[Terms defined under the Labor Code of the Philippines (Presidential Decree No. 442), related laws and issuances, implementing rules and regulations, and jurisprudence. New terms will be added from time to time.]
Alternative workplace
A location other than the regular workplace. [DO 202, s. 219; See Primer on the Telecommuting]
Ample opportunity to be heard
Any meaningful opportunity (verbal or written) given to the employee to answer the charges against him/her and submit evidence in support of his/her defense, whether in a hearing, conference or some other fair, just and reasonable way. It is a requirement of procedural due process in termination proceedings based on just causes. [DO 147-15; See Procedural due process in employment termination]
Apprentice
A person undergoing training for an approved apprenticeable occupation during an established period assured by an apprenticeship agreement. [RA 7796, Sec. 4(k), superseding Art. 58 of the Labor Code]
Apprenticeship
Training within employment with compulsory related theoretical instructions involving a contract between an apprentice and an employer on an approved apprenticeable occupation. [RA 7796, Sec. 4(j), superseding Art. 58 of the Labor Code]
Apprenticeable occupation
An occupation officially endorsed by a tripartite body and approved for apprenticeship by TESDA. [RA 7796, Sec. 4(m),]
Apprenticeship agreement
A contract wherein a prospective employer binds himself to train the apprentice who in turn accepts the terms of training for a recognized apprenticeable occupation emphasizing the rights, duties and responsibilities of each party. [RA 7796, Sec. 4(l), superseding Art. 58 of the Labor Code]
Auxiliary aids and services
Include: (1) qualified interpreters or other effective methods of delivering materials to individuals with hearing impairments; (2) qualified readers, taped tests, or other effective methods of delivering materials to individuals with visual impairments; (3) acquisition or modification of equipment or devices; and (4) other similar services and actions or all types of aids and services that facilitate the learning process of people with mental disability. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(g)]
Authorized causes
These are causes for termination of employment brought by the necessity and exigencies of business, changing economic conditions and illness of the employee. The authorized causes, provided in Articles 298 [Closure of Establishment and Reduction of Personnel] and 299 [Disease as a Ground for Termination] of the Labor Code, as amended, are: Installation of labor-saving devices; Redundancy; Retrenchment or downsizing; Closure or cessation of operation; and Disease. [DO 147-15, Sec. 4(a)]
Auxiliary social services
The supportive activities in the delivery of social services to the marginalized sectors of society. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(j)]
Bargaining representative
A legitimate labor organization whether or not employed by the employer. [Labor Code, Art. 219(j)]
Bond
The bond under Article 108 of the Labor Code that the principal may require from the contractor to be posted equal to the cost of labor under contract. [D.O. 174, Sec. 3(a); See Legitimate Contracting]
Burden of proof
The duty of a party to present evidence on the facts in issue necessary to establish his claim or defense by the amount of evidence required by law. For labor cases, the “amount of evidence” is substantial evidence. [Abbott Laboratories (Philippines), Inc. vs. Torralba, G.R. No. 229746, 11 October 2017; See Framework of employment termination]
Bystander Rule
The employer’s role in a certification election is that of a mere by-stander, as the choice of a collective bargaining agent is the sole concern of the employees. The employer has no legal standing in a certification election as it cannot oppose the petition or appeal the orders related thereto. [See By-stander rule in certification elections]
Cabo
The person or group of persons or to a labor group which, under the guise of a labor organization, cooperative or any entity, supplies workers to an employer, with or without any monetary or other consideration, whether in the capacity of an agent of the employer or as an ostensible independent contractor. [D.O. 174, Sec. 3(b); See Prohibited Labor-only Contracting]
Closed-shop agreement
An agreement whereby an employer binds himself to hire only members of the contracting union who must continue to remain members in good standing to keep their jobs. [National Labor Union vs. Aguinaldo’s Echague, Inc., 97 Phil. 184]
Closure or cessation of business
The complete or partial cessation of the operations and/or shut-down of the establishment of the employer. [See Retrenchment and Separation pay in case of closure of business; DO 147-15, Sec. 4(c)]
Commerce
Shall be taken to mean as travel, trade, traffic, commerce, transportation, or communication among the provinces or between any foreign country or any territory or possession and any province. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(p)]
Commission of a crime or offense
An offense by the employee against the person of his/her employer or any member of his/her family or his/her authorized representative. It is a just cause for termination.[DO 147-15; See Commission of crime/offense as ground for termination]
Company union
Any labor organization whose formation, function or administration has been assisted by any act defined as unfair labor practice by the Labor Code. [Labor Code, Art. 219(i)]
Contracting
