Labor Code Book 7: Penalties and Prescription of Claims

Book Seven closes the Labor Code. It runs from Article 303 to Article 317 and does three things: it sets the general penalties for violating the Code, it fixes the deadlines for filing offenses and money claims, and it carries the transitional provisions that moved the country from the pre-1974 labor regime onto this Code.

For most readers only the middle part still matters. Title II — prescription — answers the question people actually arrive with: how long do I have to file? Part of the Labor Code library.

Filing Deadlines at a Glance

Four different clocks run on Philippine labor claims, and only three of them are in the Labor Code. Getting the wrong one is how a valid claim dies.

What you are filing	Deadline	Runs from	Authority
Money claims arising from employer-employee relations — unpaid wages, overtime, holiday pay, final pay, benefits	3 years	When the cause of action accrued	Article 306 [291]
Offenses penalised under the Code and its rules	3 years	When the offence was committed	Article 305 [290]
Unfair labor practice arising from Book Five	1 year	Accrual of the ULP	Article 305 [290]
Illegal dismissal — an action contesting the legality of the dismissal itself	4 years	Date of dismissal	Not the Labor Code — Article 1146 of the Civil Code, as applied in Callanta v. Carnation Philippines[1]

Why illegal dismissal is different. The Supreme Court held in Callanta that a dismissal case is not merely a money claim: being arbitrarily deprived of a job is “an injury to the rights of the plaintiff,” which the Civil Code gives four years to sue on.[1] So a worker can be inside the four-year window for the dismissal and simultaneously outside the three-year window for the unpaid wages attached to it. The two are counted separately.

These are outer limits, not targets. Evidence decays, employers reorganise, and witnesses move on. See how to file SEnA and how to file an illegal dismissal case, and the prescription definition.

A note on the text below: Reproduced from the Department of Labor and Employment’s official 2022 renumbered edition of the Labor Code, Book Seven (pages 120–123). Each article shows its current number with the original 1974 number in brackets — “Article 306 [291]” is the same provision under both systems. Where a provision has been amended or has spent its effect, a status note appears with it.

Title I — Penal Provisions and Liabilities

Article 303 [288] — Penalties

Except as otherwise provided in this Code, or unless the acts complained of hinge on a question of interpretation or implementation of ambiguous provisions of an existing collective bargaining agreement, any violation of the provisions of this Code declared to be unlawful or penal in nature shall be punished with a fine of not less than One Thousand Pesos (P1,000.00) nor more than Ten Thousand Pesos (P10,000.00), or imprisonment of not less than three months nor more than three years, or both such fine and imprisonment at the discretion of the court.

In addition to such penalty, any alien found guilty shall be summarily deported upon completion of service of sentence.

Any provision of law to the contrary notwithstanding, any criminal offense punished in this Code shall be under the concurrent jurisdiction of the Municipal or City Courts and the Courts of First Instance.

Status note. This is the text as amended by Section 3 of Batas Pambansa Blg. 70 (1980). Two things about it are worth knowing. First, the fine range has not been adjusted since 1980 and is nominal today — but the opening words, “except as otherwise provided in this Code,” matter: several specific violations carry far heavier penalties under their own statutes. Refusing to pay a prescribed wage-order increase, for example, draws a fine of ₱25,000 to ₱100,000 plus double indemnity under Republic Act No. 8188 — see Article 123 in Book Three. Second, the “Courts of First Instance” named in the last paragraph no longer exist; they were replaced by the Regional Trial Courts under the Judiciary Reorganization Act of 1980. Read the reference as being to the courts that succeeded them.

Article 304 [289] — Who are Liable When Committed by Other Than Natural Person

If the offense is committed by a corporation, trust, firm, partnership, association or any other entity, the penalty shall be imposed upon the guilty officer or officers of such corporation, trust, firm, partnership, association or entity.

Criminal liability under the Code attaches to the responsible officers personally, not to the company as an abstraction.

