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ATENEO CENTRAL BAR OPERATIONS 2007
Labor Law and Social Legislation
SUMMER REVIEWER



Head: Ryan Quan

Labor Standards: Kukay Malabanan

Labor Relations: Peewee Estrella

Socail Legislation: Binkki Hipolito

Understudy: Kate Sabado

Volunteers: Aren Samonte, Vina Padilla, Ria Campos, Ina Quintanilla, Athena Zosa



TABLE OF CONTENTS

LABOR STANDARDS

I. GENERAL PRINCIPLES..................................................................................................................... 1

A. ARTICLE 3: Declaration of Basic Policies
B. ARTICLE 4: Construction in Favor of Labor
C. ARTICLE 5: Rules and Regulations
D. ARTICLE 6: Applicability of Labor Code
II. EMPLOYER – EMPLOYEE RELATIONSHIP ......................................................................... 2
A. Elements of Relationship
B. Independent Contractors and Labor-Only Contractors
C. Special Cases
III. PRE – EMPLOYMENT............................................................................................................. 6
A. Principles and Definitions
B. Recruitment and Placement
1. Definition: Illegal Recruitment; Prohibited Acts
2. Regulation of Recruitment and Placement
3. Contracts
4. Dispute Settlements
C. Employment of Aliens
D. Human Resources and Manpower Development
1. Government Machinery
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2. Apprenticeship and Learnership
IV. WORKING CONDITIONS...................................................................................................... 13
A. Coverage
B. Hours of Work
C. Rest Periods and Holidays
D. Service Charge and Service Incentive Leaves
E. Others
V. WAGES.................................................................................................................................. 20
A. Concept and Definition
B. Wage – Fixing
C. Payment of Wages
D. Liability for Wages
VI. WORKING CONDITIONS FOR SPECIAL GROUPS OF EMPLOYEES............................... 26
A. Women
B. Minors
C. Househelpers
D. Homeworkers
E. Handicapped/Disabled
VII. ADMINISTRATION AND EMPLOYMENT............................................................................. 30
A. ARTICLE 128: Visitorial and Enforcement Powers
B. Power of DOLE Secretary
VIII. MEDICAL, DENTAL AND OCCUPATIONAL SAFETY ........................................................ 31
IX. EMPLOYEE’S COMPENSATION………….. ......................................................................... 31
A. Workmen’s Compensation


LABOR RELATIONS
I. RIGHT TO SELF – ORGANIZATION………………………. ................................................... 35
A. Concept and Scope……………........................................................................................... 35
1. ARTICLE 243: Coverage and E,mployee’s Right to Self-Organization
2. ARTICLE 246: Non-Abridgment of Right to Self-Organization
B. Labor Organization………................................................................................................... 35
1. Definition and Types
2. Registration of Labor Organizations
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i. Requirements for Registration
See ANNEX A
ii. Requirements in Case of Merger/Consolidation
See ANNEX B
iii. Procedure for Registration of labor Organization
See ANNEX C
3. Cancellation of Registration
i. Procedure for Cancellation of Registration
See ANNEX D
4. Rights of Labor Organization
ii. ARTICLE 242: Rights of Legitimate Labor Organizations
iii. ARTICLE 277: Miscellaneous Provisions
C, Special Groups of Employees………………….................................................................... 37
1. Manegerial and Supervisory Employees
2. Confidential Employees
3. Security Guards
4. Members of Cooperatives
5. Members of Iglesia ni Kristo
6. Government Employees
i. ARTICLE 244: Rights of Employees in the Public Service
ii. ARTICLE 276: Government Employees
7. Employees of International Organizations
D. Acquisition and Retention of Membership; Union Security Agreements………………........ 39
1. ARTICLE 277: Miscellaneous Provisions
2. ARTICLE 248: Unfair Labor Practice of Employers
E. Membership; Rights of Members………………….. ............................................................. 40
1. ARTICLE 241: Rights and Conditions of Membership in a Labor Organization
2. ARTICLE 274: Visitorial Powers
3. ARTICLE 222: Appearances and Fees
4. Rights of Union Members
i. Political Right
ii. Deliberative and Decision-Making Right
iii. Right Over Money Matters
iv. Right to Information
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v. Other Rights and Conditions Under Article 241
5. Elections Under Rule 12 of the Implementing Rules and Regulations
See ANNEX F
6. Check-Offs and Assessments
II. UNFAIR LABOR PRACTICES…………………………………. .............................................. 42
A. ARTICLE 247: Concept of Unfair Labor Practice................................................................ 42
B. Elements of Unfair labor Practice…………………............................................................... 42
C. ARTICLE 248: Unfair Labor Practice of Employers…………………................................... 43
1. Interference
2. Yellow Dog Contract
3. Contracting Out
4. Company Domination of Union
5. Discrimination
6. Discrimination Because of Testimony
7. Violation of the Duty to Bargain
8. Paid Negotiation
9. Violation of the CBA
D. Relief in ULP Cases………….............................................................................................. 49
E. ARTICLE 249: Unfair labor Practices of labor Organization............................................... 50
1. Restraint or Coercion of labor Organization
2. Refusal to Bargain
3. Featherbedding and Make-Work Arrangements
III. RIGHT TO COLLECTIVE BARGAINING.............................................................................. 51
A. Duty to Bargain Collectively ……….............................................................................. ……51
1. Collective Bargaining Agreement
2. Bargaining Procedure under the Labor Code
See ANNEX G
3. Violation of the Duty to Bargain Collectively
4. Registration of Collective Bargaining Agreement
5. Rules on Effectivity and Retroactivity of New CBA
B. Bargaining Agent and Certification Election Proceedings................................................... 54
1. Voluntary Recognition
2. Certification Election
i. Procedure for Petition for Certification Election
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See ANNEX H
ii. Procedure for Conduct of Certification Election
See ANNEX I
C. Bars to Certification Election………..........................................................................………59
1. Contract Bar
2. Deadlock Bar
3. Negotiation Bar
4. Certification Year Rule Bar
D. Administration If Agreement; Grievance and Voluntary Arbitration…………....................... 59
1. Establishments of Grievance Machinery
2. Procedure in Handling Grievances
See ANNEX J
E. Labor Management Cooperation Schemes......................................................................... 61
IV. STRIKES, LOCKOUTS AND CONCERTED ACTIONS........................................................ 61
A. Strike…………….. ............................................................................................................... 61
B. Lockout…………….............................................................................................................. 61
C. Notice of Strike or Lockout…………………......................................................................... 62
D. Prohibited Activities During Strike or Lockouts………………. ............................................. 63
E. Injunction…………….. ......................................................................................................... 63
F. Assumption of J urisdiction by DOLE Secretary………….................................................... 63
G. Powers of the President Under Article 263 (g)………. ........................................................ 64
V. POST – EMPLOYMENT........................................................................................................ 65
A. Regular, Casual, Probationary Employment…………………….......................................... 65
1. Regular Employment
2. Casual Employment
3. Fixed-Term Employment
4. Project Employment
5. Probationary Employment
6. Seasonal Employment
B. Security of Tenure…………………...................................................................................... 67
1. ARTICLE 279: Security of Tenure
C. J ust Causes, Authorized Causes, Constructive Dismissal…………................................... 67
1. ARTICLE 282: J ust Causes for Termination by Employer
2. ARTICLE 283: Authorized Causes for Termination
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3. Constructive Dismissal
4. ARTICLE 284: Disease as Ground for Termination
5. ARTICLE 285: Termination by Employee
6. ARTICLE 286: When Employment Not Deemed Terminated
D. Due Process………….. ....................................................................................................... 70
1. ARTICLE 277 (b): Miscellaneous Provisions
E. Reliefs for Illegal Dismissal………………............................................................................ 71
F. Retirement………………..................................................................................................... 72
1. ARTICLE 287: Retirement
VI. DISPUTE SETTLEMENT....................................................................................................... 72
A. J urisdiction of the Different Agencies……………. ............................................................... 72
1. Bureau of Labor Relations
2. Labor Arbiters
3. NLRC
4. Med-Arbiters/BLR
5. POEA
6. DOLE Regional Directors
7. NCMB
See ANNEX L
B. Procedure…………….......................................................................................................... 74
C. Appeal………………………….. ........................................................................................... 75
1. Appeal of LA’s Decision
2. Appeal Involving Monetary Award
3. Appeal of Voluntary Arbitrator’s Decision
4. Appeal of BLR’s Decision
5. Appeal of Regional Director’s Decision Under Article 129
VII. PENAL PROVISIONS AND LIABILITIES ............................................................................. 77







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SOCIAL LEGISLATION
I. THIRTEENTH – MONTH PAY (P.D. 851)............................................................................. 78
II. ANTI-SEXUAL HARASSMENT ACT OF 1995 (RA 7877).................................................... 78
III. EXECUTIVE ORDER NO. 180............................................................................................... 79
IV. SALIENT PROVISIONS OF THE SSS LAW AND GSIS LAW
See ANNEX O
V. NATIONAL HEALTH INSURANCE ACT OF 1995 (R.A. 7875)............................................ 80











ATENEO CENTRAL BAR OPERATIONS 2007
Labor Law & Social Legislation
SUMMER REVIEWER

—Adviser: Atty. Marlon J . Manuel; Head: Ryan Quan; Understudy: Kate Sabado;
Labor Standards: Kukay Malabanan; Labor Relations: Peewee Estrella; Social Legislation: Binkki Hipolito—
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LABOR STANDARDS

I. GENERAL PRINCIPLES

Labor Code – principal labor law of the country. But
even now, there are Labor Laws that are not found in
the Labor Code.

Social Legislation – the promotion of the welfare of
all the people, the adoption by the government of
measures calculated to insure economic stability of
all the component elements of society thru the
maintenance of proper economic and social
equilibrium in the interrelations of the members of the
community, constitutionally, thru the adoption of
measures legally justifiable, or extra-constitutionally,
thru the exercise of powers underlying the existence
of all governments, on the time honored principle of
salus populi esta suprema lex (Calalang v. Williams,
02 December 1940)

Social Justice – humanization of laws and the
equalization of social and economic forces by the
State so that justice in its rational and objective
secular conception may at least be approximated

Labor Standards – sets out the minimum terms,
conditions, and benefits of employment that
employers must provide or comply with and to which
employees are entitled as a matter of legal right

Labor Relations – defines the status, rights and
duties, as well as the institutional mechanisms that
govern the individual and collective interactions
between employers, employees and their
representatives

Art. 3. Declaration of basic policy
Afford protection to labor
Promote full employment
Ensure equal work opportunities regardless of
sex, race, or creed
Regulate the relations between workers and
employers
Assure worker’s rights to self-organization,
collective bargaining, security of tenure, and just
and humane conditions of work

Seven basic rights of workers guaranteed by the
Constitution:
1. right to organize
2. to conduct collective bargaining or negotiation
with management
3. to engage in peaceful concerted activities,
including strike in accordance with law
4. to enjoy security of tenure
5. to work under humane conditions
6. to receive a living wage
7. to participate in policy and decision-making
processes affecting their rights and benefits as
may be provided by law.

Art. 4. Construction in favor of labor
When the interest of labor and capital collide, the
heavier influence of capital should be
counterbalanced with the sympathy and
compassion of law for the less privileged
workers. But protection to labor does not mean
oppression or destruction of capital. The
employer’s act will be sustained when it is in the
right. [Eastern Shipping Lines v. POEA, 166
SCRA 523 (1998)]
Court decisions adopt a liberal approach that
favors the exercise of labor rights. The mandate
is simply to resolve doubt in favor of labor. If
there is no doubt in implementing and interpreting
the law, labor will enjoy no built-in advantage and
the law will have to be applied as it is.
When the subject matter is covered by the Labor
Code, doubts which involve implementation and
interpretation of labor laws should be resolved in
favor of labor, even if the question involves Rules
of Evidence.

Management Rights / Prerogative – except as
limited by special laws, an employer is free to
regulate, according to his own discretion and
judgment, all aspects of employment, including hiring,
work assignments, working methods, time, place and
manner of work, tools to be used, processes to be
followed, supervision of workers, working regulations,
transfer of employees, work supervision, lay-off of
workers and the discipline, dismissal and recall of
workers

Capitol Medical Center, Inc. v. Meris (16
September 2005)
As long as the company’s exercise of the same is
exercised in good faith for the advancement of the
employer’s interest, and not for the purpose of
defeating or circumventing the rights of the
employees under special laws or valid agreements,
the courts will uphold them.

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Philippine Blooming Mills Employees Association
v. Philippine Blooming Mills, GR No. L-31195, 05
June 1973
The primacy of human rights – freedom of
expression, of peaceful assembly and of petition for
redress of grievances over property rights has been
sustained.

PAL v. NLRC, GR No. 85985 (1993)
The exercise of management prerogatives is not
unlimited. A line must be drawn between
management prerogatives regarding business
operations per se and those which affect the rights of
employees. In treating the latter, management should
see to it that its employees are at least properly
informed of its decisions and modes of action.


Art. 5. Rules and regulations
Department of Labor and Employment (DOLE)
Lead agency in enforcing labor laws and it
possesses rule-making power in the enforcement
of the Code
But a rule or regulation that exceeds the
Department’s rule-making authority is void.

Art. 6. Applicability of Labor Code
Applies alike to all workers, except as otherwise
provided by law, whether agricultural or non-
agricultural.
Applies to a government corporation incorporated
under the Corporation Code


II. EMPLOYER –EMPLOYEE RELATIONSHIP
(EER)

A. ELEMENTS OF RELATIONSHIP

Jurisprudential Tests to Determine Existence of
EER:

A. The employer has the ability (need not be
actual) to exercise control over the following:

1. Payment of Wages
payment of compensation by way of
commission does not militate against the
conclusion EER exists. Under Art. 97 of the
Labor Code, "wage" shall mean "however
designated, capable of being expressed in
terms of money, whether fixed or ascertained
on a time, task, price or commission basis…"
(Insular Life Assurance Co., Ltd. V. NLRC,
GR No.119930, 12 March 1998)
Wages are defined as remuneration or
earnings, however designated, capable of
being expressed in terms of money, whether
fixed or ascertained on a time, task, piece or
commission basis, or other method of
calculating the same, which is payable by an
employer to an employee under a written or
unwritten contract of employment for work
done or to be done, or for services rendered
or to be rendered, and included the fair and
reasonable value, as determined by the
Secretary of Labor, of board, lodging, or
other facilities customarily furnished by the
employer to the employee. [Ruga v. NLRC,
181 SCRA 266 (1990)]
2. Hiring – employment relation arises from
contract of hire, express or implied [Ruga v.
NLRC, 181 SCRA 266 (1990)]
Selection and engagement of the
workers rests with the employers
Not a conclusive test since it can be
avoided by the use of subcontracting
agreements or other contracts other than
employment contracts
3. Firing – disciplinary power exercised by
employer over the worker and the corresponding
sanction imposed in case of violation of any of its
rules and regulations
4. Control, not only over the end product / RESULT
of the work, but more importantly, control over
the MEANS through which the work is
accomplished. (most essential element; without
it, there is no EER)

B. Economic Relations Test – a subordinate /
alternative test. Existing economic conditions
between the parties are used to determine whether
EER exists.
1. payment of PAG-IBIG Fund contributions
2. payment / remittance of contributions to the State
Insurance Fund
3. deduction of withholding tax
4. deduction / remittance of SSS contributions

Insular Life Assurance Co., Ltd. v. NLRC, GR No.
119930, 12 March 1998
The employment status of a person is defined
and prescribed by law and not by what the parties
say it should be.

Algon Engineering Construction Corp. v. NLRC,
GR No. 83402, 06 October 1997
No particular evidence is required to prove the
existence of an EER. All that is necessary is to show
that the employer is capable of exercising control
over the employee. In labor disputes, it suffices that
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there be a causal connection between the claim
asserted and the EER. Control of the employee's
conduct is commonly regarded as the most crucial
and determinative indicator of the presence or
absence of an employer-employee relationship.

Aurora Land Projects Corp. v. NLRC, GR No.
114733, 02 January 1997
Whenever the existence of EER is in dispute,
four elements constitute the reliable yardstick (four-
fold test); (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's conduct. It is the so-called "control test,"
and that is whether the employer controls or has
reserved the right to control the employee not only as
to the result of the work to be done but also as to the
means and methods by which the same is to be
accomplished, which constitute the most important
index of the existence of the employer-employee
relationship Stated otherwise, an EER exists where
the person for whom the services are performed
reserves the right to control no only the end to be
achieved but also the means to be used in reaching
such end.

Filipinas Broadcasting Network, Inc. v. NLRC, GR
No. 118892, 11 March 1998
There could be no EER where "the element of
control is absent; where a person who works for
another does so more or less at his own pleasure
and is not subject to definite hours or conditions of
work; and in turn is compensated according to the
result of his efforts and not the amount thereof, we
should not find that the relationship of employer-
employee exists."

Dy Keh Beng v. International Labor, GR No. L-
32245, 25 May 1979
It should be borne in mind that the control test
calls merely for the existence of the right to control
the manner of doing the work, not the actual exercise
of the right.

AFP Mutual Benefit Association v. NLRC, GR No.
102199, 28 January 1997
However, not all that glitters is control. The
fact that private respondent was required to solicit
business exclusively for petitioner could hardly be
considered as control in labor jurisprudence. Under
Memo Circulars No. 2-81 and 2-85 issued by the
Insurance Commissioner, insurance agents are
barred from serving more than one insurance
company, in order to protect the public and to enable
insurance companies to exercise exclusive
supervision over their agents in their solicitation work.
Thus, the exclusivity restriction clearly springs from a
regulation issued by the Insurance Commission, and
not from an intention by petitioner to establish control
over the method and manner by which private
respondent shall accomplish his work. This feature is
not meant to change the nature of the relationship
between the parties, nor does it necessarily imbue
such relationship with the quality of control
envisioned by the law.
So too, the fact that private respondent was
bound by company policies, memo/circulars, rules
and regulations issued from time to time is also not
indicative of control. With regard to the territorial
assignments given to sales agents, this too cannot be
held as indicative of the exercise of control over an
employee. Further, not every form of control that a
party reserves to himself over the conduct of the
other party in relation to the services being rendered
may be accorded the effect of establishing an
employer-employee relationship.

Ruga v. NLRC, 181 SCRA 266 (1990)
The employer-employee relationship between the
crew members and the owners of the fishing vessels
engaged in deep-sea fishing is merely suspended
during the time the vessels are drydocked or
undergoing repairs or being loaded with the
necessary provisions for the next fishing trip. The
said ruling is premised on the principle that all these
activities i.e., drydock, repairs, loading of necessary
provisions, form part of the regular operation of the
company fishing business.

B. INDEPENDENT CONTRACTORS AND
LABOR-ONLY CONTRACTORS

Independent
Contractors
Labor – Only
Contractors
has sufficient substantial
capital OR investment in
machinery, tools or
equipment directly or
intended to be related to
the job contracted
has NO substantial
capital OR investment in
the form of machinery,
tools or equipment
carries an independent
business different from
the employer’s
has no independent
business
undertakes to perform
the job under its own
account and
responsibility, FREE from
the principal’s control
performs activities
directly related to the
main business of the
principal
NO EER except when
the contractor or
subcontractor fails to pay
the employees’ wages.
Principal treated as direct
employer of the person
recruited in all instances
(contractor is deemed
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agent of the principal)
LIMITED liability
(principal solidarily liable
with contractor or
subcontractor only when
latter fails to comply with
requirements as to
unpaid wages and other
labor standards
violations.
Principal’s liability
extends to all rights,
duties and liabilities
under labor standard
laws including the right to
self-organization
PERMISSIBLE PROHIBITED

Contracting or subcontracting – an arrangement
whereby a principal agrees to put out or farm out with
a contractor or subcontractor the performance or
completion of a specific job, work or service within a
definite or predetermined period, regardless of
whether such job, work or service is to be performed
or completed within or outside the premises of the
principal

Contractor or subcontractor – any person or entity
engaged in a legitimate contracting or subcontracting
arrangement

Contractual employee – one employed by a
contractor or subcontractor to perform or complete a
job, work or service pursuant to an arrangement
between the latter and a principal

Principal – any employer who puts out or farms out a
job, service or work to a contractor or subcontractor

Permissible Job Contracting; Conditions
a. The contractor carries on an independent
business;
b. Undertakes the contract work on his own account
under his own responsibility according to his own
manner and method, free from the control and
direction of his employer or principal in all matters
connected with the performance of the work
except as to the results thereof; and
c. The contractor has substantial capital or
investment in the form of tools, equipment,
machineries, work premises, and other materials
which are necessary in the conduct of his
business.

Labor-only Contracting – an arrangement where
the contractor or subcontractor merely recruits,
supplies or places workers to perform a job, work or
service for a principal, and any of the following
elements are present:
1. The contractor or subcontractor does not have
substantial capital or investment which relates to
the job, work or service to be performed
2. The employees recruited, supplied or placed by
such contractor or subcontractor are performing
activities which are directly related to the main
business of the principal; or
3. The contractor does not exercise the right to
control over the performance of the work of the
contractual employee.

Substantial capital or investment – capital stocks
and subscribed capitalization in the case of
corporations, tools, equipment, implements,
machineries and work premises, actually and directly
used by the contractor or subcontractor in the
performance or completion of the job, work or service
contracted out.

Right to Control – 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.

The test to determine whether one is a job or
labor-only contractor is to look into the elements
of a job contractor. If ALL elements of a job
contractor are present, then he is a job
contractor. Otherwise, he is a labor-only
contractor. Absent one of the elements for being
a job contractor, the person is a labor-only
contractor.
On the other hand, not all requisites of a labor-
only contractor need to be present. As long as
any one of the elements is present, then the
person is a labor-only contractor.

Posting of Bond – an employer or indirect employer
may require the contractor or subcontractor to furnish
a bond equal to the cost of labor under contract, on
condition that the bond will answer for the wages due
the employees should the contractor or
subcontractor, as the case may be, fail to pay the
same

Civil liability of employer and contractors – Every
employer or indirect employer shall be jointly and
severally liable with his contractor or sub-contractor
for the unpaid wages of the employees of the latter.
Such employer or indirect employer may require the
contractor or sub-contractor to furnish a bond equal
to the cost of labor under contract on condition that
the bond will answer for the wages due the
employees should the contractor or subcontractor, as
the case may be, fail to pay the same

Liability of the principal to the employee in cases
of illegal dismissal
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1. J oint and several with the employer, but with the
right to reimbursement from the employer-
contractor
2. Wage differentials only to the extent where the
employee performed the work under the
principal.
3. Separation pay and backwages, only when the
principal has some relation to the termination
(such as when he conspired to terminate)
(Rosewood Processing Inc. v. NLRC, GR Nos.
116476-84, 21 May 1998)
NOTE: this ruling is an obiter and made an
unjustified interpretation of Art. 109 of the Labor
Code. Art. 109 makes the principal liable in illegal
dismissal WON there was fault on his part.

Prohibited Acts (DO 18-02):
a. Contracting out of a job, work or service when not
done in good faith and not justified by the
exigencies of the business and the same results
in the termination of regular employees and
reduction of work hours or reduction or splitting of
the bargaining unit

b. Contracting out of work with a "cabo" as defined
in Section 1 (ii), Rule I, Book V of these Rules.
" Cabo" refers to a person or group of persons or
to a labor group which, in the guise of a labor
organization, 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

c. Taking undue advantage of the economic
situation or lack of bargaining strength of the
contractual employee, or undermining his
security of tenure or basic rights, or
circumventing the provisions of regular
employment, in any of the following instances:
i. In addition to his assigned functions,
requiring the contractual employee to
perform functions which are currently being
performed by the regular employees of the
principal or of the contractor or
subcontractor;
ii. Requiring him to sign, as a precondition to
employment or continued employment, an
antedated resignation letter; a blank
payroll; a waiver of labor standards
including minimum wages and social or
welfare benefits; or a quitclaim releasing
the principal, contractor or subcontractor
from any liability as to payment of future
claims; and
iii. Requiring him to sign a contract fixing the
period of employment to a term shorter
than the term of the contract between the
principal and the contractor or
subcontractor, unless the latter contract is
divisible into phases for which substantially
different skills are required and this is
made known to the employee at the time of
engagement

d. Contracting out of a job, work or service through
an in-house agency which refers to a contractor
or subcontractor engaged in the supply of labor
which is owned, managed or controlled by the
principal and which operates solely for the
principal

e. Contracting out of a job, work or service directly
related to the business or operation of the
principal by reason of a strike or lockout whether
actual or imminent

f. Contracting out of a job, work or service being
performed by union members when such will
interfere with, restrain or coerce employees in the
exercise of their rights to self organization as
provided in Art. 248 (c) of the Labor Code, as
amended

Existence of EER – The contractor or subcontractor
shall be considered the employer of the contractual
employee for purposes of enforcing the provisions of
the Labor Code and other social legislation.

The principal, however, shall be solidarily liable
with the contractor in the event of any violation of
any provision of the Labor Code, including the
failure to pay wages.
The principal shall be deemed the employer of
the contractual employee in any of the following
cases as declared by a competent authority:
a. where there is labor-only contracting; or
b. where the contracting arrangement falls
within the prohibited acts

Registration of Contractors and Subcontractors
The registration of contractors and
subcontractors shall be necessary for purposes
of establishing an effective labor market
information and monitoring.
Failure to register shall give rise to the
presumption that the contractor is engaged in
labor-only contracting.

Neri v. NLRC, GR Nos. 97008-09, 23 July 1993
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The law does not require both substantial capital
and investment in the form of tools, equipment and
machineries. This is clear from the use of the
conjunction “or.” If the intention was to require the
contractor to prove that he has both capital and the
requisite investment, then the conjunction “and”
should have been used.
While these services (janitorial, security and even
technical or other specific services) may be
considered directly related to the principal business
of the employer, nevertheless, they are not
necessary in the conduct of the principal business of
the employer.

Lapanday Agricultural Dev’t Corp. v. CA, GR No.
112139, 31 January 2000
It will be seen from the above provisions that the
principal (petitioner) and the contractor (respondent)
are jointly and severally liable to the employees for
their wages. The joint and several liability of the
contractor and the principal is mandated by the Labor
Code to assure compliance with the provisions
therein including the minimum wage. The contractor
is made liable by virtue of his status as direct
employer. The principal, on the other hand, is made
the indirect employer of the contractor's employees to
secure payment of their wages should the contractor
be unable to pay them. Even in the absence of an
EER, the law itself establishes one between the
principal and the employees of the agency for a
limited purpose i.e. in order to ensure that the
employees are paid the wages due them.

Several factors to consider to Determine Whether
Contractor is carrying on an independent
business:
1. nature and extent of work
2. skill required
3. term and duration of the relationship
4. right to assign the performance of specified
pieces of work
5. control and supervision of worker
6. power of employer with hiring, firing, and
payment of wages
7. control of the premises
8. duty to supply premises, tools, appliances,
materials and labor
9. mode, manner, terms of payment (Vinoya v.
NLRC, GR No. 126286, 02 February 2000)

C. SPECIAL CASES

1. Working scholars – no EER between students
on one hand, and schools, colleges or
universities on the other, where:
a. there is written agreement between them
under which the former agree to work for the
latter in exchange for the privilege to study
free of charge
b. provided, the students are given real
opportunities, including such facilities as may
be reasonable and necessary to finish their
chosen courses under such agreement

2. Resident physicians in training – There is EER
between resident physicians and the training
hospital unless:
a. There is a training agreement between them
b. The training program is duly accredited or
approved by the appropriate government
agency.


III. PRE-EMPLOYMENT

A. PRINCIPLES AND DEFINITIONS

JMM Promotion & Management Inc. v. CA, GR No.
120095, 05 August 1996
The POEA Rules are clear. A reading thereof
readily shows that in addition to the cash and surety
bonds and the escrow money, an appeal bond in an
amount equivalent to the monetary award is required
to perfect an appeal from a decision of the POEA.
Obviously, the appeal bond is intended to further
insure the payment of the monetary award in favor of
the employee if it is eventually affirmed on appeal to
the NLRC. Overseas recruiters are subject to more
stringent requirements because of the special risks to
which our workers abroad are subjected by their
foreign employers, against whom there is usually no
direct or effective recourse. The overseas recruiter is
solidarily liable with the foreign employer. The bonds
and the escrow money are intended to insure more
care on the part of the local agent in its choice of the
foreign principal to whom our overseas workers are
to be sent. Every intendment of the law must be
interpreted in favor of the working class, conformably
to the mandate of the Constitution. By sustaining
rather than annulling the appeal bond as a further
protection to the claimant employee, this Court
affirms once again its commitment to the interests of
labor.

PNB v. Cabansag, GR No. 157010, 21 June 2005
Noteworthy is the fact that respondent likewise
applied for and secured an Overseas Employment
Certificate from the POEA through the Philippine
Embassy in Singapore. The Certificate, issued on
March 8, 1999, declared her a bona fide contract
worker for Singapore. Under Philippine law, this
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document authorized her working status in a foreign
country and entitled her to all benefits and processes
under our statutes. Thus, even assuming that she
was considered at the start of her employment as a
“direct hire” governed by and subject to the laws,
common practices and customs prevailing in
Singapore she subsequently became a contract
worker or an OFW who was covered by Philippine
labor laws and policies upon certification by the
POEA. At the time her employment was illegally
terminated, she already possessed the POEA
employment Certificate. Whether employed locally or
overseas, all Filipino workers enjoy the protective
mantle of Philippine labor and social legislation,
contract stipulations to the contrary notwithstanding.
This pronouncement is in keeping with the basic
public policy of the State to afford protection to labor,
promote full employment, ensure equal work
opportunities regardless of sex, race or creed, and
regulate the relations between workers and
employers.

B. RECRUITMENT AND PLACEMENT

1. Definition: Illegal Recruitment; Prohibited Acts

Recruitment and Placement – any act of
(CETCHUP) canvassing, enlisting, transporting,
contracting, hiring, utilizing or procuring workers and
includes (CRAP) includes contract services, referrals,
advertising for employment, promising 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

Prohibited Practices
1. To charge or accept, directly or indirectly, any
amount greater than that specified in the
schedule of allowable fees prescribed by the
Secretary of Labor, or to make a worker pay any
amount greater than that actually received by him
as a loan or advance
2. To furnish or publish any false notice or
information or document in relation to recruitment
or employment
3. 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 this Code
4. To induce or attempt to induce a worker already
employed to quit his employment in order to offer
him to another unless the transfer is designed to
liberate the worker from oppressive terms and
conditions of employment
5. To influence or to attempt to influence any person
or entity not to employ any worker who has not
applied for employment through his agency
6. 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
7. To obstruct or attempt to obstruct inspection by
the Secretary of Labor or by his duly authorized
representatives
8. To fail to file reports on the status of employment,
placement vacancies, remittance of foreign
exchange earnings, separation from jobs,
departures and such other matters or information
as may be required by the Secretary of Labor
9. To substitute or alter employment contracts
approved and verified by the Department of
Labor from the time of actual signing thereof by
the parties up to and including the periods of
expiration of the same without the approval of the
Secretary of Labor
10. To become an officer or member of the Board of
any corporation engaged in travel agency or to
be engaged directly or indirectly in the
management of a travel agency
11. To withhold or deny travel documents from
applicant workers before departure for monetary
or financial considerations other than those
authorized under this Code and its implementing
rules and regulations
12. Failure to actually deploy without valid reason as
determined by DOLE
13. 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

Art. 38. Illegal recruitment
Any recruitment activities, including the prohibited
practices enumerated under Article 34 of this
Code, to be undertaken by non-licensees or non-
holders 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.

People v. Panis, 142 SCRA 664 (1986)
The number of persons dealt with is not the basis
in determining WON an act constitutes recruitment
and placement. Any of the acts mentioned in Article
13 (b) will constitute recruitment and placement even
if only one prospective worker is involved. In that
case, a license or authority from POEA is needed.
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The proviso about “two or more persons” merely lays
down a rule of evidence: where fee is collected
because of a promise or offer of employment to two
or more prospective workers, the individual or entity
dealing with them shall be deemed to be engaged in
the act of recruitment and placement. The words
“shall be deemed” create that presumption.

Labor Code
RA 8042 – Overseas
Filipinos and Overseas
Migrant Workers Act
local recruitment and
employment
applies to recruitment for
overseas employment
Illegal Recruitment
(Art. 38):
Any recruitment
activity including
Prohibited Acts
under Art. 34
committed by non-
licensees or non-
holders of authority.

Elements:
1. That the offender
has no valid license
or authority required
by law to enable one
to lawfully engage in
recruitment and
placement of
workers; and,
2. That the offender
undertakes either
any activity within
the meaning of
recruitment and
placement defined
under Article 13(b),
or any prohibited
practices
enumerated under
Article 34.
Illegal Recruitment (Sec.
6):
Any recruitment activity
committed by non-
licensees / non-holders
of authority; OR
Prohibited Acts (same
as Art. 34 of LC)
committed by any
person, whether a non-
licensee, non-holder,
licensee or holder of
authority.
Added the following in
the list of Prohibited
Acts:
1. fail to actually deploy
without valid reason;
2. fail to
reimburse expenses
incurred by the worker
in connection with
his/her documentation
and processing for
purposes of
deployment, in cases
where the deployment
does not actually take
place without the
workers fault.

To prove illegal recruitment, it must be shown
that the accused gave the distinct impression that
he had the power or ability to send complainants
abroad for work such that the latter were
convinced to part with their money in order to be
deployed.
A person is guilty of illegal recruitment when he
gives the impression that he has the power to
send workers abroad.

Illegal recruitment involving economic sabotage
1. By a syndicate – carried out by a group of 3 or
more persons confederating with one another
2. In large scale – committed against 3 or more
persons individually or as a group

People v. Fernandez, et. al., 07 March 2002
These categories are separate or independent
categories. If there is only one complainant in several
complaints, there is no illegal recruitment in large. But
where there are three conspiring recruiters, there is
illegal recruitment by a syndicate.

Non-licensee / Non-Holder of authority – 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,
or whose license or authority has been suspended,
revoked or cancelled by the POEA or the Secretary

Who are liable:
Principals, accomplices, and accessories
For juridical persons, the officers having control,
management or direction of their business shall
be liable.
Where illegal recruitment is proved but the
elements of “large scale” or “syndicate” are
absent, the accused can be convicted only of
“simple illegal recruitment”. (People v. Sagun, GR
No. 110554, 19 February 1999)

Illegal recruitment (IR) involving Economic
Sabotage (Art. 38 (b) Labor Code & Sec. 10 RA
8042):
1. IR committed by syndicate – carried out by a
group of 3 or more persons conspiring and/or
confederating with one another in carrying out
any unlawful or illegal transaction, enterprise or
scheme falling under illegal recruitment
2. IR committed in large scale - committed against 3
or more persons individually or as a group

Estafa – a person convicted for illegal recruitment
under Labor Code can be convicted for violation of
the Revised Penal Code provisions on estafa
provided the elements of the crime are present.

Art. 39 (c) of Labor Code unconstitutional
Only a J udge may issue warrants of search and
arrest. The labor authorities must go through the
judicial process.

Venue – filed with the RTC of the province or city,
Where offense committed; OR
Where offended party actually resides at the time
of the commission of the offense

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Prescriptive Periods:
Simple IR – within 5 years from time IR
happened
Economic Sabotage – within 20 years from time
IR happened

People v. Diaz, 259 SCRA 441 (1996)
The acts of the appellant, which were clearly
described in the lucid testimonies of the three victims,
such as collecting from each of the complainants
payment for passport, medical tests, placement fee,
plane tickets and other sundry expenses, promising
them employment abroad, contracting and
advertising for employment, unquestionably
constitute acts of large scale illegal recruitment.

Aquino v. CA, 204 SCRA 240 (1991)
Receipt of payments, after the expiration of the
license, for services rendered before said expiration
does not constitute illegal recruitment. Recruitment
refers to the offering of inducements to qualified
personnel to enter a particular job or employment.
The advertising, the promise of future employment
and other come-ons took place while Ms. Aquino was
still licensed. True, the payments for services
rendered are necessary consequences of the
applications for overseas employment. However, it is
asking too much to expect a licensed agency to
absolutely at the stroke of midnight stop all
transactions on the day its license expires and refuse
to accept carry-over payments after the agency is
closed. In any business, there has to be a winding-up
after it ceases operations. The collection of unpaid
accounts should not be the basis of a criminal
prosecution.
The prosecution is based on the date of the
prohibited activity, not on the payments being illegal
exactions even if effected during the correct period.
The payments are necessary in order to defray the
expenses entailed in any overseas contract of
employment. They are intended for administrative
and business expenses and for the travelling
expenses of the applicants once cleared for overseas
travel.

People v. Senoron, 267 SCRA 278 (1997)
According to the Labor Code, it is not the
issuance or signing of receipts for the placement fees
that makes a case for illegal recruitment, but rather
the undertaking of recruitment activities without the
necessary license or authority. Absent any other
participation in the IR activities, mere receiving of
placement fees or signing of receipt do not constitute
IR.

Darvin v. CA, 292 SCRA 534 (1998)
By themselves, procuring a passport, airline
tickets and foreign visa for another individual, without
more, can hardly qualify as recruitment activities. IR
must be proved beyond reasonable doubt.

2. Regulation of Recruitment and Placement
Activities

Entities authorized to engage in recruitment and
placement
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 DOLE Secretary
g. construction contractors

Is direct-hiring of OFWs allowed? Why?
No. Employers cannot directly hire workers for
overseas employment except through authorized
entities see (enumeration above).
The reason for the ban is to ensure full regulation
of employment in order to avoid exploitation.

Fees to be Paid by Workers:
No worker shall be charged with any fee until
employee: (1) obtained work through recruiter’s
efforts; and (2) worker has actually commenced
working.
Placement fee in an amount equivalent to one
month’s salary of the worker and documentation
costs are the ONLY AUTHORIZED PAYMENTS
that may be collected from a hired worker.