Contracting or subcontracting refers to an arrangement whereby a principal agrees to farm out to a contractor the performance or completion of a specific job or work within a definite or predetermined period, regardless of whether such job or work is to be performed or completed within or outside the premises of the principal. [D.O. 174, Sec. 3(c); See Legitimate Contracting, Prohibited Labor-only Contracting]
Contractor
Any person or entity engaged in a legitimate contracting or subcontracting agreement providing services for a specific job or undertaking farmed out by principal under a Service Agreement. [D.O. 174, Sec. 3(d); See Legitimate Contracting]
Contractor’s employee
An employee of the contractor hired to perform or complete a job or work farmed out by the principal pursuant to a Service Agreement with the latter. [D.O. 174, Sec. 3(e); See Legitimate Contracting]
Control test
Commonly regarded as the most crucial and determinative indicator of the presence or absence of an employer-employee relationship under the four-fold test. Under the control test, an employer-employee relationship exists where the person for whom the services are performed reserves the right to control not only the end achieved, but also the manner and means used to achieve that end. [DO 147-15, Sec. 3; David vs. Macasio, G.R. No. 1954661, 2 July 2014]
Covered entity
An employer, employment agency, labor organization or joint- labor management committee. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(o)]
Disability
Means: (1) a physical or mental impairment that substantially limits one or more psychological, physiological or anatomical function of an individual or activities of such individual; (2) a record of such an impairment; or (3) being regarded as having such an impairment. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(c)]
Disabled persons
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. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(a); See effect of definition to Labor Code’s Handicapped workers]
Doctrine of management prerogative
Every employer has the inherent right to regulate, according to his own discretion and judgment, all aspects of employment, including hiring, work assignments, working methods, the time, place and manner of work, work supervision, transfer of employees, lay-off of workers, and discipline, dismissal, and recall of employees. The only limitations to the exercise of this prerogative are those imposed by labor laws and the principles of equity and substantial justice. In the context of balancing of interests between capital and labor, this balances the employees’ Security of tenure. [Peckson vs. Robinsons Supermarket Corp., G.R. No. 198534, 3 July 2013]
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. [See Separation pay in employment termination]
Downsizing
See Retrenchment.
Dual system/training
A delivery of quality technical and vocational education which requires training to be carried out alternatively in two venues: In school and in the production plant. In-school training provides the trainee the theoretical foundation, basic training, guidance and human formation, while in-plant training develops his skills and proficiency in actual work conditions as it continues to inculcate personal discipline and work values. [RA 7796, Sec. 4(p)]
Employee
Any person in the employee of an employer. It shall include any individual whose work has ceased as a result of or in connection with any current labor dispute or because of any unfair labor practice (DO 147-15).
Employer
Any person, natural or juridical, employing the services of the employee (Labor Code, Art. 173). Any person acting in the interest of an employer, directly or indirectly. It shall include corporation, partnership, sole proprietorship and cooperative. [DO 147-15]. The term shall not include any labor organization or any of its officers or agents except when acting as employer (Labor Code, Art. 219(e)).
Entrepreneurship
Training for self-employment or assisting individual or small industries within the purview of Title I of Book Two, Labor Code. [Labor Code, Art. 44]
Four-fold test
Factors considered to ascertain the existence of an employer-employee relationship, to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the employee’s conduct, or the so-called “control test.” [DO 147-15, Sec. 3]
Fraud
Any act, omission, or concealment which involves a breach of legal duty, trust or confidence justly reposed, and is injurious to another. It is a just cause for termination. [DO 147-15; See Fraud as ground for employment termination]
Gross neglect
The absence of that diligence that an ordinary prudent man would use in his/her own affairs. [DO 147-15; See Gross and habitual neglect in employment termination]
Habitual neglect
Repeated failure to perform one’s duties over a period of time, depending upon the circumstances. It is a just cause for termination. [DO 147-15; See Gross and habitual neglect in employment termination]
Handicap
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. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(d)]
Handicapped workers
Those whose earning capacity is impaired by age or physical or mental deficiency or injury. [Labor Code, Art. 44; see also Disabled persons]
Impairment
Any loss, diminution or aberration of psychological, physiological, or anatomical structure or function. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(b)]
In-house agency
A contractor which is owned, managed, or controlled directly or indirectly by the principal or one where the principal owns/represents any share of stock, and which operates solely or mainly for the principal. [D.O. 174, Sec. 3(f); See , Prohibited Labor-only Contracting]
In-house cooperative
