied with the guidelines issued by the Secretary of DOLE with
respect to the requirement to secure a license or authority to recruit and deploy
workers; and
iii. hat she committed the unlawful acts against three (3) or more persons. People v.
Avelina Manalang, G.R. No. 198015, January 20, 2021

6. What is the nature of liability of the local recruitment agency and foreign employer?

The liability of the principal/employer and the recruitment/placement agency on any and all
claims [under this Rule] shall be joint and solidary. This liability shall be incorporated in the
contract for overseas employment and shall be a condition precedent for its approval. The
performance bond to be filed by the recruitment/placement agency, as provided by law, shall
be answerable for all money claims or damages that may be awarded to the workers. Section
60, RA No. 8042

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7. When is a discriminatory act on account of age justified under RA No. 10911?

It shall not be unlawful for an employer to set age limitations in employment if:

a) Age is a bona fide occupational qualification reasonably necessary in the normal

operation of a particular business or where the differentiation is based on reasonable
factors other than age;

b) The intent is to observe the terms of a bona fide seniority system that is not intended
to evade the purpose of this Act;

c) The intent is to observe the terms of a bona fide employee retirement or a voluntary
early retirement plan consistent with the purpose of this Act: Provided, That such
retirement or voluntary retirement plan is in accordance with the Labor Code, as
amended, and other related laws; or

d) The action is duly certified by the Secretary of Labor and Employment in accordance
with the purpose of this Act. Section 6, R.A. 10911

8. May a disabled person be hired as an apprentice? If so, what is the rule for such
employment?

Yes. Subject to the provision of the Labor Code as amended, disabled persons shall be eligible
as apprentices or learners; Provided, That their handicap is not much as to effectively impede
the performance of job operations in the particular occupation for which they are hired;
Provided, further, That after the lapse of the period of apprenticeship if found satisfactory in
the job performance, they shall be eligible for employment. Section 7, R.A. 7277

9. What is the rule as regards work schedule of solo parents?

The employer shall provide for a flexible working schedule for solo parents: Provided, That
the same shall not affect individual and company productivity: Provided, further, That any
employer may request exemption from the above requirements from the DOLE on certain
meritorious grounds. Section 6, R.A. 8972

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EMPLOYMENT PROPER

10. Explain “bona fide occupational qualification”.

Employment in particular jobs may not be limited to persons of a particular sex, religion, or
national origin unless the employer can show that sex, religion, or national origin is an actual
qualification for performing the job. The qualification is called a bona fide occupational
qualification (BFOQ). Armando Yrasuegui v. Philippine Airlines, Inc., G.R. No. 168081,
October 17, 2008

11. What is “wage distortion”?

“Wage distortion” shall mean a situation where an increase in prescribed wage rates results
in the elimination or severe contraction of intentional quantitative differences in wage or
salary rates between and among employee groups in an establishment as to effectively
obliterate the distinctions embodied in such wage structure based on skills, length of service,
or other logical bases of differentiation. Art. 124, Labor Code

12. When is there diminution of benefits?

There is diminution of benefits when the following are present:

i. the grant or benefit is founded on a policy or has ripened into a practice over a long
period of time;
ii. the practice is consistent and deliberate;
iii. the practice is not due to error in the construction or application of a doubtful or
difficult question of law; and
iv. the diminution or discontinuance is done unilaterally by the employer. Colegio San
Agustin-Bacolod vs. Melinda M. Montaño, G.R. No. 212333, March 28, 2022

13. Can the maternity leave credits be allocated to the child’s father?

Yes. Any female worker entitled to maternity leave benefits as provided for herein may, at
her option, allocate up to seven (7) days of said benefits to the child’s father, whether or not
the same is married to the female worker: Provided, That in the death, absence, or incapacity
of the former, the benefit may be allocated to an alternate caregiver who may be a relative
within the fourth degree of consanguinity or the current partner of the female worker sharing

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the same household, upon the election of the mother taking into account the best interests
of the child: Provided, further, That written notice thereof is provided to the employers of
the female worker and alternate caregiver: Provided, furthermore, That this benefit is over
and above that which is provided under Republic Act No. 8187, or the "Paternity Leave Act of
1996": Provided, finally, That in the event the beneficiary female worker dies or is
permanently incapacitated, the balance of her maternity leave benefits shall accrue to the
father of the child or to a qualified caregiver as provided above. Section 3, RA No. 11210

14. What is retirement under RA No. 7699 (Portability Law)?

Under RA 7699, otherwise known as the Portability Law, government retirees who do not
meet the required number of years provided under PD 1146 and RA 8291 may still avail
themselves of retirement and other benefits.

