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L A B O R L A W

2005 CENTRALIZED BAR OPERATIONS
SELECTED QUESTIONS in LABOR LAW
LABOR STANDARDS
1. Differentiate labor standards law fro labor relations law. Are t!e two "t"all# e$%l"si&e'
Labor standards law is that labor law which prescribes terms and conditions of employment
like Book III, Book IV, Title I and Book VI of the Labor Code. These books of the Labor Code deal
with working conditions, wages, working conditions for women, minors, house helpers and home-
workers, medical and dental serices, occupational health and safety, termination and retirement.
!n the other hand, labor relations law is that labor law which regulates the relations
between employers and workers like Book V of the Labor Code which deals with labor
organi"ations, collectie bargaining, unfair labor practices and strikes and lockouts.
Labor standards laws and labor relations laws are not mutually e#clusie$ they complement
to each other. Thus the law on strikes and lockouts which is and e#ample of labor relations law
includes some proisions on the security of tenure of workers who go on strike or who are locked
out. These proisions are clear e#amples of labor law relations.

(.W!at is t!e Constit"tional basis of Arti%les )*11 re+ardin+ ean%i,ation of tenants'
%The &tate shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farmworkers, who are landless, to own directly or collectiely the lands they
till or, in the case of other farmworkers, to receie a 'ust share of the fruits thereof. To this end,
the &tate shall encourage and undertake the 'ust distribution of all agricultural lands, sub'ect to
such priorities and reasonable retention limits as the Congress may prescribe, taking into account
ecological, deelopmental, or e(uity considerations, and sub'ect to the payment of 'ust
compensation. In determining retention limits, the &tate shall respect the rights of small
landowners. The &tate shall further proide incenties for oluntary land-sharing.) (Article XIII,
Section 4, 1987 Constitution)
-. Is a %or,oration. of w!i%! se&ent# ,er%ent /)012 of t!e a"t!ori3ed and &otin+ %a,ital is
owned and %ontrolled b# 4ili,ino %iti3ens. allowed to en+a+e in t!e re%r"itent and ,la%eent
of wor5ers. lo%all# or o&erseas' E$,lain briefl#.
NO. *rt. +, of the Labor Code e#plicitly re(uires that in order to (ualify for participation in
the oerseas employment program, the corporation must at least possess seenty-fie percent
-,./0 of the authori"ed and oting capital stock of which is owned and controlled by 1ilipino
citi"ens.
6. Can a re%r"iter be %on&i%ted of &iolatin+ a 7OEA Cir%"lar w!i%! was i,leented wit!o"t
,rior ,"bli%ation'
NO. The 2!3* 434! Circular no. +, series of 5678 was oid. 9here the administratie
circular in (uestion is one of those issuances which should be published for its effectiity, since its
purpose is to enforce and implement an e#isting law pursuant to a alid delegation. Considering
that 2!3* *dministratie Circular :o. +, &eries of 5678 has not as yet been published or filed with
the :ational *dministratie ;egister, the same is ineffectie and ma not be enforced (Philsa
International Placement and Services Corp vs Secretar! o" #$%&, '( )o 1*+144, April 4,
,**1).
8. Is t!e absen%e of an e,lo#ent a &alid defense in a %ase of ille+al re%r"itent' E$,lain.
NO. the law is clear on the matter. 2riate respondents further argue that they cannot be
held liable by petitioner because no employment contract between him and &tep-<p *gency had
been approed by the 2!3*. They also claim that the absence of a Special Power of Attorney and
an Affidavit of Responsibility, as re(uired under &ections 5 and +, ;ule 5, Book III of the 2!3*
;ules and ;egulations only proes that they did not deploy petitioner to &ingapore.



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Their argument is far from persuasie. &urely, they cannot e#pect us to utili"e their non-
compliance with the 2!3* ;ules and ;egulations as a basis in absoling them. To do so would be
tantamount to giing premium to acts done in iolation of established rules. *t most, priate
respondents= act of deploying petitioner to &ingapore without complying with the 2!3*
re(uirements only made them susceptible to cancellation or suspension of license as proided by
&ection +, ;ule I, Book VI of 2!3* ;ules and ;egulations. (-ornales v )%(C, '( )o 11894+,
Septem.er 1*, ,**1).
9. Is t!ere a re:"ireent t!at a ,!#si%ian "st be a%%redited b# t!e 7OEA before !e %an
attend to a si%5 seaan'
This Court also finds no basis on -sic0 the petitioners= contention that the company-
designated >physician? must also be accredited with the 2!3* before he can engage in the medical
treatment of a sick seaman. There is nothing in the &tandard 3mployment Contract that proides
this accreditation re(uirement, and een if there is, this would be absurd and contrary to public
policy as its effect will deny and deprie the ailing seaman of his basic right to seek immediate
medical attention from any competent physician. The lack of 2!3* accreditation of a physician
who actually treated the ailing seaman does not render the findings of such physician -declaring the
seaman permanently disabled0 less authoritatie or credible. To our mind, it is the competence of
the attending physician, not the 2!3* accreditation, that determines the true health status of the
patient-seaman, which in this instant case, is >sic? the attending physicians from the 4anila @octors
Aospital ('erman /arine A0encies, Inc v )%(C, '( )o 14,*49, 1anuar! +*, ,**1).
). ;artina is a %ler5 t#,ist in <os,i%io de San =ose. a %!aritable instit"tion de,endent for its
e$isten%e on %ontrib"tions and donations fro well wis!ers. S!e renders wor5 ele&en /112
!o"rs a da# b"t !as not been +i&en o&ertie ,a# sin%e !er ,la%e of wor5 is a %!aritable
instit"tion. Is So%orro entitled to o&ertie ,a#' E$,lain briefl#.
>ES. 4artina is entitled to oertime compensation. &he does not fall under any of the
e#ceptions enumerated under *rt. 7+ of the Labor Code. &aid proision e(uiocally states that
%Title I, Book III of the Labor Code dealing with hours of work, weekly rest periods, holidays,
serice incentie leaes and serice charges, coers all employees in all establishments, whether
for profit or not, e#cept the following employees?
a. Boernment employees
b. 4anagerial employees
%. !fficers and members of the managerial staff
d. 1ield personnel
e. 4embers of the family of the employer who and dependent on him for support
f. @omestic helpers
+. 2ersons in the personal serice of another
!. 9orkers paid by results.
* coered employee who works beyond eight -70 hours is entitled to oertime
compensation.
@. Aris!na earns 7).00 for e&er# ani%"re s!e does in t!e barbers!o, of a friend w!i%! !as
nineteen /1B2 e,lo#ees. At ties. s!e ta5es !oe 71)8.00 a da# and at ot!er ties s!e earns
not!in+. S!e now %lais !olida# ,a#. Is Aris!na entitled to t!is benefit'
NO. :emia is not entitled to holiday pay. *rt. 7+ of the Labor Code proide that workers
who are paid by results are, among others, not entitled to holiday pay. :emia is a worker who is
paid by results. &he earns 2,.CC for eery manicure she does.
B. As a tirean in a +asoline station. w!i%! is o,en twent# fo"r /(62 !o"rs a da# wit! onl# fi&e
/82 e,lo#ees. =oewa wor5ed fro 10?00 ,.. "ntil )?00 A.;. of t!e followin+ da#. <e %lais
to be entitled to ni+!t s!ift differential. Is !e %orre%t'
NO. In the !mnibus ;ules Implementing the Labor Code -Book III, ;ule II, dealing with night
shift differential0 it is proided that its proisions on night shift differential shall :!T apply to
employees of %retail and serice establishments regularly employing not more that fie -.0









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L A B O R L A W
2005 CENTRALIZED BAR OPERATIONS
workers). Because of this proision, Doewa is not entitled to night shift differential because the
gasoline station where he works -being a serice establishment0 has only fie employees.
10. A an"fa%t"rin+ fir wit! 800 e,lo#ees s%!ed"les S"nda# as t!e latterCs rest da#. 4ift#
wor5ers w!o were se&ent!*da# ad&entists and (00 wor5ers w!o belon+ to t!e I+lesia ni Aristo
obDe%t and ,ro,ose t!at t!eir rest da#s be s%!ed"led on Sat"rda#s and T!"rsda#s. res,e%ti&el#.
T!e %o,an# %lais t!at t!e ,ro,osed s%!ed"le will serio"sl# ,reD"di%e or obstr"%t its
an"fa%t"rin+ o,erations and ref"ses to re*s%!ed"le t!e rest da# as re:"ested.
a. Do t!e se&ent! da# ad&entists and ebers of t!e I+lesia ni Aristo !a&e an# ri+!t to %!oose
t!eir own rest da#s'
>ES. The employer, under the law, is re(uired to respect the preference of the employee if
the same is based on religious grounds. The employee shall make known his preference to the
employer in writing at least -,0 days before the desired effectiity of the initial rest day preffered
-&ec.E, ;ule III, Book I, Implementing ;ules and ;egulations0.
b. Ass"in+ t!at t!e %lai of t!e e,lo#er is well*fo"nded. %an it le+all# ref"se to re*s%!ed"le
t!e rest da# of t!e e,lo#ees in&ol&ed'
>ES. If the employer cannot resort to other remedial measures, it may schedule the rest
days of the employees inoled on the days of their choice for at least + days in a month -&ec.E,
;ule III, Book III, Implementing ;ule and ;egulations0.
11. T!is #ear. National <eroes Da# /A"+"st (82 falls on a S"nda#. S"nda# is t!e rest da# of
Bonifa%io w!ose dail# rate is 7800.00.
a. If Bonifa%io is re:"ired b# !is e,lo#er to wor5 on t!at da# for ei+!t /@2 !o"rs.
!ow "%! s!o"ld !e be ,aid for !is wor5' E$,lain.
1or working on his scheduled rest day, according to *rt. 68-a0, Bonifacio should be paid
2.CC.CC -his daily rate0 plus 25.C.CC -8C/ of his daily rate F 2G.C.CC. This amount 2G.C.CC should
be multiplied by + F 25,8CC.CC. this is the amount that Bonifacio as employee working on his
scheduled rest day which is also a regular holiday should receie. *rt. 6E-c0 of the Labor Code
proides that an employee shall be paid a compensation e(uialent to twice his regular rate for
working on any regular holiday. The %regular rate) of Bonifacio on 4ay 5,+CC+ with an additional
thirty percent because the day is also his scheduled rest day.
1ormulaH
/a2 To +et rest da# ,a#
Ste, 1H Bet hourly wage rate
e0 (P2** 3 8 hrs) 4 1+*5 6 P81,2 (rest da! 7a0e rate)
Ste, (H Compute wage between 7HCCpm I .HCC pm using rest day wage rate
e0 8hrs 4 P81,2 6 P82*
/b2 To +et re+"lar !olida# ,a#
e0 P82* 4 ,**5 6 P1+**