Eastern Assurance and Surety Corp. v. Secretary
of Labor, 181 SCRA 110 (1990)
POEA has the power to order refund of illegally
collected fees. Implicit in its power to regulate the
recruitment and placement activities of all agencies is
the award of appropriate relief to the victims of the
offenses committed by the respondent agency or
contractor. Such relief includes the refund or
reimbursement of such fees as may have been
fraudulently or otherwise illegally collected, or such
money, goods or services imposed and accepted in
excess of what is licitly prescribed.

Nature of the liability of local recruitment agency
and foreign principal
1. Local Agency is solidarily liable with foreign
principal.
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2. Severance of relations between local agent and
foreign principal does not affect liability of local
recruiter.

Joint and solidary liability of recruiter with
Foreign Principal
A recruitment agency is solidarily liable for the
unpaid salaries of a worker it recruited for
employment overseas.
Even if the recruiter and the principal had already
severed their agency agreement at the time
employee was injured, the recruiter may still be
sued for a violation of the employment contract
because no notice of the agency agreement's
termination was given to the employee.

Catan v. NLRC, 160 SCRA 691 (1988)
This must be so, because the obligations
covenanted in the recruitment agreement entered
into by and between the local agent and its foreign
principal are not coterminous with the term of such
agreement so that if either or both of the parties
decide to end the agreement, the responsibilities of
such parties towards the contracted employees under
the agreement do not at all end, but the same
extends up to and until the expiration of the
employment contracts of the employees recruited
and employed pursuant to the said recruitment
agreement. Otherwise, this will render nugatory the
very purpose for which the law governing the
employment of workers for foreign jobs abroad was
enacted.

Posting of cash bond by recruiter

Capricorn Travel & Tours v. CA, 184 SCRA 123
(1990)
The requirement for the posting of a cash bond is
also an indispensable adjunct to the requirement that
the agency undertakes to assume joint and solidary
liability with the employer for all claims and liabilities
which may arise in connection with the
implementation of the contract of overseas
employment and to guarantee compliance with
existing labor and social legislation of the Philippines
and the country of employment. The undertaking to
assume joint and solidary liability and to guarantee
compliance with labor laws, and the consequent
posting of cash and surety bonds, may be traced all
the way back to the constitutional mandate for the
State to "afford full protection to labor, local and
overseas." The peculiar nature of overseas
employment makes it very difficult for the Filipino
overseas worker to effectively go after his foreign
employer for employment-related claims and, hence,
public policy dictates that, to afford overseas workers
protection from unscrupulous employers, the
recruitment or placement agency in the Philippines
be made to share in the employer's responsibility.

Stronghold Insurance Co. v. CA, 205 SCRA 605
(1992)
The surety bond required of recruitment agencies
is intended for the protection of our citizens who are
engaged for overseas employment by foreign
companies. The purpose is to insure that if the rights
of these overseas workers are violated by their
employers, recourse would still be available to them
against the local companies that recruited them for
the foreign principal. The foreign principal is outside
the jurisdiction of our courts and would probably have
no properties in this country against which an
adverse judgment can be enforced. This difficulty is
corrected by the bond, which can be proceeded
against to satisfy that judgment.

Liability of surety
In a surety bond, the surety unequivocally bound
itself to answer for all liabilities which the POEA
may adjudge or impose against the principal in
connection with the recruitment of Filipino
seamen

Stronghold Insurance Co. v. CA, 205 SCRA 605
(1992)
The surety agreed to answer for whatever
decision might be rendered against the principal,
whether or not the surety was impleaded in the
complaint and had the opportunity to defend itself.
There is nothing in the stipulation calling for a direct
judgment against the surety as a co-defendant in an
action against the principal.

Power to suspend or cancel any license or
authority to recruit employees for overseas
employment is concurrently vested with the
POEA and the Secretary of Labor.
The penalties of suspension and cancellation of
license or authority are prescribed for violations
of the above quoted provisions, among others.
And the Secretary of Labor has the power under
Section 35 of the law to apply these sanctions, as
well as the authority, conferred by Section 36, not
only to 'restrict and regulate the recruitment and
placement activities of all agencies,' but also to
'promulgate rules and regulations to carry out the
objectives and implement the provisions'
governing said activities. Pursuant to this rule-
making power thus granted, the Secretary of
Labor gave the POEA on its own initiative or
upon filing of a complaint or report or upon
request for investigation by any aggrieved
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person, (authority to) conduct the necessary
proceedings for the suspension or cancellation of
the license or authority of any agency or entity'
for certain enumerated offenses including
1. the imposition or acceptance, directly or
indirectly, of any amount of money, goods or
services, or any fee or bond in excess of
what is prescribed by the Administration
2. any other violation of pertinent provisions of
the Labor Code and other relevant laws,
rules and regulations.

The Administrator was also given the power to
'order the dismissal of the case or the suspension
of the license or authority of the respondent
agency or contractor or recommend to the
Minister (now Secretary) the cancellation thereof.

3. Contracts

Freedom to Stipulate

Vir-Jen Shipping v. NLRC, 115 SCRA 347 (1992);
125 SCRA 577 (1983)
The form contracts approved by the National
Seamen Board [now POEA] are designed to protect
Filipino seamen not foreign shipowners who can take
care of themselves. The standard forms embody the
basic minimums which must be incorporated as parts
of the employment contract. They are not collective
bargaining agreements or illimitable contracts which
the parties cannot improve upon or modify in the
course of the agreed period of time.

Terms and conditions and other benefits not
provided by the minimum requirements are valid
if the whole employment package is more
beneficial to the worker than the minimum. But
the stipulations should not contradict law, public
policy and morals.

Minimum Provisions for Contract
1. Guaranteed wages, for regular working hours
and overtime pay for services rendered beyond
regular work hours in accordance with the
standards established by the Administration
2. Free transportation from point of hire to site of
employment and return
3. Free emergency medical and dental treatment
and facilities
4. J ust causes for the termination of the contract or
of the services of the workers
5. Workmen’s compensation benefits and war
hazard protection
6. Repatriation of workers remains and properties in
case of death to the point of hire, or if this is not
possible under the circumstances, the proper
disposition thereof, upon prior arrangement with
the worker’s next-of-kin and the nearest Embassy
or Consulate through the Office of the Labor
Attache
7. Assistance in the remittance of worker’s salaries,
allowances or allotments to his beneficiaries
8. Free and adequate lodging facilities or
compensatory food allowance at prevailing cost
of living standards at the jobsite

4. Dispute Settlement

Regulatory power – DOLE Secretary 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.

Jurisdiction of the POEA
Original and exclusive jurisdiction to hear and decide:
a. all cases, which are administrative in character,
involving or arising out of violations of rules and
regulations relating to licensing and registration
of recruitment and employment agencies or
entities
b. disciplinary action cases and other special cases,
which are administrative in character, involving
employers, principals, contracting partners and
Filipino migrant workers

Money Claims of OFWs
A worker dismissed from overseas employment
without just, valid or authorized cause as defined by
law or contract, is entitled to:
a. full reimbursement of the placement fee with
interest at 12% per annum PLUS
b. his salary for unexpired portion of his
employment contract OR salary for 3 months for
every year of the unexpired term, WHICHEVER
IS LESSER

3-months option available ONLY IF the
employment contract is for at least one year. If
the contract is shorter than that, the salary paid
should be that for the unexpired portion.

Jurisdiction over Money Claims
Labor Arbiters have jurisdiction over all monetary
claims of Overseas Filipino Workers arising from
employer-employee relationship or by virtue of any
law or contract involving Filipino workers for overseas
deployment, including claims for actual, moral,
exemplary and other forms of damages.
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C. EMPLOYMENT OF ALIENS

Requisites for Employment of Non-Resident
Aliens
1. working permit from DOLE
2. certification that there is no available Filipino
willing and competent to do the job for the
employer
3. alien must train at least two Filipino understudies
for such undertaking
4. FOR ENTERPRISES REGISTERED IN
PREFERRED AREAS OF INVESTMENT –
employment permit issued upon recommendation
of government agency charged with the
supervision of said registered enterprise

Exemption from Permit
1. All members of Diplomatic Services and foreign
government officials accredited with the Phil.
Government
2. Members of international organizations with
which the Phil. Government is a cooperating
member (i.e. ADB, IRRI)
3. Missionaries actually engaged in missionary work
4. All aliens granted exemption by special laws and
all those whose employment in the Phil. Have
been determined by the Sec. of Labor to be
beneficial to national interest.

Duration of Permit
Valid for 1 year from date of issuance, unless
sooner revoked by the Secretary of Labor
Renewable upon showing of good cause
Non-transferable

Other Prohibitions
Aliens shall not transfer to another job or change
his employer without prior approval of the
secretary of labor
Non-resident alien shall not take up employment
in violation of the provisions of the Code.

D. HUMAN RESOURCES &
MANPOWER DEVELOPMENT

1. Government Machinery

Policy
It is the policy of the State to provide relevant,
accessible, high quality and efficient technical
education and skills development in support of the
development of high-quality Filipino middle-level
manpower responsive to and in accordance with
Philippine development goals and priorities.

Power and Functions of TESDA
Responsible for formulating, continuing,
coordinating, and fully integrating technical education
and skills development policies, plans and programs

2. Apprenticeship and Learnership
Learners Apprentices
What Persons hired as
trainees in semi-
skilled and other
industrial
occupations
Non-
apprenticeable
May be learned
through practical
training on the
job in a relatively
short period of
time
Shall not exceed
3 months
Practical
training on the
job
Supplemented
by related
theoretical
instruction
Covered by a
written
apprenticeship
agreement with
an individual
employer or
entity
Needs DOLE
approval
Shall not
exceed 6
months
When
may be
hired
No experienced
workers
available
Prevent
curtailment of
employment
opportunities
Not to create
unfair
competition in
labor costs and
lower working
standards
Only in highly-
technical
industries
Only in
apprenticeable
occupations
List of learnable
trades provided
by TESDA
At least 14
years old
Possesses
vocational
aptitude and
capacity for
tests
Ability to
comprehend
Ability to follow
oral and written
instructions
Any form of
employment
requiring
beyond 3 mos.
practical
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training on the
job
supplemented
by related
theoretical
instruction
No list

Requisites for a Valid Apprenticeship
1. qualifications of apprentice are met
2. the apprentice earns not less than 75% of the
prescribed minimum salary
3. apprenticeship agreement duly executed and
signed
4. apprenticeship program approved by the Sec. of
Labor; otherwise, the apprentice shall be deemed
as a regular employee
5. period of apprenticeship not exceed 6 months

At the termination of the apprenticeship, the
employer is not required to continue the
employment.
Employer may not pay wage if the apprenticeship
is
• a requirement for graduation
• required by the School
• required by the Training Program Curriculum
• requisite for Board examination

Venue of Apprenticeship Programs
The plant, shop, premises of the employer or firm
concerned if the apprenticeship program is
organized by an individual employer or firm.
The premises of one or several firms designated
for the purpose by the organizer of the program if
such organizer is an association of employers,
civic groups and the like.
DOLE training center or other public training
institutions with which the Bureau has made
appropriate arrangements.

Contents of Learnership Agreement
1. names and addresses of employer and learner
2. occupation to be learned and the duration of the
training period which shall not exceed 3 months
3. wage of the learner which shall be at least 75%
of the applicable minimum wage
4. commitment to employ the learner, if he so
desires, as a regular employee upon completion
of training

A learner who has worked during the first two
months shall be deemed a regular employee if
training is terminated by the employer before the
end of the stipulated period thorough no fault of
the learner.


V. WORKING CONDITIONS

Coverage
Book III of the Labor Code provides the conditions or
standards of employment. These standards apply
only if there exists EER.

Excluded Employees
1. Government employees whether employed by
the National Government or any of its political
subdivisions, including those employed in
GOCCs
2. Management employees. If they meet ALL of the
following conditions:
i. Their primary duty consists of the management
of the establishment in which they are
employed or of a department or subdivision
thereof
ii. They customarily and regularly direct the work
of two or more employees therein
iii. They have authority to hire or fire other
employees of lower rank; or there suggestions
and recommendations as to the hiring and
firing and as to the promotion or any other
change of status of other employees are given
particular weight
3. Officers or members of managerial staff if they
perform the following duties and responsibilities
i. Primary duty consists of performance of work
directly related to management policies of
employer
ii. Customarily and regularly exercise discretion
and independent judgment
iii. (a) Regularly and directly assist a proprietor
or a managerial employee; (b) Execute under
general supervision work along specialized
or technical lines requiring special training,
experience or knowledge; (c) execute under
general supervision special assignments and
tasks; and
iv. who do not devote more than 20% of their
hours worked in a workweek to activities
which are not directly and closely related to
the performance of work in i-iii above.
4. domestic servants and persons in the personal
service of another if
i. they perform such services in the employer’s
home which are usually necessary or
desirable for the maintenance and enjoyment
thereof, or
ii. minister to the personal comfort,
convenience, or safety of the employer as
well as members of the employer’s
household
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5. workers paid by results, including those who are
paid on piece-work, takaw, pakyaw or task basis
6. non-agricultural field personnel if they regularly
perform their duties away from the principal or
branch office of place of business and whose
actual hours of work in the field cannot be
determined with reasonable certainty.

Managerial Employees – refer to those whose
primary duty consists of the management of the
establishment in which they are employed or of a
department or subdivision thereof, and to other
officers or members of the managerial staff

Field Personnel – non-agricultural employees who
regularly perform their duties away from the principal
place of business or branch office of the employer
and whose actual hours of work in the field cannot be
determined with reasonable certainty

Mercidar Fishing Corp. v. NLRC, 297 SCRA 440
(1998)
Fishermen are not field personnel since
throughout the duration of their work, they are under
the effective control and supervision of the employer.

Autobus Transport Systems Inc. v. Bautista, GR
No. 156367, 16 May 2005)
It is of judicial notice that along the routes that
are plied by bus companies, there are its inspectors
assigned in strategic places, mandatory once-a-week
car barn or shop day, drivers/conductors must be at a
specific place at a specific time, as they generally
observe prompt departure and arrival from their point
of origin to their point of destination. They are under
the constant supervision while in the performance of
this work. Thus, drivers/conductors are not field
personnel.

B. HOURS OF WORK

Work hours shall not exceed 8. Thus, part-time
work, or a day’s work of less than 8 hours, not
prohibited.

Work Day – 24-hr period commencing from the time
an employee regularly starts to work regardless of
whether the work is broken or continuous

Calendar Day – 24-hr. period commencing at 12
midnight and ending at 11:59 p.m.

Compressed Work Week (CWW)
Resorted to by the employer to prevent serious
losses due to causes beyond his control, such as
when there is substantial slump in demand for his
goods and services or when there is lack of raw
materials.
Instead of working 6 days a week, the employees
will be regularly working for less than 6 days but
each workday exceeds 8 hrs. For the hours
exceeding 8 in a workday, the employees waive
their OT pay because, in return, they will no
longer incur transport and other expenses.
Allowed on condition that it is freely agreed upon
between the employer and majority of the
employees. Further, the arrangement should not
diminish the employees’ monthly or daily pay or
their established employment benefits.
Extended workday in CWW should not exceed 12
hrs. Work exceeding 12 hrs. in a day or 48 hrs. in
a week should be considered OT.
Should the work shift revert to 8 hrs., the
reversion shall not constitute a diminution of
benefits.

Hours of Work of Hospital and Clinic Personnel;
Coverage
1. all hospitals and clinics situated in cities or
municipalities with a population of 1 million or
more
2. all hospitals and clinics with a bed capacity of at
least 100

Hospitals and Clinics – place devoted primarily to
maintenance and operation of facilities for the
diagnosis, treatment, and care of individuals suffering
from illness, disease, injury or deformity or in need of
obstetrical or other medical and nursing care

Regular Working Hours and Days of Hospital and
Clinic Personnel
Not more than 8 hrs. in any one day and not
more than 40 hrs. in any one week
Not more than 5 days in a work week. The
workweek may begin at any hour and on any day

Overtime Work of Hospital and Clinic Personnel
May be scheduled to work for more than 5 days
or 40 hrs. a week, provided employee is paid for
overtime work
Overtime: additional compensation of regular
wage +at least 30% thereof

Considered as Compensable Hours Worked
1. All time during which an employee required to be
on duty or to be at the employer’s premises or to
be at a prescribed work place; and
2. All time during which an employee suffered or
permitted to work.
3. Rest periods of short duration during working
hours.
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Principles in Determining Hours Worked
1. All hours are hours worked which the employee
is required to give to his employer, regardless of
whether or not such hours are spent in productive
labor or involve physical or mental exertion
2. An employee need not leave the premises of the
workplace in order that his rest period shall not
be counted, it being enough that he stops
working, may rest completely and may leave his
workplace
3. If the work performed was necessary or it
benefited the employer, or the employee could
not abandon his work at the end of his normal
working hours because he had no replacement,
all time spent or such work shall be considered
as hours worked, if the work was with the
knowledge of his employer or immediate
supervisor.
4. The time during which an employee is inactive by
reason of interruptions in his work beyond his
control shall be considered working time either if
a. the imminence of the resumption of work
requires the employee's presence at the
place of work; or
b. if the interval is too brief to be utilized
effectively and gainfully in the employee's
own interest.

Waiting Time
Waiting time spent by an employee shall be
considered as working time if
1. waiting is an integral part of his work or
2. the employee is required or engaged by the
employer to wait.
Working while on call - an employee who is
required to remain on call in the employer's
premises or so close thereto that he cannot use
the time effectively and gainfully for his own
purpose.

Travel Time
Travel From
Home to Work
Travel that is
All in Days
Work
Travel Away
from Home
Normal travel from
home to work
which is not work
time
Time spent by
an employee
in travel as
part of his
principal
activity, like
travel from
jobsite to
jobsite during
the workday
Travel that
keeps an
employee
away from
home
overnight
GR: not Compensable Work time
compensable
because it is a
normal incident of
employment

Exceptions:
1. where
employee
made to work
on an
emergency
call and travel
is necessary in
proceeding to
the workplace
2. travel is done
through a
conveyance
provided by
the employer
3. travel is done
under the
supervision
and control of
the employer
4. travel is done
under vexing
and
dangerous
circumstances
and counted
as hours
worked
when it cuts
across an
employee’s
workday
because it
substitutes for
the hours the
employee
should have
been in the
office

Univ. of Pangasinan Faculty Union v. Univ. of
Pangasinan, 127 SCRA 691 (1984)
Semestral break of teachers is compensable
hours worked for it is a form of interruption beyond
their control. Applies only for regular full-time
teachers.

Rada v. NLRC, 205 SCRA 69 (1992)
The fact that he picks up employees at certain
specified points in EDSA in going to the project site
and drops them off at the same time on his way back
from the field office going home to Marikina is not
merely incidental to petitioner’s job as a driver.
Said transportation arrangement had been
adopted not so much for the convenience of the
employees, but primarily for the benefit of the
employer. Since the assigned task of fetching and
delivering employees is indispensable and
consequently mandatory, then the time required of
and used by petitioner in going from his residence to
the field office and back should be paid as overtime
work.

Lectures, Meeting, Trainings, Programs
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NOT considered working time if ALL the following
conditions are met:
1. Attendance is outside of the employee's
regular working hours
2. Attendance is in fact voluntary
3. The employee does not perform any
productive work during such attendance.

Meal and Rest Periods
GR: not less than 1 hour time-off for regular meals –
non-compensable

Except: meal period of not less than 20 mins. in the
following cases – compensable hours worked:
1. Where the work is non-manual work in nature or
does not involve strenuous physical exertion
2. Where the establishment regularly operates not
less than 16 hours a day
3. In case of actual or impending emergencies or
there is urgent work to be performed on
machineries, equipment or installations to avoid
serious loss which the employer would otherwise
suffer
4. Where the work is necessary to prevent serious
loss of perishable goods
Rest periods or coffee breaks – running from 5
to 20 mins. considered as compensable working
time.
To shorten meal time to less than 20 mins, is not
allowed. If the so-called “meal time” is less than
20 mins., it becomes only a rest period.
Sime Darby Pilipinas v. NLRC, 289 SCRA 86
(1998)
The employer may change the meal break from
30 mins. fully paid to 60 mins. without pay.
For a full one hour undisturbed lunch break, the
employees can freely and effectively use this hour
not only for eating but also for their rest and comfort.
Since the employees are no longer required to work
during this 1-hour lunch break, there is no more need
for them to be compensated for this period.
Overtime Pay (OT) – work exceeding eight hours
within the worker’s 24-hour workday. Work within the
E’ee’s shift is not overtime.
OT on a Regular Day: regular wage +at least
25% thereof
OT on a Holiday/E’ee’s Rest Day: rate of 1
st
8
hrs. on holiday/rest day +at least 30% thereof.
Since the OT work is considered hourly, the pay
rate is computed also on per hour basis. The
daily wage is divided by 8 to get the hourly base
rate.
If employee is paid on a monthly salary basis, the
daily rate is obtained by the following formula:
Daily Rate = monthly salary x 12_____
Total no of days considered
paid in a year
Permissible for the employer to stipulate that the
employee’s monthly salary constitutes payment
for all the days of the month, including rest days
and holidays, where the employee’s monthly
salary, when converted by the increased divisor
into its daily equivalent, would still meet minimum
wage.
Regular Wage – includes the cash wage only,
without deduction on account of facilities provided by
the employer
Conditions to be entitled to OT pay
1. Actual rendition of OT work
2. Submission of sufficient proof that said work was
actually performed
3. OT work is with the knowledge and consent of
the employer

Compulsory OT Work (provided employee paid
the additional compensation required)
1. Country at war/National or Local Emergency
2. Completion of work started before the 8
th
hour
and is necessary to prevent serious obstruction
or prejudice to the business
3. Urgent work to be performed on Machines to
avoid serious loss or damage to employer
4. Necessary to Prevent loss of life/property or
Imminent danger to public safety
5. Necessary to prevent loss or damage to
perishable goods
6. Necessary to avail of favorable weather or
environmental condition
Undertime NOT Offset by OT – an employee’s
regular pay rate is lower than the OT rate. Offsetting
the undertime hours against the OT hours would
result in undue deprivation of the employee’s extra
pay for OT work.
Right to OT pay cannot be waived. But when the
alleged waiver of OT pay is in consideration of
benefits and privileges which may even exceed
the OT pay, the waiver may be permitted.
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Night Shift Differential (NSD) – every employee
shall be paid a night shift differential of not less than
10% of his regular wage for each hour of work
performed between ten o’clock in the evening and six
o’clock in the morning.
NSD = (10% x regular wage/hr.) x no. of hrs. of work
between 10 pm – 6 am
If work done between 10 pm and 6 am is OT
work, the NSD should be based on the OT rate.
Employees NOT Covered by NSD
1. Those of the government and any of its political
subdivisions, including government-owned and/or
controlled corporations
2. Those of retail and service establishments
regularly employing not more than 5 workers
3. Domestic helpers and persons in the personal
service of another
4. Managerial employees
5. Field personnel and other employees whose time
and performance is unsupervised by the
employer including those who are engaged on
task or contract basis, purely commission basis,
or those who are paid a fixed amount for
performing work irrespective of the time
consumed in the performance thereof
C. REST PERIODS AND HOLIDAYS
Weekly Rest Periods – applies to all employers
whether operating for profit or not, including public
utilities operated by private persons
Business on Sundays/Holidays – All
establishments and enterprises may operate or open
for business on Sundays and holidays provided that
the employees are given the weekly rest day and the
benefits as provided.
Weekly Rest Day – Every employer shall give his
employees a rest period of not less than 24
consecutive hrs. after every 6 consecutive normal
work days.
Preference of employee – The preference of the
employee as to his weekly day of rest shall be
respected by the employer if the same is based on
religious grounds.
The employee shall make known his preference
to the employer in writing at least 7 days before
the desired effectivity of the initial rest day so
preferred.
Where, however, the choice of the employee as
to his rest day based on religious grounds will
inevitably result in serious prejudice or
obstruction to the operations of the undertaking
and the employer cannot normally be expected to
resort to other remedial measures, the employer
may so schedule the weekly rest day of his
choice for at least 2 days in a month.
Schedule of Rest Day
a. Where the weekly rest is given to all employees
simultaneously – the employer shall make known
such rest period by means of a written notice
posted conspicuously in the work place at least
one week before it becomes effective
b. Where the rest period is not granted to all
employees simultaneously and collectively – the
employer shall make known to the employees
their respective schedules of weekly rest through
written notices posted conspicuously in the work
place at least one week before they become
effective

Work on Rest Day Authorized (UAAP NAF)
1. In case of urgent work to be performed on
machineries, equipment or installations to avoid
serious loss which the employer would otherwise
suffer
2. In case of actual or impending emergencies
caused by serious accident, fire, flood, typhoon,
earthquake, epidemic or other disaster or
calamity, to prevent loss of life or property, or in
cases of force majeure or imminent danger to
public safety
3. In the event of abnormal pressure of work due
to special circumstances, where the employer
cannot ordinarily be expected to resort to other
measures
4. To prevent serious loss of perishable goods
5. Where the nature of the work is such that the
employees have to work continuously for 7 days
in a week or more, as in the case of the crew
members of a vessel to complete a voyage and
in other similar cases
6. Under other analogous or similar circumstances
7. When the work is necessary to avail of favorable
weather or environmental conditions where
performance or quality of work is dependent
thereon.
Other than the above circumstances, no
employee shall be required against his will to
work on his scheduled rest day.
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When an employee volunteers to work on his rest
day under other circumstances, he shall express
such desire in writing, subject to payment of
additional compensation.
An employee shall be entitled additional
compensation for work performed on a Sunday
only when it is his established rest day.
Holidays with Pay; Applies to ALL employees.
EXCEPT:
1. Those of the government and any of the political
subdivision, including government-owned and
controlled corporation
2. Those of retail and service establishments
regularly employing less than ten 10 workers
3. Domestic helpers and persons in the personal
service of another
4. Managerial employees
5. Field personnel and other employees whose time
and performance is unsupervised by the
employer including those who are engaged on
task or contract basis, purely commission basis,
or those who are paid a fixed amount for
performing work irrespective of the time
consumed in the performance thereof.

Absences
Employee on Leave of absence with pay –
entitled to the benefit provided herein
Employee on leave of absence without pay on
the day immediately preceding a regular holiday
– may not be paid the required holiday pay if he
has not worked on such regular holiday
Where the day immediately preceding the holiday
is a non-working day in the establishment or the
scheduled rest day of the employee, he shall not
be deemed to be on leave of absence on that
day, in which case he shall be entitled to the
holiday pay if he worked on the day immediately
preceding the non-working day or rest day
Temporary or Periodic Shutdown and Temporary
Cessation of Work (i.e. yearly inventory, repair or
cleaning of machineries or equipment, etc) – regular
holidays falling within this period compensable
Temporary or Periodic Shutdown and Temporary
Cessation of Work Due to Business Reverses –
employer may not pay the regular holidays during this
period
Holiday Pay of Certain Employees
1. Private School teachers including faculty
members of college and universities – may not
be paid for the regular holidays during semestral
vacations. Paid for the regular holidays during
Christmas vacation
2. Employee paid by results (payment on piece-
work) – holiday pay shall not be less than his
average daily earnings for the last 7 actual
working days preceding the regular holiday;
Provided, However, that in no case shall the
holiday pay be less than the applicable statutory
minimum wage rate
3. Seasonal workers – may not be paid the
required holiday pay during off-season when they
are not at work
4. Workers without regular working days –
entitled to the benefits
Double Holiday – an employee who is entitled to
holiday pay should receive at least 200% of his basic
wage even if he did not work on that day, provided,
he was present or on leave wit pay on the preceding
work day. If he worked, he is entitled to 300% of his
basic wage.
Holiday-Sunday – a legal holiday falling on a
Sunday creates no legal obligation for the employer
to pay extra, aside from the usual holiday pay, to its
monthly-paid employees
Successive Regular Holidays – Where there are 2
successive regular holidays, like Holy Thursday and
Good Friday, an employee may not be paid for both
holidays if he absents himself from work on the day
immediately preceding the first holiday, unless he
works on the first holiday, in which case he is entitled
to his holiday pay on the second holiday. To be
entitled to 2 successive holidays, employee must: (1)
be present on the day immediately preceding the 1
st

holiday; or (2) be on leave wit pay.
Holidays
1. New Year’s Day - J an. 1
2. Maundy Thursday - Movable Date
3. Good Friday - Movable Date
4. Araw ng Kagitingan - April 9
5. Labor Day - May 1
6. Independence Day - J une 12
7. Nat’l Heroes Day - Last Sun. of Aug.
8. Bonifacio Day - Nov. 30
9. Eidul Fit’r - Movable Date
10. Christmas Day - Dec. 25
11. Rizal Day - Dec. 30

Special Days
1. Special Non-Working Days
2. Special Public Holidays
3. Special National Holiday
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4. All Saints’ Day - Nov. 1
5. Last Day of the Yr - Dec. 31
6. Ninoy Aquino Day - August 21
Muslim Holidays – while the regular holidays are
observed in the whole country, the Muslim holidays,
except Eidul Fitr, are observed only in specified
areas. Muslim employees working outside of the
specified areas shall be excused from reporting for
work during the observance of the Muslim holidays
as recognized by law, without diminution of salary or
wages during the period.
Rules on Payment of Holiday Pay:
1. REGULAR HOLIDAYS
a. If it is employee’s regular work day:
- Unworked: - 100%
- Worked:
1
st
8 hrs - 200%
excess of 8 hrs. - +30%
of hourly rate
on said day

b. If it is employeee’s rest day:
- Unworked: - 100%
- Worked:
1
st
8 hrs. - +30% of 200%
excess of 8 hrs. - +30% of
hourly rate on said
day

2. SPECIAL DAYS
a. Unworked – no pay unless there is a favorable
company policy, practice or CBA granting
payment of wages on special days even if
unworked

b. Worked
1
st
8 hrs. - +30% of the
daily rate of 100%
excess of 8 hrs. - +30% of
hourly rate on said
day

c. Falling on employee’s rest day and if worked
1
st
8 hrs. - +50% of the
daily rate of 100%
excess of 8 hrs. - +30% of
hourly rate on said
day

3. SPECIAL WORKING HOLIDAYS – only basic rate.


D. SERVICE CHARGE &
SERVICE INCENTIVE LEAVE
Service Incentive Leave (SIL) – every employee
who has rendered at least 1 year of service shall be
entitled to a yearly service incentive leave of 5 days
with pay
Commutable to its money equivalent if not used
or exhausted at the end of the year.
At least 1 year service – service for not less than 12
months, whether continuous or broken reckoned from
the date the employee started working, including
authorized absences and paid regular holidays
unless the working days in the establishment as a
matter of practice or policy, or that provided in the
employment contract is less than 12 months, in which
case said period shall be considered as one year
Employees NOT Covered
1. Those of the government and any of its political
subdivisions, including government-owned and
controlled corporations
2. Domestic helpers and persons in the personal
service of another
3. Managerial employees
4. Field personnel and other employees whose
performance is unsupervised by the employer
including those who are engaged on task or
contract basis, purely commission basis, or those
who are paid a fixed amount for performing work
irrespective of the time consumed in the
performance thereof
5. Those who are already enjoying the benefit
herein provided
6. Those enjoying vacation leave with pay of at
least five days
7. Those employed in establishments regularly
employing less than ten employees
Service Charges – apply only to establishments
collecting service charges such as hotels,
restaurants, lodging houses, night clubs, cocktail
lounge, massage clinics, bars, casinos and gambling
houses, and similar enterprises, including those
entities operating primarily as private subsidiaries of
the Government
Employees Covered – 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 to
managerial employees
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Distribution
85% distributed equally among the covered
employees
15% for the disposition by management to
answer for losses and breakages and distribution
to managerial employees at the discretion of the
management in the latter case
distributed and paid to the employees not less
than once every 2 weeks or twice a month at
intervals not exceeding 16 days
Supervisors share in the 15%. LC speaks of
“management,” and not “managerial employees.”
E. OTHERS
Vacation Leave (VL) / Sick Leave (SL) – not
required by law and depends on voluntary employer
policy or collective bargaining.
Solo Parent Leave (RA 8972: Solo Parents’
Welfare Act of 2000) – a parental leave of not more
than 7 working days every years shall be granted to
any solo parent employee who has rendered service
of at least 1 year
Solo Parent – woman who gives birth as a result
of rape or crimes against chastity, a widow or
widower, a spouse separated legally or de facto
for at least one year, and so forth. The claimant
parent has to show that he/she is left alone with
the responsibility of parenthood.
Leave under RA 9262 (Anti-Violence Against
Women and their Children Act of 2004) – allows
the victim of violence, which may be physical, sexual,
or psychological, to apply for the issuance of a
protection order. If such victim is an employee, she is
entitled to a paid leave of up to 10 days in addition to
other paid leaves under the Labor Code, other laws
and company policies.
The employee has to submit a certification from
the Punong Barangay or Kagawad or prosecutor
or Clerk of Court that an action under RA 9262
has been filed and is pending.

VI. WAGES
A. CONCEPT AND DEFINITION
Agriculture – includes farming in all its branches
and, among other things, includes cultivation and
tillage of soil, dairying, the production, cultivation,
growing and harvesting of any agricultural and
horticultural commodities, the raising of livestock or
poultry, and any practices performed by a farmer on
a farm as an incident to or in conjunction with such
farming operations, but does not include the
manufacturing or processing of sugar, coconuts,
abaca, tobacco, pineapples or other farm products
Wage – paid to any employee shall mean the:
1. remuneration or earnings, however designated,
capable of being expressed in terms of money,
whether fixed or ascertained on a time, task,
piece, or commission basis, or other method of
calculating the same, which is payable by an
employer to an employee under a written or
unwritten contract of employment for work done
or to be done, or for services rendered or to be
rendered; and includes
2. the fair and reasonable value, as determined by
the DOLE Secretary, of board, lodging, or other
facilities customarily furnished by the employer to
the employee. "Fair and reasonable value" shall
not include any profit to the employer, or to any
person affiliated with the employer.
Fair Wage for Fair Work; No Work – No Pay
Principle – if there is no work performed by the
employee, there can be no wage or pay unless the
laborer was able, willing, and ready to work but was
prevented by management or was illegally locked
out, suspended or dismissed. But where the failure of
employees to work was not due to the employer’s
fault, the burden of economic loss suffered by the
employees. Should not be shifted to the employer.
Each party must bear his own loss.
Equal Pay for Equal Work – persons who work with
substantially equal qualifications, skill, effort and
responsibility, under similar conditions, should be
paid similar salaries.
Facilities – articles or services for the benefit of the
employee or his family but shall not include tools of
the trade or articles or service primarily for the benefit
of the employer or necessary to the conduct of the
employers business. May be deducted from the
employees’ wages.
Acceptance of Facilities – in order that the cost of
facilities furnished by the employer may be charged
against an employee, the employee’s acceptance of
such facilities MUST BE VOLUNTARY.
Mabeza v. NLRC, 271 SCRA 670 (1997)
Requirements for deducting value of facilities:
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1. Proof must be shown that such facilities are
customarily furnished by the trade
2. The provision of deductible facilities must be
voluntarily accepted in writing by the employee
3. The facilities must be charged at fair and
reasonable value

Facilities Supplements
items of expense
necessary for the
laborer’s and his family’s
existence and
subsistence
extra remuneration or
special privileges or
benefits given to or
received by the
employees over and
above their ordinary
earnings or wages.
part of the wage independent of the wage
deductible from the wage not wage deductible

Employees NOT Covered by Provisions on
Wages
1. farm tenancy / leasehold
2. domestic service
3. persons working in their respective homes in
needle work or in any cottage industry duly
registered in accordance with law
4. Barangay micro business enterprise (BMBE)
under RA 9178, the BMBE Law. BMBE – any
business entity or enterprise engaged in the
production, processing, or manufacturing of
products or commodities, including agro-
processing, trading and services, whose total
assets including those arising from loans but
exclusive of the land on which the particular
business entity’s office, plant and equipment are
situated, shall not be more than P3M
B. WAGE-FIXING
Regional Minimum Wages – the minimum wage
rates for agricultural and non-agricultural employees
and workers in each and every region of the country
shall be those prescribed by the Regional Tripartite
Wages and Productivity Boards
Minimum Wage – lowest wage rate fixed by law that
an employer can pay his employee; payment of
minimum wages is not dependent on the employer’s
ability to pay
Daily-Paid Employee – paid only for days he
actually worked
Monthly-Paid Employee – employees paid by the
month, irrespective of the number of working days
therein, with a salary of not less than the statutory or
established minimum wage, shall be presumed to be
paid for all the days in the month whether worked or
not. The monthly min. wage shall not be less than the
statutory minimum wage multiplied by 365 days
divided by 12.
Agricultural Rate – farm work from land preparation
to harvesting
Industrial Rate – manufacturing or processing of
farm products
Non-Diminution Rule
GR: Nothing in the Labor Code shall be construed to
eliminate or in any way diminish supplements, or
other employee benefits being enjoyed at the time of
promulgation of the Labor Code. Benefits being given
to employees shall not be taken back or reduced
unilaterally by the employer because the benefit has
become part of the employment contract, written or
unwritten.

Exception: To correct an error, otherwise, if the
error is left uncorrected for a reasonable period of
time, it ripens into a company policy and employees
can demand for it as a matter of right.