Under this law, retirees may combine their years of service in the private sector represented
by contributions to the Social Security System (SSS) with their government service and
contributions to the GSIS to satisfy the required years of service under PD 1146 and RA 8291.

However, if retirees have already satisfied the required years of service under the GSIS
retirement option they have chosen, they would not be allowed to incorporate their
contributions to the SSS anymore for availment of additional benefits.

In case of death, disability and old age, the periods of creditable services or contributions to
the SSS and GSIS shall be added to entitle retirees to receive the benefits under either PD
1146 or RA 8291.

If qualified under RA 8291, all the benefits shall apply EXCEPT the cash payment. The
Portability Law provides that only benefits common to both Systems (GSIS and SSS) shall be
paid. Cash payment is NOT included in the benefits provided by the SSS. GSIS Website
https://www.gsis.gov.ph/active-members/benefits/retirement/portability-law-ra-7699/

15. What is a “union security clause”?

Union security is a generic term, which is applied to and comprehends ‘closed shop,’ ‘union
shop,’ ‘maintenance of membership,’ or any other form of agreement which imposes upon
employees the obligation to acquire or retain union membership as a condition affecting
employment.

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There is union shop when all new regular employees are required to join the union within a
certain period as a condition for their continued employment. There is maintenance of
membership shop when employees, who are union members as of the effective date of the
agreement, or who thereafter become members, must maintain union membership as a
condition for continued employment until they are promoted or transferred out of the
bargaining unit, or the agreement is terminated. A closed shop, on the other hand, may be
defined as an enterprise in which, by agreement between the employer and his employees
or their representatives, no person may be employed in any or certain agreed departments
of the enterprise unless he or she is, becomes, and, for the duration of the agreement,
remains a member in good standing of a union entirely comprised of or of which the
employees in interest are a part. Ergonomic Systems Philippines, Inc. vs. Emerito C. Enaje, et
al., G.R. No. 195163, December 13, 2017

16. When may an employer invoke the “no strike, no lockout” provision in the CBA?

A “no strike, no lockout” provision in the Collective Bargaining Agreement (CBA) “may only
be invoked by an employer when the strike is economic in nature or one which is conducted
to force wage or other agreements from the employer that are not mandated to be granted
by law. It is not applicable when the strike is grounded on unfair labor practice. Guagua
National Colleges vs. Guagua National Colleges Faculty Labor Union, G.R. No. 204693, July
13, 2016

17. What constitutes “unfair labor practice” by a labor organization?

It is an unfair labor practice for a labor organization to “cause or attempt to cause an

employer to discriminate against an employee, including discrimination against an employee
with respect to whom membership in such organization has been denied or to terminate an
employee on any ground other than the usual terms and conditions under which membership
or continuation of membership is made available to other members.” United Polyresins, Inc.,
et al. vs. Marcelino Pinuela, G.R. No. 209555, July 31, 2017

18. When can an employee and officers of a union be terminated due to conduct of illegal
strike?

For union members, what is required is that they knowing participated in the commission of
illegal acts during the strike for there to be sufficient ground for termination of employment.
For union officers, however, it suffices that they knowingly participated in an illegal strike. In
other words, the services of an ordinary union member cannot be terminated for mere

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participation in an illegal strike; proof must be adduced showing that he or she committed
illegal acts during the strike. A union officer, on the other hand, may be dismissed, not only
when he actually commits an illegal act during a strike, but also if he knowingly participates
in an illegal strike. Ergonomic Systems Philippines, Inc. vs. Enaje, G.R. No. 195163, December
13, 2017

19. When can the Secretary of DOLE assume jurisdiction over a labor dispute, and what are the
effects thereof?

Article 263(g) [now Article 278] of the Labor Code, provides the conditions for, and the effects
of, the Department of Labor and Employment (DOLE) Secretary’s assumption of jurisdiction
over a dispute.

The powers given to the DOLE Secretary under Article 263(g) is an exercise of police power
with the aim of promoting public good. In fact, the scope of the powers is limited to an
industry indispensable to the national interest as determined by the DOLE Secretary.