Title II — Prescription of Offenses and Claims

Article 305 [290] — Offenses

Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall prescribe in three (3) years.

All unfair labor practice arising from Book V shall be filed with the appropriate agency within one (1) year from accrual of such unfair labor practice; otherwise, they shall be forever barred.

The one-year ULP period is the shortest deadline in the Code and is easy to miss, because unfair labor practice is also a criminal offence — but the one-year bar governs the filing of the ULP itself with the appropriate agency.

Article 306 [291] — Money Claims

All money claims arising from employer-employee relations accruing during the effectivity of this Code shall be filed within three (3) years from the time the cause of action accrued; otherwise they shall be forever barred.

All money claims accruing prior to the effectivity of this Code shall be filed with the appropriate entities established under this Code within one (1) year from the date of effectivity, and shall be processed or determined in accordance with the implementing rules and regulations of the Code; otherwise, they shall be forever barred.

Workmen’s compensation claims accruing prior to the effectivity of this Code and during the period from November 1, 1974 up to December 31, 1974, shall be filed with the appropriate regional offices of the Department of Labor not later than March 31, 1975; otherwise, they shall forever be barred. The claims shall be processed and adjudicated in accordance with the law and rules at the time their causes of action accrued.

This is the article most readers come to Book Seven for. Only the first paragraph is live: money claims prescribe in three years from accrual. The second and third paragraphs are transitional and their deadlines expired in 1975.

“From the time the cause of action accrued” does real work. For a recurring underpayment, each unpaid payday generally starts its own clock — which is why a long-running shortfall is usually recoverable for the last three years rather than the whole period.

Article 307 [292] — Institution of Money Claims

Money claims specified in the immediately preceding Article shall be filed before the appropriate entity independently of the criminal action that may be instituted in the proper courts.

Pending the final determination of the merits of money claims filed with the appropriate entity, no civil action arising from the same cause of action shall be filed with any court. This provision shall not apply to employees compensation cases which shall be processed and determined strictly in accordance with the pertinent provisions of this Code.

The money claim and any criminal case proceed on separate tracks; but while the labor claim is pending, a parallel civil action on the same cause is barred.

Title III — Transitory and Final Provisions

Most of this Title is spent. Articles 311 to 315 governed the 1974–1976 handover from the pre-Code institutions — the Workmen’s Compensation Commission, the Court of Industrial Relations, the pre-Code NLRC — to the bodies created by this Code. Their deadlines passed decades ago. They are reproduced for completeness and for anyone tracing the institutional history, not because they decide anything today.

Article 308 [293] — Application of Law Enacted Prior to this Code

All actions or claims accruing prior to the effectivity of this Code shall be determined in accordance with the laws in force at the time of their accrual.

The general principle behind the transitional articles: a claim is judged by the law in force when it arose. The same logic is why a wage order or contribution rate is applied by the period worked, not by today’s rate.

Article 309 [294] — Secretary of Labor to Initiate Integration of Maternity Leave Benefits

Within six (6) months after this Code takes effect, the Secretary of Labor shall initiate such measures as may be necessary for the integration of maternity leave benefits into the Social Security System, in the case of private employment, and the Government Service Insurance System, in the case of public employment.

Status note — obsolete. DOLE records this Article as rendered obsolete: the integration it directed has long since happened, with maternity benefits institutionalised in the SSS for private employment and the GSIS for public employment. Maternity leave itself is now governed by Republic Act No. 11210, the 105-Day Expanded Maternity Leave Law.

Article 310 [295] — Funding of the Overseas Employment Development Board and National Seamen’s Board

Funding of the Overseas Employment Development Board and National Seamen’s Board referred to in Articles 17 and 20, respectively, of this Code shall initially be funded out of the unprogrammed fund of the Department of Labor and the National Manpower and Youth Council.