When Non-Diminution Rule Applicable – The rule
is applicable if it is shown that the grant of the benefit
is
1. based on an express policy
2. has ripened into practice over a long period of
time; and the practice is consistent and
deliberate, and is not due to an error in the
construction/application of a doubtful or difficult
question of law
Bonus – a benefit which is contingent or conditional;
its demandability depends on certain pre-conditions.
It is an amount granted voluntarily to an
employee for his/her industry and loyalty which
contributed to the success and realization of
profits of the employer’s business.
It is not a demandable and enforceable obligation
unless it was promised to be given without any
conditions imposed for its payment in which case
it is deemed part of the wage.
Payment by Results – regulated by DOLE Secretary
to ensure the payment of fair and reasonable wage
rates, preferably through time and motion studies or
in consultation with representatives of workers’ and
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employers’ organizations. Includes pakyaw, piece
work and other noontime work.
Two Categories of Piece-Rate Employees
1. Employees paid piece rates which are prescribed
in Piece Rate orders issued by DOLE – wages
are determined by multiplying the number of
pieces produced by the pay rate per piece.
2. Employees paid output rates which are
prescribed by the employer and are not yet
approved by the DOLE – to determine wage, the
number of pieces produces is multiplied by the
rate per piece as determined by the employer. If
the result is equal to or greater than the
applicable legal daily rate in proportion to the
number of hours worked, the worker receives
such increased amount. If the amount is lower,
the employer must make up the difference.

Benefits Payable to Piece-Rate Workers
(HANS MOTO)
1. Holiday Pay
2. Applicable Statutory Minimum Daily Rate
3. Night Differential Pay
4. Service Incentive Leave
5. Meal and Rest Periods
6. Overtime and Premium Pay
7. Thirteenth Month Pay
8. Other Benefits

Basic Wage – means all remuneration or earnings
paid by an employer to a worker for services
rendered on normal working days and hours but does
not include cost-of-living allowances, profit sharing
payments, premium payments, 13th month pay or
other monetary benefits which are not considered as
part of or integrated into the regular salary of the
workers

Minimum Wage – lowest wage rate fixed by law than
an employer can pay his employees

Who Sets Minimum Wage
1. Regional Tripartite Wages and Productivity Board
2. Congress

National Wages and Productivity Commission
1. Prescribes rules and guidelines for the
determination of appropriate minimum wage and
productivity measures at the regional, provincial,
or industry levels
2. Reviews regional wage levels set by the Regional
Tripartite Wages and Productivity Boards to
determine if these are in accordance with
prescribed guidelines and national development
plans

Regional Tripartite Wages and Productivity
Boards
1. Determine and fix minimum wage rates
applicable in their regions, provinces or industries
therein and to issue the corresponding wage
orders, subject to guidelines issued by the
National Wages and Productivity Commission.
2. Develop plans, programs and projects relative to
wages, incomes and productivity improvement for
their respective regions
3. Receive, process and act on applications for
exemption from prescribed wage rates as may be
provided by law or any Wage Order
4. Other functions

Composition of Each Regional Board
1. Regional Director of DOLE
2. Regional Director of NEDA
3. Regional Director of DTI
4. 2 members from Employer sector
5. 2 members from Employee sector
Wage Order – an order issued by the Regional
Board whenever the conditions in the region so
warrant after studying and investigating and studying
all pertinent facts and based on the standards and
criteria prescribed by the Labor Code.
A wage order adjusts the minimum level but not
the levels above the minimum. It does not
mandate across the board salary increase.
Employees NOT Covered
1. Household or domestic helpers, including family
drivers and workers in the personal service of
another
2. Workers and employees in retail/service
establishments regularly employing not more
than 10 workers, when exempted from
compliance, for a period fixed by the
Commission/Boards
3. Workers and employees in new business
enterprises outside the National Capital Region
and export processing zones for a period of not
more than two or three years, as the case may
be, from the start of operations when exempted
Effectivity of Wage Orders – takes effect after 15
days from its complete publication in at least one
newspaper of general circulation in the region
Public Hearings and Consultations Mandatory –
notice must be given to employees’ and employers’
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groups, provincial, city and municipal officials and
other interested parties.
A wage order issued without the required public
consultation and newspaper publication is null
and void.
Frequency – a wage order issued by the Board may
not be disturbed for a period of 12 months from its
effectivity and no petition for wage increase shall be
entertained during said period EXCEPT when
Congress itself issues a law increasing wages.
Standards/Criteria for Minimum Wage
Fixing – must be economically feasible to maintain
the minimum standards of living necessary for the
health, efficiency and general well-being of the
employees within the framework of the national
economic and social development program. Factors
to Consider:
1. The demand for living wages
2. Wage adjustment vis-à-vis the consumer price
index
3. The cost of living and changes or increases
4. The needs of workers and their families
5. The need to induce industries to invest in the
countryside
6. Improvements in standards of living
7. The prevailing wage levels
8. Fair return of the capital invested and capacity to
pay of employers
9. Effects on employment generation and family
income
10. The equitable distribution of income and wealth
along the imperatives of economic and social
development
Wage Distortion – 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 basis of differentiation. Simply, if the
pay advantage of a position over another is removed
or significantly reduced by a pay adjustment required
by a wage order, such pay advantage should be
restored.
Correction of Wage Distortion
A. ORGANIZED ESTABLISHMENT
1. Employer and union shall negotiate to correct the
distortion
2. Any dispute arising should be resolved through
grievance procedure under CBA
3. If dispute remains unresolved, through voluntary
arbitration

B. UNORGANIZED ESTABLISHMENT
1. The employer and employees shall endeavor to
correct the distortion
2. Any dispute shall be settled through National
Conciliation and Mediation Board (NCMB)
3. If remains unresolved after 10 days of
conciliation, it shall be referred to the NLRC
Amount of Distortion Adjustment – the restoration
of the previous pay advantage is the aim but not
necessarily to the last peso. Restoration of
appreciable differential, a significant pay gap, should
suffice as correction.
Suggested Formula to Correct a Salary Distortion
Minimum Wage = % x Prescribed Increase Actual
Salary
Prubankers Association v. Prudential Bank and
Trust Co., 302 SCRA 74 (1999)
Wage distortion involves comparison of jobs
located in the same region. Examination of alleged
salary distortion is limited to jobs or positions in the
same employer in the same region; thus, the
comparison of salaries has to be intra-region, not
inter-region.

Bankard Employees Union – WATU v. NLRC, GR
No. 140689, 17 February 2004
The distortion that should be rectified refers to
distortion arising from compliance with a government
wage order. It does not refer to distortion caused by
salary revisions voluntarily initiated by the employer
unless such a duty exists because of a CBA
stipulation or company practice.
C. PAYMENT OF WAGES
Manner of wage payment – wages shall be paid in
legal tender and the use of tokens, promissory notes,
vouchers, coupons, or any other form alleged to
represent legal tender is absolutely prohibited even
when expressly requested by the employee.
Payment by check – Payment of wages by bank
checks, postal checks or money orders is allowed
where
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1. such manner of wage payment is customary on
the date of the effectivity of the Labor Code,
2. where it is so stipulated in a collective
agreement, or
3. where all of the following conditions are met:
a. There is a bank or other facility for
encashment within a radius of 1 kilometer
from the workplace
b. The employer or any of his agents or
representatives does not receive any
pecuniary benefit directly or indirectly from
the arrangement
c. The employees are given reasonable time
during banking hours to withdraw their wages
from the bank which time shall be considered
as compensable hours worked if done during
working hours
d. The payment by check is with the written
consent of the employees concerned if there
is no collective agreement authorizing the
payment of wages by bank checks

Time of payment
GR:
1. not less than once every 2 weeks; or
2. twice a month at intervals not exceeding 16 days

Except:
1. In case payment cannot be made with such
regularity due to force majeure or circumstances
beyond the employer's control – the employer
shall pay the wages immediately after such force
majeure or circumstances have ceased.
2. In case of payment of wages by results involving
work which cannot be finished in 2 weeks,
payment shall be made at intervals not exceeding
sixteen days in proportion to the amount of work
completed. Final settlement shall be made
immediately upon completion of the work.

Place of payment – the place of payment shall be at
or near the place of undertaking. Payment in a place
other than the work place shall be permissible only
under the following circumstances:
1. When payment cannot be effected at or near the
place of work by reason of the deterioration of
peace and order conditions, or by reason of
actual or impending emergencies caused by fire,
flood, epidemic or other calamity rendering
payment thereat impossible
2. When the employer provides free transportation
to the employees back and forth
3. Under any other analogous circumstances;
Provided, That the time spent by the employees
in collecting their wages shall be considered as
compensable hours worked
Prohibited Place of Payment – bar, night or day
club, drinking establishment, massage clinic, dance
hall, or other similar places or in places where games
are played with stakes of money or things
representing money except in the case of persons
employed in said places
Payment through Banks; Requisites
1. There must be a written permission of the
majority of the employees concerned in an
establishment
2. The establishment must have 25 or more
employees
3. The establishment must be located within 1 km.
radius to the bank.
Payment through ATM allowed

Direct Payment of Wages
GR: paid directly to workers to whom they are due

Exceptions:
1. Payment Through Another Person
a. In case of force majeure rendering such
payment impossible provided such person is
under written authority given by the worker
for the purpose
b. When authorized under existing law
including:
i. payments for the insurance premiums of
the employee
ii. union dues where the right to check-off
has been recognized by the employer in
accordance with a collective agreement
iii. authorized in writing by the individual
employees concerned
2. Payment Through Heirs of Worker – in case the
worker has died, employer may pay wages of the
deceased to the heirs of the latter without
necessity of intestate proceedings

Procedure:
1. When the heirs are of age, they shall execute an
affidavit attesting to their relationship to the
deceased and the fact that they are his heirs to
the exclusion of all other persons.
2. In case any of the heirs is a minor, such affidavit
shall be executed in his behalf by his natural
guardian or next of kin.
3. Affidavit shall be presented to the employer who
shall make payment through the DOLE Sec. or
his representative
4. Payment of wage shall absolve the employer of
any other liability with respect to the amount paid.

3. Payment through Member of Worker’s Family –
where the employer is authorized in writing by the
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employee to pay his wages to a member of his
family
Non-interference in Disposal of Wages – No
employer shall limit or otherwise interfere with the
freedom of any employee to dispose of his wages
and no employer shall in any manner oblige any of
his employees to patronize any store or avail of the
services offered by any person.
Wage Deductions
GR: NOT allowed
Except:
1. 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
2. For union dues, in cases where the right of the
worker or his union to check-off has been
recognized by the employer or authorized in
writing by the individual worker concerned
3. In cases where the employer is authorized by law
or regulations issued by the DOLE Secretary

Other Allowable Deductions
1. In cases where employee indebted to employer,
where such indebtedness has become due and
demandable
2. In court awards, wages may be the subject of
execution or attachment, but only for debts
incurred for food, shelter, clothing, and medical
attendance
3. Withholding Tax
4. Salary deductions of a legally established
cooperative
5. Deductions for payment to 3rd persons, upon
written authorization of the employee
6. Union dues
7. Agency fee
8. Deductions for value of meals and other facilities
9. Deductions for loss or damage
10. SSS, Medicare, Pag-IBIG premiums

Deductions for Loss or Damage
GR: No employer shall require his worker to make
deposits for the reimbursement of loss of or damage
to material, equipment, or tools supplied by the
employer.

Except: When the trade, occupation or business of
the employer recognizes or considers the practice of
making deductions or requiring deposits necessary or
desirable.

Requisites for Valid Deduction for Loss/Damage
1. The employee concerned is clearly shown to be
responsible for the loss or damage
2. The employee is given reasonable opportunity to
show cause why deduction should not be made
3. The amount of such deduction is fair and
reasonable and shall not exceed the actual loss
or damage
4. The deduction from the wages of the employee
does not exceed 20% of the employee's wages in
a week

Prohibited / Unlawful Acts
1. 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.
2. 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.
3. 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.
4. 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.
D. LIABILITY FOR WAGES
Worker Preference in Case of Employer’s
Bankruptcy – workers shall enjoy first preference as
regards their wages and other monetary claims, any
provisions of law to the contrary notwithstanding.
Such unpaid wages and monetary claims shall be
paid in full before claims of the government and other
creditors may be paid.
A declaration of bankruptcy or a judicial
liquidation must take place before the worker’s
preference may be enforced.
Establishes a preference of credit and NOT a
lien.
Attorney’s Fees
1. In case of unlawful withholding of wages, the
culpable party may be assessed attorney’s fees
equivalent to ten percent of the amount of wages
recovered.
2. It shall be unlawful for any person to demand or
accept, in any judicial or administrative
proceedings for the recovery of wages, attorney’s
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fees which exceed ten percent of the amount of
wages recovered.

VII. WORKING CONDITIONS FOR SPECIAL
GROUPS OF EMPLOYEES
A. WOMEN
Night Work Prohibition – no woman regardless of
age shall be employed or permitted or suffered to
work, with or without compensation in any:
1. In any industrial undertaking or branch thereof -
between 10 pm – 6 am of the following day; or
2. In any commercial or non-industrial
undertaking or branch thereof, other than
agricultural - between 12 mn – 6 am of the
following day; or
3. In any agricultural undertaking at nighttime
unless she is given a period of rest of not less
than nine (9) consecutive hours.
Exceptions: Prohibitions DO NOT APPLY
1. In cases of actual or impending emergencies
caused by serious accident, fire, flood, typhoon,
earthquake, epidemic or other disasters or
calamity, to prevent loss of life or property, or in
cases of force majeure or imminent danger to
public safety;
2. In case of urgent work to be performed on
machineries, equipment or installation, to avoid
serious loss which the employer would otherwise
suffer;
3. Where the work is necessary to prevent serious
loss of perishable goods;
4. Where the woman employee holds a responsible
position of managerial or technical nature, or
where the woman employee has been engaged
to provide health and welfare services;
5. Where the nature of the work requires the
manual skill and dexterity of women workers and
the same cannot be performed with equal
efficiency by male workers;
6. Where the women employees are immediate
members of the family operating the
establishment or undertaking; and
7. Under other analogous cases exempted by the
Secretary of Labor and Employment in
appropriate regulations.

Facilities for Women
The DOLE Secretary may require employers to:
1. Provide seats proper for women and permit them
to use such seats when they are free from work
and during working hours, provided they can
perform their duties in this position without
detriment to efficiency
2. To establish separate toilet rooms and lavatories
for men and women and provide at least a
dressing room for women
3. To establish a nursery in a workplace for the
benefit of the women employees therein
4. To determine appropriate minimum age and
other standards for retirement or termination in
special occupations such as those of flight
attendants and the like

Maternity Leave (under RA 1161 SSS Law)
A female member, who need not be legally
married, who has paid for 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
o 60 days – normal delivery
o 78 days – caesarian delivery
Benefits shall be paid only for the FIRST 4
deliveries or miscarriages
Maternity benefits, like other benefits granted by
the SSS, are granted in lieu of wages and
therefore, may not be included in computing the
employee’s 13th month pay for the calendar year
The employer shall advance the payment subject
to reimbursement by the SSS.
It is not necessary that the woman be
impregnated by her legitimate husband. It is
immaterial who the father is.
Every pregnant woman in the private sector,
whether married or unmarried, is entitled to the
maternity leave benefits.

Paternity Leave (under RA 8187 Paternity Leave
Act of 1996)
Grants 7 working days of paternity leave with full
pay to married male employees in the private and
public sectors. (Sec. 1(a), RA 8187 IRR)
Conditions to entitlement:
a. The claimant, a married male employee, is
employed at the time of delivery of his child
b. He is cohabiting with his spouse at the time
she gives birth or suffers a miscarriage
c. He has applied for paternity leave
d. His wife has given birth or suffered a
miscarriage
Wife – lawful wife; woman legally married to male
employee concerned
Family Planning Services; Incentives for Family
Planning – employers who habitually employ more
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than 200 workers in any locality shall provide free
family-planning services to their employees and their
spouses which shall include but not limited to, the
application or use of contraceptives
Discrimination Prohibited – unlawful for any
employer to discriminate against any woman
employee with respect to terms and conditions of
employment solely on account of her sex
Acts of Discrimination
1. Payment of a lesser compensation, including
wage, salary or other form of remuneration and
fringe benefits, to a female employees as against
a male employee, for work of equal value
2. Favoring a male employee over a female
employee with respect to promotion, training
opportunities, study and scholarship grants solely
on account of their sexes
Person guilty of committing these acts are
criminally liable under Arts. 288-289 of the
Labor Code
That the institution of any criminal action
under this provision shall not bar the
aggrieved employee from filing an entirely
separate and distinct action for money
claims, which may include claims for
damages and other affirmative reliefs. The
actions hereby authorized shall proceed
independently of each other.

Stipulation Against Marriage
It shall be unlawful for the employer to:
1. require as a condition of employment or
continuation of employment that a woman
employee shall not get married
2. to stipulate expressly or tacitly that upon getting
married, a woman employee shall be deemed
resigned or separated
3. to actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee merely
by reason of her marriage

PT&T Co. v. NLRC, 272 SCRA 596 (1997)
A woman worker may not be dismissed on the
ground of dishonesty for having written “single” on
the space for civil status on the application sheet,
contrary to the fact that she was married.

Prohibited Acts
It is unlawful for any employer:
1. To discharge any woman employed by him for
the purpose of preventing such woman from
enjoying the maternity leave, facilities and other
benefits provided under the Code
2. To discharge such woman employee 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 be pregnant
4. To discharge any woman or child or any other
employee for having filed a complaint or having
testified or being about to testify under the Code
5. To require as a condition for a continuation of
employment that a woman employee shall not
get married or to stipulate expressly or tacitly that
upon getting married, a woman employee shall
be deemed resigned or separated, or to actually
dismiss, discharge, discriminate or otherwise
prejudice a woman employee merely by reason
of her marriage
Classification of Certain Women Workers – Any
woman who is permitted or suffered to work, with or
without compensation, in any night club, cocktail
lounge, massage clinic, bar or similar establishments
under the effective control or supervision of the
employer for a substantial period of time as
determined by the Secretary of Labor and
Employment, shall be considered as an employee of
such establishment for purposes of labor and social
legislation.
B. MINORS
Below 15 Not employed EXCEPT:
1. when the child works directly
under the sole responsibility of
his/her parents/legal guardian
who employs only members of
his/her family under the ff
conditions
a. employment does not
endanger the child’s life,
safety, health and morals
b. employment does not
impair the child’s normal
development; and
c. the parent/legal guardian
provides the child with
primary/secondary
education

2. when the child’s employment or
participation in public
entertainment or information
through cinema, theater, radio
or television is essential,
provided that:
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a. employment does not
involve advertisements or
commercials promoting
alcoholic beverages,
intoxicating drinks, tobacco
and its by-products or
exhibiting violence
b. there is a written contract
approved by the DOLE, if
possible
c. the conditions prescribed
for the employment of
minors in No. 1 are met
d. the following requirements
are complied with:
i. employer shall ensure
protection, health,
morals, and normal
development of the
child
ii. employer shall institute
measures to prevent
child’s exploitation /
discrimination taking
into account the system
and level of
remuneration, duration,
and arrangement of
working time
iii. employer shall
formulate and
implement a continuing
program for training and
skills acquisition of the
child, subject to
approval and
supervision of
competent authorities
(as amended by RA 9231)
15 – Below 18 ALLOWED ONLY in: non-
hazardous or non-deleterious
undertakings
18 years and
above
No prohibition

Hazardous Workplaces
a. Nature of the work exposes the workers to
dangerous environmental elements,
contaminants or work conditions
b. Workers are engaged in construction work,
logging, fire-fighting, mining, quarrying, blasting,
stevedoring, dock-work, deep sea fishing, and
mechanized farming
c. Workers are engaged in the manufacture or
handling of explosives and other pyrotechnic
products
d. Exposed to or use of heavy power-driven
machinery or equipment
e. Workers use or are exposed to power-driven
tools
C. HOUSEHELPERS
Domestic or Household Service – services in the
employer’s home which is which is usually necessary
or desirable for the maintenance and enjoyment
thereof and includes ministering to the personal
comfort and convenience of the members of the
employer’s household, including services of family
drivers.
Rights of Househelpers
1. Not to be assigned to non-household work
2. Reasonable compensation (minimum cash wage)
3. Lodging, food and medical attendance
4. If under 18 years, an opportunity for elementary
education – cost of which shall be part of
househelper’s compensation
5. Contract for household service shall NOT
EXCEED 2 years – renewable from year to year
6. J ust and humane treatment
7. Right not to be required to work for more than 10
hrs. a day – if the househelper agrees to work
overtime and there is additional compensation,
the same is permissible
8. Right to 4 days vacation each month with pay – if
the helper does not ask for the vacation, the
number of vacation days cannot be accumulated,
he is only entitled only to its monetary equivalent.
9. Funeral expenses must be paid by the employer
if the househelper has no relatives with sufficient
means in the place where the head of the family
lives
10. Termination only for just cause
11. Indemnity for unjust termination of service
12. Employment certification as to nature and
duration of service and efficiency and conduct of
the househelper

Indemnity for Unjust Termination of Service
1. If the period for household service is fixed,
neither the employer nor the househelper may
terminate the contract before the expiration of the
term except for a just cause.
2. If the househelper is unjustly dismissed, he or
she shall be paid the compensation already
earned +that for 15 days by way of indemnity
3. If the househelper leaves without justifiable
reason, he or she shall forfeit any unpaid salary
due him/her not exceeding 15 days.
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Employment for Certification – upon the severance
of the household service relationship, the
househelper may demand from the employer a
written statement of the nature and duration of the
service and his/her efficiency and conduct as
househelper
Apex Mining Co. Inc. v. NLRC, 196 SCRA 251
(1991)
The criteria are the personal comfort and
enjoyment of the family of the employer in the home
of said employer. While it may be true that the nature
of the work of a househelper, domestic servant or
laundrywoman in a home or in a company staffhouse
may be similar in nature, the difference in their
circumstances is that in the former instance they are
actually serving the family while in the latter case,
whether it is a corporation or a single proprietorship
engaged in business or industry or any other
agricultural or similar pursuit, service is being
rendered in the staffhouses or within the premises of
the business of the employer. In such instance, they
are employees of the company or employer in the
business concerned entitled to the privileges of a
regular employee.
D. HOMEWORKERS
Homeworker – applies to any person who performs
industrial homework for an employer, contractor or
sub-contractor
Industrial Homeworker – 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
Employer of Homeworker – includes any person,
natural or artificial who, for his account or benefit, or
on behalf of any person residing outside the country,
directly or indirectly, or through an employee, agent
contractor, sub-contractor or any other person:
a. 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 directions
b. Sells any goods, articles or materials to be
processed or fabricated in or about a home and
then rebuys them after such processing or
fabrication, either by himself or through some
other person
Deductions – No employee, contractor, or sub-
contractor 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:
1. The homeworker concerned is clearly shown to
be responsible for the loss or damage;
2. The employee is given reasonable opportunity to
show cause why deductions should not be made;
3. The amount of such deduction is fair and
reasonable and shall not exceed the actual loss
or damages; and
4. The deduction is made at such rate that the
amount deducted does not exceed 20% of the
homeworker's earnings in a week.
Liability of employer and contractor – Whenever
an employer shall contract 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 sub-contractor shall be paid in accordance
with the provisions of this Rule. In the event that such
contractor or sub-contractor fails to pay the wages or
earnings of his employees or homeworkers as
specified in this Rule, such employer shall be jointly
and severally liable with the contractor or sub-
contractor 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.
Prohibitions for Homework
1. explosives, fireworks and articles of like character
2. drugs and poisons
3. other articles, the processing of which requires
exposure to toxic substance
E. HANDICAPPED / DISABLED
Handicapped Workers – those whose earning
capacity is impaired by age or physical or mental
deficiency or injury, disease or illness
There must be a link between the deficiency and
the work which entitles the employer to lessen
the worker’s wage. If the disability of the person
is not in any way related to the work for which he
was hired, he should not be so considered as a
handicapped worker.
Handicapped Worker
(Art. 78 LC)
Handicapped Person
(RA 7277 Magna Carta
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for Disabled Persons)
Those whose earning
capacity is impaired by
age or physical or
mental deficiency or
injury
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.

When Employable
1. their employment is necessary to prevent
curtailment of employment opportunities
2. does not create unfair competition in labor costs
3. does not impair or lower working standards
Handicapped Workers May Become Regular
Employees – if their handicap is not such as to
effectively impede the performance of job operations
in the particular occupations for which they were
hired.
Equal Opportunity for Employment – no disabled
person shall be denied access to opportunities for
suitable employment. Qualified disabled employees
shall be subject to same terms and conditions of
employment and the same compensation, privileges,
benefits, fringe benefits, incentives or allowances as
a qualified able-bodied person
Employment Agreement; Contents
1. Names and addresses of the employer and the
handicapped worker
2. Rate of pay of the handicapped worker which
shall not be less than 75% of the legal minimum
wage
3. Nature of work to be performed by the
handicapped worker
4. Duration of the employment

VIII. ADMINISTRATION AND EMPLOYMENT
Art. 128. Visitorial and enforcement power.
Power of the Sec. of Labor or his duly authorized
representative, including labor regulation officers to:
1. have access to employer’s records and premises
at any time of the day or night whenever work is
being undertaken therein
2. right to copy records
3. to question any employee
4. investigate any fact, condition, or matter which
may be necessary to determine violations or
which may be necessary to aid in enforcement of
the Labor Code or any labor law or order
5. issue compliance orders to give effect to labor
legislation based on the findings of employment
and enforcement officers or industrial safety
engineers made in the course of inspection

Compliance Order – must observe due process in
administrative proceedings:
a. alleged violator must first be heard and given
adequate opportunity to present evidence on his
behalf
b. evidence presented duly considered before any
decision reached
c. decision is based on substantial evidence
d. decision based on evidence presented in the
hearing, or at least contained in the record and
disclosed to the parties
e. decision is that of the decision-making authority
and not mere views of subordinates
f. decision should explain the issues involved and
the reasons for the decisions rendered

6. Issue writs of execution to the appropriate
authority for the enforcement of their orders,
EXCEPT in cases where the employer contests
the findings of the labor employment and
enforcement officer and raises isues supported
by documentary proofs which were not
considered in the course of inspection – in the
latter case, the case will have to be forwarded to
a Labor Arbiter

Appeal
If order issued by duly authorized representative
of DOLE Sec. – appeal to the latter
If order involves monetary award – an appeal by
the employer may be perfected upon only upon
posting of CASH or SURETY bond in the amount
equivalent to the monetary award in the order
appealed from

Power of DOLE Secretary
May order stoppage of work OR suspension of
any unit or department where non-compliance
with the law or implementing rules and
regulations poses grave and imminent danger to
the health and safety of workers in the workplace.
Within 24 hrs – a hearing shall be conducted to
determine whether an order for the stoppage of
work or suspension of operations shall be lifted
If violation is attributable to FAULT OF THE
EMPLOYER, he shall pay the employees
concerned their salaries or wages during the
period of such stoppage of work or suspension of
operations.
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Unlawful
For any person or entity to obstruct, impede,
delay or otherwise render ineffective the orders of
the Sec. or his authorized representatives issued
pursuant to the authority under Art. 128
No inferior court shall issue temporary or
permanent injunction or restraining order or
otherwise assume jurisdiction over any case
involving the enforcement orders.

Enforcement Power cannot be Used
Case does not arise from exercise of visitorial
power
When EER ceased to exist at the time of
inspection
If employer contests finding of the labor officer
and such contestable issue is not verifiable in the
normal course of inspection
Recovery of Wages, Simple Money Claims and
Other Benefits (Art. 129)
J urisdiction: DOLE Regional Director (summary
proceeding and non-litigious)
Claimant: Employee or person in domestic or
household service, provided:
1. no claim for reinstatement
2. aggregate claims of each employee or
househelper DOES NOT EXCEED P5,000.
Guico v. Sec. of Labor, 298 SCRA 666 (1998)
If the claim later exceeds P5,000, the Regional
Director still retains jurisdiction based on inspection’s
findings in the nature of enforcement action
3. claims arise from EER
NOTE:
Notice and hearing
Resolution of complaint within 30 days from filing
(Appeal within 5 calendar days to NLRC)
NLRC to resolve appeal within 10 calendar days
from submission of last pleading
Not Included: claims for Employees’ Compensation,
Social Security benefits, Medicare benefits and
Maternity Benefits
Art. 128 Art. 129
WHO
EXERCISES
DOLE Sec. OR
his duly
Regional
Director or any
POWER authorized
representative
who may or
may not be a
Regional
Director
duly authorized
hearing officer
of DOLE
NATURE OF
POWER
Visitorial and
enforcement
power exercised
through routine
inspections of
establishment
Adjudicatory
power on matter
involving
recovery of
wage
EXISTENCE
OF EER
Requires
existence of
EER
EER not
necessary since
it should not
include a claim
for
reinstatement
HOW
INITIATED
Enforcement
power is an
offshoot of
visitorial power
Sworn
complaint filed
by interested
party
LIMITS AS
TO AMOUNT
OF CLAIM
No limit Aggregate claim
of each
complainant
does not
exceed P5,000
APPEAL Appeal to Sec.
of Labor within
10 calendar
days
Appeal to NLRC
within 5
calendar days


IX. MEDICAL, DENTAL AND
OCCUPATIONAL SAFETY
First Aid Treatment – adequate, immediate and
necessary medical and dental attention or remedy
given in case of injury or illness suffered by a worker
during employment, irrespective of whether or not
such injury or illness is work-connected, before a
more extensive medical and/or dental treatment can
be secured.
First-Aider – any person trained and duly certified as
qualified to administer first aid by the PNRC or by any
other organization accredited by the former


X. EMPLOYEES’ COMPENSATION
Workmen’s Compensation – a general and
comprehensive term applied to those laws providing
for compensation for loss resulting from the injury,
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disablement or death of a workman through industrial
accident, casualty or disease
Compensation – money relief offered according to
the scale established under the statute as
differentiated from compensatory damages
recoverable in an action at law for breach of contract
or for tort
WORKMEN’S
COMPENSATION ACT
(WCA)
EMPLOYEES
COMPENSATION LAW
(ECL)
Presumption of
compensability
No presumption of
compensability
Presumption of
aggravation
No presumption of
aggravation
There is a need for the
employer to controvert
the claim within 14 days
otherwise he is deemed
to have waived the right
No need for the
employer to controvert
the claim
Payment of
compensation is made
by the employer
Payment of
compensation is made
by the SSS/GSIS
through the State
Insurance Fund. The
employer’s obligation is
to pay his counter
contribution to the SSS
Injury – any harmful change in the human organism
from any accident arising out of and in the course of
employment
Conditions for Injury to be Compensable
1. The employee must have been injured at the
place where the work required him to be
2. The employee must have been performing his
official functions
3. If the injury is sustained elsewhere, the employee
must have been executing an order of the
employer
4. The injury was not due to the employee’s
intoxication, willful intention to injure or kill himself
or another, or notorious negligence
Injuries incurred by a health worker while
doing overtime work shall be considered
work-connected
Sickness – any illness accepted as an occupational
disease listed by the Commission or any illness
caused by the employment subject to proof that the
risk of contracting the same is increased by the
working conditions
Conditions for Occupational Disease and
Resulting Disability or Death to be Compensable
1. Employee’s work must involve the risk described
therein
2. the disease was contracted as a result of the
employee’s exposure to the described risks
3. the disease was contracted within the period of
exposure and other such factors necessary to
contract it
4. there was no notorious negligence on the part of
the employee
Death – loss of life resulting from injury or sickness
Disability – loss or impairment of a physical or
mental function resulting from injury or sickness
Direct Premises Rule
GR: The accident should have occurred at the place
of work to be compensable.

Exceptions:
1. INGRESS-EGRESS / PROXIMITY RULE – when
the injury is sustained when the employee is
proceeding to or from his work on the premises of
the employer, the injury is compensable.
2. GOING TO OR COMING FROM WORK – when
the injury is sustained when the employee is
proceeding to or from his work on the premises of
the employer, the injury is compensable.
a. The act of the employee of going to, or
coming from, the work place, must have
been a continuing act, that is, he had not
been diverted therefrom by any other activity
and he had not departed from his usual route
to, or from, his workplace; and
b. An employee on a special errand must have
been official and in connection with his work.
c. EXTRA PREMISES RULE – the company
which provides the means of transportation in
going to, or coming from the place of work, is
liable to the injury sustained by the
employees while on board said means of
transportation
d. SPECIAL ERRAND RULE – injury sustained
outside the company premises is
compensable if his being out is covered by
an office order or a locator slip or a pass for
official business
e. DUAL PURPOSE DOCTRINE – allows
compensation where a special trip would
have to be made for the employer if the
employee had not combined the service for
the employer with his going or coming trip
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f. SPECIAL ENGAGEMENT RULE – covers
field trips, outings, intramurals, and picnics
when initiated and sanctioned by the
employer
g. POSITIONAL AND LOCAL RISKS
DOCTRINE – if an employee by reason of
his duties is exposed to a special or peculiar
danger from the elements, that is, one
greater than that to which other persons in
the community are exposed and an
unexpected injury occurs, the injury is
compensable
Compulsory Coverage – ECL applies to all
employers, and to all employees, public or private
including casual, emergency, temporary, or substitute
employees
An employee over 60 yrs of age and paying
contributions to qualify for the retirement or life
insurance benefit administered by the system
shall be subject to compulsory coverage.
Effective Date of Coverage – the employer is
covered from the first day of operation and the
employee from first day of employment
Limits of Liability
No compensation if the injury, death or disability is
the result of the employee’s:
1. intoxication
2. willful intention to injure or kill himself or another
3. notorious negligence – deliberate act of the
employee in disregard to his own personal safety
4. otherwise provided by the Labor Code

Death through Suicide
GR: not compensable

Exceptions:
1. by agreement of the parties
2. if the suicide/death is caused by work-related or
compensable illness or disease

Rules on Simultaneous Recovery
1. Simultaneous recovery under the Labor Code
and the Civil Code cannot be made. The action is
selective and the employee may either choose to
file the claim under either. But once the election
is made, the claimant cannot opt for the other
remedy.
2. Simultaneous recovery under the Labor Code
and the SSS can be made.
State Insurance Fund – all covered employers are
required to remit to a common fund a monthly
contribution equivalent to 1% of the monthly salary
credit of every covered employee. The employee
pays no contribution to the fund. Any agreement to
contrary is prohibited
Disability Categories
1. TEMPORARY TOTAL – if as a result of the injury
or sickness, the employee is unable to perform
any gainful occupation for a continuous period
not exceeding 120 days
2. PERMANENT TOTAL – 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
3. PERMANENT PARTIAL - if as a result of the
injury or sickness, the employee suffers a
permanent partial loss of the use of any part of
his body
Death Benefits – The System shall pay to the
primary beneficiaries upon the death of the covered
employee an amount equal to his monthly income
benefit, plus 10% thereof for each dependent child,
but not exceeding 5, beginning with the youngest,
and without substitution. The income benefit shall be
guaranteed for 5 years.
Dependent
1. Legitimate, legitimated, and legally adopted or
acknowledged natural child who is unmarried, not
gainfully employed and not over 21 years of age
or over 21 years of age, provided he is incapable
of self-support due to a physical or mental defect
which is congenital or acquired during minority
2. legitimate spouse living with the employee
3. parents of said employee wholly dependent upon
him for regular support

Benefits
1. for life to the primary beneficiaries, guaranteed
for 5 years
2. for not more than 60 mos. to the secondary
beneficiaries in case there are no primary
beneficiaries
3. in no case shall the total benefit be less than
P15,000.

Beneficiaries
A. PRIMARY
1. Dependent spouse until he/she remarries
2. Dependent children (legitimate, legitimated,
natural born or legally adopted)

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B. SECONDARY
1. Illegitimate children and legitimate
descendants
2. Parents, grandparents, grandchildren







































































































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LABOR RELATIONS

I. RIGHT TO SELF ORGANIZATION

A. CONCEPT & SCOPE

Art. 243. Coverage and employees’ right to self-
organization.
Art. 246. Non-abridgment of right to self-
organization.

Employer – includes any person acting in the
interest of an employer, directly or indirectly; the term
shall not include any labor organization or any of its
officers or agents except when acting as employer

Employee – includes any person in the employ of an
employer.
The term shall not be limited to the employees of
a particular employer, unless the Code so
explicitly states.
It shall include any individual whose work has
ceased as a result of or in connection with any
current labor dispute or because of any unfair
labor practice if he has not obtained any other
substantially equivalent and regular employment.
Any employee, whether employed for a definite
period or not, shall, beginning on his first day of
service, be considered as an employee for
purposes of membership in any labor union.
(ART. 277 par.c)

Right to Self-Organization
The right includes:
1. Forming, joining, or assisting labor organizations
for the purpose of collective bargaining through
representatives of their own choosing.
2. To engage in lawful concerted activities for the
purpose of collective bargaining or for their
mutual aid and protection.

Who Enjoys the Right to Self Organization
General Rule:
1. ALL persons in:
Commercial, industrial, agricultural, religious,
charitable, medical and educational institutions,
whether or not operated for profit.

PURPOSE: Collective bargaining, engaging in lawful
concerted activities for collective bargaining, and
mutual aid and protection.

2. Ambulant, intermittent and itinerant and rural
workers, the self-employed and those with no
definite employers may form labor organizations.

PURPOSE: Mutual aid and protection.

It shall be unlawful for any person to restrain,
coerce, discriminate against, or unduly interfere
with employees and workers in their exercise of
the right to self organization.

B. LABOR ORGANIZATIONS

1. Definition and Types

Labor Organization – means 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

Legitimate Labor Organization – means any labor
organization duly registered with the DOLE, and
includes any branch or local thereof

Affiliate – refers to an independent union affiliated
with a federation or national union or a chartered
local which was subsequently granted independent
registration but did not disaffiliate from its federation,
reported to the Regional Office and the Bureau in
accordance with Rule III, Sections 6 and 7 of these
Rules.

Chartered Local – refers to a labor organization that
acquired legal personality through the issuance of a
charter certificate by a duly registered federation or
national union, and reported to the Regional Office in
accordance with Rule III, Section 2-E of the Rules.