Industries that are indispensable to the national interest are those essential industries such
as the generation or distribution of energy, or those undertaken by banks, hospitals, and
export-oriented industries. And following Article 263(g), the effects of the assumption of
jurisdiction are the following: (a) the enjoining of an impending strike or lockout or its lifting;
and (b) an order for the workers to return to work immediately and for the employer to
readmit all workers under the same terms and conditions prevailing before the strike or
lockout, or the return-to-work order. San Fernando Coca-Cola Rank-and-File Union
(SACORU) vs. Coca-Cola Bottlers Philippines, Inc., G.R. No. 200499, October 4, 2017

20. What is a “return-to-work order”?

A return-to-work order is issued by the Secretary of Labor and Employment when he or she
assumes jurisdiction over a labor dispute in an industry that is considered indispensable to
the national interest. Article 278(g) of the Labor Code provides that the assumption and
certification of the Secretary of Labor and Employment shall automatically enjoin the
intended or impending strike. When a strike has already taken place at the time the Secretary
of Labor and Employment assumes jurisdiction over the labor dispute, all striking employees
shall immediately return to work. Moreover, the employer shall immediately resume
operations, and readmit all workers under the same terms and conditions prevailing before
the strike. Manggagawa ng Komunikasyon sa Pilipinas vs. Philippine Long Distance
Telephone Company, Inc., G.R. Nos. 190389 & 190390, April 19, 2017

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21. What is Telecommuting Program under Republic Act No. 11165?

An employer in private sector may offer a telecommuting program to its employees on a

voluntary bases, and upon such terms and conditions as they may mutually agree upon:
Provided, That such terms and conditions shall not be less than the minimum labor standards
set by law, and shall include compensable work hours, minimum number of work hours,
overtime, rest days, and entitlement to leave benefits. In all cases, the employer shall provide
the telecommuting employee with relevant written information in order to adequately
apprise the individual of the terms and conditions of the telecommuting program, and the
responsibilities of employee. Section 4, R.A. No. 11165

POST-EMPLOYMENT

22. What is the “four-fold test” in determining the existence of employer-employee

relationship?

The four (4)-fold test used in determining the existence of employer-employee relationship
involves an inquiry into:

a) the selection and engagement of the employee;

b) the payment of wages;
c) the power of dismissal; and
d) the employer’s power to control the employee with respect to the means and method
by which the work is to be accomplished. Maria Lea Jane I. Gesolgon, et al. v.
Cyberone PH, Inc., et al., G.R. No. 210741, October 14, 2020

23. How is the employment status of a person defined?

The employment status of a person is defined and prescribed by law and not by what the
parties say it should be.

Equally important to consider is that a contract of employment is impressed with public

interest such that labor contracts must yield to the common good. Thus, provisions of
applicable statutes are deemed written into the contract, and the parties are never at liberty
to insulate themselves and their relationships from the impact of labor laws and regulations
by simply entering into contracts with each other. Innodata Knowledge Services, Inc. vs.
Socorro D’Marie T. Inting, et al., G.R. No. 211892, December 6, 2017

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24. Can a contractor, despite proof of substantial capital, may still be deemed as engaged in
labor-only contracting?

Yes. In most cases, despite proof of substantial capital, the Supreme Court (SC) declared a
contractor as a labor-only contractor whenever it is established that the principal — not the
alleged legitimate contractor — actually controls the manner of the employees’ work.

The element of control was defined under DOLE DO No. 18-02 as: The “right to control” shall
refer to the right reserved to the person for whom the services of the contractual workers
are performed, to determine not only the end to be achieved, but also the manner and means
to be used in reaching that end.

In other words, the contractor should undertake the performance of the services under its
contract according to its own manner and method, free from the control and supervision of
the principal. Otherwise, the contractor is deemed an illegitimate or labor-only contractor.
The control over the employees’ performance of the work is, as the Court ruled in some cases,
usually manifested through the power to hire, fire, and pay the contractor’s employees, the
power to discipline the employees and impose the corresponding penalty, and more
importantly, the actual supervision of the employees’ performance. San Miguel Foods, Inc.
vs. Hannival V. Rivera, et al., G.R. No. 220103, January 31, 2018

25. What is the nature of the liability of the principal and contractor found guilty of labor-only
contracting?

In the event of violation of any provision of the Labor Code, including the failure to pay wages,
there exists a solidary liability on the part of the principal and the contractor for purposes of
enforcing the provisions of the Labor Code and other social legislations, to the extent of the
work performed under the employment contract. Section 9, DOLE DO No. 174, s. 2017

26. Distinguish regular from project employees?

An employment is generally deemed regular where: (i) the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade of
the employer, subject to exceptions, such as when one is a fixed, project or seasonal
employee; or (ii) the employee has been engaged for at least a year, with respect to the
activity he or she is hired, and the employment of such employee remains while such activity
exists.