Status note — the bodies no longer exist. The Overseas Employment Development Board and the National Seamen’s Board were abolished by Executive Order No. 797 (1982), which created the Philippine Overseas Employment Administration to assume their functions along with the overseas employment functions of the Bureau of Employment Services. The POEA’s functions have since been transferred again, to the Department of Migrant Workers.

Article 311 [296] — Termination of the Workmen’s Compensation Program

Transitional — period elapsed 1976.

The Bureau of Workmen’s Compensation, Workmen’s Compensation Commission, and Workmen’s Compensation Units in the regional offices of the Department of Labor shall continue to exercise the functions and the respective jurisdictions over workmen’s compensation cases vested upon them by Act No. 3428, as amended, otherwise known as the Workmen’s Compensation Act until March 31, 1976. Likewise, the term of office of incumbent members of the Workmen’s Compensation Commission, including its Chairman and any commissioner deemed retired as of December 31, 1975, as well as the present employees and officials of the Bureau of Workmen’s Compensation, Workmen’s Compensation Commission and the Workmen’s Compensation Units shall continue up to that date. Thereafter, said offices shall be considered abolished and all officials and personnel thereof shall be transferred to and mandatorily absorbed by the Department of Labor, subject to Presidential Decree No. 6, Letters of Instructions Nos. 14 and 14-A and the Civil Service Law and rules.

Such amount as may be necessary to cover the operational expenses of the Bureau of Workmen’s Compensation and the Workmen’s Compensation Units, including the salaries of incumbent personnel for the period up to March 31, 1976 shall be appropriated from the unprogrammed funds of the Department of Labor.

Article 312 [297] — Continuation of Insurance Policies and Indemnity Bonds

Transitional — period elapsed 1974.

All workmen’s compensation insurance policies and indemnity bonds for self-insured employers existing upon the effectivity of this Code shall remain in force and effect until the expiration dates of such policies or the lapse of the period of such bonds, as the case may be, but in no case beyond December 31, 1974. Claims may be filed against the insurance carriers and/or self-insured employers for causes of action which accrued during the existence of said policies or authority to self-insure.

Article 313 [298] — Abolition of the Court of Industrial Relations and the National Labor Relations Commission

Transitional — effect spent on the Code taking force in 1974.

The Court of Industrial Relations and the National Labor Relations Commission established under Presidential Decree No. 21 are hereby abolished. All unexpended funds, properties, equipment and records of the Court of Industrial Relations, and such of its personnel as may be necessary, are hereby transferred to the Commission and to its regional branches. All unexpended funds, properties and equipment of the National Labor Relations Commission established under Presidential Decree No. 21 are transferred to the Bureau of Labor Relations. Personnel not absorbed by or transferred to the Commission shall enjoy benefits granted under existing laws.

This is the article that created the institutional break: the Court of Industrial Relations and the pre-Code NLRC ended here, and the NLRC as it exists today traces to Book Five of this Code.

Article 314 [299] — Disposition of Pending Cases

Transitional — period elapsed 1975.

All cases pending before the Court of Industrial Relations and the National Labor Relations Commission established under Presidential Decree No. 21 on the date of effectivity of this Code shall be transferred to and processed by the corresponding labor relations divisions or the National Labor Relations Commission created under this Code having cognizance of the same in accordance with the procedure laid down herein and its implementing rules and regulations. Cases on labor relations on appeal with the Secretary of Labor or the Office of the President of the Philippines as of the date of effectivity of this Code shall remain under their respective jurisdictions and shall be decided in accordance with the rules and regulations in force at the time of appeal.

All workmen’s compensation cases pending before the Workmen’s Compensation Units in the regional offices of the Department of Labor and those pending before the Workmen’s Compensation Commission as of March 31, 1975, shall be processed and adjudicated in accordance with the law, rules and procedure existing prior to the effectivity of the Employees Compensation and State Insurance Fund.

Article 315 [300] — Personnel Whose Services are Terminated

Transitional — effect spent.