A cooperative which is managed, or controlled directly or indirectly by the principal or one where the principal or any of its officers owns/represents any equity or interest, and which operates solely or mainly for the principal. [D.O. 174, Sec. 3(f); See Prohibited Labor-only Contracting]
Insubordination
The refusal to obey some order, which a superior is entitled to give and have obeyed. It is a willful or intentional disregard of the lawful and reasonable instructions of the employer. It is a just cause for termination. [DO 147-15; See Willful disobedience in employment termination]
Internal union dispute
Includes all disputes or grievances arising from any violation of or disagreement over any provision of the constitution and by laws of a union, including any violation of the rights and conditions of union membership provided for in the Labor Code. [Labor Code, Art. 219(q)]
Installation of labor-saving devices
The reduction of the number of workers in any workplace made necessary by the introduction of labor-saving machinery or devices. This is one of the authorized causes. [DO 147-15; See Installation of labor-saving devices in employment termination]
Just causes
Causes for termination of employment that are directly attributable to the fault or negligence of the employee. The just causes, enumerated under Article 297 [Termination by Employer] of the Labor Code, as amended, are: Serious misconduct; Willful disobedience or insubordination; Gross and habitual neglect of duties; Fraud; Loss of trust and confidence; Commission of crime or offense; and Analogous cases. [DO 147-15
Labor dispute
Includes any controversy or matter concerning terms and conditions of employment or the association or representation of persons in negotiating, fixing, maintaining, changing or arranging the terms and conditions of employment, regardless of whether the disputants stand in the proximate relation of employer and employee. [Labor Code, Art. 219(l)]
Labor-only contracting
An arrangement where the contractor or subcontractor merely recruits, supplies or places workers to perform a job or work for a principal. [D.O. 174, Sec. 3(h); See Prohibited Labor-only Contracting]
Labor organization
Any union or association of employees which exists in whole or in part for the purpose of collective bargaining or of dealing with employers concerning terms and conditions of employment. [Labor Code, Art. 219(g); See Legitimate labor organization]
Last-in, first-out rule
When there are two or more employees occupying the same position in the company affected by installation of labor-saving devices, redundancy and retrenchment, the last one employed will be the first to go. ([DO 147-15]
Learners
Persons hired as trainees in semi-skilled and other industrial occupations which are non-apprenticeable. Learnership programs must be approved by TESDA. [RA 7796, Sec. 4(n)]
Legitimate labor organization
Any labor organization duly registered with the Department of Labor and Employment, and includes any branch or local thereof. [Labor Code, Art. 219(h)]
Levy grant system
A legal contribution from participating employers who would be beneficiaries of the program (often as a percentage of the payroll) which is subsequently turned over or rebated to enterprises offering employee training programs. [RA 7796, Sec. 4(q)]
Lockout
Any temporary refusal of an employer to furnish work as a result of an industrial or labor dispute. [Labor Code, Art. 219(p)]
Loss of confidence
A condition arising from fraud or willful breach of trust by employee of the trust reposed in him/her employer or his/her duly authorized representative. [DO 147-15; See Loss of trust and confidence in employment termination]
Managerial employees
Those 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. [Labor Code, Art. 219(e); See Supervisory employees and Rank-and-file employees]
Manpower
That portion of the nation’s population which has actual or potential capability to contribute directly to the production of goods and services. [Labor Code, Art. 44]
Marginalized disabled persons
Disabled persons who lack access to rehabilitative services and opportunities to be able to participate fully in socioeconomic activities and who have no means of livelihood and whose incomes fall below the poverty threshold. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(k)]
Market-driven strategy
See User-led strategy.
Middle-level manpower
Refers to those: (a) who have acquired practical skills and knowledge through formal or non-formal education and training equivalent to at least a secondary education but preferably a post-secondary education with a corresponding degree or diploma; or (b) skilled workers who have become highly competent in their trade or craft as attested by industry. [RA 7796, Sec. 4(e)]
Misconduct
The transgression of some established and definite rule or action, a forbidden act, a dereliction of duty, willful in character and implies wrongful intent and not mere error in judgment. Serious misconduct is a just cause for employment termination. [DO 147-15; See Serious misconduct as ground for dismissal]
Night worker
Any employed person whose work requires performance of a substantial number of hours of night work which exceeds a specified limit. This limit shall be fixed by the Secretary of Labor after consulting the workers’ representatives/labor organizations and employers (Labor Code, Art. 154). A night worker is any employed person whose work covers the period from 10 o’clock in the evening to 6 o’clock the following morning provided that the worker performs no less than seven (7) consecutive hours of work (DOLE D.O. No. 119).