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Daily Basic Wage X special holiday wage rate
Number of hours worked
Number of hours worked X special holiday wage rate
Rest day Wage rate X Regular holiday
San Beda
College of Law
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b. If !e wor5s for ten /102 !o"rs on t!at da#. !ow "%! s!o"ld !e re%ei&e for !is
wor5' E$,lain.
25,8CC.CC which is the amount that Bonifacio is to receie for working on 4ay 5, +CC+
should be diided by 7 to determine his hourly rate of 25G+... This hourly rate should be multiplied
by + -the number of hours he worked oertime0. Thus, the amount that Bonifacio is entitled to
receie for his oertime work per hour on 4ay 5, +CC+ is 28+..CC.
Aoliday wage rate J 8C/ of holiday rate -+CC/0
Ste, 1H Bet hourly wage rate
e0 (P1+** 3 8 hrs) 4 ,**5 6 P+,2
Ste, (H Compute !T 2remium 2ay between .HCC pm I 5Cpm
e0 (+* 5 4 P+,2) E P+,2 6 P4,,2*
no o" $9 hours (2pm : 1*pm) 6 ,hrs
------------
P842**
Ste, -? C!42<T*TI!:
8am;2pm 8hrs 4 P,**** P1+**
, hours ,hrs 4 P,8*** 842
;;;;;;;;;;;;
Total Ta5e <oe 7a# 7 (.168
1(. Sia. t!e e,lo#er. adits t!at Daas%oCs wor5 starts at @?-0 in t!e ornin+ and ends ", at
9?-0 in t!e e&enin+ dail#. e$%e,t !olida#s and S"nda#s. <owe&er. Sia %lais t!at Daas%oCs
basi% salar# of 7160.00 a da# is ore t!an eno"+! to %o&er t!e Fone !o"r e$%ess wor5G w!i%!
is t!e %o,ensation t!e# alle+edl# a+reed ",on. W!at ot!er e&iden%es are re:"ired to warrant
t!e award of o&ertie ,a#'
Dudicial admissions made by parties in the pleadings, or in the course of the trial or other
proceedings in the same case are conclusie, no further eidence being re(uired to proe the same,
and cannot be contradicted unless preiously shown to hae been made through palpable mistake
or that no such admission was made. In iew of &ia=s formal admission that @amasco worked beyond
eight hours daily, the latter is entitled to oertime compensation. :o further proof is re(uired. &ia
already admitted she worked an e#tra hour daily. Thus, public respondent graely erred in deleting
the award of oertime pay to @amasco on the prete#t that the claim has no factual basis.
&till, een assuming that @amasco receied a wage which is higher than the minimum
proided by law, it does not follow that any additional compensation due her can be offset by her
pay in e#cess of the minimum, in the absence of an e#press agreement to that effect. 4oreoer,
such arrangement, if there be any, must appear in the manner re(uired by law on how oertime
compensation must be determined. 1or it is necessary to hae a clear and definite delineation
between an employee=s regular and oertime compensation to thwart iolation of the labor
standards proision of the Labor Code (#amasco vs )%(C, '( )o 112722, #ecem.er 4, ,***).
1-. ;a# a Co,an# ado,t wor5in+ !o"rs be#ond @ !o"rs a da#' If t!e wor5ers do not :"estion
s"%! an arran+eent. wo"ld t!at s%!ee be %onsidered &alid'









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Daily Basic Wage X special holiday wage rate
Number of hours worked
[(30% X Wage Per Hour) + Wage Per Hour]

No. of ! Hours = OT Premium Pay

L A B O R L A W
2005 CENTRALIZED BAR OPERATIONS
>ES. In Interphil %a.oratories &mplo!ees <nion ==> v Interphil ('( )o 14,8,4,
#ecem.er 19, ,**1) it was held by the Court thatH
&ection 5. ;egular 9orking Aours K * normal workday shall consist of not more than
eight -70 hours. The regular working hours for the Company shall be from ,H8C *.4. to EH8C
2.4. The schedule of shift work shall be maintained$ howeer the company may change the
preailing work time at its discretion, should such change be necessary in the operations of
the Company. *ll employees shall obsere such rules as hae been laid down by the
company for the purpose of effecting control oer working hours.
It is eident from the foregoing proision that the working hours may be changed, at the
discretion of the company, should such change be necessary for its operations, and that the
employees shall obsere such rules as hae been laid down by the company. In the case before us,
Labor *rbiter Caday found that respondent company had to adopt a continuous +E-hour work daily
schedule by reason of the nature of its business and the demands of its clients. It was established
that the employees adhered to the said work schedule since 5677. The employees are deemed to
hae waied the eight-hour schedule since they followed, without any (uestion or complaint, the
two-shift schedule while their CB* was still in force and een prior thereto. The two-shift schedule
effectiely changed the working hours stipulated in the CB*. *s the employees assented by practice
to this arrangement, they cannot now be heard to claim that the oertime boycott is 'ustified
because they were not obliged to work beyond eight hours.
16. E$,lain t!e ,rin%i,le of FA 4AIRS DA> WAHE 4OR A 4AIRS DA>CS LABORG
The age-old rule goerning the relation between labor and capital, or management and
employee of a Lfair dayMs wage for a fair dayMs laborL remains as the basic factor in determining
employeesM wages. If there is no work performed by the employee there can be no wage or pay
unless, of course, the laborer was able, willing and ready to work but was illegally locked out,
suspended or dismissed, or otherwise illegally preented from working (Calte4 (e"iner!
&mplo!ees Association (C(&A) vs ?rillantes, ,79 SC(A ,18), a situation which we find is not
present in the instant case. It would neither be fair nor 'ust to allow priate respondents to recoer
something they hae not earned and could not hae earned because they did not render serices at
the Nalibo office during the stated period (A@lan &lectric Cooperative Incorporated v )%(C,
'( )o 1,14+9, 1anuar! ,2, ,***).
18. A Co.. a toba%%o an"fa%t"rin+ fir. is owned b# ;r. I w!o also owned B Se%"rit# A+en%#
/BSA2. W!en t!e e,lo#ees of B fored a "nion. ACs ana+eent ,reterinated t!e se%"rit#
%ontra%t between A and B firs. W!en t!e +"ards filed a %ase of ille+al disissal and UL7
a+ainst bot! A and B. t!e %o"nsel of A filed a ;otion to Disiss. alle+in+ t!at t!at t!ere was no
e,lo#er*e,lo#ee relations!i, between A and t!e +"ards.
a. S!o"ld t!e ;OTION be +ranted' E$,lain.
NO. The 4otion should not be granted. The facts indicate a concerted effort on the part of
respondents to remoe petitioners from the company and thus abate the growth of the union and
block its actions to enforce their demands in accordance with the Labor &tandards laws. The Court
held in Insular %i"e Assurance Co, %td, &mplo!ees Association;)A9< vs Insular %i"e Assurance
Co, %td,+7 SC(A ,44 (1971), that %the test of whether an employer has interfered with and
coerced employees within the meaning of section -a0 -50 is whether the employer has engaged in
conduct which it may reasonably be said tends to interfere with the free e#ercise of employeesM
rights under section 8 of the *ct, and it is not necessary that there be direct eidence that any
employee was in fact intimidated or coerced by statements of threats of the employer if there is a
reasonable inference that anti-union conduct of the employer does hae an aderse effect on self-
organi"ation and collectie bargaining.)
b. Is t!e do%trine of ,ier%in+ t!e &eil of %or,orate fi%tion
a,,li%able !ereto'
It is a fundamental principle in corporation law that a corporation is an entity separate and
distinct from its stockholders and from other corporations to which it is connected. Aoweer, when
the concept of separate legal entity is used to defeat public conenience, 'ustify wrong, protect



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fraud or defend crime, the law will regard the corporation as an association of persons, or in case
of two corporations, merge them into one. The separate 'uridical personality of a corporation may
also be disregarded when such corporation is a mere alter ego or business conduit of another
person.
In the case at bar, it was shown that B&* was a mere ad'unct of * Company. B&*, by irtue
of a contract for security serices, proided * Co. with security guards to safeguard its premises.
Aoweer, records show that B&* and * Co. hae the same owners and business address, and B&*
proided security serices only to * Co. and other companies belonging to its owners. The
purported sale of the shares of the former stockholders to a new set of stockholders who changed
the name of the corporation appears to be part of a scheme to terminate the serices of B&*=s
security guards posted at the premises of * Co. and bust their newly-organi"ed union which was
then beginning to become actie in demanding the companyMs compliance with Labor &tandards
laws. <nder these circumstances, the Court cannot allow * Co. to use its separate corporate
personality to shield itself from liability for illegal acts committed against its employees. (#e %eon
vs )%(C, '( )o 11,881, /a! +*, ,**1)
19. Dis%"ss t!e do%trine on t!e Aeconomic realit! o" the relations o" partiesB test wit! res,e%t
to t!e e$isten%e of e,lo#er*e,lo#ee relations!i,.
The relationship of employer-employee, which determines the liability for employment
ta#es under the &ocial &ecurity *ct was not to be determined solely by the idea of control which an
alleged employer may or could e#ercise oer the details of the serice tendered to his business by
the worker or workers. Control is characteristically associated with the employer -employee
relationship, but in the application of social legislation, employees are those who as a matter of
economic reality are dependent upon the business to which they render serice, taking into
account permanency of the relations, the skills re(uired and the inestments in the facilities for
work and opportunities for profit or loss from actiities. It is the total situation that controls.
/Investment Plannin0 Corp vs SSS, ,1 SC(A 9,4)
The concept of independent contractor is interminably linked with the economic reality
test when we consider the fact that such person is one who carries on a distinct and independent
business and undertakes to perform the 'ob to do a piece of work on his own account and under his
own responsibility, according to his own manner and methods and free from the control and
direction of his principal, e#cept as to the result of the work. *mong the factors to be considered
are whether the contractor is carrying on an independent business$ whether the work is part of the
employerMs general business$ the nature and e#tent of the work$ the skill re(uired$ the term and
duration of the relationship$ the right to assign the performance of the work to another$ the power
to terminate the relationship$ the e#istence of a contract for the performance of a specified piece
of work$ the control and superision of the work$ the employerMs powers and duties with respect to
the hiring, firing, and payment of the contractorMs serants-, the control of the premises$ the duty
to supply the premises, tools, appliances, material and labor$ and the mode, manner, and terms of
payment. (/A=I)C$ Corporation v $ple, 7* SC(A 1+9)
1). 7ando# was an ele%tri%ian w!o wor5ed wit!in t!e ,reises of Us!ioJs %ar a%%essor# s!o,. in
Banawe Street. Q"e3on Cit#. <e filed a %o,laint for ille+al disissal. non*,a#ent of o&ertie
,a#. !olida# ,a#. and ot!er benefits a+ainst Us!io. w!i%! o&ed to disiss t!e %o,laint
%laiin+ t!at 7ando# was not an e,lo#ee b"t a free lan%e o,erator w!o waited on t!e s!o,Js
%"stoers s!o"ld t!e latter re:"ire !is ser&i%es. Us!io ar+"es t!at in fine. t!e s!o, owner and
t!e free lan%e o,erator. as an inde,endent %ontra%tor. were ,artners in trade. Kbot! benefitin+
fro t!e ,ro%eeds of t!eir Doint efforts.G It f"rt!er %laied t!at it was a re%o+ni3ed and
a%%e,ted trade ,ra%ti%e ,e%"liar to t!e a"to s,are ,arts s!o, ind"str# o,eratin+ alon+ t!e
stret%! of Banawe Street t!at s!o, owners wo"ld %olle%t t!e ser&i%e fees fro its %"stoers
and disb"rse t!e sae to t!e inde,endent %ontra%tor at t!e end of a wee5. ;oreo&er. 7ando#
was free to ,osition !iself near ot!er %ar a%%essor# s!o,s to offer !is ser&i%es to %"stoers of
said s!o,s. On t!e ot!er !and. 7ando# insists t!at !e is entitled to t!e benefits be%a"se !e was
lo#al to Us!io. as !e did not ,erfor wor5 for an#one else. Is !e %orre%t'