Consolidation – refers to the creation or formation of
a new union arising from the unification of two or
more unions

Independent Union – refers to a labor organization
operating at the enterprise level that acquired legal
personality through independent registration

Legitimate Workers’ Association – refers to an
association of workers organized for mutual aid and
protection of its members or for any legitimate
purpose other than collective bargaining registered
with the Department

Merger – refers to a process where a labor
organization absorbs another

National Union or Federation – refers to a group of
legitimate labor unions in a private establishment
organized for collective bargaining or for dealing with
employers concerning terms and conditions of
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employment for their member unions or for
participating in the formulation of social and
employment policies and standards and programs,
registered with the Bureau

Union – refers to any labor organization in the private
sector organized for collective bargaining and for
other legitimate purposes

Workers’ Association – refers to an association of
workers organized for the mutual aid and protection
of its members for any legitimate purpose other than
collective bargaining.

2. Registration of labor organizations

Art. 231. Registry of unions and file of collective
bargaining agreements.
Art. 234. Requirements of registration.
Art. 235. Action on application.
Art. 236. Denial of registration; appeal.
Art. 237. Additional requirements for federations
or national unions.
Art. 238. Cancellation of registration; appeal.
Art. 239. Grounds for cancellation of union
registration.
Art. 240. Equity of the incumbent.

Requirements for Registration
(ANNEX A)

Requirements in Case Of Merger/Consolidation
(ANNEX B)

Procedure for Registration of Labor Organization
(ANNEX C)

3. Cancellation of registration

Grounds for Cancellation of Union Registration
1. Misrepresentation, False Statement or Fraud in
connection with:
a. adoption/ratification of the CBL or
amendments thereto, minutes of ratification
and the list of members who took part in the
ratification
b. election of officers, minutes thereof, list of
officers/voters
c. in the preparation of the financial reports

2. Failure to Submit:
a. CBL, minutes of its adoption/ratification, list
of members who took part within 30 days
from adoption of ratification or amendments
thereto
b. Minutes of the elections of officers, list of
officers/voters within 30 days from election
c. Annual financial report to the BLR within 30
days after the closing of every fiscal year
d. List of individual members to the BLR once a
year or whenever required by the BLR

3. Acting as labor contractor or engaging in the
'Cabo System' or otherwise engaging in any
activity prohibited by law
4. Entering into CBAs with terms and conditions of
employment below minimum standards
established by law
5. Asking for or accepting attorney's fees or
negotiation fees from employer
6. Checking off special assessments or any other
fees without duly signed individual written
authorizations of the members (other than for
mandatory activities under the Labor Code)

Procedure for Cancellation of Registration
(ANNEX D)

Procedure for Cancellation of Registration Due to
Non-Compliance with Reportorial Requirements
(ANNEX E)

4. Rights of Labor Organization

Art. 242. Rights of legitimate labor organizations.
Art. 277. Miscellaneous provisions.
(a) All unions are authorized to collect reasonable
membership fees, union dues, assessments and
fines and other contributions for labor education and
research, mutual death and hospitalization benefits,
welfare fund, strike fund and credit and cooperative
undertakings.

Rights of Labor Organizations
1. To act as the representative of its members for
the purpose of collective bargaining;
2. To be certified as the exclusive representative for
purposes of collective bargaining;
3. To be furnished by the employer, with its annual
audited financial statements, including the
balance sheet and the profit and loss statement.
4. To own property, real or personal, for the use and
benefit of the labor organization and its members;
5. To sue and be sued in its registered name;
6. To undertake all other activities designed to
benefit the organization and its members,
including cooperative, housing, welfare and other
projects not contrary to law.

The income and properties received by legitimate
labor organization which are actually, directly and
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exclusively used for their lawful purposes shall be
free from taxes, duties and other assessments.

Right to Represent its Members
When a union files a case “for and in behalf of its
members,” a member of that union will not be
permitted to file in the same case a complaint-in-
intervention.
Intervention will be allowed only if there is
suggestion of fraud or collusion or that the
representative will not act in good faith for the
protection of all interest represented by the union.
Compromise agreement between the union and
the company is binding upon the minority
members of the union. [Dionela v. Court of
Industrial Relations, 8 SCRA 832 (1963)]

Compromise of Money Claims
Money claims due to laborers cannot be the
object of settlement or compromise effected by a
union or counsel without the specific individual
consent of each laborer concerned. The
beneficiaries are the individual complainants
themselves. The union can only assist them but
cannot decide for them. [Kaisahan ng mga
Manggagawa sa La Campana v. Sarmiento 133
SCRA 220 (1984)]

When the Union has the Right to be Furnished
with Financial Statements
1. After the union has been recognized by the
employer as sole bargaining representative of the
employees in the bargaining unit.
2. After the union is certified by DOLE as such sole
bargaining representative.
3. Written request from the union
4. Within the last 60 days of the life of a CBA
5. During the collective bargaining negotiation

Right to Collect Fees
Right to collect fees is recognized in Art. 277(a)
and discussed under the topic of check-off under
Art. 241 (Rights and conditions of membership in
a labor organization)

C. SPECIAL GROUPS OF EMPLOYEES

1. Managerial & Supervisory Employees
Under Art. 245, managerial employees are
not eligible to join, assist or form any labor
organization.
Supervisory employees shall not be eligible
for membership in a labor organization of the
rank-and-file employees but may join, assist
or form separate labor organizations of their
own.

Manager – one who is vested with the power or
prerogative to lay down an execute management
policies and/or to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees
Note that the management policies must pertain
exclusively to labor relations.

Supervisor – one, who, in the interest of the
employer, effectively recommends managerial
actions

Power to recommend
Must be both
1. Effective, and
2. Requires the Use of Independent J udgment.

2. Confidential Employees
Confidential employees are also prohibited
from forming, joining or assisting any labor
organization.

Confidential Employees – a confidential employee
is one who is entrusted with confidence on delicate
matters, or with custody, handling, or care and
protection of the employer’s property. (National
Association of Trade Unions (NATU) – Republic
Planters Bank Supervisors Chapter v. Honorable
Ruben Torres, 1994)
Confidential employees assist and act in a
confidential capacity to, or have access to
confidential matters of, persons who exercise
managerial functions in the field of labor relations
[Philips Industrial Development v. NLRC; G.R.
No. 88957 (June 25, 1992)]

NOTE: Confidential employees may be managerial,
supervisory or even a rank and file employee.

Purpose of Disqualification of Confidential
Employees

Doctrine of Necessary Implication – what is
implied in s statute is as much part thereof as that
which is expressed
Under Art. 245, confidential employees are not
prohibited from joining, assisting, or forming any
labor organization. But by virtue of necessary
implication, confidential employees are similarly
disqualified.
By the very nature of their functions, they assist
and act in a confidential capacity to, or have
access to confidential matters of, persons who
exercise managerial functions in the field of labor
relations. As such, the rationale behind the
ineligibility of managerial employees to form,
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assist or join a labor union equally applies to
them. (Metrolab Industries, Inc. v. Roldan-
Confesor ,1996)

Access to Confidential Labor Relations
Information
The information must be related labor relations
matters. When the employee does not have
access to confidential labor relations information,
then the prohibition to form, join, or assist a union
does not apply. (Sugbuanon Rural Bank v.
Laguesma,2000)
If the access is merely incidental to his duties and
not necessary in the performance of such duties,
the access does not render the employee a
confidential employee (San Miguel Corp.
Supervisors & Exempt Union, et. al. v. Laguesma
1997)

3. Security Guards
Under RA 6715, they may now join a abor
organization of the rank and file or that of the
supervisory union, depending on their rank.
(Manila Electric Co. v. Secretary of Labor
and Employment, GR No. 91902, 20 May
1991)

4. Members of Cooperatives

Benguet Electric Cooperative v. Ferrer-Calleja,
180 SCRA 740 (1989)
Issue:
Whether employees of a cooperatove are
qualified to form or join a labor organization for
purposes of collective bargaining.

Held:
The right to collective bargaining is not available to
an employee of a cooperative who at the same time
is a member and co-owner thereof. With respect,
however, to employees who are neither members nor
co-owners of the cooperative they are entitled to
exercise the rights to self-organization, collective
bargaining and negotiation.
The fact that the member-employees of petitioner
(cooperative) do not participate in the actual
management of the cooperative does not make them
eligible to form, assist or join a labor organization
purposes of collective bargaining. They cannot
invoke the right to collective bargaining for “certainly
an owner cannot bargain with himself or his co-
owners.”
It is the fact of ownership of the cooperative, and
not involvement in the management thereof, which
disqualifies a member from joining any labor
organization within the cooperative.

5. Members of Iglesia ni Kristo

Victoriano v. Elizalde Rope Workers’ Union, 59
SCRA 54 (1974)
What the Constitution and the Industrial Peace
Act recognize and guarantee is the “right” to form or
join associations. Nothwithstanding the different
theories propounded by the different schools of
jurisprudence regarding the nature and contents of a
“right,” it can be safely said that whatever theory one
subscribes to, a right comprehends at least 2 broad
notions, namely: first, liberty or freedom, i.e. the
absence of legal restraint, whereby an employee may
act for himself without being prevented by law; and
second, power whereby an employee may, as he
pleases, join or refrain from joining an association. It
is therefore, the employee who should decide for
himself whether he should join or not in an
association. It is clear, therefore, that the right to join
a union includes the right to abstain from joining any
union.
The legal protection granted to such right to
refrain from joining is withdrawn by operation of law,
where a labor union and an employer have agreed on
a closed shop.
What the exception provides is that members of
said religious sects cannot be compelled or coerced
to join labor unions even when said unions have
close shop agreements with the employers; that in
spite of any closed shop agreement, members of said
religious sects cannot be refused employment or
dismissed from their jobs on the sole ground that they
are not members of the collective bargaining union.
It is clear therefore, that the assailed Act, far from
infringing the constitutional provision on freedom of
association, upholds and reinforces it. It does not
prohibit the members of said religious sects from
affiliating with labor unions. If, notwithstanding their
religious beliefs, the members of said religious sects
prefer to sign up with the labor union, they can do so;
the law does not coerce them to join; neither does the
law prohibit them from joining; and neither may the
employer or labor union compel them to join.

Kapatiran sa Meat and Canning Division v. Ferrer-
Calleja, 162 SCRA 367 (1988)
This Court’s decision in Victoriano v. Elizalde
Rope Workers’ Union upholding the right of members
of the Iglesia no Kristo sect not to join a labor union
for being contrary to their religious beliefs, does not
bar the members of that sect from forming their own
union. The public respondent correctly observed that
the “recognition of the tenets of that sect xxx should
not infringe on the basic right of self-organization
granted by the constitution to workers, regardless of
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religious affiliation.

6. Government Employees

Art. 244. Right of employees in the public service.
Art. 276. Government employees.

Association of Court of Appeals Employees v.
Ferrer-Calleja, 203 SCRA 596 (1991)
The terms and conditions of employment in the
government service are governed by law.
Any understanding between the top officials of a
government agency and the union which represent
the rank-and-file is subordinate to the law governing
the particular issue or situation.

Davao City Water District v. Civil Service
Commission, 201 SCRA 593 (1991)
By government owned or controlled corporation
with original charter, we mean government owned or
controlled corporation created by a special law and
not under the Corporation Code of the Philippines.
It is clear that what has been excluded from the
coverage of the CSC are those corporations created
pursuant to the Corporation Code.

Government Employees Not Allowed To Unionize
1. Members of the Armed Forces
2. Police Officers/Policemen
3. Firemen
4. J ail Guards

High level employees are also not allowed to join
the organization of rank and file government
employees.
o High level employees- one whose functions
are normally considered policy determining,
managerial or one whose duties are highly
confidential in nature.

7. Employees of International Organizations

International Catholic Migration Commission v.
Calleja, 190 SCRA 130 (1989)
Labor organizations in the International Catholic
Migration Commission (ICMC) and International Rice
Research Institute (IRRI), both international
organizations, filed a petition for certification election.
ICMC and IRRI claimed immunity.

Held:
The grant of immunity from local jurisdiction to
ICMC and IRRI is clearly necessitated by their
international character and respective purposes. The
objective is to avoid the danger and partiality and
interference by the host country in their internal
workings. The exercise of jurisdiction by the DOLE in
these instances would defeat the very purpose of
immunity, which is to shield the affairs of international
organizations, in accordance with international
practice, from political pressure or control by the host
country to the prejudice of member states of the
organization, and to ensure the unhampered
performance of their functions.
The immunity granted being “from every form of
legal process except in so far as in any particular
case they have expressly waived in their immunity,” it
is inaccurate to state that a certification election is
beyond the scope of that immunity for the reason that
it is not a suit against ICMC. A certification election
cannot be viewed as independent or isolated
process. It could trigger off a series of events in the
collective bargaining process together with related
incidents and/or concerted activities, which could
inevitably involve ICMC in the “legal process,” which
includes “any penal, civil and administrative
proceedings.”

D. ACQUISITION AND RETENTION OF
MEMBERSHIP; UNION SECURITY AGREEMENTS

Art. 277. Miscellaneous provisions.
(c) Any employee, whether employed for a definite
period or not, shall, beginning on his first day of
service, be considered as an employee for purposes
of membership in any labor union.
Art. 248. Unfair labor practices of employers. –(e)
Discrimination.

What the law prohibits is discrimination to
encourage or discourage membership in a labor
organization. Where the purpose is to influence
the union activity of employees, the
discrimination is unlawful.
However, the inclusion of union security clause in
the CBA is not considered ULP.

Union Security Clause – generic term which
comprehends “closed shop,” “union shop,” or any
other form of agreement which imposes upon
employees the obligation to acquire or retain union
membership as a condition of employment.

Kinds of Union Security Agreements
1. CLOSED-SHOP – only union members can be
hired and they must remain as union members to
retain employment.
2. UNION SHOP – Nonmembers may be hired, but
must become union members after a certain
period to retain employment.
3. MODIFIED UNION SHOP – Employees who are
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not union members at the time of the signing the
contract is not required to join the union, but all
workers hired after is required to join.
4. MAINTENANCE OF MEMBERSHIP SHOP –
Employees are not compelled to join the union,
but all present or future members must remain in
good standing in the union.
5. EXCLUSIVE BARGAINING SHOP – Union is
recognized as the exclusive bargaining agent for
all employees in the bargaining unit, whether
union members or not.
6. BARGAINING FOR MEMBERS ONLY – Union is
recognized as the bargaining agent only for its
own members.
7. AGENCY SHOP – an agreement whereby
employees must either join the union or pay to
the union as exclusive bargaining agent a sum
equal to that paid by the members.

These union security agreements are opposite of
OPEN SHOP. Open shop does not require union
membership as a condition of employment.

Liberty Flour Mills Employees v. Liberty Flour
Mills, Inc., GR Nos. 58768-70, 29 December 1989
Union and Company executed a CBA which
contained a union shop clause
Over a year after the execution of the CBA, 2
employees were dismissed after they formed their
own union.

Held:
It is the policy of the State to promote unionism to
enable the workers to negotiate with management on
the same level and with more persuasiveness than if
they were to individually and independently bargain
for the improvement of their respective conditions. To
this end, the Constitution guarantees to them the
rights "to self-organization, collective bargaining and
negotiations and peaceful concerted actions including
the right to strike in accordance with law." There is no
question that these purposes could be thwarted if
every worker were to choose to go his own separate
way instead of joining his co-employees in planning
collective action and presenting a united front when
they sit down to bargain with their employers. It is for
this reason that the law has sanctioned stipulations
for the union shop and the closed shop as a means
of encouraging the workers to join and support the
labor union of their own choice as their representative
in the negotiation of their demands and the protection
of their interest vis-a-vis the employer.

A closed shop provision is a valid for of union
security, and such a provision in a collective
bargaining agreement is not a restriction of the
right of freedom of association guaranteed by the
constitution. (Manila Mandarin Employees Union
v. NLRC, GR No. 76989, 29 September 1987)


E. MEMBERSHIP; RIGHTS OF MEMBERS

Art. 241. Rights and conditions of membership in
a labor organization.
Art. 274. Visitorial power.
Art. 222. Appearances and Fees.

Rights of Union Members
1. POLITICAL RIGHT
a. right to vote
b. right to be voted for

2. DELIBERATIVE AND DECISION-MAKING RIGHT
a. right to participate in deliberations on major
policy questions
b. decide on major policy questions by secret
ballot

3. RIGHTS OVER MONEY MATTERS
a. right against excessive fees
b. right against unauthorized collection
c. right against unauthorized disbursements
d. right to require adequate records of income
and expenses.
e. right to access financial records
f. right to vote on officers’ compensation
g. right to vote on proposed special
assessments
h. right to deduction of special assessments
only with written authorization from member.

4. RIGHT TO INFORMATION
a. right to be informed about the organization’s
constitution and by-laws and the collective
bargaining agreement and about labor laws.

Other Rights & Conditions under Art. 241
1. Labor organizations cannot knowingly admit or
continue in membership any individual who
belongs to a subversive organization or engaged
directly or indirectly in any subversive activity.
2. A member who has been convicted of a crime
involving moral turpitude is ineligible for election
or appointment in the union.
3. Every payment of fees, dues or other
contributions by a member shall be evidenced by
a receipt signed by the officer and entered into
the record of the organization.
4. Every income shall be evidenced by a record
showing its source. And every expenditure shall
be evidenced by a receipt from the person who
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was paid. The receipt shall state the date, place
and purpose of such payment.

Eligibility for Membership
Eligibility for membership depends upon the
union’s constitution and by laws. However, under
Art. 277, an employee is already qualified for
union membership starting on his first day of
service.

Election of Union Officers
Officers shall be elected directly by members in
secret ballot voting.
Election shall take place every 5 years.
The only qualification requirement for candidacy
shall be membership in good standing in labor
organization.
o Membership in good standing – any person
who has fulfilled the requirements for
membership in the union and who has
neither voluntarily withdrawn from
membership nor has been expelled or
suspended from membership.
The secretary or any other responsible union
officer shall give the Secretary with a list of the
newly-elected officers, and appointed officers or
agents who are entrusted with the handling of
funds within 30 days after the election
Procedure of elections
o GR: in accordance with the union’s
constitution and by-laws or agreement
among the members.
o If the constitution, by laws are silent or if
there is no agreement, then Rule 12 of the
Implementing rules will apply

Elections under Rule 12 of the Implementing
Rules (ANNEX F)

Eligibility of Voters
Only members of the union can take part in the
election of union officers.

Tancinco v. Pura Ferrer-Calleja GR. No. 78131
(1988)
The question of eligibility to vote may be
determined through the use of the applicable payroll
period and employee’s status during the applicable
period.
Submission of the employees’ name with the
BLR as qualified members of the union is not a
condition sine qua non to enable said members to
vote in the election of the union officers.

Disqualification of Union Officers
1. Convicted of a crime involving moral turpitude.
2. Individual who belongs to a subversive
organization or engaged directly or indirectly in
any subversive activity.
- one cannot even be a member of the
organization

Union Election Protest – complaints or protests
regarding election of union officers is treated as an
intra/inter-union dispute

Check-Offs & Assessments

Check-Off – a method of deducting from an
employee’s pay at prescribed period, the amounts
due the union for fees, fines or assessments.
Deductions for union service fee are authorized
by law and do not require individual check-off
authorizations.

Agency Fee – amount equivalent to union dues,
which a nonunion member pays to the union because
he benefits from the CBA negotiated by the union

Requisites for a Valid Special Assessments
1. Authorization by a written resolution of the
majority of all the members at the general
membership meeting duly called for that purpose.
2. Secretary’s record of the minutes of the meeting.
o must include list of members present, votes
cats, purpose of the special assessments
and the recipient of such assessments.
3. Individual written authorization for check-off duly
signed by the employee concerned – to levy such
assessments

Palacol v. Ferrer-Calleja, 182 SCRA 710 (1990)
The union president submitted the authorization
for the company to deduct union dues and 10% by
way of special assessments.
Subsequently, members of the union submitted
documents stating that they were withdrawing their
authorization such that in the end, there ere 528
objectors and only 272 supporters.
Petitioners question the special assessments.

Held:
The failure of the union to comply strictly with the
requirements set out by the law invalidates the
questioned special assessments. Substantial
compliance is not enough in view of the fact that the
special assessment will diminish the compensation of
the union members.
Under Art. 241, (n), the Union must submit to the
company a written resolution of a majority of all the
members at a general membership meeting called for
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the purpose. In addition, the secretary of the
organization must record the minutes of the meeting
which in turn, must include, among others, the list of
all the members present as well as the votes cast.
The law would not have specified a general
membership meeting had the legislative intent been
to allow local meetings in lieu of the latter.
There can be no valid check-off considering that
the majority of the union members had already
withdrawn their individual authorization.

Violation of Rights of Members
GR: Complaint for violation of rights must be reported
by at least 30% of the union members.

Exception: when the violation directly affects only
one or two members, then only one or two members
can report such violation.

Consequence of Violation of Rights
1. Cancellation of the union registration
2. Expulsion of the cULPable officers.

Remedies for Violation of Rights

Litton Mills Employees Association-Kapatiran v.
Ferrer-Calleja, GR No. L-78061 (1988)
Despite the practical difficulties in complying with
the said procedure, petitioners should have shown
substantial compliance with said impeachment
procedure, by giving the union officer ample
opportunity to defend himself, as contrasted to an
outright impeachment, right after he failed to appear
before the first and only investigation scheduled.

Diamonon v. Dept. of Labor, et. al. GR. No.
108951, 07 March 2000
When the Constitution and by-laws of both
unions dictated the remedy for intra-union dispute,
this should be resorted to not only to give the
grievance machinery or appeals’ body of the union
the opportunity to decide the matter by itself, but also
to prevent unnecessary and premature resort to
administrative or judicial bodies.
The underlying principle of the rule on exhaustion
of administrative remedies rests on the presumption
that when the administrative body, or grievance
machinery, as in this case, is afforded a chance to
pass upon the matter, it will decide the same
correctly.

Visitorial Power
The Secretary or his duly authorized
representative can inquire into the financial
activities of any labor organization on the basis of
a complaint under oath, supported by 20% of the
membership.


II. UNFAIR LABOR PRACTICES

Art. 247. Concept of unfair labor practice and
procedure for prosecution thereof.

Concept of Unfair Labor Practices
The aim of labor relations policy is industrial
democracy whose realization is most felt in a free
collective bargaining or negotiation over terms
and conditions of employment. Because self –
organization is a prerequisite of industrial
democracy, the right to self – organize has been
enshrined in the Constitution, and any attack to it
– any attack to it – any act intended to defeat or
debilitate the right – is regarded by law as an
offense.
The victim of the offense is not just the workers
as a body and the well – meaning employees
who value peace, but the State as well. Thus, the
attack to this constitutional right is considered a
crime which carries both civil and criminal
liabilities.

Elements of Unfair Labor Practice
1. EER between the offender and the offended.
ULP is negation of a counteraction to the
right to organize which is available only to
employees in relation to their employer. No
organizational right can be negated or
assailed if the employer – employee
relationship is absent in the first place.
2. The act done is expressly defined in the Code as
an act of unfair labor practice.
Art. 212(k) defines unfair labor practice as
any unfair labor practice as defined by this
Code.
The prohibited acts are all related to the
workers’ self – organizational right and to the
observance of a collective bargaining
agreement. Because ULP is and has to be
related to the right to self organization and to
the observance of the CBA, it follows that not
every unfair act is unfair labor practice.
ULP therefore, refers only to acts opposed to
workers’ right to organize. When committed
by the employer, it commonly connotes anti –
unionism.

Aspects of Unfair Labor Practice
1. Civil Aspect
2. Criminal Aspect

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Civil aspect may include liability for damages and
may be passed upon by the labor arbiter.
Prosecution of ULP as a criminal offense can be
initiated only after the finality of judgment in the
labor.
But judgment in the labor case will not serve as
evidence of ULP in the criminal case.

Jurisdiction of Criminal Charge of ULP
The criminal charge fall under the concurrent
jurisdiction of the MTC or the RTC.

Only substantial evidence is required in the labor
case while proof beyond reasonable doubt is
need in the criminal prosecution.
Recovery of civil liability in the administrative
proceedings shall bar recovery under the Civil
Code.

Who are Liable when ULP is Committed by Other
than a Natural Person
The penalty shall be imposed upon the guilty
officers of a corporation, partnership, association or
entity (Art. 289). If the ULP is committed by a labor
organization, the parties liable are the officers,
members of governing boards, representatives or
agents or members of labor associations or
organizations who have actually participated in,
authorized or ratified such (Art. 249).

Prescription of actions for ULP
The offense prescribes in 1 year (Art. 290).

Art. 248. Unfair labor practices of employers.
Art. 261. Jurisdiction of Voluntary Arbitrators or
panel of Voluntary Arbitrators.

Conditions precedent to the ULP charge
1. The injured party is within the definition of
“employee.”
2. The act charged as ULP must fall under the
prohibitions of Art. 248 (acts of the employer) or
249 (acts of the union).

The Hongkong and Shanghai Banking Corp.
Employees Union ns. NLRC, GR No. 125038, 06
November 1997
The Code enumerates the acts or categories of
acts considered as ULP. The enumeration does not
mean an exhaustive listing of ULP incidents. The
Labor Code does not undertake the impossible task
of specifying in precise and unmistakable language
each incident which constitutes an unfair labor
practice. Rather, it leaves to the court the work of
applying the law’s general prohibitory language in the
light of indefinite combinations of events which may
be charged as violative of its terms.

When There is no ULP: Instance of Valid Exercise
of Management Rights
The law on unfair labor practices is not intended
to deprive the employer of his fundamental right
to prescribe and enforce such rules as he
honestly believes to be necessary to the proper,
productive and profitable operation of his
business.
The only condition imposed upon this control is
that it must not be exercised so as to effect a
violation of the Act and its several prohibitions.
Where, however, an employer does violate the
Act and is found guilty of the commission of an
unfair labor practice, it is no excuse that his
conduct was unintentional and innocent.

Rubberworld Phils., Inc., et al. v. NLRC, GR No.
75704, 19 July 1989
As a rule, it is the prerogative of the company to
promote, transfer or even demote its employees to
other positions when the interests of the company
reasonably demand it. Unless there are instances
which directly point to interference by the company
with the employees right’s to self – organization, the
transfer of an employee should be considered within
the bounds allowed by law, e.g. where despite his
transfer to a lower position, his original rank and
salary remained undiminished.

Enriquez v. Zamora, GR No. 51382, 29 December
1986
Acceptance of a voluntary resignation is not ULP.
In a Philippine Airlines case the courts said that the
pilot’s protest retirement/resignation was not a
concerted activity which was protected by law. They
did not assume the status of strikers. They cannot,
therefore, validly claim that the company committed
unfair labor practice. When the pilots voluntarily
terminated their employment relationship with the
company, they cannot claim that they were dismissed

Wise and Co., Inc. v. Wise & Co., Employees
Union, GR No. 87672, 13 October 1989
There can be no discrimination committed by the
employer as the situation of the union employees is
different from that of the nonunion employees.
Discrimination per se is not unlawful. There can be
no discrimination where the employees concerned
are not similarly situated.
The grant by the employer of profit – sharing
benefits to the employees outside the bargaining unit
falls under the ambit of its managerial prerogative. It
appears to have been done in good faith and without
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ulterior motive. More so when as in this case there is
a clause in the CBA where the employees are
classified into those who are members of the union
and those who are not. In the case of the union
members, they derive their benefits from the terms
and conditions of the CBA which constitutes the law
between the contracting parties. Both the employer
and the union members are bound by such
agreement

Philippine Graphic Arts, Inc. v. NLRC, et al., GR
No. L-80737, 29 September 1988
Where the vacation leave without pay, which the
employer requires employees to take in view of the
economic crisis, is neither malicious, oppressive nor
vindictive, ULP is not committed

NLU v. Insular La Yebana Co., 2 SCRA 924 (1961)
Except as limited by special laws, an employer is
free to regulate, according to his own discretion and
judgment, all aspects of employment, including hiring,
work assignments, working methods, time, place and
manner of work, tools to be used, process to be
followed, supervision of workers, working regulations,
transfer of employees, work supervision, lay – off
workers and the discipline, dismissal and recall of
work.

LVN Picture Workers v. LVN, 35 SCRA 147 (1970)
So long as a company’s management
prerogatives are exercised in good faith for the
advancement of the employer’s interest and not for
the purpose of defeating or circumventing the rights
of the employees under special laws or under valid
agreements, the Court will uphold them

Determination of validity
Necessarily, determining the validity of an
employer’s acts involve an appraisal of his motives.
Thus, there must be a measure of reliance on the
administrative agency. It is for the CIR [NLRC now],
in the first instance, to weigh the employer’s
expressed motive in determining the effect on the
employees of management’s otherwise equivocal act.
[Republic Savings Bank v. CIR, 21 SCRA 226 (1967)]

AHS/Philippines Employees Union v. NLRC, GR
No. 73721, 30 March 1987
An employer may treat freely with an employee
and is not obliged to support his actions with reason
or purpose. However, where the attendant
circumstances, the history of the employer’s past
conduct and like considerations, coupled with an
intimate connection between the employer’s actions
and the union affiliations or activities of the particular
employee or employees taken as a whole raise a
suspicion as to the motivation for the employer’s
action, the failure of the employer to ascribe a valid
reason therefore may justify an interference that his
unexplained conduct in respect of the particular
employee or employees was inspired by the latter’s
union membership or activities.

Unfair Labor Practice of Employers
1. interference
2. yellow dog condition
3. contracting out
4. company unionism
5. discrimination for or against union membership
6. discrimination because of testimony
7. violation of duty to bargain
8. paid negotiation
9. violation of CBA

First ULP: Interference (Art. 248 (A))
Interference with employee organizational rights
were found where the superintendent of the employer
threatened the employees with cutting their pay,
increasing rent of the company houses, or closing the
plant if they supported the union and where the
employer encouraged the employees to sign a
petition repudiating the union

ULP Even Before Union is Registered

Judric Canning Corporation v. Inciong, GR No. L-
51494, 19 August 1982
Under Art. 248 (a) of the Labor Code of the
Philippines, “to interfere with, restrain, or coerce
employees in their exercise of their right to self –
organization” is an unfair labor practice on the part of
the employer. Paragraph (d) of said Article also
considers it an unfair labor practice for an employers
“to initiate, dominate, assist or otherwise interfere the
formation or administration of any labor organization,
including the giving of financial “or other support to it.”
In this particular case, the private respondents were
dismissed, or their services were terminated,
because they were soliciting signatures in order to
form a union within the plant.

Samahan ng mga manggagawa sa Bandolino –
LMLC et. al. v. NLRC Bandolino Shoe Corp., et.
al., GR No. 125195, 17 July 1997
In short, an employer who interfered with the right
to self – organization before the union is registered
can be held guilty of ULP.

Prohibiting organizing activities
However, in the absence of showing that the
illegal dismissal was dictated by anti – union motives,
the same does not constitute an unfair labor practice
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as would be a valid ground for strike. The remedy is
an action for reinstatement with backwages and
damages. (AHS/Philippine Employees Union v.
NLRC, G.R. No. 87321, 31 March 1987)

Examples of unlawful acts to discourage
membership in a labor organization:
1. dismissal of union members upon their refusal to
give up their membership, under the pretext of
retrenchment due to reduced dollar allocations
(Manila Pencil Co. v. CIR, 14 SCRA 953)
2. refusal over a period of years to give salary
adjustments according to the improved salary
scales in the collective bargaining agreements
(Benguet Consolidated v. BCI Employees and
Workers Union, 22 SCRA 129)
3. dismissal of an old employee allegedly for
inefficiency, on account of her having joined a
union and engaging in union activities (East
Asiatic Co. v. CIR, 16 SCRA 820).
4. Dismissal of teachers for fear by the school that
there would be strike the following semester
(Rizal Memorial Colleges Faculty Union, et. al. v.
NLRC GR. Nos. 59012-13, 12 October 1989)
5. A company’s capital reduction efforts, to
camouflage the fact that it has been making
profits to justify the mass lay-off of its employees
especially union members. (Madrigal &
Company, Inc. v. Zamora, Gr. No. L-4823, 30
June 1987)

CLLG E.G. Gochangco Workers Union v. NLRC,
GR No. L-67158, 30 May 1988
We have held that unfair labor practice cases are
not, in view of the public interest involved, subject to
comprise.

Totality of Conduct Doctrine
The culpability of employer’s remarks is to be
evaluated on the basis of their implication,
against the background of and in conjunction with
collateral circumstances.
Under this doctrine, an expression which might
be permissibly uttered by one employer, might be
deemed improper when spoken by a more hostile
employer, and consequently actionable as an
unfair labor practice.
This doctrine, expressions of opinion by an
employer, though innocent in themselves,
frequently were held to be culpable because of
the circumstances under which they were
uttered, the history of the particular employer’s
labor relations or anti – union bias or because of
their connection with an established collateral
plan of coercion or interference.

Lockout or Closure Amounting to ULP
A lockout, actual or threatened, as a means of
dissuading the employees from exercising their
rights under the Act is clearly an unfair labor
practice.
However, to hold an employer who actually or
who threatens to lock out his employees guilty of
a violation of this Act, the evidence must
establish that the purpose thereof was to interfere
with the employee’s exercise of their rights.

Sale in Bad Faith
The sale of a business enterprise to avoid the
legal consequences of an unfair labor practice is
necessarily attended with bad faith and both the
vendor and the vendee continue to be liable to
the affected workers. (Cruz v. PAFLU, G.R. No.
L-26519, 29 October 1971)
Where the sale of a business enterprise was
attended with bad faith, there is no need to
consider the applicability of the rule that labor
contracts being in personam are not enforceable
against the transferee. The latter is in the position
of tort – feasor, having been a party likewise
responsible for the damage inflicted on the
members of the aggrieved union and therefore
cannot justly escape liability. (Cruz v. PAFLU,
G.R. No. L-26519, 29 October 1971)

Doctrine of Successor-Employer
A new company will be treated as a continuation
or successor of the one that closed in the new or
take-over company is engaging in the same
business as the closed company or department,
or is owned by the same people, and the
"closure" is calculated to defeat the worker's
organizational right in which case the closure
may be declared a subterfuge.
The successor-employer doctrine is just an
enforcement of the piercing the veil of corporate
entity.

Factors to Determine Continuity:
1. Retention of CONTROL
2. Use of the SAME PLANT OR FACTORY
3. Use of the SAME OR SUBSTANTIALLY THE
SAME EMPLOYEES, workers, supervisors or
managers
4. Similar or substantially the same work or
production under SIMILAR OR SUBSTANTIALLY
THE SAME WORKING CONDITIONS
5. Use of the SAME MACHINERY AND
EQUIPMENT
6. Manufacture of the SAME PRODUCTS or the
performance of the same services

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Second ULP: Yellow Dog (Art. 248 (B))

Yellow Dog Contract – a promise exacted from
workers as a condition of employment that they are
not to belong to, or attempt to foster, a union during
their period of employment

3 Usual Provisions under the Yellow Dog
Contract
1. a representation by the employee that he is not a
member of a labor union
2. a promise by the employee not to join a labor
union
3. a promise by the employee that, upon joining a
labor union, he will quit his employment

Third ULP: Contracting Out [Art. 248 (c)]

Contracting Out as ULP
Contracting out services or functions being
performed by union members when such act will
interfere with, restrain, or coerce employees in
the exercise of their right to self – organize.
However, an employer is not guilty of an unfair
labor practice in contracting work out for business
reasons such as decline in business, the
inadequacy of his equipment, or the need to
reduce the cost, even if the employer’s estimate
of his cost is based on a projected increase
attributable to unionization.

Runaway shop
An industrial plant moved by its owners from one
location to another to escape union labor
regulations or state laws or to discriminate
against employees at the old plant because of
their union activities.
Resorting to runaway shop is ULP.
Where a plant removal is for business reasons
but the relocation is hastened by anti – union
motivation, the early removal is unfair labor
practice. It is immaterial that the relocation is
accompanied by a transfer of title to a new
employer who is an alter ego of the original
employer.
Mere ownership by a single stockholder or by
another corporation of all or nearly all of the
capital stock of a corporation is not of itself
sufficient ground for disregarding the separate
corporate personality. [Sunio v. NLRC, 127
SCRA 390 (1984)]

Fourth ULP: Company Domination Of Union (Art.
248 (D))

Manifestations of Domination of a Labor Union

1. Initiation of the company union idea.
This may further occur in three styles:
a. outright formation by the employer or his
representatives
b. employee formation on outright demand or
influence by employer
c. managerially motivated formation by
employees

2. Financial support to the union.
By defraying the union expenses or pays the
attorney’s fees to the attorney who drafted the
constitution and by – laws of the union.

3. Employer encouragement and assistance.
Immediately granting the union exclusive
recognition as a bargaining agent without determining
whether the union represents the majority of
employees.

4. Supervisory assistance.
This takes the form of soliciting membership,
permitting union activities during working time or
coercing employees to loin the union by threats of
dismissal or demotion (Philippine American Cigar &
Cigarette Factory Workers Union v. Philippine
American Cigar & Cigarette Mfg. Co., Inc., 7 SCRA
375).