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On the other hand, a project employee "is one whose employment has been fixed for a
specific project or undertaking, the completion or termination of which has been determined
at the time of the engagement of the employee." Thus, the "services of project-based
employees are co-terminous with the project and may be terminated upon the end or
completion of the project or a phase thereof for which they were hired."

Generally, length of service is a measure to determine whether or not an employee who was
initially hired on a temporary basis has attained the status of a regular employee who is
entitled to security of tenure. However, such measure may not necessarily be applicable in a
construction industry since construction firms cannot guarantee continuous employment of
their workers after the completion stage of a project. In addition, a project employee's work
may or may not be usually necessary or desirable in the usual business or trade of the
employer. Thus, the fact that a project employee's work is usually necessary and desirable in
the business operation of his/her employer does not necessarily impair the validity of the
project employment contract which specifically stipulates a fixed duration of employment.

In Lopez v. Irvine Construction Corp., it was held that "the principal test for determining
whether particular employees are properly characterized as 'project employees[,]' as
distinguished from 'regular employees,' is whether or not the 'project employees' were
assigned to carry out a 'specific project or undertaking,' the duration and scope of which were
specified at the time the employees were engaged for that project."

In the instant case, in order to ascertain whether respondents were project employees, as
claimed by ECCA, it is essential to determine whether notice was given to them that they
were being engaged just for a specific project, which notice must be made at the time of
hiring. Engineering & Construction Corporation of Asia v. Palle, G.R. No. 201247, July 13,
2020

27. What is a fixed-term employee?

A fixed-term employment, while not expressly mentioned in the Labor Code, has been
recognized by this Court as a type of employment "embodied in a contract specifying that the
services of the employee shall be engaged only for a definite period, the termination of which
occurs upon the expiration of said period irrespective of the existence of just cause and
regardless of the activity the employee is called upon to perform."

Along the same lines, it has been held that "[t]he fixed-term character of employment
essentially refers to the period agreed upon between the employer and the employee."
Accordingly, "the decisive determinant in term employment should not be the activities that
the employee is called upon to perform, but the day certain agreed upon by the parties for

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the commencement and termination of their employment relationship. Specification of the

date of termination is significant because an employee's employment shall cease upon
termination date without need of notice.

In other words, a fixed-term employment contract which otherwise fails to specify the date
of effectivity and the date of expiration of an employee's engagement cannot, by virtue of
jurisprudential pronouncement, be regarded as such despite its nomenclature or
classification given by the parties. The employment contract may provide for or describe
some other classification or type of employment depending on the circumstances, but it is
not, properly speaking, a fixed-term employment contract. Regala v. Manila Hotel Corp.,
G.R. No. 204684, October 5, 2020

28. When does a private school teacher acquire a permanent status of employment?

According to the Manual of Regulations for Private Schools, before a private school teacher
acquires permanent status, the following requisites must first be met:

i. The teacher serves full--time;

ii. he/she must have rendered three consecutive years of service; and
iii. such service must have been satisfactory.

Only a full-time teaching personnel can acquire regular or permanent status. A part-time
teacher cannot acquire permanent status. Arlene Palgan vs. Holy Name University and/or
Fr. Francisco Estepa, SVD, G.R. No. 219916, February 10, 2021

29. What are the causes for termination of employment by the employer?

Under the Labor Code, an employee may be terminated for just or authorized cause.

Just causes refer to those instances enumerated under Article 297 (Termination by Employer)
of the Labor Code, as amended. These are causes directly attributable to the fault or
negligence of the employee. (Section 4(b), DOLE DO No. 147-15, series of 2015)

Authorized causes refer to those instances enumerated under Articles 298 (Closure of
Establishment and Reduction of Personnel) and 299 (Disease as a Ground for Termination) of
the Labor Code, as amended. These are causes brought by the necessity and exigencies of
business, changing economic conditions and illness of the employee. (Section 4(a), Ibid.)

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30. What are the just causes of termination of employment by the employer?

Article 297. Termination by Employer. An employer may terminate an employment for any of
the following causes:

a) Serious misconduct or willful disobedience by the employee of the lawful orders of

his employer or representative in connection with his work;
b) Gross and habitual neglect by the employee of his duties;
c) Fraud or willful breach by the employee of the trust reposed in him by his employer
or duly authorized representative;
d) Commission of a crime or offense by the employee against the person of his employer
or any immediate member of his family or his duly authorized representatives; and
e) Other causes analogous to the foregoing.