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NO. In stark contrast to the Company=s regular employees, there are independent,
freelance operators who are permitted by the Company to position themseles pro#imate to the
company premises. These independent operators are allowed by the Company to wait on Company
customers who would be re(uiring their serices. In e#change for the priileges of faorable
recommendation by the Company and immediate access to the customers in need of their serices,
these independent operators allow the Company to collect their serice fee from the customer and
this fee is gien back to the independent operator at the end of the week. In effect, they do not
earn fi#ed wages from the Company as they earn their ariable fees from the customers of the
Company. The Company has no control oer and does not restrict the methodology or the means
and manner by which these operators perform their work. These operators are not superised by
any employee of the Company since the results of their work is controlled by the customers who
hire them. Likewise, the Company has no control as an employer oer these operators. They are
not sub'ect to regular hours and days of work and may come and go as they wish. They are not
sub'ect to any disciplinary measures from the Company, sae merely for the inherent rules of
general behaior and good conduct C<shio /ar@etin0 v )%(C, ,94 SC(A 87+ (1998)D.
1@. In t!e e,lo#ent of wor5ers. is t!ere a differen%e between an ordinar# e,lo#er*
e,lo#ee relations!i, and inde,endent Dob %ontra%tin+L s"b%ontra%tin+'
>ES. In an ordinary employer-employee relationship, there are only two parties inoled -
the employer and the employee. This relationship is established through a four-fold test, under
which the employerH
a. @irectly e#ercises control and superision oer the employee not only as to the results of
the work but also as to the means employed to attain this result$
b. Aas the power to select and hire the employee$
%. Aas the obligation to pay the employees his or her wages and other benefits.
d. Aas the power to transfer and dismiss or discharge employees.
The power of control is the most important factor in determining the e#istence of an
employer-employee relationship. The employer need not actually e#ercise this power. It is enough
that the employer retains the right to e#ercise this power, as it may deem necessary or
appropriate.
In job contracting / subcontracting, there are three parties inoledH
a. The principal who decides to farm out a 'ob or serice to a subcontractor$
b. The 'ob contractor or subcontractor which has the capacity to independently undertake
the performance of the 'ob or serice$ and
%. The employees engaged by the 'ob contractor or subcontractor to accomplish the 'ob or
serice.
In 'ob contracting or subcontracting, the four-fold test of employer-employee relationship
should be satisfied by the contractor or subcontractor in relation to the employee it engages to
accomplish the contracted or subcontracted 'ob or serice. In such cases, the contractor or
subcontractor is also referred to as an independent contractor.
If the four-fold test is satisfied not by the 'ob contractor or subcontractor but by the
principal, the principal then becomes the employer of the employees engaged to accomplish the
'ob or serice. 9hat e#ists is not 'ob contracting or subcontracting but a direct employer-employee
relationship between the principal and the employees and the 'ob contractor becomes merely the
agent of the principal or the subcontractor, the agent of his contractor, as the case may be.
1B. Is t!ere a differen%e between a Dob %ontra%tor or s"b%ontra%tor and a ,ri&ate re%r"itent
and ,la%eent a+en%# /7R7A2'
>ES. * 'ob contractor or subcontractor directly undertakes a specific 'ob or serice for a
principal, and for this purpose employs its own workers. * 2;2* cannot be a subcontractor. It
simply recruits workers for the purpose of placing them with another employer so that the workers
recruited will not become the 2;2*Ms employees.



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* 'ob contractor or subcontractor is goerned primarily by *rticles 5CG-5C6 of the Labor
Code. * priate recruitment and placement agency is goerned by *rticles +. to 86 of the Labor
Code and the rules implementing these articles.
* 'ob contractor or subcontractor does not need authority from the @epartment of Labor
and 3mployment -@!L30 to undertake a subcontracted 'ob or serice. * 2;2* needs an authority or
license from @!L3 to legally undertake recruitment and placement actiities.
(0. W!at law or r"les +o&ern Dob %ontra%tin+ or s"b%ontra%tin+'
The basic law goerning 'ob contracting or subcontracting is the Labor Code, particularly
*rticles 5CG to 5C6 thereof. These proisions prescribe the conditions for the regulation of 'ob
contracting or subcontracting and the rights and obligations of parties to this arrangement.
@epartment !rder :o. 8, which took effect on +6 4ay +CC5 was the latest set of rules released by
the @!L3 implementing *rticles 5CG to 5C6.
The following laws and rules also apply in addition to *rticles 5CG to 5C6 of the Labor CodeH
a. *rticle +E7 -c0 of the Labor Code, which disallows contracting out of serices or functions
being performed by union members when such will interfere with, restrain or coerce employees in
the e#ercise of their right to self-organi"ation$
b. *rticle +7C, Labor Code, which classifies employees into regular, pro'ect or seasonal
employees$
%. *rticle +57C of the Ciil Code, under which the principal, in a ciil suit for damages
instituted by an in'ured person, can be held liable for any negligent acts of the employees of a
labor-only contractor$
d. ;epublic *ct :o. .E7,, which regulates the operation of security agencies, and its
implementing rules$
e. Durisprudence interpreting the foregoing laws$
f. @.!. :o. 56, &eries of 5668, for subcontracting arrangements in the construction industry$
and
!. Contractual stipulations proided these are not in conflict with Labor Code proisions,
'urisprudence, and @.!. :os. 8 and 56.
(1. W!at are t!e i,ortant feat"res of D.O. No. -'
The following are the important features of @.!. :o. 8H
a. It reoked @epartment !rder :o. 5C, &eries of 566,, which was then the implementing rules
on *rticles 5CG to 5C6$
b. It prohibits labor-only contracting$
%. It recogni"es the continuing alidity of contracts entered into when @.!. :o. 5C was still in
force$
d. It is a temporary measure$
e. It sets the process and mechanism, which is through consultations through the Tripartite
Industrial 2eace Council, by which a new set of rules shall be formulated.
((. Is Dob %ontra%tin+ or s"b%ontra%tin+ ille+al'
NO. proided the re(uirements for legitimate 'ob contracting or subcontracting are
satisfied and the prohibition against labor-only contracting or subcontracting is obsered. In two
recent cases decided by the &upreme Court, Eino! v )%(C, '( )o 1,8288, =e.ruar! *,,,***,
and %im v )%(C, '( )o 1,48+*, =e.ruar! 19, 1999, the definition of legitimate
subcontracting is as followsH
Contracting or subcontracting shall be legitimate if the following conditions concurH
a. The contractor or subcontractor carries on a distinct and independent business and
undertakes to perform the 'ob, work or serice on its own account and under its own responsibility,
according to its own manner and method, and free from the control and direction of the principal
in all matters connected with the performance of the work e#cept as to the results thereof$
b. The contractor or subcontractor has substantial capital or inestment$









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%. The agreement between the principal and the contractor or subcontractor assures the
contractual employees entitlement to all occupational safety and health standards, free e#ercise of
the right to self organi"ation, security of tenure, and social and welfare benefits.
(-. W!at is s"bstantial %a,ital' Is s"bstantial %a,ital s"ffi%ient to establis! le+itiate
s"b%ontra%tin+'
&ubstantial capital refers to such inestment, whether it is in the form of money, facilities,
tools, e(uipment, machineries, work premises, or subscribed capital stock that would indicate the
subcontractorMs capacity to undertake the contracted or subcontracted work or serice
independently. 1or e#ample, a contractor or subcontractor with a capital stock of 25 4illion which
is fully subscribed and paid for has been deemed by the &upreme Court to be a highly capitali"ed
enture which satisfies the re(uirement of substantial capital.
9here a 'ob contractor or subcontractor is highly capitali"ed, the &upreme Court has held
that it need not show eidence that it has inestment in the form of tools, e(uipment,
machineries, work premises, among others, to be considered legitimate. Aoweer, it is still
necessary for it to show that it has the capacity to be an independent contractor. That is, it can
undertake the performance of the contract according to its own manner and method, free from the
superision of the principal in all matters e#cept as to the results of the work.
(6. W!at is t!e basis of t!e State in ,ro!ibitin+ labor*onl# %ontra%tin+' W!at is t!e obDe%ti&e
and t!e ,ro!ibition'
The basis of the &tate in prohibiting labor-only contracting areH
a. The Constitution, which proides that the &tate shall protect labor and promote its welfare,
and shall guarantee basic labor rights including 'ust and humane terms and conditions of
employment and the right to self-organi"ation.
b. *rticle 5CG of the Labor Code, which allows the &ecretary of Labor to distinguish between
labor-only contracting and 'ob contracting to preent any iolation or circumention of the Labor
Code.
The ob'ectie of the &tate in prohibiting labor-only contracting is to ensure that labor laws
are followed and to preent the e#ploitation of workers. * labor-only contractor is one who
presents itself as an employer een if it does not hae capital to run a business or capacity to
ensure that its workers are paid their wages and other benefits as prescribed by law. *s such, it
cannot independently undertake to perform a contracted or subcontracted 'ob or serice. To allow
a labor-only contractor to operate is to gie it an opportunity to circument the law and to e#ploit
workers.
(8. If #o" are t!e %o"nsel of an a+en%# w!i%! is bein+ %!ar+ed of LABOR*ONL> CONTRACTINH.
w!at e&iden%e will #o" ,resent to ref"te t!e %!ar+e' E$,lain.
I would present the same documents shown in the case of &scario vs )%(C, '( )o
1,4*22, 1une 8, ,***, to witH
%@.L. *dmark is a legitimate independent contractor. *mong the circumstances which tend
to establish the status of @.L. *dmark as a legitimate 'ob contractor areH
a. The &3C registration certificate of @.L. *dmark states that it is a firm engaged in
promotional, adertising, marketing and merchandising actiities.
b. The serice contract between C4C and @.L. *dmark clearly proides that the agreement is
for the supply of sales promoting merchandising serices rather than one of manpower placement.
%. @.L. *dmark was actually engaged in seeral actiities such as adertising, publication,
promotions, marketing and merchandising. It had seeral merchandising contracts with companies
like 2urefoods, Corona supply, :abisco Biscuits and Licron. It was likewise engaged in the
publication business, as eidenced by its maga"ine, the %2henomenon.)
d. It had its own capital assets to carry out its promotion business. It then had current assets
amounting to 2G million and is therefore a highly capitali"ed enture. It had an authori"ed capital
stocks of 2.CC,CCC. It owned seeral motor ehicles and other tools, materials and e(uipment to
serice its clients. It paid rentals of 28C,C+C for the office space it occupied.



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(9. W!at are t!e effe%ts of a labor*onl# %ontra%tin+ arran+eent'
The following are the effectsH
a. The contractor or subcontractor will be treated as the agent of the principal. &ince the act
of an agent is the act of the principal, representations made by the contractor or subcontractor to
the employees will bind the principal.
b. The principal will become the employer as if it directly employed the workers engaged to
undertake the contracted or subcontracted 'ob or serice. It will be responsible to them for all
their entitlements and benefits under the labor laws.
%. The principal and the contractor or subcontractor will be solidarily treated as the
employer.
d. The employees will become employees of the principal, sub'ect to the classifications of
employees under *rticle +7 of the Labor Code.
If the labor-only contracting actiity is undertaken by a legitimate labor organi"ation, a
petition for cancellation of union registration may be filed against it, pursuant to *rticle +86 -e0.
(). If a le+itiate inde,endent Dob %ontra%tor or s"b%ontra%tor %annot ,a# t!e wa+es of t!e
e,lo#ees it en+a+es to ,erfor t!e Dob or ser&i%e. will t!e ,rin%i,al a"toati%all# be%oe t!e
e,lo#er of s"%! e,lo#ees'
NO. <nder *rticle 5CG, a principal has two types of liability in relation to the employees of
the contractor or subcontractor. The first type of liability is limited, and is goerned by the first
two paragraphs of *rticle 5CG. Thus, mere inability of the contractor or subcontractor to pay wages
will not automatically make the principal the direct employer. It will only make the principal
'ointly and seerally liable with the contractor or subcontractor for payment of the employeesM
wages to the e#tent of the work performed under the contract.
The second type of liability, which arises from the third and fourth paragraphs of *rticle
5CG, is absolute and direct. This liability arises when there is labor-only contracting as defined in
@.!. :o. 8. In such cases, the principal shall be held responsible to the workers in the same manner
and e#tent as if it directly employed these workers.
(@. W!i%! e,lo#er s!o"ld be !eld liable for t!e wa+es of se%"rit# +"ards. t!e 7RINCI7AL
E;7LO>ER or t!e AHENC>' E$,lain.
There e#isted a contractual agreement between 2T&I and 3*BL3, wherein the former
aailed of the security serices proided by the latter. In return, the security agency collects from
its client payment for its security serices. This payment coers the wages for the security guards
and also e#penses for their superision and training, the guards= bonds, firearms with ammunitions,
uniforms and other e(uipments >sic?, accessories, tools, materials and supplies necessary for the
maintenance of a security force.
2remises considered, the security guards= immediate recourse for the payment of the
increases is with their direct employer, 3*BL3. Aoweer, in order for the security agency to
comply with the new wage and allowance rates it has to pay the security guards, the 9age !rders
made specific proision to amend e#isting contracts for security serices by allowing the
ad'ustment of the consideration paid by the principal to the security agency concerned. 9hat the
9age !rders re(uire, therefore, is the amendment of the contract as to the consideration to coer
the serice contractor=s payment of the increase mandated. In the end therefore, the ultimate
liability for the payment of the increases rests with the principal (Securit! and Credit
Investi0ation Inc v )%(C, '( )o 114+18, 1anuar! ,8, ,**1).