Oceanic Air Products, Inc. v. CIR, GR No. L-
18704, 31 January 1963
A labor union is company – dominated where it
appears that key officials of the company have been
forcing employees belonging to rival labor union to
join the former under pain of dismissal should they
refuse to do so; that key officials of the company, as
well as its legal counsel, have attended the election
of officers of the former union; that officers and
members of the rival union were dismissed allegedly
pursuant to a retrenchment policy of the company,
after they had presented demands for the
improvement of the working conditions despite its
alleged retrenchment policy; and that, after dismissal
of the aforesaid officers of the rival labor union, the
company engages the services of new laborers

Fifth ULP: Discrimination (Art. 248 (E))

Pagkakaisang Itinataguyod ng mga Manggagawa
sa Ang Tibay, et. al. v. Ang Tibay, et. al., GR No.
L-22273, 16 May 1967
Under the Industrial Peace Act (as under the
present Labor Code), to constitute an unfair labor
practice, the discrimination committed by the
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employer must be in regard to the hire or tenure of
employment or any term or condition of employment
to encourage or discourage membership in any labor
organization. The exaction by the Company, from
strikers returning to work, of a promise not to destroy
company property and no to commit acts of reprisal
against the Union members who did not participate in
the strike, cannot be considered as intended to
encourage or discourage Union membership. Taking
the circumstances surrounding the prescribing of that
condition, the requirement by the Company is
actually an act of self – preservation and designed to
inure the maintenance of peace and order in the
Company premises

Discrimination in Bonus Allocation or Salary
Adjustments
There is unfair and unjust discrimination in the
granting of salary adjustments where the evidence
shows that (a) the management paid the employees
of the unionized branch; (b) where salary
adjustments were granted to employees of one of its
non - unionized branches although it was losing in its
operations; and (c) the total salary adjustments given
every ten of its unionized employees would not even
equal the salary adjustments given one employee in
the non – unionized branch. (Manila Hotel Company
v. Pines Hotel Employees Ass’n. (CUGCO) and CIR,
G.R. No. L-30818, 28 September 1972)

Discrimination in Layoff or Dismissal
Even where business conditions justified a layoff
of employees, unfair labor practices in the form of
discriminatory dismissal were found where only
unionists were permanently dismissed while non
– unionists were not.

Test of Discrimination
For the purpose of determining whether or not a
discharge is discriminatory, it is necessary that
the underlying reason for the discharge be
established.
The fact that a lawful cause for discharge is
available is not a defense where the employee is
actually discharged because of his union
activities. If the discharge is actually motivated by
a lawful reason, the fact that the employee is
engaged in union activities at the time will not lie
against the employer and prevent him from the
exercise of his business judgment to discharge
an employee for cause. (NLRB v. Ace Comb Co.,
342 F. 2 841)

Discharge due to union activity, a question of fact

Philippine Metal Foundries, Inc., v. CIR, GR Nos.
L-34948 – 49, 15 May 1979
The question of whether an employee was
discharged because of his union activities is
essentially a question of fact as to which the findings
of the court of Industrial Relations are conclusive and
binding if supported by substantial evidence
considering the record as a whole.

When there is Valid Discrimination: 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. It is indeed
compulsory union membership whose objective
is to assure continued existence of the union. In a
sense, there is discrimination when certain
employees are obliged to join a particular union.
But it is discrimination favoring unionism; it is a
valid kind of discrimination.
The employer is not guilty of unfair labor practice
if it merely complies in good faith with the request
of the certified union for the dismissal of
employees expelled from the union pursuant to
the union security clause in the collective
bargaining agreement. (Soriano v. Atienza, GR
No. 68619, 16 March 1989)

Villar vs Inciong, 121 SCRA 444 (1983)
It is true that disaffiliation from a labor union is
not open to legal objection. It is implicit in the
freedom of association ordained by the Constitution.
But a closed shop is a valid form of union security,
and such provision in a collective bargaining
agreement is not a restriction of the right of freedom
of association guaranteed by the Constitution.

Victorias Milling Co., Inc. v. Victorias – Manapla
Workers Organization – PAFLU, GR No. L-18467,
30 September 1963
Another reason for enforcing the closed – shop
agreement is the principle of sanctity or inviolability of
contracts guaranteed by the Constitution. As a matter
of principle, the provision of the Industrial Peace Act
granting freedom to employees to organize
themselves and select their representative for
entering into bargaining agreements, should be
subordinated to the constitutional provision protecting
the sanctity of contracts.

Advantages of Closed Shop Agreement
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1. increases the strength and bargaining power of
labor organizations.
2. prevents non – union workers from sharing in the
benefits of the union’s activities without also
sharing its obligations.
3. prevents the weakening of labor organizations by
discrimination against union members.
4. eliminates the lowering of standards caused by
competition with non - union workers.
5. enables labor organizations effectively to enforce
collective agreements.
6. facilitates the collection of dues and enforcement
of union rules.
7. creates harmonious relations between the
employer and employee (NLU v. Aguinaldo’s
Echague, Inc., 51 O.G. 2898)

Disadvantages of a Closed Shop Agreement
1. results in monopolistic domination of employment
by labor organizations
2. interferes with the freedom of contract and
personal liberty of the individual worker
3. compels employers to discharge all non – union
workers regardless of efficiency, length of
service, etc.
4. facilitates the use of labor organizations by
unscrupulous union leaders for the purpose of
extortion, restraint of trade, etc.
5. denies to non – union workers equal opportunity
for employment
6. enables union to charge exorbitant dues and
initiation fees

Valid dismissal because of application of union
security clause

Malayang Samahan ng mga Manggagawa sa M.
Greenfield v. Ramos, GR No. 113907, 28 February
2000
Union security clauses in the collective
bargaining agreements, if freely and voluntarily
entered into, are valid and binding. Thus, the
dismissal of an employee by the company pursuant
to a labor union’s demand in accordance with a union
security agreement does not constitute unfair labor
practice.

Manalang, et. al. v. Artex Development Co., et. al.,
GR No. L-20432, 30 October 1967
A union member who is employed under an
agreement between the union and his employer is
bound by the provisions thereof since it is a joint and
several contract of the members of the union entered
into by the union as their agent.

Villar v. Inciong, 121 SCRA 444 (1983)
Petitioners, although entitled to disaffiliation from
their union and to forma new organization of their
own, must, however, suffer the consequences of their
separation from the union under the security clause.

Due process required in enforcing union security
clause; intra – union matter becomes termination
dispute with employer
Although a union security clause in a CBA may
be validly enforced and dismissal pursuant
thereto may likewise be valid, this does not erode
the fundamental requirement of due process. The
reason behind the enforcement of union security
clauses which is the sanctity and inviolability of
contracts cannot override one’s right to due
process.
While it is true that the issue of expulsion of the
local union officers is originally between the local
union and the federation, hence, intra – union in
character, the issue was later on converted into a
termination dispute when the company dismissed
the petitioners from work without the benefit of a
separate notice and hearing. Thus,
notwithstanding the fact that the dismissal was at
the instance of the federation and that it
undertook to hold the company free from any
liability resulting from such a dismissal, the
company may still be held liable if it was remiss
in its duty to accord the would – be dismissed
employees their right to be heard on the matter.

Liability of union to pay wage and fringe benefits
of illegally dismissed employee
Where the employer compelled the employee to
go on forced leave upon recommendation of the
union for alleged violation by the employee of the
closed – shop agreement, the NLRC correctly
ordered the reinstatement of the employee and
directed the union to pay the wages and fringe
benefits which employees failed to receive as a result
of her forced leave and to pay attorney’s fees. The
employer would not have compelled the employee to
go on forced leave were it not for the union’s
insistence and demand to the extent that because of
the failure of the employer to dismiss the employee
as requested, the union filed a notice of strike on the
issue of unfair labor practice. Moreover, under the
collective bargaining agreement between the union
and the employer, the union holds the company free
and blameless from any liabilities that may arise
should the employee question the dismissal. (Manila
Mandarin Employees Union v. NLRC, GR No. 76989,
29 September 1987)

Employer in good faith not liable
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Where the employer dismissed his employees in the
belief in good faith that such dismissal was required
by the closed – shop provisions of the collective
bargaining contract with the union, he may not be
ordered to pay back compensation to such
employees although their dismissal is found to be
illegal. (Confederated Sons of Labor v. Anakan
Lumber co., et. al., GR No. L-12503, 29 April 1960)

Employees not covered by the closed shop
provision
1. any employee who at the time the closed – shop
agreement takes effect is a bona fide member of
a religious organization which prohibits its
members from joining labor unions of religious
grounds
2. employees already in service and already
members of a labor union or unions other than
the majority union at the time the closed – shop
agreement took effect
3. confidential employees who are excluded from
the rank and file bargaining unit
4. employees excluded from the closed – shop by
express terms of the agreement

It is well – settled in this jurisdiction that, in the
absence of a manifest intent to the contrary, closed –
shop provisions in a collective bargaining agreement
apply only to persons to be hired or to employees
who are not yet members of any labor organization
and that said provisions of the agreement are not
applicable to those already in the service at the time
of the execution. To hold that the employees in a
company who are members of a minority union may
be compelled to disaffiliate from their union and join
the majority or contracting union, would render
nugatory the right of all employees to self –
organization and to form, join or assist labor
organizations of their own choosing, a right
guaranteed by the Industrial Peace Act as well as by
the Constitution. (Kapisanan ng mga Manggagawa
ng Alak (NAFLU) v. Hamilton Distellery Co., et. al.,
GR No. L-18112, 30 October 1962)

Agency fee instead of union membership
Under the agency – shop clause of a CBA, an
employee is not required to join the union as a
condition of continued employment, but must pay the
union a service fee (usually equivalent to union dues
and initiation fees). Since a union is required by
statute to act as the bargaining representative of all
employees, both union and non – union, within their
bargaining unit, the justification for the clause is that
the nonmember should contribute towards the cost of
collective bargaining process without supporting it
financially.

Sixth ULP: Discrimination Because Of Testimony
[Art. 248 (f)]
The testimony or proceedings might involve
wages, employee’s benefits disciplinary rules, or
organizational rights, or anything covered by the
Labor Code. What is chargeable as ULP is the
employer’s retaliatory act regardless of the
subject of the employee’s complaint or testimony.

Seventh ULP: Violation of the Duty to Bargain
[Art. 248 (g)]

Four Forms of ULP in bargaining:
a. Failure or refusal to meet and convene
b. Evading the mandatory subjects of bargaining
c. Bad faith in bargaining, including failure or refusal
to execute the collective agreement, if requested
d. Gross violation of the CBA

Eighth ULP: Paid Negotiation [Art. 248 (H)]
Self – organization and collective bargaining are
treasured rights of the workers. The law
zealously shields them from corruption. It is a
punishable act of ULP for the employer to pay the
union or any of its officers or agents any
negotiation fee or attorney’s fees as part of the
settlement in collective bargaining or any labor
dispute. To do so is not only unlawful. It is
ethically reprehensible.
Correspondingly, Art. 249 prohibits union officers
or agents from asking for or accepting such
payments. Such act, furthermore, is a ground for
cancellation of union registration under Art. 239
(g).

Ninth ULP: Violation of the CBA
Implementation of the CBA is still part of the
bargaining process. The duty to bargain requires
good faith, and good faith implies faithful
observance of what has been agreed upon. It
logically follows that noncompliance with the
agreement is non – observance of good faith in
bargaining; therefore, the noncompliance
amounts to a ULP.
Violation of the CBA must be gross.

Relief In ULP Cases
1. Cease and Desist Order
To support a cease and desist order, the
record must show that the restrained
misconduct was an issue in the case; that
there was a finding of fact of said misconduct
and such finding was supported by evidence.
The Court is not authorized to issue blank
cease and desist orders, but must confine its
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injunction orders to specific act or acts which
are related to past misconduct.

2. Affirmative Order
In addition to a cease and desist order, the
court may issue an affirmative order to
reinstate the said employee with back pay
from the date of the discrimination.
If other laborers have been hired, the
affirmative order shall direct the respondent
to dismiss these hired laborers to make room
for the returning employee.

3. Court may order the Employer to Bargain, CBA
may be imposed
4. Strike by union members

ULP is not subject to compromise

CLLC E.G. Gochangco Workers Union, et. al. v.
NLRC, GR No. 67158, 30 May 1988
ULP cases are not, in view of the public interest
involved, subject to compromises. The relation
between capital and labor are not merely contractual.
They are so impressed with public interest that labor
contracts must yield to the common good.

ULP in a given period should be included in a
single charge

Dionela, et. al. v. CIR et. al., GR No. L-18334, 31
August 1963
When a labor union accuses an employer of acts
of unfair labor practice allegedly committed during a
given period of time, the charges should include all
acts of unfair labor practice committed against any
and all members of the union during that period. The
union should not, upon the dismissal of the charges
first preferred, be allowed to split its cause of action
and harass the employer with subsequent charges,
based upon acts committed during the same period
of time.

Art. 249. Unfair labor practices of labor
organizations.

Unfair Labor Practices of Labor Organization
1. To restrain or coerce employees in the exercise
of their right to self organization.
2. To attempt to or cause an employer to
discriminate against an employee to whom
membership in the labor organization was denied
or to terminate an employee on any ground other
than he usual terms and conditions under which
membership or continuation of membership is
made available to other members.
3. To refuse to bargain collectively with the
employer, if it is the representative of the
employee.
4. To attempt to or cause the employer to pay
money or other things of value, in the nature of
an exaction, for services which are not performed
or not to be performed. This includes fee for
union negotiations.
5. To ask or accept negotiations or attorney’s fees
from employers as part of the settlement in any
dispute.
6. Violation of CBA.

Restraint or Coercion by Labor Organization;
Interference by Union is not ULP [Art. 249 (a)]
A labor organization commits ULP when it
restrains or coerces employees in their right to
self – organization.
A labor organization may interfere in the
employees’ right to self – organization as long as
the interference does not amount to restraint or
coercion.

Union cannot coerce employees to join a strike
Similarly, violation is committed when a union
threatens the employees with bodily harm in
order to force them to strike.
A union violates the law when, to restrain or
coerce nonstrikers from working during the strike,
it:
o assaults or threatens to assault them
o threatens them with the loss of their jobs
o blocks their ingress to and egress from the
plant
o damages nonstrikers’ automobiles or forces
them off the highway
o physically preventing them from working
o sabotages the employer’s property in their
presence, thereby creating an atmosphere of
fear or violence
o demonstrates loudly in front of a nonstrikers’
residence with signs and shouts accusing the
nonstriker of “scabbing”
o holding the nonstriker up to ridicule
o seeking public condemnation of the
nonstriker

Union-Induced Discrimination

Arbitrary use of union security clause
The broad rule is that the union has the right to
determine its membership and to prescribe the
conditions for the acquisition and retention
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thereof. Consequently, admission to membership
may not be compelled.

This rule, however, is qualified in the case of
labor unions holding a monopoly in the supply of
labor, either in a given locality, or as regards a
particular employer by reason of a closed – shop
or similar agreements. In such case, qualified
applicants may not be barred by unreasonable
rules.

Salunga v. Court of Industrial Relations, 21 SCRA
216 (1967)
Employee resigned from the union. The union
requested the company to enforce the closed shop
provision of the CBA. Company deferred action and
informed the employee of the possible effects of his
resignation from the union. Employee tried to revoke
his resignation from the union but this denied by the
union. Company finally granted the request of the
union and terminated the employee. Employee
complained of illegal dismissal.

Held:
Labor unions are not entitled to arbitrarily exclude
qualified applicants for membership and a closed –
shop provision will not justify the employer in
discharging, or a union in insisting upon the
discharge of, an employee whom the union thus
refuses to admit to membership, without any
reasonable ground thereof.
Having been dismissed from service owing to
unfair labor practice on the part on the part of the
union, petitioner is entitled to reinstatement as
member of the union and to his former or
substantially equivalent position in the company,
without prejudice to his seniority and/or rights and
privileges, and with back pay.

Manila Mandarin Employees Union v. NLRC, 154
SCRA 369 (1987)
Union security clauses are also governed by law
and by principles of justice, fair play, and legality.
Union security clauses cannot be used by union
officials against an employer, much less their own
members, except with a high sense of responsibility,
fairness, prudence and judiciousness.

Refusal To Bargain [Art. 249(c)]
A union violates its duty to bargain collectively by
entering negotiations with a fixed purpose of not
reaching an agreement or signing a contract.

Featherbedding And Make – Work Arrangements
[Art. 249 (d)]

Featherbedding – employee practices which create
or spread employment by unnecessarily maintaining
or increasing the number of employees used, or the
amount of time consumed, to work on a particular job
It may take the form of minimum – crew
regulations on the railroad, make – work rules
such as the setting of and prompt destruction of
unneeded bogus type in the newspaper industry,
stand – by pay for musicians when a radio station
broadcasts music from phonograph records or
production ceilings for work on the assembly
lines or at the construction site


III. RIGHT TO COLLECTIVE BARGAINING

A. DUTY TO BARGAIN COLLECTIVELY

Art. 250. Procedure in collective bargaining.
Art. 251. Duty to bargain collectively in the
absence of collective bargaining agreements.
Art. 252. Meaning of duty to bargain collectively.
Art. 253. Duty to bargain collectively when there
exists a collective bargaining agreement.
Art. 253-A. Terms of a collective bargaining
agreement.
Art. 254. Injunction prohibited.
Art. 231. Registry of unions and file of collective
bargaining agreements.

Collective Bargaining Agreement – a contract
executed upon request of either the employer or the
exclusive bargaining representative of the employees
incorporating the agreement reached after
negotiations with respect to wages, hours of work
and all other terms and conditions of employment,
including proposals for adjusting any grievance or
questions under the agreement

Parties to Collective Bargaining
1. Employer
2. Employees, represented by the exclusive
bargaining agent

Jurisdictional Requirements
1. Status of majority representation of the
employees’ representative.
2. Proof of majority representation
3. Demand to bargain under art. 250 (a) (Kiok Loy
v. NLRC, 141 SCRA 179)

The duty of the employer to bargain collectively
arises only after the union requests the employer
to bargain. If there is no demand, the employer
cannot be in default.
When there is a legitimate representation issue,
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there is no duty to bargain collectively on the part
of the employer [Lakas ng Manggagawang
Makabayan v. Marcelo Enterprises, 118 SCRA
425 (1982)]

Commencement of Bargaining
During Certification Year – within 12 months after
the determination and certification of the
employees’ exclusive bargaining representative.

Bargaining Procedure
The parties may agree on the bargaining
procedure. If there is a procedure agreed upon,
the Labor Code Procedure applies suppletorily.

Bargaining Procedure under the Labor Code
(Art. 250) (ANNEX G)

Duty to Bargain Collectively When There Is No
Collective Bargaining Agreement
1. the performance of a mutual (employer and the
exclusive bargaining agent) obligation to meet
and convene,
2. promptly and expeditiously in good faith
3. for the purpose of negotiating an agreement with
respect to wages, hours of work and all other
terms and conditions of employment, including
proposals for adjusting any grievances or
questions arising under such agreement, and
4. Executing a contract incorporating such
agreements.

The duty does not compel any party to agree to a
proposal or to make any concession.
The CBA remains in full force and effect during
the 60 day period and until a new agreement is
reached.

Duty to Bargain Collectively when there is a
Collective Bargaining Agreement
When there is a CBA, the duty to bargain also
means that neither party shall terminate nor
modify such agreement during its lifetime.
But 60 days before the CBA expires, either party
may notify the other in writing that it wants to
terminate or modify the agreement.

4 Forms of 7
th
ULP - Violation of the Duty to
Bargain Collectively
1. Failure or refusal to meet and convene
2. Evading the mandatory subjects of bargaining
3. Bad faith in bargaining
4. Gross violation of the CBA

Failure or Refusal to Meet and Convene

Kiok Loy v. NLRC, 141 SCRA 179 (1986)
The union gave the employer copies of its
proposed CBA and requested the company to make
counter-proposals. The company did not reply. The
union again wrote the company but this was also
ignored.

Held:
It is unfair labor practice for an employer to
refuse to meet and convene promptly and
expeditiously in good faith for the purpose of
negotiating an agreement for wages, hours of work
and other terms of employment.
A company’s refusal to make counter-proposal if
considered in relation to the entire bargaining
process, may indicate bad faith and this is especially
true where the Union’s request for a counter proposal
is left unanswered.
We agree with the pronouncement that it is not
obligatory upon either side of a labor controversy to
precipitately accept or agree to the proposals of the
other. But an erring party should not be tolerated and
allowed with impunity to resort to schemes feigning
negotiations by going through empty gestures.

Evading the Mandatory Subjects

Mandatory Subjects
1. Wages
2. Hours of Work
3. Other Terms and Conditions of Employment

Where the subject of the dispute is a mandatory
bargaining subject, either party may bargain to an
impasse as long as he bargains in good faith.
Where the subject is nonmandatory, a party may
not insist on bargaining to the point of impasse.
His insistence may be construed as evasion of
the duty to bargain.

Bargaining in Bad Faith
There is no per test of good faith in bargaining.
The good faith or bad faith is an inference to be
drawn from the facts and is largely a matter for
the NLRB’s expertise.
The charge of bad faith should be raised while
the bargaining is in progress.

Samahang Manggagawa sa Top Form
Manufacturing-United Workers of the Philippines
v. NLRC, GR No. 13856, 07 September 1998
With the execution of the CBA, bad faith can no
longer be imputed upon any of the parties thereto. All
provisions in the CBA are supposed to have been
jointly and voluntarily incorporated therein by the
parties. This is not a case where private respondent
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exhibited an indifferent attitude towards collective
bargaining because the negotiations were not the
unilateral activity of petitioner union. The CBA is good
enough that private respondent exerted “reasonable
effort of good faith bargaining.”

Lakas ng Manggagawang Makabayan v. Marcelo
Enterprises, GR Nos. L-38258, 38260, 19
November 1982
It is also evident from the records that the charge
of bargaining in bad faith imputed to the respondent
companies, is hardly credible. In fact, such charge is
valid as only against the complainant LAKAS. The
parties had a total of 5 conferences for purposes of
collective bargaining. It is worth considering that the
first strike of Sept. 4 1967 was staged less than a
week after the 4
th
CBA conference and without any
benefit of any previous strike notice. In this
connection, it must be stated that the notice of strike
filed on J une 13, 1967 could not have been the strike
notice for the first strike because it was already
withdrawn on J uly 14, 1967. Thus, from these stated
facts can be seen that the first strike was held while
the parties were in the process of negotiating.
The company’s refusal to accede to the demands
of LAKAS appears to be justified since there is no
showing that these companies were in the same
state of financial and economic affairs.
There is reason to believe that the first strike was
staged only for the purpose of compelling the
respondent companies to accede to the inflexible
demands of the complainant LAKAS.

Registration of Collective Bargaining Agreements

Where to file
With the Regional Office which issued the
certificate of registration/certificate of creation of
chartered local.
If the certificate of creation of the chartered local
was issued by the bureau, the agreement shall
be filed with the Regional Office which has
jurisdiction over the place where it principally
operates
Multi-employer collective bargaining agreements
shall be filed with the Bureau.

When to file
within 30 days from execution of the CBA.

Requirements for registration
The application for CBA registration shall be
accompanied by the original and 2 duplicate copies
of the following documents.
1. CBA
2. A statement that the CBA was posted in at least
2 conspicuous places in the establishment
concerned for at least 5 days before its
ratification.
3. Statement that the CBA was ratified by the
majority of the employees in the bargaining unit.

The following documents must be certified under
oath by the representative of the employer and
the labor union.
No other document shall be required in the
registration of the CBA.

Procedure
1. The Regional Office or the Bureau shall act on
the applications within 5 days form receipt of the
application.
2. The Regional Office or Bureau may within 5 days
from receipt of the application,
a. approve the application and issue the
certificate of registration or
b. deny the application for failure to comply with
the requirements.
c. If the supporting documents are not
complete, or are not verified under oath, the
Regional Office or the Bureau shall notify the
applicants in writing of the requirements
needed to complete the registration.
o If the applicant fails to complete the
requirements within 10 days from
receipt of notice, application is denied
without prejudice.
o The denial shall be in writing, stating in
clear terms the reason therefore and
served upon the applicant union and
employer within 24 hours from issuance.
3. The denial by the Regional Office of the
registration of single enterprise collective
bargaining agreements may be appealed to the
Bureau while the denial by the Bureau of the
registration of multi-employer collective
bargaining agreements may be appealed to the
Office of the Secretary, both within 10 days from
receipt of the notice of denial.
4. The memorandum of appeal is filed with the
Regional Office or the Bureau, as the case may
be.
5. The memorandum of appeal and the entire
records of the application shall be transmitted to
the Bureau or the Office of the Secretary within
24 hours from receipt of the memorandum of
appeal.
6. Bureau or the Office of the Secretary shall
resolve within the same period and in the same
manner as that prescribed for inter/intra-union
disputes.

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Duration of CBA
1. Representation Aspect: 5 years
• Refers to the identity and majority status of
the union that negotiated the CBA as the
exclusive bargaining representative.

2. All other provisions should be renegotiated not
later than 3 years from effectivity.
• Refers to the rest of CBA, economic as well
as non-economic other than representational.

Hold Over Principle
The CBA shall be in full force and effect until the
parties reach a new agreement.

New Pacific Timber & Supply Company Inc. v.
NLRC, 328 SCRA 404 (2000)
It is clear from the above provision of law (Art.
253) that until a new CBA has been executed by and
between the parties, they are duty-bound to keep the
status quo and to continue in full force and effect the
terms and conditions of the existing agreement. The
law does not provide for any exception nor
qualification as to which of the economic provisions
of the existing agreement are to retain force and
effect, therefore, it must be understood as
encompassing all the terms and conditions in the said
agreement.
It is the duty of both parties to continue in full
force and effect the terms and conditions of the
existing agreement during the 60-day period and/or
until a new agreement is reached by the parties.
To rule otherwise would be to create a gap during
which no agement would govern, from the time the
old contract expired to the time a new agreement
shall have been entered into.

Rules on Effectivity and Retroactivity of New CBA
(Apply Only to Provisions Other than
Representational)

I. CBA as a Result of Negotiations

A. With Previous CBA
1. Effectivity of new CBA entered into within 6
months after the expiration of the old CBA:
retroact to the date following the expiry date.
2. Effectivity of new CBA entered into after 6
months following the expiration of the old
CBA:
GR: effective on the date agreed upon by
the parties.
If there is no agreement, the arbitral
award will retroact to the day after the
end of the 6-month period after the expiry
of the old CBA.

B. New and First-Ever CBA (No previous CBA) –
effective on date agreed upon by the parties

II. Arbitral Awards

A. With Previous CBA
1. Arbitral award final within 6 months from old
CBA: retroact to the date following the expiry
of the old CBA.
2. Arbitral award final after 6 months following
the expiration of the old CBA:
General Rule: the agreement between
the parties.
If there is no agreement, retroact to the
1
st
day following the 6-month period

B. New and First-Ever CBA (No previous CBA) -
Labor Secretary’s discretion will be followed.

B. BARGAINING AGENT &
CERTIFICATION ELECTION PROCEEDINGS

Art. 255. Exclusive bargaining representation and
workers’ participation in policy and decision-
making.
Art. 256. Representation issue in organized
establishments.
Art. 257. Petitions in unorganized establishments.
Art. 258. When an employer may file petition.
Art. 259. Appeal from certification election orders.

Bargaining Unit – a group of employees sharing
mutual interests within a given employer unit,
comprised of all or less than all of the entire body of
employees in the employer unit or any specific
occupational or geographical grouping within such
employer unit

Certification Election/Consent Election – The
process of determining through secret ballot the sole
and exclusive representative of the employees in an
appropriate unit for purposes of collective bargaining
or negotiation. A certification election is ordered by
the Department, while a consent election is
voluntarily agreed upon by the parties, with or without
the intervention by the Department.

Organized Establishment – an enterprise where
there exists a recognized or certified sole and
exclusive bargaining agent

Run-off Election – an election between the labor
unions receiving the 2 highest number of votes in a
certification or consent election with 3 or more
choices, where such a certified or consent results in
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none of the 3 or more choices receiving the majority
of the valid votes cast; provided that the total number
of votes for all contending unions is at least 50% of
the number if votes cast

Voluntary Recognition – process by which a
legitimate labor union is recognized by the employer
as the exclusive bargaining representative or agent in
a bargaining unit, reported with the Regional Office in
accordance with Rule VII, section 2 of these Rules.

3 Methods to Determine the Bargaining Union
1. Voluntary Recognition
2. Certification Election
3. Consent Election

Voluntary Recognition

When to file
In unorganized establishments with only one
legitimate labor organization, the employer may
voluntarily recognize the representation status of
the union.
Within 30 days from such recognition, the
employer and union shall submit a notice of
voluntary recognition.

Where to file
Regional Office which issued the recognized
labor union’s certificate of registration or
certificate of creation of a chartered local.

Requirements for Voluntary Recognition
The notice of voluntary recognition shall be
accompanied by the original copy and 2 duplicate
copies of the following documents:
1. A joint statement under oath of voluntary
recognition attesting to the fact of voluntary
recognition.
2. Certificate of posting of the joint statement of
voluntary recognition for 15 consecutive days in
at least 2 conspicuous places in the
establishment or bargaining unit where the union
seeks to operate.
3. Approximate number of employees in the
bargaining unit, accompanied by the names of
those who support the voluntary recognition
comprising at least a majority of the members of
the bargaining unit.
4. A statement that the labor union is the only
legitimate labor organization operating within the
bargaining unit.

These documents shall be certified under oath by
the employer’s representative and president of he
recognized labor union.

Procedure: Voluntary Recognition
1. If notice of voluntary recognition is sufficient in
form, number and substance, and there is no
other registered labor union operating within the
bargaining unit, the Regional Office shall record
the fact of voluntary recognition within 10 days
from receipt of notice.
2. Where notice of voluntary recognition is
insufficient, the Regional Office shall notify the
labor union of its findings and advise it to comply
with the necessary requirements.
If the employer or union failed to complete
the requirements for voluntary recognition
within 30 days from receipt of advisory, the
Regional Office shall return.

Effects of recording of fact of Voluntary
Recognition
1. The recognized labor union shall enjoy the rights,
privileges and obligations of an existing
bargaining agent of all the employees in the
bargaining unit.
2. A petition for certification election cannot be filed
for 1 year from the date of entry of the voluntary
recognition.

Certification Election

Who may file
1. any legitimate labor organization
2. employer, when requested to bargain collectively

Where to file
Regional Office which issued the certificate of
registration/certificate of creation.

When to file
Anytime, except:
1. When voluntary recognition has been
entered, or a valid certification, consent or
run-off election has been conducted within 1
year prior to the filing.
2. negotiations in good faith with the employer
3. bargaining deadlock had been submitted to
conciliation or arbitration or had become the
subject of a valid notice of strike or lockout.
4. Registered CBA – may file only within 60
days prior to the expiration of the CBA.

Grounds for Denying Petition
1. the petitioner is not listed in the Department’s
registry of legitimate labor unions or that its legal
personality has been revoked or cancelled with
finality in accordance with Rule XIV of these
Rules;
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2. the petition was filed before or after the freedom
period of a duly registered collective bargaining
agreement; provided that the sixty-day period
based on the original collective bargaining
agreement shall not be affected by any
amendment, extension or renewal of the
collective bargaining agreement; (Contract Bar)
3. the petition was filed within 1 year from entry of
voluntary recognition or a valid certification,
consent or run-off election and no appeal on the
results of the certification, consent or run-off
election is pending; (12-month Bar/Certification
year bar)
4. a duly certified union has commenced and
sustained negotiations with the employer in
accordance with Article 250 of the Labor Code
within the one-year period referred to in Section
14.c of this Rule, or there exists a bargaining
deadlock which had been submitted to
conciliation or arbitration or had become the
subject of a valid notice of strike or lockout to
which an incumbent or certified bargaining agent
is a party; (Negotiation Bar)
5. in case of an organized establishment, failure to
submit the 25% support requirement for the filing
of the petition for certification election.

Procedure: Petition for Certification Election
(ANNEX H)

Procedure: Conduct of Certification Election
(ANNEX I)

Preliminary Conference
The Med-Arbiter shall conduct a preliminary
conference and hearing within 10 days from the
receipt of the petition to determine the following:
a. the bargaining unit to be represented;
b. contending labor unions;
c. possibility of consent elections;
d. existence of any of the bars to certification
election; and
e. such other matters as may be relevant for the
final disposition of the case

In case the contending unions agree to a consent
election, the Med-Arbiter shall not issue a formal
order calling for the conduct of certification
election, but shall enter the fact of the agreement
in the minutes of the hearing.

Order/Decision on the Petition – within 10 days
from the date of the last hearing, the Med-Arbiter
shall issue a formal order granting or denying the
petition.
In organized establishments, no order or decision
shall be issued during the freedom period.
The order granting the petition shall state the
following:
a. Name of the employer or establishment
b. Description of the bargaining unit
c. Statement that none of the grounds for
dismissal exists
d. Names of contending labor unions
e. Directive upon the employer and the
contending union(s) to submit within 10 days
from receipt of the order, the certified list of
employees in the bargaining unit.

Prohibited Grounds for Denial of Petition (must
be heard and resolved by the Regional Director in
an independent petition for cancellation of
registration:
1. validity of petitioning union’s certificate of
registration
2. legal personality as a labor organization
3. validity of registration
4. execution of CBAs

Appeal
a. order granting conduct of certification election in
unorganized establishments – NOT appealable
b. all others – appealed to the DOLE Sec. within 10
days from receipt thereof.

Pre-election Conference
Within twenty-four (24) hours from receipt of the
assignment for the conduct of a certification
election, the Election Officer shall cause the
issuance of notice of pre-election conference
upon the contending unions and the employer.
Must be scheduled within 10 days from receipt of
the assignment.
Must be completed within 30 days from the last
hearing.

Purpose of Pre-election Conference
The pre-election conference shall set the
mechanics for the election and determine the
following:
1. date, time and place of the election,
not be later than forty-five (45) days from the
date of the first pre-election conference
on a regular working day
within the employer’s premises, unless
circumstances require otherwise
2. list of eligible and challenged voters
3. number and location of polling places or booths
and the number of ballots to be prepared with
appropriate translations, if necessary
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4. name of watchers or representatives and their
alternates for each of the parties during election
5. mechanics and guidelines of the election

Consent Election
In case the contending unions agree to a consent
election, the Med-Arbiter shall not issue a formal
order calling for the conduct of certification
election, but shall enter the fact of the agreement
in the minutes of the hearing.
The minutes of the hearing shall be signed by the
parties and attested to by the Med-Arbiter.
The Med-Arbiter shall, immediately thereafter,
forward the records of the petition to the Regional
Director or his/her authorized representative for
the determination of the Election Officer by the
contending unions through raffle.
The first pre-election conference shall be
scheduled within ten (10) days from the date of
entry of agreement to conduct consent election.
(See Annex H)

Effect of failure to appear during the pre-election
conference
considered as a waiver to be present and to
question or object to any of the agreements
reached in said pre-election conference
However, the non-appearing party or the
employer still has the right to be furnished notices
of subsequent pre-election conferences and to
attend the same

Qualification of Voters
All employees who are members of the
appropriate bargaining unit at the time of the
issuance of the order granting the conduct of a
certification election shall be eligible to vote.
An employee who has been dismissed from work
but has contested the legality of the dismissal in
a forum of appropriate jurisdiction at the time of
the issuance of the order for the conduct of a
certification election shall be considered a
qualified voter
o unless his/her dismissal was declared valid
in a final judgment at the time of the conduct
of the certification election.

Inclusion-Exclusion of Voters
In case of disagreement over the voters’ list or
over the eligibility of voters, all contested voters shall
be allowed to vote. But their votes shall be
segregated and sealed in individual envelopes.

Posting of Notices of Election
1. at least 10 days before the actual date of the
election
2. in 2 most conspicuous places in the company
premises

Contents of the Notice
1. the date and time of the election
2. names of all contending unions
3. the description of the bargaining unit and the list
of eligible and challenged voters

The posting of the notice of election, the
information required to be included therein and
the duration of posting cannot be waived by the
contending unions or the employer.

Challenging of Votes
An authorized representative of any of the
contending unions and employer
Before it is deposited in the ballot box
Grounds:
a. that there is no employer-employee
relationship between the voter and the
company;
b. that the voter is not a member of the
appropriate bargaining unit which
petitioner seeks to represent.

Procedure in Challenging of Votes
1. The Election Officer shall place the ballot in an
envelope.
sealed in the presence of the voter and the
representatives of the contending unions and
employer.
indicate on the envelope the voter’s name,
the union or employer challenging the voter,
and the ground for the challenge.
envelope shall be signed by the Election
Officer and the representatives of the
contending unions and employer.
2. The Election Officer shall note all challenges in
the minutes of the election and shall be
responsible for consolidating all envelopes
containing the challenged votes.
3. The envelopes shall be opened and the
question of eligibility shall be passed upon only
if the number of segregated voters will materially
alter the results of the election.

Protest
Any party-in-interest may file a protest based on
the conduct or mechanics of the election.
Protests shall be recorded in the minutes of the
election proceedings. Protests not so raised are
deemed waived.
The protesting party must formalize its protest
with the Med-Arbiter, with specific grounds,
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arguments and evidence, within five (5) days
after the close of the election proceedings.
If not recorded in the minutes and formalized
within the prescribed period, the protest shall be
deemed dropped.

Canvassing of Votes
Counted and tabulated by the Election Officer in
the presence of the representatives of the
contending unions.
Each representative entitled to a copy of the
minutes of the election proceedings and results
of the election.
The ballots and the tally sheets shall be
i. sealed in an envelope
ii. signed by the Election Officer and the
representatives of the contending unions
iii. transmitted to the Med-Arbiter, together
with the minutes and results of the
election, within 24 hours from the
completion of the canvass
Where the election is conducted in more than
one region, consolidation of results shall be made
within 15 days from the conduct thereof.

Conduct of Election and Canvass of Votes
The election precincts shall open and close on
the date and time agreed upon during the pre-
election conference.
The opening and canvass shall proceed
immediately after the precincts have closed.
Failure of any party or the employer or
his/her/their representative to appear during the
election proceedings shall be considered a
waiver to be present and to question the conduct
thereof.

Certification of Exclusive Bargaining Agent
The union which obtained a majority of the valid
votes cast shall be certified as the sole and exclusive
bargaining agent of all the employees in the
appropriate bargaining unit within 5 days from the
day of the election, provided no protest is recorded in
the minutes of the election.