Principal
Any natural or juridical entity, whether an employer or not, who puts out or farms out a job or work to a contractor. [D.O. 174, Sec. 3(h); See Legitimate Contracting]
Private enterprises
An economic system under which property of all kinds can be privately owned and in which individuals, alone or in association with another, can embark on a business activity. This includes industrial, agricultural, or agro-industrial establishments engaged in the production, manufacturing, processing, repacking or assembly of goods including service-oriented enterprises. [RA 7796, Sec. 4(f)]
Procedural due process
The requirement that an employer must observe the requirement of twin-notice rule and provide the employee with ample opportunity to be heard, before a dismissal can be effected. [See Due process in employment termination proceedings]
Public transportation
Transportation by air, land and sea that provides the public with general or special service on a regular and continuing basis. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(n)]
Qualified individual with a disability
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. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(l)]
Rank-and-file employees
All employees not classified as Managerial employees or Supervisory employees. [Labor Code, Art. 219(m)]
Readily achievable
A goal can be easily attained and carried out without much difficulty or expense. In determining whether an action is readily achievable, factors to be considered include: (1) the nature and cost of the action; (2) the overall financial resources of the facility or facilities involved in the action; the number of persons employed at such facility; the effect on expenses and resources, or the impact otherwise of such action upon the operation of the facility; (3) the overall financial resources of the covered entity with respect to the number of its employees; the number, type and location of its facilities; and (4) the type of operation or operations of the covered entity, including the composition, structure and functions of the work force of such entity; the geographic separateness, administrative or fiscal relationship of the facility or facilities in question to the covered entity. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(m)]
Reasonable accommodation
Includes: (1) improvement of existing facilities used by employees in order to render these readily accessible to and usable by disabled persons; and (2) modification of work schedules, reassignment to a vacant position, acquisition or modification of equipment or devices, appropriate adjustments or modifications of examinations, training materials or company policies, rules and regulations, the provision of auxiliary aids and services, and other similar accommodations for disabled persons. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(h)]
Reasonable period
A period of at least five (5) calendar days from receipt of the notice to give the employee an opportunity to study the accusation, consult or be represented by a lawyer or union officer, gather data and evidence, and decide on the defenses against the complaint. It is a part of procedural due process in termination proceedings based on just causes. [DO 147-15; See Due process in employment termination]
Redundancy
The condition when the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise or superfluous. It is an authorized cause for employment termination. [DO 147-15; See Redundancy as a ground for dismissal]
Rehabilitation
An integrated approach to physical, social, cultural, spiritual, educational and vocational measures that create conditions for the individual to attain the highest possible level of functional ability. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(e)]
Retrenchment
Retrenchment or downsizing is an economic ground for dismissing employees and is resorted to primarily to avoid or minimize business losses. It is an authorized cause for employment termination. [DO 147-15; See Retrenchment as ground for termination]
Security of tenure
In case of regular employment, the employer shall not terminate the services of an employee, except for a just cause or an authorized cause. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and to his backwages computed from the time his compensation was withheld from him up to time of his reinstatement. [Labor Code, Art. 294; See Procedural requirements in employment termination]
Service Agreement
The contract between the principal and contractor containing the terms and conditions governing the performance or completion of a specific job or work being farmed out for a definite or predetermined period. [D.O. 174, Sec. 3(j); See Legitimate Contracting]
Sheltered employment
The provision of productive work for disabled persons 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. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(i)]
Skill
The acquired and practiced ability to carry out a task or job. [RA 7796, Sec. 4(a)]
Skills development
The process through which learners and workers are systematically provided with learning opportunities to acquire or upgrade, or both, their ability, knowledge and behavior pattern required as qualifications for a job or range of jobs in a given occupational area. [RA 7796, Sec. 4(b)]
Social barriers
The characteristics of institutions, whether legal, economic, cultural, recreational or other, any human group, community, or society which limit the fullest possible participation of disabled persons in the life of the group. Social barriers include negative attitudes which tend to single out and exclude disabled persons and which distort roles and inter-personal relationships. [“Magna Carta for Disabled Persons” (R.A. 7277), Sec. 4(f)]
Solidary liability
The liability of the principal, pursuant to the provision of Article 109 of the Labor Code, as direct employer together with the contractor for any violation of the Labor Code. It also refers to the liability of the principal, in the same manner and extent that heshe is liable to his/he direct employees, to the extent of the work performed under the contract when the contractor fails to pay the wages of his/her employees, as provided in Article 106 of the Labor Code, as amended. [D.O. 174, Sec. 3(k); See Legitimate Contracting, Prohibited Labor-only Contracting]
Strike
Any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. [Labor Code, Art. 219(o)]
Strike area
The establishment, warehouses, depots, plants or offices, including the sites or premises used as runaway shops, of the employer struck against, as well as the immediate vicinity actually used by picketing strikers in moving to and fro before all points of entrance to and exit from said establishment. (As amended by Section 4, Republic Act No. 6715, March 21, 1989)
Strike-breaker
Any person who obstructs, impedes, or interferes with by force, violence, coercion, threats, or intimidation any peaceful picketing affecting wages, hours of work or conditions of work or in the exercise of the right of self-organization or collective bargaining. [Labor Code, Art. 219(r)]
Subcontracting
See Contracting.