Personnel of agencies or any of their subordinate units whose services are terminated as a result of the implementation of this Code shall enjoy the rights and protection provided in Sections 5 and 6 of Republic Act numbered fifty-four hundred and thirty five and such other pertinent laws, rules and regulations. In any case, no lay-off shall be effected until funds to cover the gratuity and/or retirement benefits of those laid off are duly certified as available.

Article 316 [301] — Separability Provisions

If any provision or part of this Code, or the application thereof to any person or circumstance, is held invalid, the remainder of this code, or the application of such provision or part to other persons or circumstances, shall not be affected thereby.

Still operative. If a court strikes down one provision, the rest of the Code survives.

Article 317 [302] — Repealing Clause

All labor laws not adopted as part of this Code either directly or by reference are hereby repealed. All provisions of existing laws, orders, decrees, rules and regulations inconsistent herewith are likewise repealed.

The Code closes with its enactment line: “Done in the City of Manila, this 1st day of May in the year of our Lord, nineteen hundred and seventy-four.” By its own terms under Article 2, it took effect six months later, on 1 November 1974.

Amendment and Status Table

Article	Status	Note
303 [288] Penalties	Amended; partly outdated	Sec. 3, B.P. Blg. 70 (1980). Fine range unchanged since 1980; “Courts of First Instance” superseded by the Regional Trial Courts
304 [289] Liability of officers	Current	—
305 [290] Offenses	Current	3 years for offences; 1 year for ULP under Book Five
306 [291] Money claims	Current (first paragraph)	3-year period live; 2nd and 3rd paragraphs transitional, expired 1975
307 [292] Institution of money claims	Current	—
308 [293] Prior law	Current principle	Claims judged by the law in force at accrual
309 [294] Maternity leave integration	Obsolete	Integration completed into SSS and GSIS; leave now under R.A. No. 11210
310 [295] OEDB and NSB funding	Bodies abolished	E.O. No. 797 (1982) abolished the OEDB and NSB and created the POEA; functions since moved to the Department of Migrant Workers
311–315	Transitional, spent	Deadlines fell between 1974 and 1976
316 [301] Separability	Current	—
317 [302] Repealing clause	Current	—

Sources

Callanta v. Carnation Philippines, Inc., G.R. No. L-70615, 28 October 1986, lawphil.net. Supports: an action for illegal dismissal prescribes in four years under Article 1146 of the Civil Code, because it is predicated on an injury to the rights of the plaintiff rather than being a money claim under the Labor Code. Classification: controlling jurisprudence. Accessed 1 September 2026.

Department of Labor and Employment, Labor Code of the Philippines, as Amended and Renumbered (2022 edition), Book Seven, pages 120–123, including DOLE’s own amendment and obsolescence footnotes. Published by DOLE at dole.gov.ph; the same edition is mirrored as a PDF by the International Labour Organization. Accessed 1 September 2026.
Presidential Decree No. 442, as amended — lawphil.net
Batas Pambansa Blg. 70 (1980), Section 3 — amending the penalty provision
Executive Order No. 797 (1982) — abolishing the OEDB and NSB and creating the POEA
Republic Act No. 8188 — increased penalties and double indemnity for wage-order violations
Civil Code of the Philippines, Article 1146 — four-year period for actions upon an injury to the rights of the plaintiff

Sources rechecked as of: September 1, 2026
Last materially reviewed: September 1, 2026

Educational content, not legal advice. This page reproduces statutory text, including transitional provisions whose effect is spent, for general educational and legal-information purposes. It is not legal advice and does not create a lawyer-client relationship. Prescriptive periods turn on when a cause of action accrued, which is itself a question of fact, and they can be interrupted or affected by other circumstances. If a deadline may be close, consult a Philippine labor lawyer, DOLE, or the NLRC without delay. LaborCode.ph is independent and is not a government website, tribunal, or law firm.

Labor Code Book Seven — Transitory and Final Provisions (Articles 303–317)