Failure of Election
Where the number of votes cast in a certification
or consent election is less than the majority of the
number of eligible voters and there are no
material challenged votes.
A failure of election shall not bar the filing of a
motion for the immediate holding of another
certification or consent election within 6 months
from date of declaration of failure of election.

Action on the motion for the immediate holding of
another certification or consent election
Within 24 hours from receipt of the motion, the
Election Officer shall immediately schedule the
conduct of another certification or consent election
within 15 days from receipt of the motion and cause
the posting of the notice of certification election at
least 10 days prior to the scheduled date of election
in 2 most conspicuous places in the establishment.
The same guidelines and list of voters shall be used
in the election.

Proclamation and Certification of the Result of
the Election
Within twenty-four (24) hours from final canvass
of votes.
There being a valid election.
the Election Officer shall transmit the records of
the case to the Med-Arbiter
Med-arbiter shall issue an order proclaiming the
results of the election and certifying the union
which obtained a majority of the valid votes cast
as the sole and exclusive bargaining agent in the
subject bargaining unit, under any of the following
conditions:

a. no protest was filed or, even if one was filed,
the same was not perfected within the five-
day period for perfection of the protest;
b. no challenge or eligibility issue was raised or,
even if one was raised, the resolution of the
same will not materially change the results of
the elections.

The winning union shall have the rights,
privileges and obligations of a duly certified
collective bargaining agent from the time the
certification is issued.

Run-off Election
When an election which provides for 3 or more
choices results in none of the choices (unions or “no
union” choice) receiving a majority of the valid votes
cast, the Election Officer shall motu propio conduct a
run-off election within 10 days from the close of the
election proceedings between the labor unions
receiving the two highest number of votes. Provided,
that the total number of votes for all contending
unions is at least 50% of the number of votes cast.

And there are no objections or challenges which
if sustained can materially alter the results,
“No Union” shall not be a choice in the run-off
election.
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Notice of run-off elections shall be posted by the
Election Officer at least five (5) days before the
actual date of run-off election.

C. BARS TO CERTIFICATION ELECTION

Art. 232. Prohibition on certification election

Grounds for denying petition for certification
election
1. Deadlock Bar
2. Contract Bar
3. 12-month bar/certification year bar
4. Negotiation Bar

Contract Bar
While a valid and registered CBA is subsisting,
the BLR is not allowed to hold an election contesting
the majority status of the incumbent union.

When contract bar rule not applied
1. CBA is not registered
2. CBA deregistered
3. CBA is incomplete in itself
4. CBA does not foster industrial peace
5. CBA was concluded in violation of an order
enjoining the parties from entering into a CBA
until the issue of representation is resolved
6. Petition is filed during the 60-day freedom period

Deadlock Bar
A petition for certification election cannot be
entertained if, before the filing of the petition for
certification election, a bargaining deadlock to which
an incumbent or certified bargaining agent is a party,
had been submitted to conciliation or arbitration or
had become the subject of a valid notice of strike or
lockout.

Negotiation Bar
A petition for certification election cannot be filed
if the duly certified union has commenced and
sustained negotiations in good faith with the
employer in accordance with Art. 250 of the Labor
Code within 1 year prior to the filing of the petition for
certification election.

Certification Year Rule Bar
No petition for certification election may be filed
within one year from the date of a valid certification,
consent, or run-off election or from the date of
voluntary recognition.

R. Transport Corp v. Laguesma, GR No. 106830,
16 November 1993
The 12 month prohibition presupposes that there
was an actual conduct of election, i.e. ballots were
cats and there was a counting of votes. In a case
where there was no certification election conducted
precisely because the first petition was dismissed on
the ground that it did not include all the employees
who should be properly included in the collective
bargaining unit, the certification year bar does not
apply.

Capitol Medical Center Alliance, etc. v.
Laguesma, GR No. 118915, 04 February 1997
But in one case the winning union failed to
conclude a CBA with the employer within one year,
hence another union filed a petition for certification
election. Although filed outside the 12-month bar, the
petition was nonetheless dismissed, and the court
upheld the dismissal and explained that ordinarily, a
bargaining agent who failed to secure a CBA within
12 months could be suspected as a tool of
management and should deserve to be replaced. But
if circumstances show that the reason for not having
concluded a CBA was not the union’s fault, such
union should not be blamed, and a certification
election should not be authorized even though no
CBA has been concluded despite passage of 12
months. The situation takes the nature of a “deadlock
bar.”

Certification year rule will not apply if in fact there
was a failure of election because less than
majority of the CBU members voted. Another
petition for certification election may be filed
within 6 months.
Certification year rule will apply even if the “No
union” choice won. (Samahang Manggagawa sa
Permex v. Secretary of Labor, GR No. 107792,
02 March 1998)

D. ADMINISTRATION IF AGREEMENT;
GRIEVANCE AND VOLUNTARY ARBITRATION

Art. 260. Grievance machinery and voluntary
arbitration.
Art. 261. Jurisdiction of Voluntary Arbitrators or
panel of Voluntary Arbitrators
Art. 262. Jurisdiction over other labor disputes
Art. 277. Miscellaneous provisions.
(f) A special Voluntary Arbitration Fund is hereby
established in the Board to subsidize the cost of
voluntary arbitration in cases involving the
interpretation and implementation of the Collective
Bargaining Agreement, including the Arbitrator’s fees,
and for such other related purposes to promote and
develop voluntary arbitration. The Board shall
administer the Special Voluntary Arbitration Fund in
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accordance with the guidelines it may adopt upon the
recommendation of the Council, which guidelines
shall be subject to the approval of the Secretary of
Labor and Employment. Continuing funds needed for
this purpose in the initial yearly amount of fifteen
million pesos (P15,000,000.00) shall be provided in
the 1989 annual general appropriations acts.
The amount of subsidy in appropriate cases shall
be determined by the Board in accordance with
established guidelines issued by it upon the
recommendation of the Council.
The Fund shall also be utilized for the operation
of the Council, the training and education of
Voluntary Arbitrators, and the Voluntary Arbitration
Program.

(g) The Ministry shall help promote and gradually
develop, with the agreement of labor organizations
and employers, labor-management cooperation
programs at appropriate levels of the enterprise
based on the shared responsibility and mutual
respect in order to ensure industrial peace and
improvement in productivity, working conditions and
the quality of working life.

(h) In establishments where no legitimate labor
organization exists, labor-management committees
may be formed voluntarily by workers and employers
for the purpose of promoting industrial peace. The
Department of Labor and Employment shall endeavor
to enlighten and educate the workers and employers
on their rights and responsibilities through labor
education with emphasis on the policy thrusts of this
Code.

Establishment of Grievance Machinery
1. Agreement by the parties
2. Grievance committee shall be created within 10
days from the signing of the CBA.

Grievance committee shall be composed of at
least 2 representatives each from the members
of the bargaining unit and the employer, unless
otherwise agreed upon by the parties.
o Representatives of the employers designated
by the union.

Disputes under Grievance Machinery
1. interpretation or implementation of the CBA
2. interpretation or enforcement of company
personnel policies

Procedure in handling grievances
(ANNEX J)

Jurisdiction of Voluntary Arbitrators
1. Grievances arising from the implementation or
interpretation of CBAs.
2. Arising from interpretation or enforcement of
company personnel policies
3. Wage distortion issues arising from the
application of any wage orders in organized
establishments
4. Arising from interpretation and implementation of
the productivity incentive programs under RA
6971

Any other labor disputes upon agreement by the
parties.
The parties may choose to submit the dispute to
voluntary arbitration proceedings before or at
stage of the compulsory arbitration proceedings.

Powers of the Voluntary Arbitrators
1. hold hearings
2. receive evidence
3. take whatever action is necessary to resolve the
dispute.

The voluntary arbitrator may conciliate or mediate
to aid the parties in reaching a voluntary
settlement.

Procedure: Voluntary Arbitration
All parties to the dispute shall be entitled to
attend the arbitration proceedings. The
attendance of any third party or the exclusion of
any witness from the proceedings shall be
determined by the voluntary arbitrator or panel of
voluntary arbitrators.
Hearing may be adjourned for cause or upon
agreement by the parties.
It shall be mandatory for the voluntary arbitrator
to render an award or decision within 20 calendar
days from the date of submission for resolution
unless the parties agree otherwise.
o Failure on the part of the voluntary arbitrator
to render a decision, resolution, order or
award within the prescribed period, shall
upon complaint of a party, be sufficient
ground for the Board to discipline said
voluntary arbitrator, pursuant to the
guidelines issued by the Secretary.
o In cases that the recommended sanction is
de-listing, it shall be unlawful for the
voluntary arbitrator to refuse or fail to turn
over to the board, for its further disposition,
the records of the case within 10 calendar
days from demand thereof.
Decision final and executory after 10 calendar
days from receipt of the copy by the parties. No
MR allowed.
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The voluntary arbitrator or labor arbitrator (if there
voluntary arbitrator is absence or incapacitated)
may issue a writ of execution upon motion of any
interested party.
Voluntary arbitrator shall turn over the records of
the case to the regional branch of the Board
within 10 days upon satisfaction of the final
award.

E. LABOR MANAGEMENT
COOPERATION SCHEMES

Creation of Labor Management and Other
Councils
The Department shall promote the formation of
labor-management councils in organized and
unorganized councils.

Purpose of the Labor-Management Councils
To enable the workers to participate in policy and
decision-making processes in the establishment,
insofar as said processes will directly affect their
rights, benefits and welfare.

Not covered by the Labor-Management Councils
1. Those covered by CBAs
2. Traditional areas of bargaining

Services to be rendered by the Department in line
with the said policy
1. Conduct awareness campaigns
2. Assist the parties in setting up labor-management
structures, functions and procedures
3. Provide process facilitators upon request of the
parties
4. Monitor the activities of labor-management
structures as may be necessary and conduct
studies on best practices aimed at promoting
harmonious labor-management relations.

Selection of employees’ representatives to the
council
1. Organized establishments: Nominated by the
exclusive bargaining representatives
2. Where there is no legitimate labor organization:
by the employees at large.


IV. STRIKES, LOCKOUTS AND
CONCERTED ACTIONS

Art. 263. Strikes, picketing and lockouts
Art. 264. Prohibited activities
Art. 265. Improved offer balloting.

Concerted Action – an activity undertaken by two or
more employees, by one on behalf of others

Strike – any temporary stoppage of work by the
concerted action of the employees as a result of an
industrial or labor dispute

Lockout – temporary refusal of any employer to
furnish work as a result of an industrial or labor
dispute

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 this Code

Strike-breaker – any person who obstructs,
impedes, or interferes with by force, violence,
coercion, threats, or intimidation any peaceful
picketing affecting wages, hours or conditions of work
or in the exercise of the right of self-organization or
collective bargaining

Strike Area – 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

Characteristics of a Strike
1. There must be an employer-employee
relationship.
2. Existence of a dispute.
3. Employment relation is deemed to continue
although in a state of belligerent suspension.
4. There is temporary work stoppage.
5. Work stoppage is done through concerted action.
6. The striking group is a legitimate labor
organization. In case of bargaining deadlock, it
must be the employees’ sole bargaining
representative.

Grounds for lockout
1. Collective Bargaining Deadlock
2. Unfair Labor Practice

violations of CBA must be gross to be considered
as ULP

Conversion Doctrine
A strike may start as economic and, as it
progresses, becomes ULP, or vice-versa.

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When strike or lockout cannot be declared
1. Violations of CBA which are not gross.
2. Grounds involving inter/intra union disputes
3. When there is no notice of strike or lockout or
without the strike or lockout vote
4. After assumption of jurisdiction by the Secretary
5. After certification or submission of dispute to
compulsory or voluntary arbitration or during the
pendency of cases involving the same grounds
for strike or lockout.

Who may declare a strike or lockout
1. Any legitimate labor organization
2. Any certified or duly recognized bargaining
representative
3. Employer

If there is certified or duly recognized bargaining
representative, any legitimate labor organization
may declare a strike but only on grounds of unfair
labor practice.

Notice of strike or lockout
1. In case of bargaining deadlocks: at least 30 days
before the intended date of strike
2. In case of unfair labor practice: at least 15 days
before the intended date of strike
3. In case of ULP involving the dismissal of a union
officer which may constitute union-busting: union
may take action immediately after the strike vote
and the submission of the results of the strike
vote to the regional branch of the Board

Contents of the notice of strike or lockout
1. Names and addresses of employer
2. Union involved
3. Nature of industry to which the employer belongs
4. Number of union members
5. Workers in the bargaining unit
6. Other relevant data
7. In case of bargaining deadlocks: the unresolved
issues, written proposals of the union, counter-
proposals of the employer and proof of request
for conference to settle differences
8. In case of unfair labor practice: the acts
complained of, and the efforts taken to resolve
the dispute

Board shall inform the concerned party in case
notice does not conform with the requirements.

Action on notice of strike or lockout
Upon receipt of the notice, the regional branch of
the Board shall exert all efforts at mediation and
conciliation to enable the parties to settle the
dispute amicably. It shall also encourage the
parties to submit the dispute to voluntary
arbitration.
The regional branch of the Board may, upon
agreement of the parties, treat a notice as a
preventive mediation case.
During the proceedings, the parties shall not do
any act which may disrupt or impede the early
settlement of the dispute. They are obliged, as
part of their duty to bargain collectively in good
faith and to participate fully and promptly in the
conciliation meetings called by the regional
branch of the Board.
A notice, upon agreement of the parties, may be
referred to alternative modes of dispute
resolution, including voluntary arbitration.

Preventive Mediation
The regional branch may treat the notice as
preventive mediation case upon agreement of the
parties.

Strike or lockout vote
1. approved by majority of total union membership
or by majority of the BOD or partners
2. by a secret ballot
3. in a meeting called for that purpose

The regional branch may supervise the conduct
of the secret balloting at its own initiative or upon
request of any party.
Notice of the meeting must be given at least 24
hours before such meeting, and the results of the
voting must be given at least 7 days before the
intended strike or lockout to the regional branch
of the Board. This is subject to the cooling-off
period.

Lapanday Workers’ Union, et. al. v. NLRC, 248
SCRA 96 (1995)
The result of the strike (or lockout voting) should
be reported to the NCMB at least 7 days before the
intended strike or lockout, subject to the cooling off
period. This means that after the strike vote is taken
and the result reported to NCMB, seven days must
pass before the union can actually commence the
strike. This seven-day reporting period is intended to
give the Dept. of Labor and Employment an
opportunity to verify whether the projected strike
really carries the imprimatur of the majority of the
union members.

Samahan ng Manggagawa in Moldex Products, et.
al. v. NLRC, et.al. GR No. 119467, 01 February
2000
A strike tagged without the submission of the
result of the strike vote is illegal.
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When labor may strike or when the employer may
lock out its workers
If the dispute remain unsettled after the lapse of
the requisite number of days from the filing of the
notice of strike or lockout and of the results of the
election.
The regional branch of the Board shall continue
mediating and conciliating.

Prohibited activities during strikes and lockouts
1. strike or lock-out without first having bargained
collectively strike or lock-out without the
necessary notice being filed with the DOLE
2. strike or lock-out without the necessary vote first
having been obtained and reported to the DOLE
3. strike or lock-out after DOLE has assumed
jurisdiction or the President or after certification
or submission of dispute to the compulsory
arbitration/voluntary arbitration or during the
pendency of cases involving the same grounds
for the strike or lockout
4. knowingly participating in illegal strike or
knowingly participates in the commission of
illegal acts during a strike ground for
termination of employment
5. obstruct, impede, or interfere with by force,
violence, coercion, threats, or intimidation any
peaceful picketing by employees during any labor
controversy or shall abeit or aid such obstruction
or interference
6. employment or use of any strikebreaker/
employed as a strike breaker
7. bringing in, introducing, or escorting by any public
officer or employee, including officers and
personnel of the AFP or PNP, or any armed
person in any manner of any individual who
seeks to replace strikers in entering or leaving
the premises of a strike area or work in place of
strikers
8. commit any act of violence, coercion or
intimidation while engaged in picketing or
obstruct the ingress or egress from the
employer's premises for lawful purposes or
obstruct public thoroughfares (must be pervasive
and widespread/consistently and deliberately
resorted to as a matter of policy)

Improved Offer Balloting
1. In case of strike
• Regional branch of the Board shall, conduct
a referendum by secret balloting on the
improved offer of the employer.
• on or before the 30th day of strike.
• at its own initiative or upon the request of any
affected party.
• When at least a majority of the union
members vote to accept the improved offer,
the striking workers shall immediately return
to work and the employer shall thereupon
re-admit them upon the signing of the
agreement.

2. In case of lockout
• The regional branch of the Board shall also
conduct a referendum by secret balloting on
the reduced offer of the union.
• on or before the 30
th
day of the lockout.
• When at least a majority of the board of
directors or trustees or the partners holding
the controlling interest in the case of
partnership vote to accept the reduced offer,
the workers shall immediately return to work
and the employer shall thereupon readmit
them upon the signing of the agreement.

Injunction
GR: No court or entity shall enjoin any picketing,
strike or lockout.

Exceptions:
1. When prohibited or unlawful acts are being or
about to be committed that will cause grave or
irreparable damage to the complaining party.
2. National Interest

Assumption of Jurisdiction by DOLE Secretary

1. Discretionary
In his opinion there exists a labor dispute
causing or likely to cause a strike or lockout
in an INDUSTRY INDISPENSABLE TO THE
NATIONAL INTEREST
may certify the same to the commission for
COMPULSORY ARBITRATION
Effect: AUTOMATICALLY ENJ OINS the
intended on impending strike or lockout but if
one has already taken place, all striking or
locked out employees SHALL
IMMEDIATELY RETURN TO WORK and the
employer shall immediately resume
operations and re-admit all workers under the
same terms and conditions prevailing before
the strike or lock-out
2. Mandatory: (within 24 hours)
In labor disputes adversely affecting the
continued operation of HOSPITALS,
CLINICS, OR MEDICAL INSTITUTIONS
May assume jurisdiction or certify it to the
NLRC for compulsory arbitration
Duty of striking union or locking out employer
to provide and maintain an effective
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SKELETAL WORKFORCE of medical and
other health personnel, where movement and
service shall be unhampered and
unrestricted as are necessary to insure the
proper and adequate protection of the life
and health of its patients most especially
emergency cases for the duration of the
strike or lock-out

Power of the President under Art. 263(g)
1. may determine the industries, which are in his
opinion indispensable to national interest
2. may intervene at any time and assume
jurisdiction over any such labor dispute in order
to settler or terminate the same

Decision of the President, DOLE Secretary is
final and executory after receipt thereof by the
parties.

Sarmiento v. Tuico, 162 SCRA 676 (1988)
The return-to-work order not so much confers a
right as it imposes a duty. While as a right it may be
waived, it must be discharged as a duty even against
the worker’s will. Returning to work in this situation is
not a matter of option or voluntariness but of
obligation.
If the stoppage of work will be unfruitful not only
to bith the employer and the employees, more
particularly if the national economy will suffer
because if the resultant reduction in our export
earnings and our dollar reserves, not to mntion
possible cancellation of the contracts of the company
with foreign exporters, the labor dispute may properly
be certified to the National Labor Relations
Commission, to avoid such a development, with the
return-to-work order following as a mater of course
under the law.
Where the return to work order is issued pending
the determination of the legality of the strike, it is not
correct to say that it may be enforced only if he strike
is legal and may be disregarded if illegal. Precisely,
the purpose of the return to work order is to maintain
the status quo while the determination is being made.

The discretion to assume jurisdiction may be
exercised by the Secretary of Labor and
Employment without the necessity of prior notice
of hearing given to any of the parties disputants
(Magnolia Poultry Employees Union, et.al. v.
Sanchez GR. Nos. 76227-28, 05 November
1986)

Consequences of Illegal Strike

Good-Faith Doctrine
A strike may be considered legal when the union
believed that the respondent company committed
unfair labor acts and the circumstances warranted
such belief in good faith although subsequently such
allegation of unfair labor practices are found out as
not true. (People’s Industrial and Commercial
Employees and Workers Organization (FFW) v.
People’s Industrial and Commercial Corp. GR No.
37687 15 March 1982)

Rule on Wages of Strikers
GR: Strikers are not entitled to their wages during the
period of a strike, even if the strike is legal.

Exceptions:
1. In case of a ULP STRIKE, in the discretion of
the authority deciding the case.
2. Where the strikers voluntarily and
unconditionally offered to return to work, but the
employer refused to accept the offer [e.g. of an
“unconditional offer”: “we will return tomorrow”
and NOT “willing to return provided]
o They are entitled to backwages from the date
the offer was made.
3. Where there is RETURN-TO-WORK ORDER and
the employees are discriminated against.
o They are entitled to backwages from the date
of discrimination.

Rule on Reinstatement of Striking Workers
GR: Striking employees are entitled to reinstatement,
regardless of whether or not the strike was the
consequence of the employer’s ULP.

Exceptions:
The following strikers are NOT entitled to
reinstatement:
1. union officers who knowingly participate in an
illegal strike.
2. any striker/union member who knowingly
participates in the commission of illegal acts
during the strike.

Sarmiento v. Tuico, 162 SCRA 676 (1988)
The return-to-work order should benefit only
those workers who comply with it and, regardless of
the outcome of the compulsory arbitration
proceedings, are entitled to be paid for the work they
have actually performed. Conversely, those workers
who refuse to obey said order and instead wage a
strike are not entitled to be paid for work not done or
to reinstatement to the positions they have
abandoned by their refusal to return thereto as
ordered.

St. Scholastica’s College v. Torres, GR No.
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100158, 19 June 1992
A return to work order is immediately effective
and executory notwithstanding the filing of a motion
for reconsideration. It must be strictly complied with
even during the pendency of any petition questioning
its validity.
The respective liabilities of striking union officers
and members who failed to immediately comply with
the return-to-work order is outlined in Art. 264 of the
Labor Code which provides that any declaration of a
strike or lockout after the Secretary of Labor and
Employment has assumed jurisdiction over the labor
dispute is considered an illegal act. Any worker or
union office who knowingly participates in a strike
defying a return-to-work order may, consequently “be
declared to have lost his employment status.”

Batangas Laguna Tayabas Bus Company v.
NLRC, GR No. 101858, 21 August 1992
But to justify dismissal, the defiance of the return-
to-work order must be proved. In one case the Court
said that the mere fact that the majority of the strikers
were able to return to work does not necessarily
mean that the rest deliberately defied the return to
work order or that they had been sufficiently notified
thereof. As the Solicitor General correctly adds, some
of them may have left Metro Manila and did not have
enough time to return during the period given by the
period given by petitioner.

Gold City Integrated Port Services, Inc. v. NLRC,
245 SCRA 627 (1995)
Art. 264 makes a distinction between workers
and union officers who participate in a strike.
An ordinary striking worker cannot be terminated
for mere participation in an illegal strike. There must
be proof that he committed illegal acts during a strike.
A union officer, on the other hand, may be
terminated from work when he knowingly participates
in an illegal strike, or when he commits an illegal act
during a strike.


V. POST-EMPLOYMENT

A. REGULAR, CASUAL,
PROBATIONARY EMPLOYMENT

Art. 280. Regular and casual employment
Art. 281. Probationary employment

Regular Employment
Engaged to perform tasks usually necessary and
desirable to the business of the employer
Regular employment does not mean permanent
employment
- A probationary employee is considered regular
after 6 months, becomes regular.
May be terminated only for just / authorized
causes

Test to determine regular employment

Universal Robina Corporation v. Catapang, GR
No. 164736. October 14, 2005
The primary standard of determining regular
employment is the reasonable connection between
the particular activity performed by the employee to
the usual trade or business of the employer. The test
is whether the former is usually necessary or
desirable in the usual business or trade of the
employer.
Also, the performance of a job for at least a year
is sufficient evidence of the job’s necessity if not
indispensability to the business. This is the rule even
if its performance is not continuous and merely
intermittent. The employment is considered regular,
but only with respect to such activity and while such
activity exists.
The practice of entering into employment
contracts which would prevent the workers from
becoming regular should be struck down as contrary
to public policy and morals.

Casual Employment
Activity performed is not usually necessary or
desirable in the usual business or trade of the
employer, not project and not seasonal
Except: if he has rendered at least 1 year of
service, whether such service is continuous or
broken, he is considered a REGULAR employee
with respect to the activity in which he is
employed and his employment shall continue
while such activity exists.
Despite the distinction between regular and
casual employment, every employee shall be
entitled to the same rights and privileges, and
shall be subject to the same duties as may be
granted by law to regular employees during the
period of their actual employment.

Fixed-Term Employment
Period is agreed upon knowingly and voluntarily
by the parties without force, duress, or improper
pressure exerted on the employee.
Brent case: fixed-term employment repealed by
LC. But the Civil Code, a general law, allows fixed-
term employment
Employee hired on a fixed-term is regular if job is
necessary and desirable to business of employer.
(Philips Semiconductor v. Fadriquela, GR No.
141717, April 2004)
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Project Employment
One whose employment has been fixed for a
specific project or undertaking the completion of
which has been determined at the time of
engagement of the employee; the period is not
the determining factor, so that even if the period
is more than 1 year, employee does not
necessarily become regular

Maraguinot v. NLRC, 284 SCRA 539 (1998)
Repeated hiring on a project to project basis is
considered necessary and desirable to the business
of the employer. Thus, employee is regular.

FilSystems v. Puente, GR No. 153832, 18 March
2005
Repeated hiring does not necessarily mean
regular employment.

“Day Certain” Rule – project employment ends on
a certain date does not end on an exact date, but
on the completion of the project.
Phil. Global Communication case: usual and
desirable does not matter because employer
hires without intent of making them regular.
Regularization is not a management prerogative.
It is a mandate of law. (PAL v. Pascua, 15 August
2003)
Nature of employment determines regular
employment.
Art. 280 does not apply to OFWs. (LC does not
apply to migrant workers, RA 8042 does.)
Poseidon Fishing case: if engaged in deep-sea
fishing, locally-hired employees, 280 applies

Probationary Employment
GR: Not to exceed 6 months

Exceptions:
a. covered by an apprenticeship agreement
stipulating a longer period
b. voluntary agreement of parties (especially when
nature of work requires a longer period)
c. the employer gives the employee a second
chance to pass the standards set

Termination of Probationary Employment
a. just / authorized causes
b. when he fails to qualify as a regular employee in
accordance with reasonable standards made
known by the employer to employee at the time
of his engagement
If allowed to work after the probationary period,
he shall be considered a REGULAR employee

After lapse of probationary period (6 months), the
employee becomes regular. (Voyeur Visage,
2005)
Probationary employee may be dismissed before
end of the probationary period.

Aberdeen Court, Inc. v. Agustin, GR No. 149371,
13 April 2005
There is probationary employment where the
employee, upon his engagement, is made to undergo
a trial period during which the employer determines
his fitness to qualify for regular employment, based
on reasonable standards made known to him at the
time of engagement.
The services of an employee who has been
engaged on probationary basis may be terminated
only for a just cause, when he fails to qualify as a
regular employee in accordance with the reasonable
standards prescribed by the employer.
In all cases of probationary employment, the
employer shall make known to the employee the
standards under which he will qualify as a regular
employee at the time of his engagement. Where no
standards are made known to the employee at that
time, he shall be deemed a regular employee.

Mariwasa Manufacturing, Inc. v. Leogardo, Jr., 26
January 1989
Issue:
May the employer and the employee validly
agree to extend the probationary period beyond six
months?

Held:
YES. Such an extension may be lawfully agreed
upon, despite the seeming restrictive language of
Article 281. A voluntary agreement extending the
original probationary period to give the employee a
second chance to pass the probation standards
constitutes a lawful exception to the statutory limit.

UST v. NLRC, 15 February 1990
Issue:
For private school teachers, what are the legal
requirements for acquisition of permanent
employment?

Held:
(1) The teacher is a full-time teacher; (2) the
teacher must have rendered three consecutive years
of service; and (3) such service must have been
satisfactory.

Seasonal Employment
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Work or services to be performed is seasonal in
nature and the employment is for the duration of
the season

Hacienda Fatima v. National Federation of
Sugarcane Workers-Food and General Trade, GR
No. 149440, 28 January 2003
The fact that seasonal workers do not work
continuously for one (1) whole year but only for the
duration of the season does not detract from
considering them in regular employment since in a
litany of cases, the Court has already settled that
seasonal workers who are called to work from time to
time and are temporarily laid off during off-season are
not separated from service in said period, but merely
considered on leave until re-employed. Workers who
have performed the same tasks every season for
several years are considered regular employees for
their respective tasks.

B. SECURITY OF TENURE

Art. 279. Security of tenure
Applies to all establishment or undertakings
whether for profit or not
Project employees have no security of tenure.
(see how full backwages are computed)
Full backwages are computed from the time
wages are withheld up to the time the employee
is actually reinstated.
In the case of project employees, you cannot
demand wages for the time when there is no
project. Thus, 279 does not apply to project
employees.

C. JUST CAUSES, AUTHORIZED CAUSES,
CONSTRUCTIVE DISMISSAL

Art. 282. Just Causes for Termination by
employer

Grounds: (SoMe WiD GAN FWeT CO)
1. Serious Misconduct or Willful Disobedience by
the employee of the lawful orders of his employer
or representative in connection with his work
(work-related)
2. Gross And habitual Neglect by the employee of
his duties
3. Fraud or Willful breach by employee of the Trust
reposed in him by his employer or duly
authorized representative (not mere suspicion)
4. Commission of a Crime or offense by the
employee against the person of his employer or
any immediate member of his family or duly
authorized representative
5. Other analogous cases

Serious Misconduct
Improper or wrong conduct; the transgression of
some established and definite rule of action, a
forbidden act, a dereliction of duty, willful in
character, and implies wrongful intent and not mere
error in judgment. To be serious within the meaning
and intendment of the law, the misconduct must be of
such grave and aggravated character and not merely
trivial or unimportant (Villamor Golf Club v. Pehid, 04
October 2005)

Elements of Serious Misconduct
1. serious;
2. relate to the performance of the employee’s
duties;
3. employee has become unfit to continue working
for the employer (Phil. Aeolus v NLRC, 2000)

Elements of Willful Disobedience
1. employee’s assailed conduct was willful or
intentional, the willfulness being characterized by
a wrongful and perverse attitude;
2. the order violated must have been reasonable,
lawful, made known to the employee and must
pertain to the duties which he has been engaged
to discharge (Micro Sales Operation Network v.
NLRC,11 October 2005)

Gross and Habitual Neglect
GROSS and HABITUAL must concur together.
Implies a want or absence of or failure to
exercise slight care or diligence, or the entire
absence of care. It evinces a thoughtless
disregard of consequences without exerting any
effort to avoid them.
Previous infractions by the employee should
have been acted upon appropriately by the
employer before terminating the former.

Fraud or Willful Breach of Trust
Can be committed only by confidential and
managerial employees
- confidential employees – charged with custody
and protection of employer’s property like a
cashier (this is different from the “confidential
employees” in labor relations)
A criminal case need not be actually filed.
Commission of acts constituting a crime is
sufficient.

Analogous Cases; Examples
violation of safety rules
gross inefficiency
wrongful acts of employee against the company
violation of code of discipline
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failure to heed an order not to join an illegal
picket
immorality
sexual harassment

Art. 283. Authorized Causes for Termination

Grounds:
1. Introduction of labor-saving devices
2. Redundancy
3. Retrenchment
4. Closure of business as a result of grave financial
loss
5. Closure not due to losses

Redundancy
Redundancy exists where the services of an
employee are in excess of what is reasonably
demanded by the actual requirements of the
enterprise.
A position has become superfluous as an
outcome of a number of factors such as
overhiring of workers, decreased volume of
business, dropping of a particular product line or
service activity previously manufactured or
undertaken by the enterprise (thus it only
requires superfluity not duplication of work)
The redundancy SHOULD NOT have been
created by the EMPLOYER.

Validity of a Redundancy Program

DAP v. CA, GR No. 165811, 14 December 2005
The employer must comply with the following
requisites to ensure the validity of the redundancy
program:
1. a written notice served on both the employees
and the Department of Labor and Employment
(DOLE) at least one month prior to the intended
date of retrenchment
2. payment of separation pay equivalent to at least
one month pay or at least one month pay for
every year of service, whichever is higher
3. good faith in abolishing the redundant positions
4. fair and reasonable criteria in ascertaining what
positions are to be declared redundant and
accordingly abolished

Retrenchment
Resorted primarily to avoid or minimize business
losses.

Standards to Justify Retrenchment
1. The losses expected should be substantial and
not merely de minimis in extent.
2. The substantial loss apprehended must be
reasonably imminent.
3. It be reasonably necessary and likely to
effectively prevent the expected losses. The
employer should have taken other measures
prior or parallel to retrenchment to forestall
losses.
4. The alleged losses if already realized, and the
expected imminent losses must be proved by
sufficient and convincing evidence. (Oriental
Petroleum & Minerals Corp. v Fuentes, 14
October 2005)

Difference between redundancy and
retrenchment: In redundancy, company has no
financial problems; in retrenchment, company
suffers from financial problems.

Closure Not Due to Losses
In cases of closure not due to losses, it must
NOT be in BAD FAITH.
If the dismissal is based on a just cause under
Article 282 but the employer failed to comply with
the notice requirement, the sanction to be
imposed upon him should be tempered because
the dismissal process was, in effect, initiated by
an act imputable to the employee.
If the dismissal is based on an authorized cause
under Article 283 but the employer failed to
comply with the notice requirement, the sanction
should be stiffer because the dismissal process
was initiated by the employer’s exercise of his
management prerogative

Constructive Dismissal
1. No formal dismissal
2. The employee is placed in a situation by the
employer such that his continued employment
has become UNBEARABLE.

Veterans Security Agency v. Vargas, GR No.
159293. 16 December 2005
Constructive dismissal exists when an act of
clear discrimination, insensibility or disdain on the
part of the employer has become so unbearable as to
leave an employee with no choice but to forego
continued employment.
Abandonment, as a just and valid cause for
termination, requires a deliberate and unjustified
refusal of an employee to resume his work, coupled
with a clear absence of any intention of returning to
his or her work.
Abandonment is incompatible with constructive
dismissal.
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Article 286 applies only when there is a bona fide
suspension of the employer’s operation of a business
or undertaking for a period not exceeding 6 months.
In security agency parlance, being placed “off
detail” or on “floating” status means “waiting to be
posted.”
It is the inherent prerogative of an employer to
transfer and reassign its employees to meet the
requirements of its business. Be that as it may, the
prerogative of the management to transfer its
employees must be exercised without grave abuse of
discretion. The exercise of the prerogative should
not defeat an employee's right to security of tenure.
The employer’s privilege to transfer its employees to
different workstations cannot be used as a subterfuge
to rid itself of an undesirable worker.

Art. 284. Disease as ground for termination

Disease as Ground for Termination
When his continued employment is prohibited by
law or prejudicial to his health or to the health of
his co-employees
There is a certification by a competent public
health authority that the disease is of such nature
or at such stage that it cannot be cured within a
period of 6 months even with proper medical
treatment
The requirement for a medical certificate cannot
be dispensed with; otherwise, it would sanction
the unilateral and arbitrary determination by the
employer of the gravity or extent of the
employee’s illness and thus defeat the public
policy on the protection of labor. (Manly Express
v. Payong, 25 October 2005)

Art. 285. Termination by employee

Termination without Just Cause
1. at least 1 month prior notice
2. employee may be held liable for damages for
failure to give notice

Termination with Just Cause
1. Grounds
a. serious insult on the honor and person of
employee by the employer or his
representative
b. inhumane and unbearable treatment
accorded to the employee
c. commission of a crime against person of the
employee or any of the immediate members
of his family
d. other causes analogous to the foregoing
2. Notice not necessary

Resigning employee not entitled to separation
pay, unless company policy gives it.

No Separation Pay in resignation; Exceptions;
Waivers and Quitclaims, when valid

Candido Alfaro v. CA, et al., GR No.
140812, 28 August 2001
Generally, separation pay need not be paid to an
employee who voluntarily resigns. However, an
employer who agrees to expend such benefit as an
incident of the resignation should not be allowed to
renege in the performance of such commitment.
Not all waivers and quitclaims are invalid as
against public policy. If the agreement was voluntarily
entered into and represented a reasonable
settlement, it is binding on the parties and may not
later be disowned, simply because of a change of
mind.

Art. 286. When employment not deemed
terminated
The bona-fide suspension of the operation of a
business or undertaking for a period not
exceeding 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.

Temporary Lay-off
Must not exceed 6 months.

Options of employer (i.e. security agency) in case
of pull out by client:
1. retrenchment – must give notice 1 month before
retrenchment; pay separation pay
2. closure – must comply with 1 month advanced
notice; no need to pay separation pay

Abandonment
means the deliberate, unjustified refusal of an
employee to resume his/her employment

Two elements must be proved
1. the intention to abandon
2. an overt act from which it may be inferred that the
employee has no more intent to resume his/her
work

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This is negated by immediate filing of an action
for ILLEGAL DISMISSAL.

Employment Not Deemed Terminated
a. bona fide suspension of the operation of a
business/undertaking for a period of not more
than 6 months
b. fulfillment by the employee of a military or civic
duty

Employer shall reinstate the employee to his
former position without loss of seniority rights IF
employee indicates his desire to resume his
work not later than 1 month from resumption of
operations of his employer or his relief from the
military or civic duty

Preventive Suspension
justified where the employee’s continued
employment poses a serious and imminent
threat to the life or property of the employer or of
his co-workers (there is a REASONABLE
POSSIBILITY of the employee posing such a
threat)
must not exceed 1 month
It is only for the purpose of investigating the
offense to determine whether he is to be
dismissed or not. IT IS NOT A PENALTY.
if more than 1 month, the employee must be
actually reinstated or reinstated in the payroll
officers liable only if with malice and bad faith

Floating Status
It is legal, such as in the case of security guards
who have no assignment.
Such a status should not exceed six-months; if it
does, it amounts to a dismissal.