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(B. W!en is an Fins"ran%e a+entG deeed an inde,endent %ontra%tor of an ins"ran%e
%o,an#'
*s held in Insular %i"e Insurance Compan!, %td vs )%(C, '( )o 84484, )ov 12,
1989, %There is no employer-employee relationship between a commission agent and an
inestment company. The former is an independent contractor where said agent and others
similarly placed areH
a. paid compensation in the form of commissions based on percentages of their sales, any
balance of commissions earned being payable to their legal representaties in the eent of death or
resignation$
b. re(uired to put up performance bond$
%. sub'ect to a set of rules and regulations goerning the performance of their duties under
the agreement with the company and termination of the serices for certain causes$
d. not re(uired to report for work at any time, nor to deote their time e#clusiely to working
for the company nor to submit a record of their actiities, and who finally shouldered their own
selling and transportation e#penses.)
Logically, the line should be drawn between rules that merely sere as guidelines toward
the achieement of the mutually desired result without dictating the means or methods to be
employed in attaining it, and those that control or fi# the methodology and bind or restrict the
party hired to the use of such means. The first, which aims only to promote the result, create no
employer-employee relationship unlike the second, which addresses both the result and the means
used to achiee it. The distinction ac(uires particular releance in the case of an enterprise
affected with public interest, as in the business of insurance, which on that account, is sub'ect to
regulations by the &tate with respect, not only to the relations between insurer and insured, but
also to the internal affairs of the insurance company.
-0. W!en are FsalesenG %onsidered inde,endent %ontra%tors rat!er t!an re+"lar
Fe,lo#eesG of a b"siness establis!ent'
In, /A=I)C$ 9radin0 Corporation v $ple, '( )o %;+779*, /arch ,2, 1978, it was held
where, as in the case at bar, a peddler formally entered into a peddling contract with petitioner
for the purchase and sale of Cosmos softdrinks, indicating the manner of selling the goods, whereby
the petitioner proides the peddler with deliery truck and bears the cost of gasoline and
maintenance ofM the truck$ while on the other hand the peddler employs the drier and helpers and
take care of the latterMs compensation and social security contributions, the peddlers are
independent contractors and not employees of petitioner.
-1. Is t!e Doint and se&eral liabilit# of t!e ,rin%i,al and t!e Dob %ontra%tor "nder Arti%les 10)
and 10B. in relation to Arti%le 109 of t!e Labor Code. de,endent ",on t!e insol&en%# or
"nwillin+ness to ,a# on t!e ,art of t!e %ontra%tor or dire%t e,lo#ees'
NO. :othing in *rticle 5CG indicates that insolency or unwillingness to pay by the
contractor or direct employer is a prere(uisite for the 'oint and seeral liability of the principal or
indirect employer. This 'oint and seeral liability facilitates, if not guarantees, payment of the
workers= performance of any work, task, 'ob or pro'ect, thus giing the workers ample protection
as mandated by the 567, Constitution (#evelopment ?an@ o" the Philippines vs )%(C, 1une 17,
1994).
-(. A ta$i%ab %o,an# re:"ired its ta$i dri&ers to a5e de,osits to defra# an# defi%ien%# w!i%!
t!e latter a# in%"r in t!e reittan%e of t!eir Fbo"ndar#G and to %o&er %ar was! ,a#ents. Is
t!is re:"ireent a"t!ori3ed "nder Arti%le 116 of t!e Labor Code' E$,lain.
The re(uirement for deposit to defray any deficiency in the remittance of driers
%boundary) is not lawful. *rticle 55E, which proides the rule on deposits for loss or damage to
tools, materials or e(uipment supplied by the employer, does not apply to or permit such kind of
deposit.
But the re(uirement for deposit for car wash payments is lawful. There is no dispute that as
a matter of practice in the ta#i industry, after a tour of duty, it is incumbent upon the drier to



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restore the unit he has drien to the same clean condition when he took it out. 1urthermore, the
amounts doled out were paid directly to the persons who washed the units. 1inally, it will be noted
that there was nothing to preent the driers from cleaning the ta#i units themseles, if they
wanted their car wash payments (=ive 1 9a4i vs )%(C, Au0ust ,,, 1994).
--. Do dis,arit# in wa+es between e,lo#ees !oldin+ siilar ,ositions b"t lo%ated in different
re+ions of t!e %o"ntr# %onstit"te wa+e distortion as %onte,lated b# law' E$,lain.
NO. Varying in each region of the country are controlling facts, such as the cost of liing,
supply and demand of basic goods, serices and necessities$ and the purchasing power of the peso.
The wages in different regions are not uniform. *nd the fact that a person is receiing more in one
region does not necessarily mean that he or she is better off than a person receiing less in another
region.
9age distortion presupposes an increase in the compensation of the lower ranks in an
office hierarchy without a corresponding raise for higher-tiered employees in the same region of
the country, resulting in the elimination or the seere dimunition of the distinction between the
two groups (Prudential ?an@ Association vs Prudential ?an@ and 9rust Co, 1anuar! ,2, 1999).
-6. Does a wa+e in%rease +ranted ,"rs"ant to a %olle%ti&e bar+ainin+ a+reeent %onstit"te
%o,lian%e wit! a s"bse:"entl# iss"ed wa+e order'
NO. * collectie bargaining agreement is a contractual obligation. It is distinct from an
obligation imposed by law. The terms and conditions of a collectie bargaining contract constitute
the law between the parties. Beneficiaries thereof are therefore, by right, entitled to the
fulfillment of the obligation prescribed therein. 4oreoer, compliance with a collectie bargaining
agreement is mandated by the e#pressed policy to gie protection to labor. <nless otherwise
proided by law, said policy should be gien paramount consideration.
Increments to the laborersM financial gratification, be they in the form of salary increases or
changes in the salary scale are aimed at one thing - improement of the economic predicament of
the laborers. *s such, they should be iewed in the light of the &tateMs aowed policy to protect
labor. Thus, haing entered into an agreement with its employees, an employer may not be allowed
to renege on its obligation under a collectie bargaining agreement should, at the same time, the
law grant the employees the same or better terms and conditions of employment. 3mployee
benefits deried from law are e#clusie of benefits arried at through negotiation and agreement
unless otherwise proided by the agreement itself or by law. (/e!caua!an Colle0e vs #rilon,
'( )o 81144, /a! 7, 199*).
-8. Can a woan be e,lo#ed in an# 5ind of o%%",ation or "nderta5in+'
>ES. she can be employed in any occupation or undertaking allowable by law, proided it is
not deleterious to her health and safety. &he should not be discriminated against in employment by
reason of her age, marital status and pregnancy.
-9. W!at are %onsidered as a%ts of dis%riination a+ainst woen'
The following are considered acts of discriminationH
a. 2ayment of a lesser compensation, including wage, salary and fringe benefits, to a female
employee as against a male employee, for work of e(ual alue$
b. 1aoring a male employee oer a female employee with respect to promotion, training
opportunities, study and scholarship grants solely on account of their se#es.
-). <ow "%! aternit# lea&e benefit will a ,re+nant woan re%ei&e' W!o will ,a# t!e
aternit# lea&e benefits'
The member shall receie a maternity benefit e(uialent to 5CC/ of her aerage daily
salary credit multiplied by GC days for normal deliery$ or by ,7 days in cases of caesarian section
deliery.










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The employer adances the maternity leae benefit to the (ualified employee in full or in
two e(ual installments, the first to be made upon receipt of maternity leae application and the
second not later than 8C-days after payment of the first installment. <pon receipt of satisfactory
proof of such payment, the &&& will reimburse the employer after the contingency for the amount
of maternity benefit legally adanced to the employee.
-@. Can a aternit# lea&e benefit be e$tended be#ond t!e allowable 7ERIOD'
>ES. a maternity leae may be e#tended beyond GC days upon re(uest of the woman
employee. &uch re(uest must be due to illness medically certified to arise out of her pregnancy,
deliery, complete abortion or miscarriage which renders her unfit to work. The e#tended leae
benefit shall be a hindrance to recoer sickness benefit for the same period of GC days for the same
childbirth, abortion or miscarriage.
-B. W!at is t!e stat"s of a woan ,eritted or s"ffered to wor5 in an# ni+!t %l"b. bar. or
ot!er siilar establis!ent "nder t!e Labor Code'
*ny woman who is permitted or suffered to work with or without compensation in any night
club, cocktail lounge, massage clinic, bar, or similar establishment shall be considered as an
employee of such establishment for purposes of labor and social legislation.
60. W!at ot!er stat"tor# benefits and ser&i%es s!all an e,lo#er ,ro&ide t!e woan
e,lo#ee'
The employer shall proide the followingH
a. 1ree family planning serices to employees and their spouses, if the establishment regularly
employ more than +CC workers$
b. Aoliday pay during the period that the woman employee is receiing maternity or disability
benefits, e(uialent to the same percentage as the benefit granted by &&&$
%. 1le#ible work schedule to any solo parent as defined in ;epublic *ct :o. 76,+$
d. 2arental leae of not more than seen days eery year to the solo parent who has rendered
at least one-year serice.
e. facilities for women such as seats, separate toilet rooms and nursery in the work place.
f. to determine the appropriate minimum age and other standards for retirement in special
occupations for women.
61. W!o are %onsidered #o"n+ wor5ers and wor5in+ %!ildren'
Ooung workers are in different categories, namelyH
a. The working youth who are between 5. and 8C years of age -;epublic *ct :o. 7CEE0$
b. 3mployed minors who are from 5. to below 57 years of age -Labor Code0$
%. 9orking children who are below 5. years of age, sub'ect to the e#ceptions specified by
;epublic *ct :o. ,G.7$
d. Those engaged in Child Labor, which is prohibited by law.
6(. W!at is t!e ini" e,lo#able a+e for #o"n+ wor5ers'
The minimum employable age for young workers is 57 years old. Aoweer, any person
between 5. and 57 years of age may be employed in undertakings not ha"ardous or deleterious in
nature.
6-. W!at is a non*!a3ardo"s "nderta5in+'
It refers to any kind of work or actiity, in which the employee is not e#posed to any risk
that constitutes an imminent danger to his or her life and limb, safety and health.
66. W!at are t!e !a3ardo"s wor5 and a%ti&ities to ,ersons below 1@ #ears of a+e'