31. What are the requisites of a valid dismissal?

Since dismissal is the ultimate penalty that can be meted to an employee, the requisites for
a valid dismissal from employment must always be met, namely: (1) it must be for a just or
authorized cause; and (2) the employee must be afforded due process, meaning he is notified
of the cause of his dismissal and given an adequate opportunity to be heard and to defend
himself. Innodata Knowledge Services, Inc. vs. Socorro D’Marie T. Inting, et al., G.R. No.
211892, December 6, 2017

32. Define “substantive due process” and “procedural due process” in termination of
employment.

Substantive due process pertains to the just and authorized causes for dismissal as provided
under Articles 297, 298, and 299 of the Labor Code.

Procedural due process pertains to the twin requirements of notice and hearing, as explained
by the Court in Noblado v. Alfonso, 775 SCRA 178 (2015): The employer must furnish the
employee with two written notices (twin-notice rule) before the termination of employment
can be effected: (1) the first notice apprises the employee of the particular acts or omissions
for which his dismissal is sought; and (2) the second notice informs the employee of the
employer’s decision to dismiss him. Before the issuance of the second notice, the
requirement of a hearing must be complied with by giving the worker an opportunity to be
heard. It is not necessary that an actual hearing be conducted. Daguinod v. Southgate Foods,
Inc., G.R. No. 227795, February 20, 2019

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33. When can an employee’s disease/illness be a valid ground for termination of his/her
employment?

For a dismissal on the ground of disease to be considered valid, two requisites must concur:

i. the employee suffers from a disease which cannot be cured within six months and
his/her continued employment is prohibited by law or prejudicial to his/her health or
to the health of his/her co-employees, and
ii. a certification to that effect must be issued by a competent public health authority.
Omanfil International Manpower Development Corporation vs. Rolando B. Mesina,
G.R. No. 217169, November 4, 2020

34. Explain the “Doctrine of Strained Relations”.

Under the doctrine of strained relations, the payment of separation pay is considered an
acceptable alternative to reinstatement when the latter option is no longer desirable or
viable. The doctrine of strained relations should not be used recklessly or applied loosely nor
be based on impression alone. Thus, it is the task of labor tribunals and the appellate courts
to resolve whether the employee be reinstated or granted separation pay. Sheryll R. Cabañas
vs. Abelardo G. Luzano Law Office/Abelardo G. Luzano, G.R. No. 225803, July 2, 2018

35. When is employment deemed not terminated despite cessation of work?

The bona fide suspension of the operation of a business or undertaking for a period not
exceeding six (6) months, or the fulfillment by the employee of a military or civic duty shall
not terminate employment. In all such cases, the employer shall reinstate the employee to
his former position without loss of seniority rights if he indicates his desire to resume his work
not later than one (1) month from the resumption of operations of his employer or from his
relief from the military or civic duty. Article 301, Labor Code

36. When is there “constructive dismissal”?

Constructive dismissal arises “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.” In such cases, the impossibility, unreasonableness, or unlikelihood of
continued employment leaves an employee with no other viable recourse but to terminate

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his or her employment. St. Paul College, Pasig vs. Anna Liza L. Mancol, G.R. No. 222317,
January 24, 2018

37. Distinguish “backwages” from “separation pay”.

Reinstatement and backwages are two separate reliefs available to an illegally dismissed
employee. Payment of backwages is a form of relief that restores the income that was lost by
reason of unlawful dismissal. Separation pay, on the other hand, is oriented towards the
immediate future, the transitional period the dismissed employee must undergo before
locating a replacement job. BDO Unibank, Inc. v. Nerbes, G.R. No. 208735, July 19, 2017

38. Can the employer and employee fix a retirement age different from what is provided for
under the Labor Code?

Yes. By its express language, the Labor Code permits employers and employees to fix the
applicable retirement age at below sixty (60) years. Under Article 287 (Article 302), the
retirement age is primarily determined by the existing agreement or employment contract.
By its express language, the Labor Code permits employers and employees to fix the
applicable retirement age at below 60 years. Absent such an agreement, the retirement age
shall be that fixed by law, and the above cited law mandates that the compulsory retirement
age is 65 years, while the minimum age for optional retirement is set at 60 years. Manila
Hotel Corporation vs. Rosita De Leon, G.R. No. 219774, July 23, 2018

JURISDICTION AND REMEDIES

39. Are labor tribunals bound by the technical rules of evidence?

No. Article 227 of the Labor Code provides that labor tribunals are not bound by technical
rules of evidence and they may use all reasonable means to ascertain the facts of the case
without regard to technicalities of law and procedure. Joey Rontos Clemente v. Status
Maritime Corporation, et al., G.R. No. 238933, July 1, 2020

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