D. DUE PROCESS

Art. 277. Miscellaneous Provisions
(b) Subject to the constitutional right of workers to
security of tenure and their right to be protected
against dismissal except for a just and authorized
cause and without prejudice to the requirement of
notice under Article 283 of this Code, the employer
shall furnish the worker whose employment is sought
to be terminated a written notice containing a
statement of the causes for termination and shall
afford the latter ample opportunity to be heard and to
defend himself with the assistance of his
representative if he so desires in accordance with
company rules and regulations promulgated pursuant
to guidelines set by the Department of Labor and
Employment. Any decision taken by the employer
shall be without prejudice to the right of the worker to
contest the validity or legality of his dismissal by filing
a complaint with the regional branch of the National
Labor Relations Commission. The burden of proving
that the termination was for a valid or authorized
cause shall rest on the employer. The Secretary of
the Department of Labor and Employment may
suspend the effects of the termination pending
resolution of the dispute in the event of a prima facie
finding by the appropriate official of the Department
of Labor and Employment before whom such dispute
is pending that the termination may cause a serious
labor dispute or is in implementation of a mass lay-
off.

In cases of dismissal, employer has the burden
of proof to show that the dismissal falls under
the just and authorized causes. (Tolentino v.
PLDT, GR No. 160404, 08 June 2005)
Due process refers to the process to be
followed; burden of proof refers to the amount of
proof to be adduced
In money claims, the burden of proof as to the
amount to be paid the employee rests upon the
employer since he is in custody of documents
that would be able to prove the amount due,
such as the payroll.
In cases of just and authorized causes, due
process must be observed.

Due Process Requirements under Art. 277 (b)
Just Causes (282)
Authorized Causes
(283)
Twin Notice (Before and
After Investigation
- notice of the charge
- notice that employee
is guilty (after
investigation)

Investigation
One notice only
- notice to employee1
month before
installation of LSD,
retrenchment, or
closure
- 1 month advanced
notice to DOLE

Non-compliance with due process requirements

Before the Agabon case, the doctrine in Serrano v.
NLRC (GR No. 117040, 27 January 2000) was
followed. It states that termination due to authorized
cause without giving the notice required under the
Labor Code is not a violation of due process. It is
valid although declared irregular / ineffectual. He
shall however be entitled to SEPARATION PAY AND
BACKWAGES.

Agabon v. NLRC, 17 November 2004 modifies
Serrano
Dismissal for an authorized or just cause, w/o
procedural due process is not an illegal dismissal
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which warrants backwages; employee entitled only to
nominal damages.
The Court interpreted Art. 279 to the effect that
termination is illegal only if it is not for any of the
justified or authorized causes provided by law.
Payment of backwages and other benefits, including
reinstatement, is justified only if the employee was
unjustly dismissed.
The Court decided to follow Wenphil that where
the dismissal is for a just cause, the lack of statutory
due process should not nullify the dismissal or render
it illegal. However, the employer should indemnify the
employee for the violation of his rights. The indemnity
should be stiffer than that provided in Wenphil to
discourage the abhorrent practice of “dismiss now,
pay later.” The indemnity should be in the form of
nominal damages, which is adjudicated in order that
a right of plaintiff, which has been violated by the
defendant, may be vindicated.

Jaka Food Processing v. Pacot, 28 March 2005
If the dismissal is based on a just cause under
Article 282 but the employer failed to comply with the
notice requirement, the sanction to be imposed upon
him should be tempered because the dismissal
process was, in effect, initiated by an act imputable to
the employee. On the other hand, if the dismissal is
based on an authorized cause under Article 283 but
the employer failed to comply with the notice
requirement, the sanction should be stiffer because
the dismissal process was initiated by the employer’s
exercise of his management prerogative.
SC distinguished between non-compliance of due
process requirements in just and authorized causes.
Authorized causes – Php 50,000 nominal
damages
J ust causes – Php 30,000 nominal damages
(because in just causes, employee is being
dismissed due to his fault)

Industrial Timber Corp. v. Ababon, 30 March 2006
Factors to be taken into account in the
determination of the amount of nominal damages in
dismissal cases:
1. the authorized cause invoked, whether it was a
retrenchment or a closure or cessation of
operation of the establishment due to serious
business losses or financial reverses or
otherwise
2. the number of employees to be awarded
3. the capacity of the employers to satisfy the
awards, taken into account their prevailing
financial status as borne by the records
4. the employer's grant of other termination benefits
in favor of the employees
5. whether there was a bona fide attempt to comply
with the notice requirements as opposed to giving
no notice at all.
SC reduced the nominal damages from Php 30,000
to Php 10,000.

Agabon not given retroactive effect
The principle in law giving retroactive effect
where the subsequent law is corrective in character
does not necessarily apply to judicial decisions.
Unless the SC provides otherwise, the ruling would
have no retroactive effect.

E. RELIEFS FOR ILLEGAL DISMISSAL

1. Backwages + Reinstatement without loss of
seniority rights, or if reinstatement impossible
2. Backwages +Separation Pay

Where reinstatement is ordered, but the position
is already filled up, the dismissed employee must
still be reinstated if it is still possible.

Cases where reinstatement is impossible
1. Doctrine of Strained Relations (applies to
confidential and managerial employees only)
2. In case of position has been abolished (applies to
both managerial and rank and file)
Moral and exemplary damages may also be
awarded.

Computation of Separation Pay
Installation of labor-
saving devices

Redundancy
1 month pay or 1 month
pay for every year of
service whichever is
higher.

1 month pay for every
year is always higher if
the employee has
served for more than 1
year.
Retrenchment to
prevent losses

Closures or cessation of
operations of
establishments or
undertaking NOT due to
serious business losses
or financial reverses

Disease
1 month pay or at least
1/2 month pay for every
year of service
whichever is higher

Closures or cessation of
operations due to
serious business losses
or financial reverses
no separation pay
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* a fraction of at least 6 months is considered 1 year

If the retrenchment is later declared illegal,
separation pay of 1 month for every year shall be
paid. Such computation is because the
retrenchment was illegal and the employee was
entitled to reinstatement.

Reinstatement; payment of backwages

Triad Security & Allied Services, Inc, et al. v
Ortega, GR No. 160871, 06 February 2006
An order of reinstatement by the labor arbiter is
not the same as actual reinstatement of a dismissed
or separated employee. Thus, until the employer
continuously fails to actually implement the
reinstatement aspect of the decision of the labor
arbiter, their obligation to the illegally dismissed
employee, insofar as accrued backwages and other
benefits are concerned, continues to accumulate. It is
only when the illegally dismissed employee receives
the separation pay (in case of strained relations) that
it could be claimed with certainty that the EER has
formally ceased thereby precluding the possibility of
reinstatement. In the meantime, the illegally
dismissed employee’s entitlement to backwages, 13
th

month pay, and other benefits subsists. Until the
payment of separation pay is carried out, the
employer should not be allowed to remain
unpunished for the delay, if not outright refusal, to
immediately execute the reinstatement aspect of the
labor arbiter’s decision.
Further, the employer cannot refuse to reinstate
the illegally dismissed employee by claiming that the
latter had already found a job elsewhere. Minimum
wage earners are left with no choice after they are
illegally dismissed from their employment, but to seek
new employment in order to earn a decent living.
Surely, we could not fault them for their perseverance
in looking for and eventually securing new
employment opportunities instead of remaining idle
and awaiting the outcome of the case.

Reliefs of local workers vs. migrant workers
Art. 279, LC
(local workers)
Sec. 10, RA 8042
(migrant workers)
Reinstatement


Full reimbursement of
his placement fee with
interest of 12% per
annum
Full backwages from the
time his compensation
was withheld from him
up to the time of his
actual reinstatement
Salaries for the
unexpired portion of his
employment contract or
for 3 months for every
year of the unexpired
term, whichever is less
* without valid, just, or authorized cause

The option of “three months for every year” is
available only if the employment is for at least one
year. If the contract is shorter, the salary to be paid
should be that for the unexpired portion. (Marsaman
Manning Agency v. NLRC, 25 August 1999)

F. RETIREMENT

Art. 287. Retirement
(as amended by the Retirement Pay Law – RA 7641)

Exempted:
retail, service, agricultural establishments
operations employing not more than 10
employees

Kinds
1. OPTIONAL – 60 years old / 5 years in service
(includes authorized absences/vacations/regular
holidays/mandatory military or civic service). This
depends on the stipulations in the CBA, company
retirement plan, or employment contract.
2. COMPULSARY – 65 years old/ regardless or
years of service (company not bound to dismiss
employee)

Benefits
1/2 month salary per year of service which shall
include:
1. 15-day basic wage, plus
2. 1/12 of the 13
th
month pay, plus
3. 5-day Service incentive leave pay plus
4. other benefits as maybe agreed upon by
employer and employee
(a fraction of at least 6 months considered as 1 year)

Minimum benefits to be received =
(no. 1 +no. 2 +no. 3) x years of service
If CBA / retirement plan has no prohibition, an
employee can get pay under the law, CBA, and
the retirement plan.
If what is provided in the CBA is lower that what
is provided for in law, the employee is entitled to
the higher amount.


VI. DISPUTE SETTLEMENT

A. JURISDICTIONS OF THE
DIFFERENT AGENCIES

Bureau of Labor Relations
Original jurisdiction: appeal to DOLE Secretary
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Appellate jurisdiction: decision shall be
immediately executory upon issuance of entry of
final judgment; can be reviewed by the CA in a
petition for certiorari under Rule 65

Jurisdiction
1. Inter-union conflicts
2. Intra-union conflicts
3. All disputes, grievances or problems arising from
or affecting labor-management relations in all
workplaces EXCEPT those arising from the
implementation or interpretation of the CBA
which shall be the subject of grievance procedure
and/or voluntary arbitration
4. Complaint involving federations, national unions,
industry unions, its officers or member
organizations

Compromise Agreements
If voluntarily agreed upon by the parties with the
assistance of the BLR or the regional office of
DOLE final and binding upon the parties
The only time NLRC or any courts can assume
jurisdiction over issues involved therein:
a. in case of non-compliance thereof
b. if there is prima facie evidence that the
settlement was obtained through fraud,
misrepresentation or coercion

Power to Issue Subpoena
When relevant to a labor dispute under its
jurisdiction either at the request of any interested
party or at its own initiative

Privileged Communication
Information and statements made at conciliation
meetings shall NOT be used as evidence in the
NLRC
Conciliators and similar officials shall not testify in
any court or body regarding any matters taken up
at conciliation proceeding conducted by them

Appeal
within 10 days to the DOLE Secretary
Grounds:
a. grave abuse of discretion
b. gross incompetence

Marino, Jr., et. al. v. Gamilla, et. al., 31 January
2005
Issue:
Does the bureau of labor relations have
jurisdiction over claims for actual, moral, exemplary
and other forms of damages arising from intra-union
or inter-union disputes?

Held:
No. Unlike the NLRC which is explicitly vested
with the jurisdiction over claims for actual, moral,
exemplary and other forms of damages, the BLR is
not specifically empowered to adjudicate claims of
such nature arising from intra-union or inter-union
disputes.

As long as the agreement is voluntarily entered
into and has a reasonable award, it is valid.
It must be approved by the LA (NLRC Rules)
At the DOLE Secretary’s level, the Secretary
must approve.
On appeal, the NLRC must approve the
agreement.
An offer to settle is not proof that something is
due to the employee.

Mindoro Lumber and Hardware v. Eduardo D.
Bacay, et. al., 08 June 2005
Article 277 of the labor code states that any
compromise settlement, including those involving
labor standard laws, voluntarily agreed upon by the
parties with the assistance of the Bureau or the
regional office of the Department of Labor shall be
final and binding upon the parties. ‘A’, a member of a
labor union and a party to a labor dispute executed a
compromise settlement. He appeared before the
Office of the Regional Director to file said
compromise settlement together with a motion to
dismiss the case.

Issue:
Is the compromise settlement in compliance with
Article 277?

Held:
The assistance of the BLR or the regional office
of the DOLE in the execution of a compromise
settlement is a basic requirement. Without it, there
can be no valid compromise settlement. Mere
appearance before BLR or the regional office of the
DOLE to file the already executed compromise
settlement is not the “assistance” required by the law.
As such, the compromise settlement executed by ‘A’
cannot qualify as a valid compromise settlement.

Jurisdiction of Labor Arbiters
1. ULP (priority resolved within 30 cal days from
submission for decision)
2. termination disputes
3. claims for wages, rates of pay, hours of work and
other terms and conditions of employment
4. claims for actual, moral, exemplary and other
forms of damages arising from employer-
employee relationship
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5. cases arising from prohibited activities during
strikes, including questions involving the legality
of strikes and lockouts
6. all other claims arising from employer-employee
relationship involving an amount exceeding
P5000 regardless of whether accompanied by a
claim for reinstatement except ECC, SSS,
Medicare, & maternity benefits
7. Wage distortion cases in unorganized
establishments
8. All monetary claims of OFWs arising from EER or
by virtue of any law or contract involving Filipino
workers for overseas deployment, including
claims for actual, moral, exemplary and other
forms of damages (RA 8042)
9. Enforcement of compromise agreements when
there is non-compliance by any of the parties
pursuant to Art. 227 of the Code (Sec. 1, Rule V,
2005 NLRC Rules)

Cooperatives
Termination of members of cooperatives is not
cognizable by the LA (members are not
employees)
LA has jurisdiction over illegal dismissal cases
involving employees of cooperatives

LA does NOT have jurisdiction over
Intra-corporate disputes
Cases involving corporate officers (bec. they are
not employees) – BUT in Prudential Bank v.
Reyes (G.R. No. 141093, 20 February 2001), it
was held that an employee who rose from the
ranks is a regular employee and not a mere
corporate officer
Cases involving GOCCs with original charters
Cases involving entities immune from suit (except
when the entity performs proprietary functions)
Local water districts (since they are quasi-public
corporations)
Actions based on tort (Tolosa v. NLRC, 10 April
2003 – Claim of a seaman for damages is under
torts, regular court has jurisdiction.)

Jurisdiction of the NLRC
1. Original J urisdiction
a. Injunction in ordinary labor disputes to enjoin
or restrain any actual or threatened
commission of any or all prohibited or
unlawful acts or to require the performance of
a particular act in any labor dispute which, if
not restrained or performed forthwith , may
cause grave or irreparable damage to any
party
b. Injunction in strikes or lockouts under Art.
264
c. Certified labor dispute causing or likely to
cause a strike or lockout in an industry
indispensable to the national interest,
certified to it by the DOLE Secretary for
compulsory arbitration
2. Exclusive Appellate J urisdiction
a. All cases decided by the LAs, including
contempt cases
b. Cases decided by the DOLE Regional
Directors or his duly authorized hearing
officers involving recovery of wages, simple
money claims and other benefits not
exceeding Php 5,000 and not accompanied
by a claim for reinstatement

OCULAR INSPECTION by Labor Arbiter & NLRC at
any time during working hours

Jurisdiction of the POEA
Cancellation / Suspension of License of Authority
to recruit of Recruitment Agencies (until phase
out within 5 years as provided in RA 8042)
Disciplinary Action against OFWs
Appeal to Secretary of DOLE within 10 calendar
days cancellation/ revocation/ supervision of
license or authority
Appeal to NLRC within 10 calendar days
1. violation of overseas employment contracts
2. disciplinary cases filed against overseas
contract workers

Jurisdiction of DOLE Regional Directors
1. visitorial power (Art. 128)
2. claims not exceeding Php 5,000 (Art. 129)
3. violation of the constitution & by-laws and rights
& conditions membership
4. inter-union and intra-union disputes involving
independent unions and chartered locals

Jurisdiction of the NCMB
conciliation, mediation, and voluntary arbitration
cases

(SEE ANNEX L)

B. PROCEDURE

Art. 221. Technical rules not binding and prior
resort to amicable settlement
Art. 222. Appearances and Fees

The rules of evidence prevailing in courts of law
or equity shall not be controlling.
It is the spirit and intention of this Code which
shall be used as reasonable means to ascertain
the facts in each case
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Without regard to technicalities of law and
procedure all in the interest of due process
Parties may be represented by legal counsel but
it shall be the duty of the Chairman, any presiding
Commissioner or any labor arbiter to exercise
compete control of the proceedings at all stages
GR: The only way to acquire jurisdiction is to
serve summons
Voluntary appearance of the lawyer amounts to
voluntary submission to the jurisdiction of the LA.
(Santos v. NLRC, GR No. 101699, 13 March
1996)
Payment of docket fees is not required in labor
standards claims under Art. 277(d). EXCEPT: in
case of bargaining deadlock, the fees are shared
by the parties
Failure to implead a substitute party is not a fatal
defect. (Chu v. Pasajo, 13 April 2003)
Sec. 3, Rule V of the NLRC Rules allows parties
to submit position papers with attachments and
they can be made basis of the LA’s decision.
Holding of trial on the merits is discretionary on
the part of the LA.
Due process in Art. 277(b) (termination disputes)
end line is hearing with representative of own
choice
Due process in Art. 221 opportunity to be
heard
It is wrong to apply opportunity be heard in due
process under Art. 277(b).
Verification and Certification of Non-Forum
Shopping are required BUT Art. 221 can be
invoked.
NLRC Rules provide that before deciding, LA
must inform parties that the case has been
submitted for decision. If this is not complied with,
decision is still valid because of Art. 221.
Art. 218(c) cannot be invoked to support a faulty
decision of the LA. The provision refers to a
power of the NLRC and not the LA.

C. APPEALS

Art. 223. Appeal
Art. 224. Execution of decisions, orders or
awards

Appeal of LA’s Decision
Appeal from the decision of the Labor Arbiter is
brought by ordinary appeal to the NLRC within 10
calendar days from receipt by the party of the
decision.
From the decision of the NLRC, there is no
appeal.
The only way to elevate the case to the CA is by
way of the special civil action of certiorari under
Rule 65 of the Rules of Civil Procedure.
From the ruling of the Court of the Appeals, it
may be elevated to the SC by way of ordinary
appeal under Rule 45 of the Rules of Civil
Procedure. (St. Martin Funeral Home vs. NLRC,
et al., GR No. 130866, 16 September 1998)

Grounds
1. prima facie evidence of abuse of discretion on
the part of LA
2. the decision, order or award was secured through
fraud or coercion including graft and corruption
3. pure questions of law
4. raised serious errors in the findings of facts which
could cause grave or irreparable damage or
injury to the appellant
5. additional Requirement: in case of judgment
involving a monetary award-employer (appellant)
may perfect the appeal only upon the posting of a
cash or surety bond issued by a reputable
bonding company duly accredited by the NLRC in
the amount equivalent to the monetary award in
the judgment appealed from

Requisites for Perfection of Appeal
1. filed within the reglementary period
2. Memorandum of Appeal under oath
3. appeal fee
4. cash, property, or surety bond, if judgment
involves monetary award
5. proof of service to the adverse party

Procedure
1. File Memorandum of Appeal within 10 calendar
days, counted from receipt of decision
2. Other party can file an Answer within 20 calendar
days from receipt of Appeal
3. NLRC decides
4. NLRC decision becomes final and executory 10
days after it is rendered

Appeal Involving Monetary Award
No monetary award, no appeal bond required
If LA’s decision does not provide for a
computation of the monetary award, no appeal
bond is required to be filed.
Bond should be posted within the 10-day period
for filing of appeal
If no bond is filed, appeal is not perfected
Remedy in case of failure to post bond, remedy is
to file a motion to dismiss

Motion to Reduce Bond
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Motion to reduce bond does not toll the running
of the period to perfect appeal

In order to effectively stop the running of the
period within which to perfect the appeal, the
motion to reduce bond must comply with the
requisites that:
1. filed within the reglementary period
2. based on meritorious grounds
3. a reasonable amount of bond in relation to the
monetary award should be posted together with
said motion

A substantial monetary award, even if it runs into
millions, does not necessarily give the employer-
appellant a ‘meritorious case’ and does not
automatically warrant a reduction of the appeal
bond. (Calabash Garments v. NLRC, GR No.
110827, 08 August 1996)
Partial payment of the bond is deemed
substantial compliance with the rules while the
motion to reduce bond is still pending with the
NLRC. [Rosewood Processing v. NLRC, 352 Phil
1013 (1998)] But the partial payment must be
made within the reglementary period.
An appellant cannot invoke financial difficulties as
a ground in support of a Motion to Reduce Bond.
Suffice it to say that the law does not require
outright payment of the total monetary award, but
only the posting of a bond to ensure that the
award will be eventually paid should the appeal
fail. (Times Transportation v. NLRC, GR No.
16378, 16 February 2005)

Enforcement
Any law enforcement agency may be deputized
by the DOLE Secretary or the NLRC
Issuance of writ of execution on a judgment
within 5 years from date it becomes final and
executory motu proprio or in motion of any
interested party

Reinstatement Pending Appeal
If reinstatement is ordered in an illegal dismissal
case, it is immediately executory even pending
appeal
Self-executing with no need for a writ of
execution
Either admitted back to work under the same
terms and conditions prevailing prior to his
dismissal or separation or merely reinstated in
the payroll (at the option of the employer, i.e.
confidential employee, but the choice must be
communicated to the employee by the employer)
Posting of a bond shall not stay the execution of
reinstatement
The unjustified refusal of the employer to
reinstate an illegally dismissed employee entitles
the employee to payment of his salaries.
If despite several writs of execution, the employer
still refuses to reinstate the employee, the
remedy is not the grant of additional backwages
to serve as damages but to file a motion to cite
the employer for contempt. (Christian Literature
Crusade v. NLRC, 171 SCRA 712, 10 April 1989)
LA upheld the validity of the dismissal; NLRC
reversed. CA held that dismissal was valid.
HELD: The employer is liable to pay for the
salary of the employee previously ordered
reinstated by the NLRC although later on, the
dismissal of the employee was held not to be
illegal. (Roquero v. PAL, G.R. No. 152329, 22
April 2003)
If the former position is already filled up, the
employee ordered reinstated under Article 223
should be admitted back to work in a
substantially equivalent position. (Medina v.
Consolidated Broadcasting System, 222 SCRA
707)

Appeal of Voluntary Arbitrator’s Decision
Appealable by ordinary appeal under Rule 43 of
the Rules of Civil Procedure directly to the Court
of Appeals.
From the CA, the case may be elevated to the
Supreme Court by way of ordinary appeal under
the same Rule 45. (Luzon Development Bank v.
Association of Luzon Development Bank
Employees, et al., GR No. 120319, 06 October
1995)

Appeal of BLR’s Decision
1. Denial of application for registration of a union
Denial by the Regional Office, appeal to the
BLR
Denial is originally made by the BLR, appeal
may be had to the DOLE Secretary
2. Cancellation of registration of a union
Cancellation by the Regional Office, appeal
to the BLR.
Cancellation by the BLR in a petition filed
directly, appeal to DOLE Secretary by
ordinary appeal
3. Decision of the BLR rendered in its original
jurisdiction may be appealed to the DOLE
Secretary whose decision thereon may only be
elevated to the CA by way of certiorari under
Rule 65.
4. Decision of the BLR rendered in its appellate
jurisdiction may not be appealed to the DOLE
Secretary but may be elevated directly to the CA
by way of certiorari under Rule 65. (Abbott
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Laboratories Philippines, Inc. vs. Abbott
Laboratories Employees Union, et al., GR No.
131374, 26 January 2000)

Appeal of Regional Director’s Decision under Art.
129
Appeal to NLRC

Summary
Decision of the Voluntary Arbiter – appeal to CA
under Rule 43 (Luzon Dev’t Bank)
Decision of the DOLE and other attached
agencies (including NLRC) should be brought to
the CA under Rule 65 (St. Martin Funeral Homes)
Decision of the DOLE Secretary – certiorari to the
CA under Rule 65 (NAFLU v. Laguesma)
Order of the Med-Arbiter in CE in organized
establishments – not appealable under DO 40-03
(2003). Thus, the recourse is certiorari under
Rule 65.
Decisions of the BLR in its appellate– certiorari
under Rule 65 (UST Employees Union v. Bitonio)
Certiorari is not a substitute for lost appeal.
10 days to perfect appeal by filing a
Memorandum of Appeal
Property bond is now allowed. [UERM-Memorial
Medical Center v. NLRC, 269 SCRA 70 (1997)]
Appeal bond must be strictly complied with.
NLRC cannot resuscitate a lost appeal.

Only 1 MR is allowed.
LA cannot entertain an MR or a petition for relief
of judgment
After the decision has become final and
executory, the writ of execution is NOT
appealable.
To stay writ of execution, ask for an injunction
under Art. 218(e)
Period to appeal cannot be extended BUT in a
number of cases, SC entertained appeals filed
out of time under the interest of justice rule (esp.
if the appellants are the employees).
Doctrine of supervening event (i.e. closure of
company) requires payment of separation pay
and full backwages up to the time of the closure
of the company.

Reinstatement Pending Appeal (RPA)
1. Decision of the LA
2. Independent right
3. Payroll reinstatement
4. Receipt of LA’s decision

Even if NLRC reverses LA decision, the
employee is still entitled to the benefit of RPA.
NLRC cannot order a refund of benefits or
salaries.
Rationale: for the employee to earn after all he
won in the LA level
Time to reckon reinstatement is the date of
receipt of LA’s decision; not NLRC decision
Relief of the employer is to ask for an injunction
under Art. 218(e)
If the employee is confidential, only payroll
reinstatement is required.


VII. PENAL PROVISIONS AND LIABILITIES

Penalties for Violations of the Provisions of the
Labor Code
Fine of Php 1,000 to Php 10,000, or
imprisonment for 3 months to 3 years, or both at the
discretion of the court.

Persons liable if an offense is committed by a
juridical person
The penalty shall be imposed upon the guilty
officer or officers of such corporation, trust, firm,
partnership, association or entity.

Prescriptive period of offenses penalized by the
Labor Code
GR: 3 years from the time the cause of action
accrued

Exception: ULP cases prescribe within 1 year from
accrual of such unfair labor practice




















SOCIAL LEGISLATION

THIRTEENTH-MONTH PAY (PD 851)
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All employers are required to pay all their rank-
and-file employees a 13th month pay not later
than December 24 of every year. Such
employees are entitled to the benefit regardless
of their designation or employment status and
irrespective of the method by which their wages
are paid, provided that they have worked for at
least 1 mo. during a calendar year.
13th Month Pay – 1/12th of the basic salary of an
employee within a calendar year
Basic Salary – includes all remunerations or
earnings paid by an employer to an employee for
services rendered but does not include cost of living
allowances (COLA), profit-sharing payments and all
allowances and monetary benefits (e.g. unused VL
and sick leave credits, OT premium, night differential
and holiday pay) which are not considered or
integrated as part of the regular or basic salary of the
employee. However, the above should be included in
the computation if by individual or collective
agreement, company practice or policy.
Exempted Employees:
1. Government and any of its political subdivisions,
including GOCCs, 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 issuance of PD 851
“Its equivalent” – includes Christmas bonus,
mid-year bonus, cash bonuses and other
payments amounting to not less than 1/12 of
the basic salary but shall not include cash
and stock dividends, COLA and all other
allowances regularly enjoyed by the E’ee as
well as non-monetary benefits.
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 commission,
boundary, or task basis, and those who are paid
a fixed amount for performance of a specific
work, irrespective of the time consumed in the
performance thereof, EXCEPT where the
workers are paid on a piece-rate basis, in which
case the employer shall grant the required 13th
month pay to such workers.
Piece Rate – employees 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.

13th Month Pay for Certain Types of Employees
1. Employees paid by results – entitled to 13th
month pay
2. Those with Multiple Employers – entitled to the
13th month pay from all their private employers
regardless of their total earnings from each or all
of their employers
3. Private School Teachers – entitled regardless of
the number of months they teach or are paid
within a year, if they have rendered service for at
least 1 month within a year.
13
th
Month Pay of Resigned or Separated
Employee – entitled to the benefit in proportion to the
length of time he worked during the year, reckoned
from the time he started working during the calendar
year up to the time of his resignation or termination
from the service
May be demanded by the employee upon the
cessation of EER.
Non-inclusion in Regular Wage – benefit need not
be credited as part of regular wage of employees for
purposes of determining OT pay and premium pays,
fringe benefits as well as contributions to the state
insurance fund, Social Security, Medicare, and
private retirement plans


ANTI-SEXUAL HARASSMENT ACT OF 1995
(RA 7877)

Where Committed
working, education, training environment (WET)

Who Commits
1. employer
2. employee
3. manager
4. supervisor
5. agent of the employer
6. teacher
7. instructor
8. professor
9. coach
10. trainor
11. any other person having authority, influence or
moral ascendancy over another

How Committed
Person liable demands, requests, or otherwise
requires any sexual favor from the other, regardless
of whether the demand, request or requirement for
submission is accepted by the object of said Act
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Work-Related/Employment Environment, Sexual
Harassment Committed When
1. The sexual favor is made as a condition
a. in hiring or in the employment, reemployment
or continued employment of said individual
b. in granting said individual favorable
compensation, terms, conditions, promotions
or privileges
c. 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
3. The above acts would result in an intimidating,
hostile or offensive environment for the employee

Duty of Employer
1. Promulgate appropriate rules and regulations
prescribing the procedure for investigation of
sexual harassment cases as well as guidelines
on proper decorum in the workplace
2. Create a committee on decorum and
investigation of cases on sexual harassment.

Liability of Employer / Head of Office
Solidarily liable for damages arising from the acts of
sexual harassment committed in the employment,
education or training environment if the employer is
informed of such acts by the offended party and no
immediate action is taken

Prescription: 3 years


EXECUTIVE ORDER NO. 180
Guidelines for the exercise of the right to organize of
government employees, creating a public sector
labor-management council, and for other purposes.

Coverage
It applies to all government employees--employees
of all branches, subdivisions, instrumentalities, and
agencies of the government, including GOCCs with
original charters (§1)

Excluded from Coverage
Members of the Armed Forces of the Philippines,
including police officers, policemen, firemen and jail
guards (§4)

Right to Organize
All government employees can form, join or assist
employees’ organizations of their own choosing for
the furtherance and protection of their interests. They
can also form, in conjunction with appropriate
government authorities, labor-management
committees, work councils, and other forms of
workers’ participation schemes for the same
objectives (§2)

Who are Ineligible to Join Organization of Rank &
File Government Employees
High-level employees whose functions are normally
considered as policy-making or managerial or whose
duties are of a highly confidential nature (§3)

Protection of Right to Organize
They shall not be discriminated against in respect of
their employment by reason of their membership or
participation in employees’ organizations. Their
employment shall not be subject to the condition that
they shall not join or shall relinquish their
membership therein (§5)

Non-Interference of Government Authorities
Government authorities shall not interfere in the
establishment, functioning or administration of
government employees' organizations through acts
designed to place such organizations under the
control of government authority (§6)

Place of Registration
CSC and DOLE (§7)

Procedure for the Registration of Employees’
Organizations
1. File application with BLR or Regional Office,
which shall transmit the application to the BLR
within 3 days from receipt
2. BLR shall process the application in accordance
with the Labor Code (§7)
3. Upon approval, a registration certificate will be
issued, recognizing it as a legitimate employees’
organization with the right to represent its
members and undertake activities to further and
defend its interests
4. The certificates of registration shall be jointly
approved by the Chairman of the CSC and
Secretary of DOLE (§8)

Appropriate Organizational Unit
It is the employers unit consisting of rank-and-file
employees unless circumstances otherwise require.
(§9)

Sole and Exclusive Representative of Employees
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It is the duly registered employees’ organization
having the support of the majority of the employees in
the appropriate organizational unit (§10)

Voluntary Recognition
A duly registered employees’ organization shall be
accorded voluntary recognition upon a showing that
no other employees’ organization is registered or is
seeking registration, based on records of the BLR,
and that the said organization has the majority
support of the R&F employees in the organizational
unit (§11)

Certification Election
Where there are 2 or more duly registered
employees’ organizations in the appropriate
organizational unit, the BLR shall, upon petition,
order the conduct of a certification election and shall
certify the winner as the exclusive representative of
the R&F employees in said organization unit (§12)

Subject of Negotiation
Terms and conditions of employment or
improvements thereof, except those that are fixed by
law, may be the subject of negotiations between duly
recognized employees' organizations and appropriate
government authorities (§13)

Peaceful Concerted Activities and Strikes
The Civil Service laws and rules governing concerted
activities and strikes in the government service shall
be observed, subject to any legislation that may be
enacted by Congress. (§14)

Public Sector Labor-Management Council
It is the body charged with implementing and
administering EO 180.

Composition of Council
1. Chairman, CSC - Chairman
2. Secretary, DOLE – Vice-Chairman
3. Secretary, - DOF - Member
4. Secretary, DOJ – Member
5. Secretary, Department of Budget and
Management – Member (§15)

Settlement of Disputes
The Civil Service and labor laws and procedures,
whenever applicable, shall be followed in the
resolution of complaints, grievances and cases
involving government employees. In case any dispute
remains unresolved after exhausting all the available
remedies under existing laws and procedures, the
parties may jointly refer the dispute to the Council, for
appropriate action. (§16)

Bautista v. CA, GR No. 123375, 28 February 2005
The SC affirmed its ruling in Association of Court
of Appeals Employees v Ferrer-Calleja (GR No.
94716, 15 Nov. 1991), where it ruled that the BLR
has the jurisdiction to call for and supervise the
conduct of certification elections in the public sector.
The Court stated that there is no constitutional
objection to DOLE handling the certification process
considering its expertise, machinery and experience
in this particular activity. EO 180 requires
organizations of government employees to register
with both DOEL and CSC. This ambivalence
notwithstanding, the CSC has no facilities, personnel
and experience in the conduct of certification
elections. BLR has to do the job.


SALIENT PROVISIONS OF THE
SSS LAW & GSIS LAW
(ANNEX O)


NATIONAL HEALTH INSURANCE ACT OF 1995
(RA 7875)

General Objectives
1. provide all citizens of the Philippines with the
mechanism to gain financial access to health
services;
2. create the National Health Insurance Program to
serve as the means to help the people pay for
health care services;
3. prioritize and accelerate the provision of health
services to all Filipinos, especially that segment
of the population who cannot afford such
services; and
4. establish the Philippine Health Insurance
Corporation that will administer the Program at
central and local levels

BENEFICIARY - Any person entitled to health care
benefits under this Act.

CAPITATION - A payment mechanism where a fixed
rate, whether per person, family, household or group,
is negotiated with a health care provider who shall be
responsible for delivering or arranging for the delivery
of health services required by the covered person
under the conditions of a health care provider
contract.

CONTRIBUTION - The amount paid by or in behalf of
a member to the Program for coverage, based on
salaries or wages in the case of formal sector
employees, and on household earnings and assets,
in the case of the self-employed, or on the other
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criteria as may be defined by the Corporation in
accordance with the guiding principles set of this Act.

DEPENDENT - The legal dependents of a member
are:
1. the legitimate spouse who is not a member
2. the unmarried and unemployed legitimate,
legitimated, illegitimate, acknowledged children
as appearing in the birth certificate; legally
adopted or stepchildren below 21 years of age
3. children who are 21 years old and above who are
suffering from congenital disability, either
physical or mental, or any disability acquired that
renders them totally dependent on the member
for support
4. the parents who are 60 years old or above whose
monthly income is below an amount to be
determined by the Corporation in accordance
with the guiding principles set forth of this Act.

EMPLOYEE - Any person who performs services for
an employer in which either or both mental and
physical efforts are used and who receives
compensation for such services, where there is an
employer-employee relationship.

EMPLOYER - A natural or juridical person who
employs the services of an employee.

ENROLLMENT - The process to be determined by
the Corporation in order to enlist individuals as
members or dependents covered by the Program.

MEMBER - Any person whose premiums have been
regularly paid to the National Health Insurance
Program. He may be a paying member, an indigent
member or a pensioner/retiree member.

MEDICARE - The health insurance program currently
being implemented by the Philippine Medical Care
Commission. It consists of:
a. Program I, which covers members of the
SSS and GSIS including their legal
dependents; and
b. Program II, which is intended for those not
covered under the Program I

NATIONAL HEALTH INSURANCE PROGRAM -
The compulsory health insurance program of the
government as established in this Act, which shall
provide universal health insurance coverage and
ensure affordable, acceptable, available and
accessible health care services for all citizens of the
Philippines.

PENSIONER - An SSS or GSIS member who
receives pensions therefrom.

RETIREE - A member of the Program who has
reached the age of retirement or who was retired on
account of disability.

SELF-EMPLOYED - a person who works for himself
and is therefore both employee and employer at the
same time.