Substantial capital
The paid-up capital stock/shares at least Five Million Pesos in the case of corporations, partnerships and cooperatives; in the case of single proprietorship, a net worth of at least Five Million Pesos. [D.O. 174, Sec. 3(l); See Legitimate Contracting]
Substantial evidence
That amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion. [See Burden of proof]
Substantive due process
A requirement that dismissal must be pursuant to either a just cause or an authorized cause. Together with procedural due process, this is a requirement in employment termination proceedings.
Supervisory employees
Those who, in the interest of the employer, effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment. [Labor Code, Art. 219(e); See Managerial employees and Rank-and-file employees]
Telecommuting
A work arrangement that allows an employee in the private sector to work from an alternative workplace with the use of telecommunication and/or computer technologies. [RA 11165, Sec. 3; See Primer on the Telecommuting]
Telecommuting Act
Refers to Republic Act No. 11165, which is the law institutionalizing telecommuting as an alternative work arrangement in the private sector. [See Primer on the Telecommuting]
Telecommuting agreement
The mutual consent of the employer and the employee in the implementation of a telecommuting work arrangement based on the telecommunity program of the company, Collective Bargaining Agreement (CBA), if any, and other company rules and regulations. [DO 202, s. 219; See Primer on the Telecommuting]
Telecommuting employees
Employees who are on a telecommuting work arrangement. [DO 202, s. 219; See Primer on the Telecommuting]
Telecommuting program
A set of guidelines and rules governing the implementation of a telecommuting work arrangement. DO 202, s. 219; See Primer on the Telecommuting]
Trade
Any group of interrelated jobs or any occupation which is traditionally or officially recognized as craft or artisan in nature requiring specific qualifications that can be acquired through work experience and/or training. [RA 7796, Sec. 4(d)]
Trainees
Persons who are participants in a vocational, administrative or technical training program for the purpose of acquiring and developing job-related skills. [RA 7796, Sec. 4(i)]
Trainers
Persons who direct the practice of skills towards immediate improvement in some task. [RA 7796, Sec. 4(g)]
Trainors/trainers
Persons who provide training to trainers aimed at developing the latter’s capacities for imparting attitudes, knowledge, skills and behavior patterns required for specific jobs, tasks, occupations or group of related occupations. [RA 7796, Sec. 4(h)]
Technical education
The education process designed at post-secondary and lower tertiary levels, officially recognized as non-degree programs aimed at preparing technicians, para-professionals and other categories of middle-level workers by providing them with a broad range of general education, theoretical, scientific and technological studies, and related job skills training. [RA 7796, Sec. 4(c)]
Twin-notice rule
As part of procedural due process, two written notices must be served on the employee who is the subject of the disciplinary action. [See Procedural due process in employment termination]
Unfair labor practice
Any unfair labor practice as expressly defined by the Labor Code. [Labor Code, Art. 219(k)]
User-led strategy
“User-Led Strategy” or “Market-Driven Strategy” refers to a strategy which promotes strengthened linkages between educational/training institutions and industry to ensure that appropriate skills and knowledge are provided by the educational system. [RA 7796, Sec. 4(o)]
Voluntary arbitrator
Any person accredited by the Board as such or any person named or designated in the Collective Bargaining Agreement by the parties to act as their Voluntary Arbitrator, or one chosen with or without the assistance of the National Conciliation and Mediation Board, pursuant to a selection procedure agreed upon in the Collective Bargaining Agreement, or any official that may be authorized by the Secretary of Labor and Employment to act as Voluntary Arbitrator upon the written request and agreement of the parties to a labor dispute. [Labor Code, Art. 219(n)]
Work-from-home
A mode of telecommuting work arrangement wherein the employee works from home. [See Primer on the Telecommuting]
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