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Aa"ardous work and actiities to persons below 57 years age includeH
a. 9ork which e#poses children to physical$ psychological or se#ual abuse$
b. 9ork under ground, under water, at dangerous heights or at unguarded heights of two
meters and aboe, or in confined spaces$
%. 9ork with ha"ardous machinery, e(uipment and tools, or which inoles manual handling or
transport of heay loads$
d. 9ork in an unhealthy enironment which may e#pose children to ha"ardous processes, to
temperatures, noise leels or ibrations damaging to their health, to to#ic, corrosie, poisonous,
no#ious, e#plosie, flammable and combustible substances or composites, to harmful biological
agents, or to other dangerous chemicals including pharmaceuticals.
e. 9ork under particularly difficult conditions such as work for long hours or during the night,
or work where the child is unreasonably confined to the premises of the employer.
68. Can a %!ild below 18 #ears of a+e be e,lo#ed or ade to wor5'
* child below 5. years old is :!T permitted to work in any public or priate establishment
3PC32T in these two situationsH
5. 9hen the child works directly under the sole responsibility of his or her parents or guardians
or legal guardian and where only members of the employer=s family are employed, on the following
conditionsH
a. The employment does not endanger the child=s life, safety and health and morals$
b. The employment does not impair the child=s moral deelopment
%. The employer parent or legal guardian proides the child with primary and Q or
secondary education prescribed by the @epartment of 3ducation, Culture and &ports
-@3C&0.
+. 9here the child=s employment or participation in public entertainment or information
through cinema, theater, radio or teleision is essential, proided thatH
a. The employment does not inole adertisement or commercials promoting alcoholic
beerages, into#icating drinks, tobacco and its by-products or e#hibiting iolence$
b. There is a written contract approed by the @!L3$
%. The employment does not endanger the child=s life, safety, health and morals$
d. The employment does not interfere with his or her schooling.
69. On%e a fir &alidl# e,lo#s a #o"n+ ,erson. is !e or s!e entitled to t!e sae ters and
%onditions of e,lo#ent a%%orded to an e,lo#ee of le+al a+e'
>ES. *n employer is prohibited by the Labor Code to discriminate against any young person
with respect to terms and conditions of employment on account of his or her being a minor.
6). Can a ,erson between 18 and 1@ #ears of a+e be allowed to en+a+e in doesti% ser&i%e'
* minor, whether male or female, may be employed as a domestic serant to render
serice in and about the employer=s home, which serices are usually necessary or desirable for the
maintenance and en'oyment thereof, such as ministering to the personal comfort and en'oyment of
the employer=s family.
6@. Can a #o"n+ wor5er be a eber of t!e So%ial Se%"rit# S#ste /SSS2 and a&ail of t!e so%ial
se%"rit# /SS2 and E,lo#ees Co,ensation /EC2 benefits'
>ES. The &ocial &ecurity Law proides that coerage in the &&& is compulsory upon all
employees not oer GC years of age. This law defines an employee as any person who performs
serices for an employer and who receies compensation for such serices, where there is an
employer-employee relationship. &elf-employed young persons can also be &&& members.
6B. W!o are %onsidered %!ild laborers'









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Child laborers are persons aged below 1, or from 1 to below 1! years, performing work or
serice that is ha"ardous or deleterious in nature, or e#ploitatie, or unsuperised by the child=s
parent or guardian, or that interferes with normal deelopment, or depries that child=s right to
health and education.
Aoweer, not all children who work are engaged in child labor. 9ork performed by any
person below 5. years of age is not considered child labor if it falls under allowable situations
under ;epublic *ct :o. ,G.7. Light work that is occasional, legal and respects the child=s right to
health and education is not child labor.
80. >o" were as5ed b# a ,aint an"fa%t"rin+ %o,an# abo"t t!e ,ossible e,lo#ent as a
i$er of a ,erson. a+ed se&enteen /1)2. w!o s!all be dire%tl# "nder t!e %are of t!e se%tion
s",er&isor. W!at ad&i%e wo"ld #o" +i&e' E$,lain briefl#.
I will adise the paint manufacturing company that it cannot hire a person aged seenteen
-5,0. *rt. 586 -c0 of the Labor Code proides that a person below eighteen -570 years of age shall
not be allowed to work in an undertaking which is ha"ardous or deleterious in nature as determined
by the &ecretary of Labor. The &ecretary of Labor has classified paint manufacturing as ha"ardous
work.
81. W!at are t!e benefits ,ro&ided b# law to #o"n+ and deser&in+ st"dents w!o want to wor5'
;epublic *ct :o. ,8+8 proides for employment assistance to students who are at least 5.
but not more than +. years of age enrolled or intending to be enrolled in any secondary, tertiary,
ocational or technological institutions. The (ualified and desering youth can be employed during
the summer and Qor Christmas acation as aid to the pursuit of their education.
*s incenties for employers, they shall pay the students only GC/ of the basic wage and the
remaining EC/ in the form of educational ouchers payable by the goernment. *n employer, under
this law, can be a national or local goernment office or a priate establishment or undertaking.
8(. Are SSS benefits %onsidered ,ro,ert# earned b# t!e eber d"rin+ !is lifetie' Do t!e#
for ,art of !is estate' E$,lain.
The benefits receiable under the &&& law are in the nature of a special priilege or an
arrangement secured by the law pursuant to the policy of the &tate to proide social security to the
workingman. &uch benefits cannot be considered as property earned by the member during his
lifetime. Ais contributions to the fund, it may be noted, constitute only an insignificant portion
thereof. Thus, the benefits are specifically declared not transferable and e#empt from ta# legal
processes and liens. 1urthermore, in the settlement of claims, the procedure to be obsered is
goerned not by the general proisions of law, but by rules and regulations promulgated by the
&ocial &ecurity Commission. *nd it is not the probate or regular court but the Commission that
determines the persons to whom the benefits are payable (Social Securit! S!stem vs #avac,
'( )o %;,184,, 1ul! +*, 1988).
8-. Does t!e dela# on t!e ,art of t!e &i%ti of se$"al !arassent to %o,lain said a%t i,air
!is %a"se of a%tion a+ainst !isL!er e,lo#er'
NO. The graamen of the offense in se#ual harassment is not the iolation of the
employee=s se#uality but the abuse of power by the employer. *ny employee, male or female, may
rightfully cry foul proided the claim is well substantiated. &trictly speaking there is not time
period within which he or she is e#pected to complain through the proper channels. The time to do
so may ary depending upon the needs, circumstances, and more importantly, the emotional
threshold of the employee (Philippine Aeolus Automotive <nited Corp vs )%(C, '( )o
1,4817, April ,8, ,***).
86. T!e owners of 4ALCON 4a%tor#. a %o,an# en+a+ed in t!e asseblin+ of a"tooti&e
%o,onents. de%ided to !a&e t!eir b"ildin+ reno&ated. 4ift# /802 ,ersons. %o,osed of
en+ineers. ar%!ite%ts and ot!er %onstr"%tion wor5ers. were !ired b# t!e %o,an# for t!is



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,"r,ose. T!e wor5 is estiated to be %o,leted in t!ree /-2 #ears. T!e e,lo#ees %ontended
t!at sin%e t!e wor5 wo"ld be %o,leted after ore t!an one /12 #ear. t!e# s!o"ld be s"bDe%t
to %o,"lsor# %o&era+e "nder t!e So%ial Se%"rit# Law. Is t!eir %ontention %orre%t'
NO. <nder &ection 7 -'0 of ;* 55G5, as amended, employment of purely casual employees,
not for the purpose of the occupation or business of the employer are e#cepted from compulsory
coerage.
*n employment is purely casual if it is not for the purpose of occupation or business of the
employer.
In the problem gien, 1alcon 1actory is a company engaged in the assembling of automotie
components. The fifty -.C0 persons -engineers, architects and construction workers0 were hired by
1alcon 1actory to renoate its building. The work to be performed by these fifty -.C0 people is not
in connection with the purpose of the business of the factory. Aence, the employment of these
fifty -.C0 persons is purely casual. They are therefore e#cepted from the compulsory coerage of
the &&& law.
LABOR RELATIONS
88. 7ICO7Js ain t!esis is t!at t!e ,ositions Se%tion <eads and S",er&isors. w!o !a&e been
desi+nated as Se%tion ;ana+ers and Unit ;ana+ers. as t!e %ase a# be. were %on&erted to
ana+erial e,lo#ees "nder t!e de%entrali3ation and reor+ani3ation ,ro+ra it i,leented
in 1B@B. Bein+ ana+erial e,lo#ees. wit! alle+ed a"t!orit# to !ire and fire e,lo#ees. t!e#
are ineli+ible for "nion ebers!i, "nder Arti%le (68 of t!e Labor Code. 4"rt!erore. 7ICO7
%ontends t!at no ali%e s!o"ld be i,"ted a+ainst it for i,leentin+ its de%entrali3ation
,ro+ra onl# after t!e ,etition for %ertifi%ation ele%tion was filed inas"%! as t!e sae is a
&alid e$er%ise of its ana+eent ,rero+ati&e. and t!at said ,ro+ra !as lon+ been in t!e
drawin+ boards of t!e %o,an#. w!i%! was reali3ed onl# in 1B@B and f"ll# i,leented in
1BB1. 7ICO7 e,!ati%all# stresses t!at it %o"ld not !a&e %on%e,t"ali3ed t!e de%entrali3ation
,ro+ra onl# for t!e ,"r,ose of Kt!wartin+ t!e ri+!t of t!e %on%erned e,lo#ees to self*
or+ani3ation.K Is 7ICO7Cs %ontention tenable'
NO. The petition not being meritorious, must fail and the same should be as it is hereby
dismissed. In <nited 2epsi-Cola &uperisory <nion -<2&<0 . Laguesma, we had occasion to
elucidate on the term Lmanagerial employees.L 4anagerial employees are ranked as Top 4anagers,
4iddle 4anagers and 1irst Line 4anagers. Top and 4iddle 4anagers hae the authority to deise,
implement and control strategic and operational policies while the task of 1irst-Line 4anagers is
simply to ensure that such policies are carried out by the rank-and- file employees of an
organi"ation. <nder this distinction, Lmanagerial employeesL therefore fall in two -+0 categories,
namely, the LmanagersL per se composed of Top and 4iddle 4anagers, and the LsuperisorsL
composed of 1irst-Line 4anagers. Thus, the mere fact that an employee is designated managerL
does not ipso facto make him one. @esignation should be reconciled with the actual 'ob description
of the employee, for it is the 'ob description that determines the nature of employment (PIC$P vs
%a0uesma, '( )o 1*17+8, April 1,, ,***).
89. Do labor arbiters !a&e D"risdi%tion o&er ille+al disissal %ases t!at a# be filed a+ainst
,riests and inisters'
>ES. The fact that a case inoles the church and its religious minister does not ipso facto
gie the case a religious significance. &imply stated, what is inoled in an illegal dismissal case is
the relationship of the church as an employer and the minister as an employeeKa purely secular
matter not related to the practice of faith, worship, or doctrines of the church (Austria vs )%(C,
'( )o 1,4+8,, Au0ust 18, 1999).
8). Do Labor Arbiters or t!e NLRC !a&e D"risdi%tion o&er %riinal %ases in&ol&in+ &iolations of
t!e ,enal ,ro&isions of labor laws' E$,lain.