THE NATIONAL HEALTH INSURANCE PROGRAM

Purpose
1. To provide health insurance coverage and
ensure affordable, acceptable, available and
accessible health care services for all citizens of
the Philippines
2. To serve as the means for the healthy to help pay
for the care of the sick and for those who can
afford medical care to subsidize those who
cannot. (§5)

Establishment
1. Include sustainable system of funds constitution,
collection, management and disbursement for
financing the availment of a basic minimum
package and other supplementary packages of
health insurance benefits by a progressively
expanding proportion of the population.
2. Limited to paying for the utilization of health
services by covered beneficiaries or to
purchasing health services in behalf of such
beneficiaries.
3. Prohibited from providing health care directly,
from buying and dispensing drugs and
pharmaceuticals, from employing physicians and
other professionals for the purpose of directly
rendering care, and from owning or investing in
health care facilities. (§5)

Coverage
All citizens of the Philippines (§6)

Enrollment
1. Beneficiaries shall be enrolled in order for them
to be placed under coverage that entitles them to
avail of benefits.
2. Enrollment process includes the identification of
beneficiaries, issuance of appropriate
documentation specifying eligibility to benefits,
and indicating how membership was obtained or
is being maintained.
3. Enrollment shall proceed in accordance with
these specific policies:
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a. all persons currently eligible for benefits
under Medicare Program I, including SSS
and GSIS members, retirees, pensioners and
their dependents, shall immediately and
automatically be made members of the
National Health Insurance Program;
b. all persons eligible for benefits through health
insurance plans established by local
governments as part of Program II of
Medicare or in accordance with the
provisions of this Act, including indigent
members, shall also be enrolled in the
Program.
c. all persons eligible for benefits as members
of local health insurance plans shall also be
deemed to have enrolled in the Program.
Enrollment of persons who have no current
health insurance coverage shall be given
priority by the corporation; and
d. all persons eligible for benefits as members
of other government initiated health
insurance programs, community-based
health care organizations, cooperatives, or
private non-profit health insurance plans shall
be enrolled in the Program upon
accreditation by the Corporation (§7)

Benefit Package
1. Inpatient hospital care:
a. room and board;
b. services of health care professionals;
c. diagnostic, laboratory, and other medical
examination services;
d. use of surgical or medical equipment and
facilities;
e. prescription drugs and biologicals; subject to
the limitations stated in Section 37 of this act
f. inpatient education packages

2. Outpatient care:
a. services of health care professionals;
b. diagnostic, laboratory and other medical
examination services;
c. personal preventive services; and
d. prescription drugs and biologicals; subject to
the limitations described in Section 37 of this
Act

3. Emergency and transfer services

4. Other health care services (§10)

Excluded Personal Health Service
1. non-prescription drugs and devices;
2. outpatient psychotherapy and counseling for
mental disorders;
3. drug and alcohol abuse or dependency
treatment;
4. cosmetic surgery;
5. home and rehabilitation services;
6. optometric services;
7. normal obstetrical delivery; and
8. cost-ineffective procedures which shall be
defined by the Corporation. (§11)

ENTITLEMENT TO BENEFITS
A. Requisites:
1. A member whose premium contributions for
at least 3 months have been paid within the 6
months prior to the first day of his or his
dependents' availment;
2. He can show that he contributes with
sufficient regularity; and
3. He is not currently subject to legal penalties

B. Monthly contributions need not be paid by the
following to be entitled to benefits:
1. Retirees and pensioners of the SSS and
GSIS prior to the effectivity of this Act
2. Members who reach the age of retirement
and have paid at least 120 monthly
contributions; and
3. Enrolled indigents (§11)

GRIEVANCE SYSTEM
Members, dependents, or health care providers
of the Program who believe they have been
aggrieved by any decision of the implementors of the
Program, may seek redress of the grievance in
accordance with the provisions of this Article.

Grounds for Grievances
1. any violation of the rights of patients;
2. a willful neglect of duties of Program
implementors that results in the loss or non-
enjoyment of benefits by members or their
dependents;
3. unjustifiable delay in actions on claims;
4. delay in the processing of claims that extends
beyond the period agreed upon; and
5. any other act or neglect that tends to undermine
or defeat the purposes of this Act. (§40)

Grievance and Appeal Procedure
A. Who may file complaint
1. Member,
2. Dependent, or
3. Health care provider

B. Procedure
1. A complaint for grievance must be filed with
the Local Health Office (LHO)
Labor Law & Social Legislation Summer Reviewer
ATENEO CENTRAL BAR OPERATIONS 2007
Page 83 of 83
QuickTime™ and a
TIFF (Uncompressed) decompressor
are needed to see this picture.
2. LHO shall rule on the complaint within 90
calendar days from receipt
3. Appeals from LHO decisions must be filed
with the Board within 30 days from receipt of
notice of dismissal or disallowance by the
Office

C. LHO has NO jurisdiction over any issue involving:
1. suspension or revocation of accreditation
2. imposition of fines, or
3. imposition of charges on members or their
dependents in case of revocation of their
entitlement.

D. All decisions by the Board as to entitlement to
benefits of members or to payments of health
care providers shall be considered final and
executory

E. Hearing Procedures of Grievance and Appeal
Review Committee (GARC)
1. Upon the filing of the complaint, GARC may
dismiss the case outright due to lack of
verification, failure to state the cause of
action, or any other valid ground for dismissal
of the complaint after consultation with the
Board; or require the respondent to file a
verified answer within 5 days from service of
summons.
2. Should the defendant fail to answer the
complaint within the reglamentary five-day
period, GARC, motu proprio or upon motion
of the complainant, shall render the
judgment.
3. After an answer is filed and the issues are
joined, GARC shall require the parties to
submit, within 10 days from receipt of the
order, the affidavits of the witnesses and
other evidence on the factual issues defined
therein, together with a brief statement of
their positions setting forth the law and the
facts relied upon by them. In the event GARC
finds, upon consideration of the pleadings,
the affidavits and other evidence, and
position statements submitted by the parties,
that a judgment may be rendered thereon
without need of a formal hearing, it may
proceed to render judgment not later 10 days
from the submission of the position
statements of the parties
4. In cases where GARC deems it necessary to
hold a hearing to clarify specific factual
matters before rendering judgment, it shall
set the case for hearing for the purpose. At
such hearing, witnesses whose affidavits
were previously submitted may be asked
clarificatory questions by the proponent and
by the Committee and may be cross-
examined by the adverse party. The hearing
shall be terminated within 15 days, and the
case decided by the Committee within15
days from such termination.
5. The decision of GARC shall become final
and executory 15 days after notice thereof
6. Such decision is appealable to the Board by
filing the appellant's memorandum of appeal
within 15)days from receipt of the copy of the
judgment appealed from. The appellees shall
be given15 days from notice to file the
appellee's memorandum after which the
Board shall decide the appeal within 30 days
from the submittal of the said pleadings.
7. The decision of the Board shall also become
final and executory 15 days

Such decision is reviewable by the Supreme Court on
purely questions of law (§41)
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ANNEX C: Procedure for Registration of Labor Organization




Where to file

Regional Office Bureau
labor union





(Action within 10 days from receipt of application)


Regional Office in case of
applications for registration of
independent unions.
Applications for registration of
federations, national unions or
workers’ association operating in
more that one region shall be filed
with the Bureau or Regional Offices
but shall be processed by the
Bureau.
A duly-registered federation or
national union may directly create a
chartered local by submitting the
required documents (See Annex A)
to the Regional Office. (DO 40-B-03)
Approval
- Issuance of certificate of
registration

Denial

Ground: Failure to comply with
requirements












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TIFF (Uncompressed) decompressor
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APPEAL BY MEMO OF APPEAL
WITHIN
10 DAYS FROM RECEIPT OF NOTICE

GROUNDS:
1. Grave abuse of discretion;
2. Violation of rules as amended






If the documents submitted are
incomplete or do not contain the required
certification and attestation, The
Regional Office should notify the
applicant in writing within 5 days from
receipt of application.
The applicant must be given 30 days
from notice to complete the requirements
If applicant fails to complete the
requirements within 30 days, the
application shall be denied.

























DENIAL BY:
Regional Office
(transmit records
within 24 hours from
receipt of Memo of
Appeal)
Bureau
(transmit records
within 24 hours from
receipt of Memo of
Appeal)
Secretary of DOLE
(decision within 20
days from receipt of
records)
Bureau
(decision within 20
days from receipt of
records)
Supreme Court
Rule 65
Supreme Court
Rule 65


ANNEX D: Procedure for Cancellation of Registration of Labor Organizations











































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File independent complaint
or petition for cancellation
based on the grounds
Regional Director in case of
independent labor union,
chartered local and
workers' association
Any party-in-interest may commence
a petition for cancellation
Members of labor
organization for actions
involving violations of Art.
241
Bureau Director in case of
federations, national or
industry unions and trade
union centers
Notice and Due Process
Resolved by Regional
Director like the procedure
of Inter/Intra-Union Disputes
(Rule XI)
e. Acting as a labor contractor or
engaging in the "cabo" system, or
otherwise engaging in any activity
prohibited by law;
f. Entering into collective bargaining
agreements which provide for terms
and conditions of employment
below minimum standards
established by law;
g. Commission of any of the acts
enumerated under Article 241 of the
Labor Code; provided that no
petition for cancellation based on
this ground may be granted unless
supported by at least thirty (30%)
percent of all the members of the
respondent labor organization;
h. Asking for or accepting attorney's
fees or negotiation fees from the
employer;
i. Other than for mandatory activities
under the Labor Code, checking off
special assessments or any other
fees without duly signed individual
written authorizations of the
members;
j. Failure to submit list of individual
members to the Bureau once a year
or whenever required by the
Bureau;
k. Failure to comply with the
requirements of registration
prescribed under Rules III and IV
GROUNDS:
a. Misrepresentation, false statement
or fraud in connection with the
adoption or ratification of the
constitution and by-laws or
amendments thereto, the minutes of
ratification, the list of members who
took part in the ratification of the
constitution and by-laws or
amendments thereto, the minutes of
ratification, the list of members who
took part in the ratification;
b. Failure to submit the documents
mentioned in the preceding
paragraph within thirty (30) days
from adoption or ratification of the
constitution and by-laws or
amendments thereto;
c. Misrepresentation, false statements
or fraud in connection with the
election of officers, minutes of the
election of officers, the list of voters,
failure to submit these documents
together with the list of the newly
elected or appointed officers and
their postal address within thirty (30)
days from election;
d. Failure to submit the annual
financial report to the Bureau within
thirty (30) days after the close of
every fiscal year and
misrepresentation, false entries or
fraud in the preparation of the
financial report;




ANNEX E: Cancellation of Registration of Labor Organizations due to Non-Compliance with the
Reportorial Requirements


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Labor Relations Division of the
Regional Office or the Bureau
a) on its own initiative
b) upon complaint filed by
any party-in-interest
Make a report of the labor
organization’s non-compliance
Submit to the Bureau for
verification of records
Bureau shall send a notice for compliance
by registered mail with return card to the
labor organization concerned
Comply with the reportorial
requirements and submit proof
thereof to the Bureau
No response from labor
organization
Within 10
days from
receipt
30 days from release of notice
No response within 30 days from release of 2
nd
notice
Bureau shall cause publication
of the notice of cancellation in
2 newspapers of general
circulation
Bureau may conduct investigation:
1) employer’s premises; and
2) labor organization’s last
known address
Bureau has verified the dissolution of
the labor organization
No response w/in 30 days from
date of publication
Bureau shall:
1) order cancellation of registration
2) cause its de-listing from the roster of
legitimate labor organizations
Conditions for administrative
cancellation:

(a) Non-compliance is for a continuous
period of five (5) years;
(b) The procedures laid down in this
Rule were complied with; and
(c) The labor organization concerned
has not responded to any of the
notices sent by the Bureau, or its
notices were returned unclaimed.




























































ANNEX F: Elections under Rule 12 Of The Implementing Rules


Within 60 days before the
President of the labor
organization shall constitute a
committee on election
expiration of the term of the incumbent





Committee shall exercise its powers 10 days
from its constitution
1) set the date, time and venue of the
election;
2) prescribe the rules on the qualification
and eligibility of candidates and voters;
3) prepare and post the voters’ list and the
list of qualified candidates;
4) accredit the authorized representatives of
the contending parties;
5) supervise the actual conduct of the
election and canvass the votes to ensure
the sanctity of the ballot;
6) keep minutes of the proceedings;
7) be the final arbiter of all election protests;
8) proclaim the winners; and
9) prescribe such other rules as may
facilitate the orderly conduct of election.
Committee composed of
at least three (3)
members who are not
running for any position in
the election.
if there are identifiable
parties within the labor
organization, each party
shall have equal
representation in the
committee
at least 30% of the members of the labor
organization may file a petition for conduct of
election of union officers with the Regional Office
if 1. Terms of officers have expired and officer
failed to call for election of new officers, or 2.
Labor organization’s constitution and by-laws do
not provide for the manner by which election can
be called or conducted.
Petition to be heard by Bureau in case of
federations, national or industry unions, trade
union centers.
Formal requirements, processes
and periods of disposition of this
disposition is the same as those
stated in Rule XI of DO 40-03
Inter/Intra Union Dispute.
Appointment of an election officer
and procedures and periods in
conduct of pre-election conference
and election proceedings under
Rule IX Conduct of Certification
Election will also apply here.
Committee shall elect its
Chairman










































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ANNEX G: Bargaining Procedure under the Labor Code (Art. 250)


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Reply not later than 10 days from receipt
Serve written notice with
statement of proposals upon
the other party.




If differences arise on the basis of
notice and reply





If the dispute is not settled.


Reply of other party
Conference


Board shall intervene, call
parties to conciliation
meetings






Board shall have the power to
issue subpoenas to require
attendance to such meetings.
Board shall exert all efforts to
settle disputes amicably,
encourage parties to submit case
to voluntary arbitrator.
Parties are prohibited from doing
any act which may disrupt or
impede the early settlement of the
disputes.
The recognized or certified labor union
and its employer may adopt such
procedures and processes they may
deem appropriate and necessary for
the early termination of their
negotiations.
They shall name their respective
representatives to the negotiation,
schedule the number and frequency of
meetings, and agree on wages,
benefits and other terms and
conditions of work for all employees
covered in the bargaining unit.

































ANNEX H: PETITION FOR CERTIFICATION ELECTION








• Raffle dispensed with
If there is only 1 Med-arbiter







• Must be within 10 days from
• Receipt of petition










• may conduct such
number of hearings,
within 10 days but hearings should
from last hearing not exceed 15 days
from
preliminary hearing.


• If there is no appeal
Within 10 days from
Must be within 10 days from Receipt of decision,
Date of entry of agreement Med-arbiter shall enter
The finality of the decision
In the records of the case








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File petition for
certification election
Raffle
Service of notice of
preliminary conference
Preliminary Conference
Parties agree to a
consent election
Parties fail to
agree on consent
election
Forward records of
petition to Regional
Director/ authorized
representative
First pre-election
conference
Hearings
Decision
Who may file?
• any legitimate labor
organization
• employer, when
requested to bargain
collectvely

Where to file?
• with the Regional Office
which issued the
certificate of
registration/certificate of
creation

When to file?
• anytime, except:
a. When voluntary
recognition has been
entered, or a valid
certification, consent
or run-off election has
been conducted
within 1 year prior to
the filing.
b. negotiations in good
faith with the
employer
c. bargaining deadlock
had been submitted
to conciliation or
arbitration or had
become the subject
of a valid notice of
strike or lockout.
d. Registered CBA –
may file only within
60 days prior to the
expiration of the CBA.
Grounds for Denying Petition

a. the petitioner is not listed in the Department’s registry of legitimate labor unions
or that its legal personality has been revoked or cancelled with finality.
b. the petition was filed before or after the freedom period of a duly registered
collective bargaining agreement; provided that the sixty-day period based on
the original collective bargaining agreement shall not be affected by any
amendment, extension or renewal of the collective bargaining agreement;
c. the petition was filed within one (1) year from entry of voluntary recognition or a
valid certification, consent or run-off election and no appeal is pending;
d. a duly certified union has commenced and sustained negotiations with the
employer within the one-year period referred to in Section 14.c of this Rule, or
the bargaining deadlock existing had been submitted to conciliation or
arbitration or had become the subject of a valid notice of strike or lockout.
e. in case of an organized establishment, failure to submit the twenty-five percent
(25%) support requirement for the filing of the petition for certification election.



Petition Granted Petition Denied Petition Denied Petition Granted
Unorganized
establishment
Decision




Organized
establishment








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• within 10 days from receipt
of decision
File memorandum of appeal
with Regional Office where the
petition originated
Non-appealable




Regional Director to transmit entire
records within 24 hours from
receipt of appeal to Office of
Secretary







Reply • reply may be filed by any party within 10
days from receipt of memorandum of
appeal.


Secretary’s Decision
• Secretary shall have 15 days
from receipt of the entire
records to decide
• Secretary decision final and
executory within 10 days from
receipt by the parties.
• No motion for reconsideration
shall be entertained.
• The entire records of the case
shall be remanded to the
Regional Office for
implementation within 48 hours
from notice of receipt of
decision.










ANNEX I: Conduct of Certification Election


Receipt of notice of entry of final
judgment granting the conduct of
certification election




24 hours


Regional Director shall cause the
raffle of the case to an Election
Officer



24 hours from receipt of the assignment

Failure to appear in the pre-
election conference
considered a waiver of right
to question any agreement
in the pre-election
conference. But non-
appearing party retains the
right to be given notices of
subsequent pre-election
conferences
Posting of Notices:
at least 10 days before
election.
2 most conspicuous
places in company
premises
Contents:
1. date and time of election
2. names of all contending
unions
3. description of the
bargaining unit, list of
eligible and challenged
voters

Election Officer shall cause the
issuance of notice of pre-election
conference upon the contending
unions and the employer








Pre-election conference
Must be within 10 days from
receipt of the assignment
Must be completed within 3 days
from date of the first hearing






Certification Election
Election precincts
close
Must not be later than 45 days
from date of the first pre-election
conference



the election precincts shall open
and
close on the date and time agreed
upon during the pre-election
conference.

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the opening and canvass shall
proceed immediately after the
precincts have closed.



Transmit records of the case to
Med-arbiter. Med-arbiter shall
issue an order proclaiming the
results of the election.
The proclamation must be under any
of the ff. conditions:
1. no protest was filed or, even if
one was filed, the same was not
perfected within the five-day
period for perfection of the
protest.
2. no challenge or eligibility issue
was raised or, even if one was
raised, the resolution of the same
will not materially change the
results of the elections.
Canvass of votes





Failure of Election
• when the votes cast is less
than the majority of the
eligible voters, and there
are no material challenged
votes.
• Another certification or
consent election may be
held within 6 months.






ANNEX J: Procedure in Handling Grievances

Based on DO 40-03
This will apply only in the
absence of a provision in the
CBA or existing company
policy.


Present grievance to
shop steward




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No settlement
Immediate supervisor


Grievance Committee

Still unresolved 10 days
Either party may serve
notice upon the other of
its decision to submit to
voluntary arbitration
Grievance
committee decision
If the party upon whom the notice is
served fails or refuses to respond
favorable within 7 days from receipt:
1. Designated voluntary arbitrator or
panel shall begin voluntary
arbitration proceedings, or
2. Board shall call the parties and
appoint a voluntary arbitrator or
panel.















































ANNEX K: Inter/Intra-Union Dispute & Other Related Labor Relations Disputes


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Raffle is dispensed with if there is only one Med-
arbiter or Hearing Officer in the Region
File complaint or petition


Raffle




Within 3 days from receipt
Of petition


Med-arbiter shall cause the
service of summons upon the
respondents.
Prepare, cause service of notice
of preliminary conference upon
the party filing the petition.
Petition shall be
transmitted to Med-
arbiter







Preliminary conference
within 10 days from receipt of the
complaint or petition








No amicable settlement Parties agree to amicable
settlement
Decision based on the
amicable settlement within 5
days from preliminary
conference.





limited to clarificatory
questions by Med-arbiter
Proceed with stipulation of facts,
limitation of issues, clarificatory
questioning, submission of laws
and jurisprudence
deemed submitted for
decision after the last
hearing or upon expiration of
25 days from preliminary
conference, whichever
comes first. (max of 25 days
to conduct hearings)
Bureau/Med-arbiter must
Decision
Hearing/s
Decide within 20 days
From last hearing










Where to file?
1. Regional Office which issued certificate of registration/creation
- complaints involving labor unions with independent registration, chartered
locals, workers association, its officer/members.
2. Bureau
- involving federations, national unions, industry unions, its
officers/members.
3. Regional Director
- petitions for cancellation of registration of labor unions, petitions for
deregistration of CBA
4. Med-arbiter
- other inter/intra union disputes and other related labor relations disputes
Who may file?
any legitimate labor
organization or its members
any party-in-interest
if the issue involves the entire
membership of the labor
organization, complaint must
be supported by 30% of
members.


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Must appeal within 10
days from receipt of decision

Med-arbiter/ Regional
Director Decision
Bureau Director
Decision


May call parties to a clarificatory hearing

Must decide within 20 days
From receipt of records
Bureau Director Office of the Secretary


Final and executory
If there is no appeal with 10 days

Only 1 MR allowed


Records remanded to the
Bureau Director Decision Office of DOLE Secretary
Bureau Director
Decision Final and
Executory
Office of Secretary
Decision Final and
Executory
Regional Office or Bureau of origin
For implementation within 24 hours
From receipt of decision by the parties
and finality of decision













Execution of Decision
Med-arbiter and Regional Director Decision,
or Bureau Decision, in the exercise of its
original jurisdiction automatically stayed
pending appeal.
Bureau Decision, Office of Secretary
Decision in exercise of its appellate
jurisdiction immediately executory upon entry
of final judgment.

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The conclusions of a division on any case
submitted to it for decision shall be reached in
consultation before the case is assigned to a
member for the writing of the opinion. It shall be
mandatory for the division to meet for purposes
of the consultation ordained therein.
ANNEX M: Republic Act No. 9347

An Act Rationalizing the Composition and Functions of the National Labor Relations Commission, Amending for
this Purpose Article 213, 214, 215 and 216 of P.D. No. 442, as Amended, Otherwise Known as the Labor Code of
the Philippines

Art. 213. National Labor Relations Commission
NLRC shall be attached to the DOLE solely for
program and policy coordination only, composed
of a Chairman and 23 members.
8 members shall be chosen only from the
nominees of the workers and employers
organizations respectively. The Chairman and 7
remaining members shall come from the public
sector, with the latter to be chosen preferably
from among the incumbent labor arbiters.
NLRC may sit en banc or in 8 divisions, with 3
members each.
En banc – only for purposes of promulgating
rules and regulations governing the hearing and
disposition of cases before any of its divisions
and regional branches and formulating policies
affecting its administration and operations
Divisions – when in the exercise of its
adjudicatory and all other powers, functions and
duties
1
st
– 6
th
divisions – Luzon & NCR
7
th
& 8
th
– Visayas and Mindanao
NLRC sitting en banc may, on temporary or
emergency basis, allow cases within the
jurisdiction of any division to be heard and
decided by any other division whose docket
allows the additional workload and such transfer
will not expose litigants to unnecessary additional
expenses. The divisions of the NLRC shall have
exclusive appellate jurisdiction over cases within
their respective territorial jurisdiction.
The concurrence of 2 Commissioners of a
division shall be necessary for the
pronouncement of a judgment or resolution.
Whenever the required membership in a division
is not complete and the concurrence of 2
Commissioners to arrive at a judgment or
resolution cannot be obtained, the Chairman
shall designate such number of additional
Commissioners from the other divisions as may
be necessary.

Art. 214. Headquarters, branches and provincial
extension units
Offices of 1
st
– 6
th
Divisions Metro Manila
7
th
Division Cebu
8
th
Division Cagayan de Oro
The Commission shall establish as many regional
branches as there are regional offices of the
DOLE, sub-regional branches or provincial
extension units.
There shall be as many Labor Arbiters as may be
necessary for the effective and efficient operation
of the NLRC.

Art. 215. Appointment and qualifications
Chairman and other Commissioners – members
of the Philippine Bar and must have been
engaged in the practice of law in the Philippines
for at least 15 years, with at least 5 years
experience or exposure in the field of labor-
management relations, and shall preferably be
residents of the region where they shall hold
office
LAs – members of the Philippine Bar and must
have been engaged in the practice of law in the
Philippines for at least 10 years, with at least 5
years experience or exposure in the field of labor-
management relations
Term – hold office during good behavior until the
age of 65 years, unless sooner removed for
cause as provided by law or become
incapacitated to discharge duties of their office
But the President may extend the services of the
Commissioners and LAs up to the maximum of
70 years upon the recommendation of the
Commission en banc.
Chairman, Division Presiding Commissioners and
other Commissioners – appointed by the
President. Appointment to any vacancy in a
specific division shall come only from the
nominees of the sector which nominated the
predecessor.
LAs – appointed by the President, upon
recommendation of the Commission en banc to a
specific arbitration branch, preferably in the
region where they are residents, and shall be
subject to the Civil Service Law, rules and
regulations. Provided, that the labor arbiters who
are presently holding office in the region where
they are residents shall be deemed appointed
thereat.
Chairman and the Commissioners, shall appoint
the staff and employees of the Commission, and
its regional branches as the needs of the service
may require, subject to the Civil Service Law,
rules and regulations, and upgrade their current

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salaries, benefits and other emoluments in
accordance with law.

Art. 216. Salaries, benefits and other emoluments
Chairman and Commissioners shall have the
same rank, receive an annual salary equivalent
to, and be entitled to the same allowances,
retirement and benefits as, those of the Presiding
J ustice and Associate J ustices of the Court of
Appeals, respectively.
LAs shall have the same rank, receive an annual
salary equivalent to and be entitled to the same
allowances, retirement and other benefits and
privileges as those of RTC J udges.
In no case, however, shall the provision of this
Article result in the diminution of the existing
salaries, allowances and benefits of the
aforementioned officials.

















































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a. Motion to dismiss (except on grounds of lack
of jurisdiction over the subject matter,
improper venue, prescription and forum-
shopping)
ANNEX N: Salient Provisions of 2005 Revised Rules of Procedure of the NLRC

Suppletory Application of the Rules of Court
Pertinent provisions of the Rules of Court have a
suppletory application in the absence of an
applicable provision thereto in the interest of
expeditious dispensation of labor justice.

Appearances
A lawyer appearing for a party is presumed
authorized to appear for such purpose.
A non-lawyer may appear or counsel in the
proceedings only under the following conditions:
a. He represents himself as party to the case
b. He represents a LLO which is a party case,
provided that he represents a certification
from the BLR or Regional Office of the DOLE
attesting that his organization duly registered
and listed in the roster of legitimate labor
organizations, together with a verified
certification issued by the secretary and
attested by the president of the labor
organization stating that he is duly authorized
to represent the organization in the case and
a copy of the board resolution granting him
such authority
c. He represents a member or members of a
LLO existing within an employer’s
establishment which is a party to the case
provided that he present a verified
certification proving his authority from such
member / members and verified certification
issued by the secretary and attested by the
president of such organization stating that
the person/s he is representing are members
of the organization which is existing in the
employer’s establishment
d. He is a duly accredited member of a legal aid
office recognized by the DOJ and the IBP
upon presentation of his accreditation
e. He is the owner or president of the
corporation which is party to the case upon
presentation of a verified certification of his
authority and a board resolution of the
corporation granting him such authority.

Pleadings
b. Motion for a bill of particulars
c. Motion for new trial
d. Petition for relief from judgment when filed
with the LA
e. Petition for certiorari, mandamus or
prohibition
f. Motion to declare defendant in default
g. Motion for reconsideration or appeal from
any interlocutory order of the LA
Denial of MTD is not appealable
Certificate of Non-Forum Shopping is required
Verification – lawyer can sign verification but not
the certificate of non-forum shopping

Venue
All cases within the jurisdiction of the LA to hear
and decide may be filed with the Regional
Arbitration Branch (RAB) having jurisdiction over
the workplace of the complainant.
Venue – place where the employee is regularly
employed at the time the cause of action arose;
whether on temporary detail, assignment or
travel. For field, ambulant or itinerant workers,
the workplace shall mean the place where they
are regularly assigned or where they are
supposed to regularly receive their salaries /
wages and report the result of their assignment.
If 2 or more RABs have jurisdiction over the
workplace of the complainant, the branch that
first acquired jurisdiction over the case shall
exclude the others.
Venue of a case may be transferred to another
branch upon written agreement of the parties or
upon order of the LA or NLRC, upon motion by
the proper party in meritorious cases.
Cases involving OFWs – RAB having jurisdiction
over the place where the complainant resides or
where the principal office of any of the
respondents is situated, at the option of the
complainant.
Subject to Art. 263 (g) of the Code, the LA shall
dispose of the case assigned to him including
any or all incidents thereof in the same
proceeding to avoid multiplicity of suits.

Submission of Position Paper and Reply
When required, the LA should direct the parties
to file simultaneously their verified position
papers attaching their supporting documents and
affidavits within the inextendible period of 10
calendar days from the date of the termination of
the conciliation conference.
A reply may be filed by either party within 10
calendar days from receipt of the position papers.
No facts or evidence to prove facts of any cause
of action not included in the complaint are
allowed to be alleged in the position papers.
LA shall determine whether there is a need for a
hearing or clarificatory conference and at his
discretion, the LA may ask clarificatory questions
to elicit further information on facts.

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LA has full control and shall personally conduct
the hearing / clarificatory conference.

Appeals
Decisions and orders of the LA are final and
executory unless appealed to the Commission
within 10 calendar days; and in case of orders
and resolutions of the Regional director of the
DOLE, within 5 days from receipt thereof.
No motion or request for extension of the period
to appeal is allowed.
Requisites of perfection of appeal:
1. Appeal must be:
a) filed within the reglementary period
provided in Sec.1 of this Rule
b) verified by the appellant himself in
accordance with the Rules of Court
Sec.4, Rule 7
c) in form of a memorandum of appeal
stating
i. the grounds relied upon and
arguments in support thereof
ii. relief prayed for,
iii. statement of the date appellant
received the appealed decision,
d) in 3 copies
e) accompanied by –
i. proof of payment of required
appeal fee
ii. posting of a bond
iii. certificate of non-forum shopping
iv. proof of service upon other parties
In case the decision of the Labor Arbiter or the
Regional Director involves a monetary award, an
appeal by the employer may be perfected only
upon the posting of a bond.
Once an appeal is filed, the LA loses jurisdiction
over the case. All pleadings and motions
pertaining to the appealed case shall thereafter
be addressed to and filed with the Commission.

Injunction
A preliminary injunction or TRO may be granted
by the NLRC through its Divisions when it is
established on the basis of the sworn allegations
in the petition that the acts complained of
involving or arising from any labor dispute before
the NLRC which if not restrained may cause
grave or irreparable damage to any party.
After the hearing of the testimony of witnesses
and with opportunity for cross examination in
support of the allegations of the complaint or
petition under oath, and testimony by way of
opposition thereto, and only after a finding of fact
by the Commission:
a. that the prohibited acts have been threatened
and will be committed and continued unless
restrained;
b. that substantial and irreparable injury to
petitioner’s property will follow;
c. that as to each item of relief to be granted,
greater injury will be inflicted upon
respondents by the granting of relief;
d. that the petitioner has no adequate remedy
at law;
e. that the public officers charged with the duty
to protect petitioner’s property are unable or
unwilling to furnish adequate protection.
If the petitioner shall also allege that unless a
TRO shall be issued without notice, a substantial
or irreparable injury to petitioner’s property will be
unavoidable, such a TRO may be issued upon
testimony under oath, or by oath, or by affidavits
of the petitioner’s witnesses, if sufficient, if
sustained to justify the Commission in the
issuance thereof.





















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ANNEX O: Salient Features of the SSS Law and GSIS Law


Social Security Act of 1997
(RA 8282)
Government Service Insurance Act of
1997
(RA 8291)
WHO ARE
COVERED
1. EMPLOYER – any person, natural or
judicial, domestic or foreign who
carries on in the Philippines any trade,
business, industry undertaking or
activity of any kind and uses the
services of another person who is
under his orders as regards
employment 8(c)
*EXEMPT EMPLOYER: government
and any of its political subdivisions,
branches and instrumentality, including
GOCCs, i.e., those under GSIS
2. EMPLOYEE – any person who
performs services for an employer who
receives compensation for such
services, where there is an employer-
employee relationship
3. SELF-EMPLOYED – considered both
employer and employee
1. EMPLOYER – the national
government, its political subdivisions,
branches, agencies or
instrumentalities, including GOCCs,
and financial institutions with original
charters, the constitutional
commissions and the judiciary
2. EMPLOYEE – any person receiving
compensation while in service of an
employer as defined herein, whether
by election or appointment
DEPENDENTS 1. Legal spouse entitled for support;
2. Child, whether legitimate, legitimated, legally adopted or illegitimate;
3. Parents dependent for support
1. Unmarried;
2. Not gainfully employed;
3. Has not reached 21 years of age; OR 3. Not over age of majority; OR
CONDITIONS FOR
CHILD TO BE
CONSIDERED
DEPENDENT 4. Incapable of supporting himself either physically or mentally prior to 21 years of age or
age of majority, as the case may be
BENEFICIARIES
1. PRIMARY





2. SECONDARY





3. OTHERS



a. Dependent Spouse until remarriage
AND
b. Dependent Legitimate or Legitimated
or Legally Adopted and Illegitimate
Children

a. Dependent Parents
b. Absent primary and secondary
beneficiaries, any other person
designated by member as secondary
beneficiary

As to DEATH BENEFITS, if no beneficiary
qualifies under the Act, benefits shall be
paid to Legal Heirs in accordance with Law
of Succession

a. Legal, Dependent Spouse until
remarriage AND
b. Dependent Children



a. Dependent Parents AND
b. Legitimate descendants subject to
restrictions on dependent children,
legitimate descendants

BENEFITS 1. Monthly Pension
2. Dependents Pension
3. Retirement
4. Death
5. Permanent Disability
6. Funeral
7. Sickness
8. Maternity (ONLY 1
ST
FOUR
DELIVERIES OR MISCARRIAGES)
1. ALL MEMBERS
a. Life Insurance
b. Retirement
c. Disability
d. Survivorship
e. Separation
f. Unemployment

2. J UDICIARY

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9. Loan Grant

A. Life Insurance ONLY – ALL TAX
EXEMPT
COVERAGE
1. COMPULSORY
























2. VOLUNTARY

a. All employees not over sixty (60)
years of age and their employers;
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
b. Self-employed persons as may be
determined by the Commission under
such rules and regulations as it may
prescribe, including, but limited to: all
self-employed professionals; partners
and single-proprietors of business;
actors and actresses, directors,
scriptwriters and news correspondents
not employees; professional athletes,
coaches, trainers and jockeys, and
individual farmers and fishermen; upon
their registration with the SSS
c. Domestic helpers sixty years of age
and below with a monthly income of
not less than P1,000 on the date of
their employment
d. Individual farmers and fishermen
under SSS rules and regulations

a. Filipinos recruited by foreign-based
employers for employment abroad
b. Employee separated from
employment to maintain his right to
full benefits
c. Self-employed who realizes no
income for a certain month
d. Spouses who devote full time to
managing household and family affairs
unless specifically mandatorily covered

*By Arrangement: Any foreign government,
international organization or wholly owned
instrumentality employing workers in the
Philippines or employing Filipinos outside
the Philippines may enter agreement with
Philippines for inclusion of such employees
in SSS EXCEPT those already covered by
their respective civil service retirement
system.

COMPULSORY for all employees receiving
compensation who have not reached
compulsory retirement age, irrespective of
employment status



EXCEPTIONS
FROM
COVERAGE
1. Employment purely casual and not
for purpose occupation, or business
employer
2. Service performed on or in connection
with alien vessel, if employed when
such vessel is outside of Philippines
3. Employees of Philippine government
or instrumentality or agency thereof
4. Service performed in the employ of a
foreign government, or international
1. Members of the AFP
2. Members of the PNP
3. Contractual employees, who have no
employer-employee relationship with
the agency to serve
4. Members of judiciary and
constitutional commissions: covered
by life insurance only

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organizations, or wholly owned
instrumentality employing workers in
the Philippines or employing Filipinos
outside of the Philippines
5. Services performed by temporary
employees and other employees
excluded by SSS regulation;
employees of bona fide independent
contractors shall not be deemed
employees of the employer engaging
the services of an independent
contractor
COMPENSATION All actual renumeration for employment,
including the mandated cost-of-living
allowance, as well as the cash value of any
renumeration paid in any medium other
than cash except that part of the
renumeration in excess of the maximum
salary credit
The basic pay or salary received by an
employee, pursuant to his
election/appointment, excluding per diems,
bonuses, overtime pay, honoraria,
allowances and any other emoluments
received in addition to the basic pay
BASIS OF CLAIM Non-work connected disability, sickness,
maternity, death and old age and other
contingencies resulting in loss of income or
financial burden (sec. 2)
Work-connected exempt from liability where
permanent disability due to his grave
misconduct, habitual intoxication, or willful
intention to kill himself or another (sec. 15-
17)
EFFECTS OF
SEPARATION
FROM
EMPLOYMENT
1. Employer’s contribution on his account
ceases
2. Employee’s obligation to contribute
also ceases at the end of the month of
separation
3. Employee shall be credited with all
contributions paid on his behalf and
entitled to benefits according to the
provisions of this Act
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 this Act
REPORTING
REQUIREMENTS
A. Employer:
Report immediately to SSS the names,
ages, civil status, occupations, salaries
and dependents of all his covered
employees
B. Self-employed:
Report to SSS within 30 days from the
first day of his operation, his name,
age, civil status, occupation, average
monthly net income and his
dependents
Employer:
Report to GSIS the names, employment
status, positions, salaries of the employee
and such other matter as determined by the
GSIS
FUNDING 1. Employer’s contributions
2. Employee’s/member’s contributions
EXEMPTION
FROM TAX/LEGAL
PROCESS/LIEN
Property, assets, and revenues of SSS and GSIS are all exempt from taxes, and all
benefits paid by SSS or GSIS shall likewise be exempt from taxes, assessments, fees,
charges, and duties of all kind
DISPUTE
SETTLEMENT
Dispute arising from:
1. Coverage
2. Benefits
3. Contributions
4. Penalties
5. Any matters related thereto

J urisdiction: Social Security Commission

Any dispute arising under this Act and other
laws administered by GSIS

J urisdiction: GSIS

When decision made: 30 days from receipt
of the hearing officer’s findings and
recommendations or 30 days after
submission for decision

QuickTime™ and a
TIFF (Uncompressed) decompressor
are needed to see this picture.
When decision made: Mandatory period of
20 days from submission of evidence

Appeal:
CA – questions of law and facts
SC – questions of law only

Appeal:
CA – Rule 43, Section 31
SC – Rule 45

PRESCRIPTIVE
PERIOD
10 years from accrual of right of action 4 years from date of contingency

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