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Labor *rbiters or the :L;C are not inested with the 'udicial power$ they merely e#ercise
(uasi-'udicial functions. In the hearing and disposition of cases brought before them, they do not
adhere strictly to the technical rules of eidence. This is re(uired in criminal cases where the guilt
of the accused must be established beyond reasonable doubt. The regular courts hae 'urisdiction
oer criminal cases inoling iolations of the labor laws.
8@. E$,lain t!e do%trine of "orum non;conveniens. ;a# t!is do%trine be in&o5ed a+ainst t!e
e$er%ise of D"risdi%tion b# t!e labor arbiter'
<nder the rule of forum non conveniens, a 2hilippine court or agency 4*O assume
'urisdiction oer the case if it chooses to do so, 2;!VI@3@H
a. that the 2hilippine court is one to which the parties may coneniently resort to$
b. that the 2hilippine court is in a position to make an intelligent decision as to the law and
the facts$ and
%. that the 2hilippine court has or is likely to hae power to enforce its decision.
This doctrine may be inoked against the e#ercise of 'urisdiction of the labor arbiters as
held in the case of /anila -otel Corporation and /anila -otel International limited vs )%(C
and /arcelo Santos which ruled that the :L;C was a seriously inconenient forum on the following
groundsH
a. The :L;C is an inconenient forum gien that all the incidents of the case- from the time
of recruitment, to employment, and to dismissal occurred outside the 2hilippines. The
inconenience is compounded by the fact that the proper defendants I the 2alace Aotel and 4AICL
I are not nationals of the 2hilippines. :either are they doing business in the 2hilippines. Likewise,
the main witnesses are non-residents of the 2hilippines.
b. :either can an intelligent decision be made as to the law goerning the employment
contract as such was perfected in foreign soil. This calls for the application of the principle of le"
loci contractus -the law of the place where the contract was made0.
%. 3en assuming that the proper decision could be reached by the :L;C, such would not hae
any binding effect against the employer, the 2alace Aotel. The 2alace hotel is a corporation
incorporated under the laws of China and was not een sered with summons, hence 'urisdictions
oer its person was not ac(uired.
8B. Does t!e ,rin%i,le of F="risdi%tion b# Esto,,elG a,,l# in labor %ases'
>ES, the principle of Durisdiction by 3stoppel applies to labor cases as was held by the
&upreme Court in the case of Prudential ?an@ and 9rust Compan! vs (e!es, '(r )o 141*9+,
=e. ,*, ,**1.
<nder this principle, a party to a labor case is estopped from raising the issue of
'urisdiction of the labor arbiter when he has participated in the proceedings from start to finish. In
this case the petitioner bank actiely participated in the proceedings before the Labor *rbiter,
:L;C and Court of *ppeals. It was only when the Court of *ppeals made an aderse decision did it
raise the issue of 'urisdiction. The &upreme Court held that it was already too late to raise the
issue of 'urisdiction as the petitioner was already in estoppel. 9hile it is true that 'urisdiction oer
the sub'ect matter of a case may be raised at any time of the proceedings, this rule presupposes
that laches or estoppel has not superened.
90. Does t!e Labor Arbiter !a&e D"risdi%tion o&er dis,"tes in&ol&in+ t!e wa+es and ters and
%onditions of e,lo#ent of COO7ERATIME e,lo#ees' E$,lain.
>ES. In the case of Perpetual -elp Credit Coop Inc vs =a.urada, '( )o 1,1498,
$cto.er 8, ,**1 it was clarified thatH
*;T. 5+5. &ettlement of @isputes. K @isputes among members, officers, directors,
and committee members, and intra-cooperatie disputes shall, as far as practicable, be
settled amicably in accordance with the conciliation or mediation mechanisms embodied in



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the by-laws of the cooperatie, and in applicable laws. &hould such a
conciliationQmediation proceeding fail, the matter shall be settled in a court of competent
'urisdiction.L
Complementing this *rticle is &ection 7 of ;.*. :o. G686 -Cooperatie @eelopment *uthority Law0
which readsH
&3C. 7 4ediation and Conciliation. K <pon re(uest of either or both parties, the
*uthority shall mediate and conciliate disputes within a cooperatie or between
cooperatiesH 2roided, That if no mediation or conciliation succeeds within three -80
months from re(uest thereof, a certificate of non-resolution shall be issued by the
Commission prior to the filing of appropriate action before the proper courts.
The aboe proisions apply to members, officers and directors of the cooperatie inoled
in disputes within a cooperatie or between cooperaties.
There is no eidence that priate respondents are members of petitioner 2ACCI and een if
they are, the dispute is about payment of wages, oertime pay, rest day and termination of
employment. <nder *rt. +5, of the Labor Code, these disputes are within the original and e#clusie
'urisdiction of the Labor *rbiter.
91. ;a# an e$e%"tion be sto,,ed erel# be%a"se of a t!ird ,art# %lai'
NO. The Labor Code grants the :ational Labor ;elations Commission -:L;C0 sufficient
authority and power to e#ecute final 'udgments and awards. Thus, a third-party claim of ownership
on a leied property should not necessarily preent e#ecution, particularly where K as in the
present case K the surrounding circumstances point to a fraudulent claim. In fact, the disputed
contract of sale here is not merely rescissible$ it is simulated or fictitious and, hence, oid ab initio
(9anon0on v Samson, '( )o 14**89, /a! 9, ,**,).
9(. ;a# a te,orar# restrainin+ order in a labor dis,"te be iss"ed e4 parte'
>ES. The issuance of an e" parte T;! in a labor dispute is not per se prohibited. Its
issuance, howeer should be characteri"ed by care and caution for the law re(uires that it be
clearly 'ustified by considerations of e#treme necessity, as when the commission of unlawful acts is
causing substantial irreparable in'ury to company properties and the company is, for the moment,
bereft of an ade(uate remedy at law (?isi0 n0 /an00a0a7a sa Concrete A00re0ates, Inc vs
)%(C, Septem.er 18, 199+).
9-. In %ases in&ol&in+ onetar# award. w!# does t!e law re:"ire an e,lo#er to ,ost a %as! or
s"ret# bond as an indis,ensable %ondition for t!e ,erfe%tion of an a,,eal'
*n appeal stays the e#ecution of an award. &uch decision could be in the form of a
monetary award in faor of an employee. Thus, an appeal will mean that a monetary award will not
be e#ecuted. To ensure that an appealed monetary award is affirmed and has become final and
e#ecutory, *rt. ++8 re(uires that as an indispensable condition for the perfection of an appeal by
an employer, he must post a cash or surety bond issued by a reputable bonding company duly
accredited by the :L;C in the amount e(uialent to the monetary award in the 'udgment appealed
from.
96. W!at is t!e reed# in %ase t!e Re+ional Offi%e or BLR &erball# denies or ref"ses to a%t on
an a,,li%ation for re+istration for a %onsiderable ao"nt of tie'
&ecure a notice of denial in order to aail of the remedy of appeal. *fter all, the decision
of the ;egional !ffice or the Bureau denying the application for registration shall be in writing,
stating in clear terms the reasons for such a denial. * copy of the notice of denial should be
furnished to the applicant union.









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98. W!at is t!e effe%t of t!e filin+L,enden%# of interLintra "nion and ot!er related labor
dis,"tes to t!e relations!i, of t!e ,art# liti+ants'
5
The rights, relationships and obligations of the parties-litigants against each other and
other parties-in-interest prior to the institution of the petition shall continue to remain during the
pendency of the petition and until the date of finality of the decision rendered therein.
Thereafter, the rights, relationships and obligations of the parties-litigants against each other and
other parties-in-interest shall be goerned by the decision so ordered.
The filing or pendency of any interQintra-union dispute and other related labor relations
dispute is not a pre'udicial (uestion to any petition for certification election and shall not be a
ground for the dismissal of petition for certification election or suspension of proceedings for
certification election (Sections + and 4, (<%& XI ?oo@ E, I(( ,**+)
99. Can t!ere be se&eral "nions in one enter,rise'
>ES. There can be seeral bargaining units in one employer unit, and at least one
legitimate labor organi"ation per bargaining unit. *lso, there can be seeral unions within one
bargaining unit, since there is no law precluding such a situation. But there can only be one
bargaining agent >to the e#clusion of others? which shall be designated either by certification or
consent election, or by oluntary recognition as the case may be.
9). Can all ran5 and file e,lo#ees Doin. assist. or for a labor "nion'
NO. Confidential employees who are *L&! rank and file employees cannot form, 'oin, or
assist unions if they assist in a confidential capacity or hae access to the confidential matters of
persons who e#ercise managerial functions in the field of labor relations
By the ery nature of their functions, they assist and act in a confidential capacity to, or
hae access to confidential matters of, persons who e#ercise managerial functions in the field of
labor relations. *s such, the rationale for the ineligibility of managerial employees to form, assist
or 'oin a labor union e(ually applies to them.
In ?ulletin Pu.lishin0 Co, Inc vs -on Au0usta SancheF,144 SC(A 8,8 C1988D the Court
elaborated on the rationale for such inhibition in that, if the managerial employees would belong
to, or be affiliated with a <nion, the latter might not be assured of their loyalty to the <nion in
iew of eident conflict of interests. The <nion can also become company-dominated with the
presence of managerial employees in <nion membership.L
This also holds true for confidential employees such as accounting personnel, radio and
telegraph operators, who haing access to confidential information, may become the source of
undue adantage. &aid employee-s0 may act as a spy -ies0 of either party to a collectie bargaining
agreement. This is especially true in the present case where the petitioning <nion is already the
bargaining agent of the rank-and-file employees in the establishment. To allow confidential
employees to 'oin the e#isting <nion of the rank-and file would be in iolation of the terms of the
Collectie Bargaining *greement wherein this kind of employees by the nature of their
functionsQpositions are e#pressly e#cluded. (Philips vs )%(C, '( )o 88927, 1une ,2, 199,).
9@. In w!at fors is %o,an# doination of a labor "nion ade anifest'
a Initiation o" the compan! union idea, which may occur in three stylesH
-50 !utright formation by the employer or his representatieR
-+0 3mployee formation or outright demand or influence of the employer
-80 4anagerially motiated formation by employees.
. =inancial support to the union
*n employer commits unfair labor practice if he defrays the union e#penses or pays the
fees of the attorney who drafted the union=s constitution and by-laws.
c &mplo!er encoura0ement and assistance



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Immediately granting the union e#clusie recognition as a bargaining agent without
determining whether the union represents the ma'ority of employees is an illegal form of assistance
amounting to unfair labor practice.
d Supervisor! assistance
This takes the form of soliciting membership, permitting union actiities during working
time or coercing employees to 'oin the union by threats of dismissal or demotion (Philippine
American Ci0ar G Ci0arette =actor! >or@erHs <nion vs Philippine American Ci0ar G Ci0arette
/"0 Co Inc, '( )o %;18+84 =e.ruar! ,8, 198+).
9B. I>N Co. was infored t!at a ,etition for %ertifi%ation ele%tion !as been filed b# ABC Union.
a le+itiate labor or+ani3ation wit!in I>N Co be#ond t!e 90*da# freedo ,eriod +ranted to t!e
forer. B# &irt"e of said inforation. I>N Co. "nilaterall# s"s,ended t!e on*+oin+ ne+otiations
for a new CBA wit! I>N Co. E,lo#ees Asso%iation /I>NEA2 and ref"sed to do an# f"rt!er
ne+otiations and bar+ainin+. Was t!ere "nfair labor ,ra%ti%e on t!e ,art of I>N Co.'
Oes. The duty to bargain collectiely includes the mutual obligation to meet and conene
promptly and e#peditiously in good faith for the purpose of negotiating an agreement. In order to
allow the employer to alidly suspend the bargaining process, there must be a alid petition for
Certification 3lection raising a legitimate representation issue. 9hen a petition is filed !<T&I@3 the
GC-day freedom period, there is no legitimate representation issue and the filing of said petition do
not constitute a bar to an on-going negotiation (Cole0io de San 1uan de %etran v Association o"
&mplo!ees and =acult! o" %etran, '( )o 14147, Septem.er 18, ,***).
)0. W!at is t!e le+al D"stifi%ation of a UNION S<O7 ,ro&ision in t!e CBA' E$,lain.
The Labor Code, as amended, recogni"es the alidity of a union shop agreement in *rticle
+E7 thereof, &ection -e0 proides, to witH
#to discriminate in regard to hire or tenure of employment or any term or condition
of employment in order to encourage or discourage membership in any labor organi$ation%
&othing in this 'ode or in any other law shall prevent the parties from re(uiring
membership in a recogni$ed collective bargaining agent as a condition for employment,
e"cept of those employees who are already members of another union at the time of the
signing of the collective bargaining agreement.
9e affirm the ruling of the oluntary arbitrator for the inclusion of a union shop proision
in addition to the e#isting maintenance of membership clause in the collectie bargaining
agreement. *s the &olicitor Beneral asserted in his consolidated Comment, the <niersityMs reliance
on the case of )ictoriano vs% *li$alde Rope +or,ers- .nion is clearly misplaced. In that case, we
ruled that L...the right to 'oin a union includes the right to abstain from 'oining any union. The
right to refrain from 'oining labor organi"ations recogni"ed by &ection 8 of the Industrial 2eace *ct
is, howeer, limited. The legal protection granted to such right to refrain from 'oining is withdrawn
by operation of law, where a labor union and an employer hae agreed on a closed shop, by irtue
of which the employer may employ only members of the collectie bargaining union, and the
employees must continue to be members of the union for the duration of the contract in order to
keep their 'obs (#%S< vs %a0uesma, '()o 1*9**,, 1, April ,***).
)1. Union I. a lo%alL%!a,ter of > 4ederation o&ed to disaffiliate fro t!e latter. T!e o&e
was s",,orted b# alost all of its ebers. D"rin+ t!e ,enden%# of t!e disaffiliation
,ro%eedin+. t!e %o,an# entered into a %olle%ti&e bar+ainin+ a+reeent wit! Union I. >
federation filed an a%tion for UL7 a+ainst t!e %o,an#. De%ide.
If the local union=s moe to disaffiliate is supported by almost all >ma'ority? the members
of said union, and such fact is not disputed by the federation >mother union?, the company=s act of
entering into a CB* with the local union does not constitute <L2.
*s held in the case of Philippine S@!landers vs )%(C, '( )o 1,7+74, 1anuar! +1,
,**,, as 2&3* has alidly seered itself from 2*1L<, there would be no restrictions which could









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alidly hinder it from subse(uently affiliating with :C9 and entering into a CB* in behalf of its
members.
*pplying the principle of agency, the local union being the agent of the real principal Kthe
union members$ and the federation being merely the agent of the agent K the local union, the
former which has chosen to disaffiliate from the latter as willed by ma'ority of its members may
alidly enter into a CB* with the employer without holding the employer liable for <L2.
)(. W!at is a sweet!eart %ontra%t'
*rticle +E6 considers it an unfair labor practice for a labor organi"ation to ask for or accept
negotiation of attorney=s fees from the employer in settling a bargaining issue or a dispute. 9hen it
happens, the resulting Collectie Bargaining *greement -CB*0 will most likely be a sweetheart
contract, a CB* that does not substantially improe the employees= wages and benefits. <nder
*rticle +86 -f0, one of the grounds for cancellation of union registration is entering into collectie
bargaining agreements which proide terms and conditions of employment below minimum
standards established by law.
)-. ;a# an ele%tri% %oo,erati&e be !eld liable to ,a# daa+es for t!e UL7 it !as %oitted
a+ainst its e,lo#ees' <ow "%!'
>ES. but the amount should be tempered. 1or this reason, we find it proper in this case to
impose moral and e#emplary damages on priate respondent. Aoweer, the damages awarded by
the labor arbiter, to our mind, are e#cessie. In determining the amount of damages recoerable,
the business, social and financial position of the offended parties and the business and financial
position of the offender are taken into account. It is our iew that herein priate respondents had
not fully acted in good faith. Aoweer, we are cogni"ant that a cooperatie promotes the welfare
of its own members. The economic benefits filter to the cooperatie members. 3ither e(ually or
proportionally, they are distributed among members in correlation with the resources of the
association utili"ed. Cooperaties help promote economic democracy and support community
deelopment.
<nder these circumstances, we deem it proper to reduce moral damages to only 25C,CCC.CC
payable by priate respondent :33C! I to each indiidual petitioner. 9e also deem it sufficient for
priate respondent :33C! I to pay each indiidual petitioner 2.,CCC.CC to answer for e#emplary
damages, based on the proisions of *rticles +++6 and ++8+ of the Ciil Code ()&&C$ I v )%(C,
'( )o 118*88, 1anuar! ,4, ,***).
)6. W!at is OanP in*!o"se a+en%#'
*n in-house agency is where a contractor or subcontractor is engaged in the supply of labor
which is owned, managed, or controlled by the principal and operates solely for the principal
owning, managing, and controlling it. It is prohibited by law.
)8. W!at is t!e so*%alled <OLDOMER 7RINCI7LE in a CBA'
In the case of )e7 Paci"ic 9im.er vs )%(C, the court had the occasion to rule that *rticle
+.8 and +.8-* mandate the parties to keep the status (uo and to continue in full force and effect
the terms and conditions of the e#isting agreement during the GC-day period prior to the e#piration
of the old CBA* andQor until a new agreement is reached by the parties. Conse(uently, the
automatic renewal clause proided by the law, which is deemed incorporated in all CB*=s proides
the reason why the new CB* can only be gien a prospectie effect. Thus, employees hired after
the stipulated term of a CB* are entitled to the benefits proided thereunder. To e#clude them
would constitute undue discrimination and deprie them of monetary benefits they would
otherwise be entitled to under a new collectie bargaining contract to which they would hae been
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)9. W!i%! is t!e better baroeter of t!e tr"e finan%ial standin+ of a %o,an# for ,"r,oses of
resol&in+ an e%onoi% deadlo%5 in %olle%ti&e bar+ainin+. a ,ro,osed b"d+et or an a"dited
finan%ial stateent. E$,lain.
*s we ruled in the case of Calte4 (e"iner! &mplo!ees Association (C(&A) vs 1ose S
?rillantes, (,79 SC(A ,18, 1997) >w?e beliee that the standard proof of a companyMs financial
standing is its financial statements duly audited by independent and credible e#ternal auditors.L
1inancial statements audited by independent e#ternal auditors constitute the normal method of
proof of profit and loss performance of a company. The financial capability of a company cannot be
based on its proposed budget because a proposed budget does not reflect the true financial
condition of a company, unlike audited financial statements, and more importantly, the use of a
proposed budget as proof of a companyMs financial condition would be susceptible to abuse by
scheming employers who might be merely feigning dire financial condition in their business
entures in order to aoid granting salary increases and fringe benefits to their employees.
)). W!at is t!e %ontrollin+ do%trine on t!e iss"e of RETROACTIMIT> of CBA benefits' E$,lain.
;a# t!e Se%retar# of Labor order t!e retroa%ti&it# of a CBA'
Labor laws are silent as to when an arbitral award in a labor dispute where the &ecretary
had assumed 'urisdiction by irtue of *rticle +G8 -g0 of the Labor Code shall retroact. In general, a
CB* negotiated within si# months after the e#piration of the e#isting CB* retroacts to the day
immediately following such date and if agreed thereafter, the effectiity depends on the
agreement of the parties. !n the other hand, the law is silent as to the retroactiity of a CB*
arbitral award or that granted not by irtue of the mutual agreement of the parties but by
interention of the goernment. @espite the silence of the law, the Court rules herein that CB*
arbitral awards granted after si# months from the e#piration of the last CB* shall retroact to such
time agreed upon by both employer and the employees or their union. *bsent such an agreement as
to retroactiity, the award shall retroact to the first day after the si#-month period following the
e#piration of the last day of the CB* should there be one. In the absence of a CB*, the &ecretaryMs
determination of the date of retroactiity as part of his discretionary powers oer arbitral awards
shall control (/&(A%C$ v Iuisum.in0, '( )o 1,7298, =e.ruar! ,,, ,***).
)@. ;a# t!e Labor Unions and t!e Co,an# enter into a CBA t!at +rants a oratori" of ten
#ears in %olle%ti&e bar+ainin+' Is t!is not a no&ation of t!e "nionCs ri+!t to %olle%ti&e
bar+ainin+' E$,lain.
!n the second issue, petitioners contend that the controerted 2*L-2*L3* agreement is
oid because it abrogated the right of workers to self-organi"ation and their right to collectie
bargaining. 2etitioners claim that the agreement was not meant merely to suspend the e#isting
2*L-2*L3* CB*, which e#pires on &eptember 8C, +CCC, but also to foreclose any renegotiation or
any possibility to forge a new CB* for a decade or up to +CC7. It iolates the %protection to labor)
policy laid down by the Constitution.
<nder *rticle +.8-* of the Labor Code insofar as representation is concerned, a CB* has a
term of fie years, while the other proisions, e#cept for representation, may be negotiated not
later than three years after the e#ecution. 2etitioners submit that a 5C-year CB* suspension is
inordinately long, way beyond the ma#imum statutory life of a CB*, proided for in *rticle +.8-*.
By agreeing to a 5C-year suspension, 2*L3*, in effect, abdicated the workers= constitutional right
to bargain for another CB* at the mandated time. 9e find the argument deoid of merit ((ivera v
&spiritu, '( )o 1+2247, 1anuar! ,+, ,**,).
)B. Is t!ere a %onfli%t between a CBA t!at +rants a 10*#ear oratori" on CBA bar+ainin+ on
one !and. and Art. (8-*A of t!e Labor Code. on t!e ot!er' E$,lain.
The assailed 2*L-2*L3* agreement was the result of oluntary collectie bargaining
negotiations undertaken in the light of the seere financial situation faced by the employer, with
the peculiar and uni(ue intention of not merely promoting industrial peace at 2*L, but preenting
the latter=s closure. 9e find no conflict between said agreement and *rticle +.8-* of the Labor
Code. *rticle +.8-* has a two-fold purpose. !ne is to promote industrial stability and









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predictability. Inasmuch as the agreement sought to promote industrial peace at 2*L during its
rehabilitation, said agreement satisfies the first purpose of *rticle +.8-*. The other is to assign
specific timetables wherein negotiations become a matter of right and re(uirement. :othing in
*rticle +.8-* prohibits the parties from waiing or suspending the mandatory timetables and
agreeing on the remedies to enforce the same.
In the instant case, it was 2*L3*, as the e#clusie bargaining agent of 2*L=s ground
employees that oluntarily entered into the CB* with 2*L. It was also 2*L3* that oluntarily opted
for the 5C-year suspension of the CB*. 3ither case was the union=s e#ercise of its right to collectie
bargaining. The right to free collectie bargaining, after all, includes the right to suspend it
((ivera v &spiritu, '( )o 1+2247, 1anuar! ,+, ,**,).
@0. Distin+"is! andLor e$,lain t!e followin+ ters? /12 Dire%t Certifi%ationQ /(2 Certifi%ation
Ele%tionQ and /-2 Consent Ele%tion.
Dire%t Certifi%ation
4ed-*rbiter certifies that a certain <nion is the e#clusie collectie
bargaining representatie of the employees of an appropriate
bargaining unit without holding of a certification election, but merely
on the basis of eidence presented in support of the <nion=s claim that
it is the choice of the ma'ority of the employees. &uch eidence may
consist of affidaits made by a clear ma'ority of the employees stating
that they are members of and are supporting the <nion petitioning for
direct certification to be their e#clusie collectie bargaining
representation -2rohibited by law under 3.!. 5550
Certifi%ation
Ele%tion
* certification election is an election ordered by 4ed-*rbiter for the
purpose of determining the sole and e#clusie bargaining agent of the
employees in an appropriate bargaining unit.
Consent Ele%tion
* consent election is an election agreed upon by the parties to
determine the issue of ma'ority representation of all workers of an
appropriate collectie bargaining unit not for the purposes of
determining the sole and e#clusie bargaining agent of the employees
of the bargaining unit but only for the purpose of administering the
e#isting CB* in case of massie disaffiliation of union members.
@1. Can t!e B"rea" of Labor Relations %ertif# a "nion as t!e e$%l"si&e bar+ainin+
re,resentati&e after s!owin+ ,roof of aDorit# re,resentation t!ro"+! "nion ebers!i, %ards
wit!o"t %ond"%tin+ an ele%tion'
NO. The Bureau of Labor ;elations cannot certify a union as the e#clusie collectie
bargaining representatie after a showing of proof of ma'ority representation through union
membership cards without conducting a certification election. The Labor Code -in *rts. +.G and
+.70 proides only for a certification election as the mode for determining e#clusie collectie
bargaining representatie if there is a (uestion on representation in an appropriate bargaining unit.
@(. W!en is %onsent ele%tion a bar to a ,etition for %ertifi%ation ele%tion' W!en is it not a bar'
9here a petition for certification election had been filed and upon the intercession of the
med-arbiter, the parties agree to hold a consent election, the result thereof shall constitute a bar
to the holding of a certification election for one year from the holding of such consent election.
Aoweer, where the total number of alid otes cast in a consent election is less than the ma'ority
of all the eligible employees in the bargaining unit, there shall be a failure of election. &uch failure
will not bar the filing of a petition for the immediate holding of a certification election. 9here no
petition for certification election had been filed but the parties themseles hae agreed to hold a
consent election, the result thereof shall not constitute a bar to another certification election,
unless the winning union had been e#tended oluntary recognition.
@-. Union I. a le+itiate labor or+ani3ation filed a ,etition for %ertifi%ation ele%tion d"rin+ t!e
freedo ,eriod. Union >. anot!er "nion in t!e sae %o,an#. o&ed to disiss t!e sae



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alle+in+ aon+ ot!ers t!at Union I is %o,osed of not onl# ran5 and file e,lo#ees. b"t also of
s",er&isor# e,lo#ees. w!o "nder t!e law. a# not Doin a labor or+ani3ation %o,osed of ran5
and file e,lo#ees. W!at is t!e effe%t of s"%! alle+ation ",on t!e ,etition for %ertifi%ation
ele%tion'
There is no effect. *fter a certificate of registration is issued to a union, its legal
personality cannot be sub'ect to a collateral attack. It may be (uestioned only in an independent
petition for cancellation in accordance with &ection . of ;ule V, Book IV of the Implementing ;ules
of the Labor Code -9a0a!ta! -i0hlands International 'old Clu., Inc vs 9a0a!ta! -i0hlands
&mplo!ees <nion;P9'>$ '( )o 14,*** 1anuar! ,,, ,**+). Aaing attained such status, the
petition of the union stands unless the registration of the union is cancelled in accordance with the
aforementioned rule.
The infirmity in the membership of the respondent union can be remedied in the %pre-
election conference) thru the e#clusion-inclusion proceedings.
1urthermore, the status of being a superisory employee does not by itself dis(ualify an
employee from 'oining a labor organi"ation composed of rank and file employee. * superisory
employee to be dis(ualified must possess the powers similar to that of a managerial employee such
as the complete discretion to decide on matters without being under the control of or sub'ect to
the reiew of some other superior.
@6. ;a# an e,lo#ee w!o was i,ro,erl# laid off be entitled to &ote in a %ertifi%ation ele%tion'
>ES. The employees who hae been improperly laid off but who hae a present,
unabandoned right to an e#pectation of reemployment, are eligible to ote in certification
election. Thus, if the dismissal is under (uestion, whereby a case of illegal dismissal andQ or <L2
was filed, the employees could and should still (ualify to ote. (Phil =ruits G Ee0eta.les
Industries, Inc vs 9orres)
@8. Does a de%ision in a %ertifi%ation ele%tion %ase re+ardin+ t!e e$isten%e of an e,lo#er*
e,lo#ee relations!i, fore%lose all f"rt!er dis,"tes between t!e ,arties as to t!e e$isten%e or
non*e$isten%e of s"%! relations!i,'
NO. Aoweer final it may become, the decision in a certification election case, by the ery
nature of such proceeding, is not such as to foreclose all further dispute as to the e#istence, or
non-e#istence of an employer-employee relationship.
It is established doctrine that for res adjudicata to apply, the following re(uisites must
concurH -50 the former 'udgment or order must be final$ -+0 the court which rendered said
'udgment or order must hae 'urisdiction oer the sub'ect matter and the parties$ -80 said
'udgment or order must be on the merits$ and -E0 there must be between the first and second
actions identity of parties, sub'ect matter and cause of action.
Clearly, implicit in these re(uisites is that the action or proceedings in which is issued the
%prior Dudgment) that would operate in bar of a subse(uent action between the same parties for
the same cause, be adersarial, or contentious, as distinguished from an e" parte hearing or
proceeding of which the party seeking relief has gien legal notice to the other party and afforded
the latter an opportunity to contest it, and a certification case is not such a proceeding.
%* certification proceeding is not a Slitigation= in the sense in which this term is commonly
understood, but a mere inestigation of a non-adersary, fact-finding character, in which the
inestigating agency plays the part of a disinterested inestigator seeking merely to ascertain the
desires of the employees as to the matter of their representation. The court en'oys a wide
discretion in determining the procedure necessary to insure the fair and free choice of bargaining
representaties by the employees (Sandoval Ship!ards vs Prisco Pepito, '( )o 14+4,8, 1une
,2, ,**1).)
@9. W!at is t!e stat"tor# ,oli%# on %ertifi%ation ele%tions' <ow does t!e law treat
ana+eentCs atte,ts to t!wart initiati&es to !old %ertifi%ation ele%tion'









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The fact that 2IC!2 oiced out its ob'ection to the holding of certification election, despite
numerous opportunities to entilate the same, only after respondent <ndersecretary of Labor
affirmed the holding thereof, simply bolstered the public respondentsM conclusion that 2IC!2 raised
the issue merely to preent and thwart the concerned section heads and superisory employees
from e#ercising a right granted them by law. :eedless to stress, no obstacle must be placed to the
holding of certification elections, for it is a statutory policy that should not be circumented
(PIC$P vs %a0uesma, '( )o 1*17+8, April 1,, ,***).
@). W!at is t!e Do%trine of Union ;ono,ol#'
It means that once a union is chosen as the collectie bargaining agent of an appropriate
bargaining unit through Certification election, it alone, can collectiely bargain with management
to the e#clusion of other competing unions.
@@. Is t!ere a &iolation of t!e CBACs Fno stri5e no lo%5o"tG ,ro&ision w!en wor5ers Doin a
deonstration a+ainst ,oli%e ab"ses'
NO. The demonstration held by workers would be purely and completely an e#ercise of
their freedom of e#pression in general and of their right of assembly and of petition for redress of
grieances in particular before the appropriate goernment agency. To regard the demonstration
against police officers, not against the employer as eidence of bad faith in collectie bargaining
stretches unduly the compass of the collectie bargaining agreement (Phil ?loomin0 /ills
&mplo!ees $r0 vs Phil ?loomin0 /ills Co, Inc 1une 2, 197+).

@B. W!at is a "nion re%o+nition stri5e'
* union recognition strike is calculated to compel the employer to recogni"e one=s union
and not the other contending group, as the employees= bargaining representatie despite the
striking union=s doubtful ma'ority status to merit oluntary recognition and lack of formal
certification as the e#clusie representatie in the bargaining unit.
B0. Is t!e pari delicto r"le a,,li%able in stri5es and lo%5o"ts'
>ES. 9hen the parties are in pari delicto I the employees haing staged an illegal strike
and the employer haing declared an illegal lockout I such situation warrants the restoration of the
status (uo ante and bringing back the parties to their respectie positions before the illegal strike
and illegal lockout through the reinstatement, without backwages, of the dismissed employees.
(Philippine Inter;=ashion, Inc vs )%(C, '( )o 29847, $cto.er 18, 198,).
B1. Wo"ld t!e UnionCs fail"re to s"bit t!e STRIAE MOTE RESULTS to t!e NC;B %a"se t!e
ille+alit# of t!e stri5e' E$,lain.
>ES. The &upreme Court said so in the case of Samahan n0 /an00a0a7a sa /olde4 v
)%(C, '( )o 119487, =e.ruar! 1, ,***. It has been shown that the results of the strike-ote
were neer forwarded to the :C4B, as admitted by petitioners themseles and as attested to by a
Certification of :on-&ubmission of &trike Vote issued by the :C4B. There is thus no need for
additional eidence on the matter, as it would not change the fact that the results of the strike-
ote were not submitted to the :C4B. 9ithout the submission of the results of the strike-ote, the
strike was illegal, pursuant to *rticle +GE of the Labor Code
B(. W!at is t!e le+al i,li%ation of def#in+ t!e RETURN TO WORA ORDER in a stri5e %ase w!i%!
is "nder ass",tion of D"risdi%tion'
In the case of 9ele"un@en Semiconductors &mplo!ees <nion ==> v CA, '( )o
14+*1+;14, #ecem.er 18, ,***. the &upreme Court held that the strike of the <nion cannot be
iewed as anything but illegal for haing been staged in open and knowing defiance of the
assumption and return-to-work orders. The necessary conse(uence thereof are also detailed by the
&upreme Court in its arious rulings. In /arcopper /inin0 Corp v ?rillantes (,24 SC(A 292), the
Aigh Tribunal stated in no uncertain terms that -



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/by staging a stri,e after the assumption of jurisdiction or certification for
arbitration, wor,ers forfeited their right to0 be readmitted to wor,, having abandoned
their employment, and so could be validly replaced%1
Viewed in the light of the foregoing, we hae no alternatie but to confirm the loss of
employment status of all those who participated in the strike in defiance of the assumption order
dated 7 &eptember 566. and did not report back to work as directed in the !rder of 5G &eptember
566..
B-. Define t!e followin+?
a. Constr"%ti&e resi+nation
Constructie ;esignation is otherwise known as abandonment. It is present when the
following re(uisites concurH
-50 The worker has no intention to return to work, and
-+0 The worker has manifested by oert acts such an intention.
b. Constr"%ti&e retren%!ent
*n employee whose number of working days was reduced to 'ust two -+0 days a week due
to the financial losses suffered by the employer=s business, and who was rotated in such a way that
the number of working days had been substantially reduced for more than si# months, and
considering further that the business was ultimately closed and sold off, the &upreme Court upheld
the ruling of the :L;C that the employee was thereby constructiely dismissed or retrenched from
employment (International -ard7are, Inc vs )%(C, et al, '( )o 8*77*, Au0ust 1*, 1989).
B6. Is it wit!in t!e D"risdi%tion of t!e Labor Arbiter or t!e NLRC to ,ass D"d+ent on t!e
so"ndness of t!e ana+eent de%ision to de%lare t!at a ,osition is no lon+er ne%essar#' W!#'
&imilarly, in >iltshire =ile Co, Inc v )%(C petitioner company effected some changes in
its organi"ation by abolishing the position of &ales 4anager and simply adding the duties preiously
discharged by it to the duties of the Beneral 4anager to whom the &ales 4anager used to report. In
that case, we held that the characteri"ation of priate respondent=s serices as no longer necessary
or sustainable, and therefore properly terminable, was an e#ercise of business 'udgment on the
part of petitioner company. The wisdom or soundness of such characteri"ation or decision is not
sub'ect to discretionary reiew on the part of the Labor *rbiter or of the :L;C so long as no
iolation of law or arbitrary and malicious action is indicated (Ismael Santos v CA, '( )o
141947, 1ul! 2, 1997).
B8. W!at are t!e +"idelines for t!e %orre%t inter,retation of t!e DOCTRINE O4 LOSS O4
CON4IDENCE' E$,lain.
The Court, howeer, is cogni"ant of the fact that in numerous dismissal cases, loss of trust
and confidence has been indiscriminately used by employers to 'ustify almost eery instance of
termination and as a defense against claims of arbitrary dismissal. In the case of 'eneral ?an@ and
9rust Compan! vs Court o" Appeals, 1+2 SC(A 289 the Court came up with the following
guidelines for the application of the doctrine of loss of confidenceH
-a0 loss of confidence which should not be simulated$
-b0 it should not be used as a subterfuge for causes which are improper, illegal or un'ustified$
-c0 it should not be arbitrarily asserted in the face of oerwhelming eidence to the contrary$
and
-d0 it must be genuine, not a mere afterthought to 'ustify earlier action taken in bad faith.
Aence, while an employer is at liberty to dismiss an employee for loss of trust and
confidence, he cannot use the same to feign what would otherwise be an illegal dismissal
(Concorde -otel v Court o" Appeals, '( )o 144*89, Au0ust 9, ,**1).









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B9. Is t!e one*ont! noti%e for se,aration for a"t!ori3ed %a"ses alwa#s re:"ired'

NO. If an employee consented to his retrenchment or oluntarily applied for retrenchment
with the employer due to the installation of labor saing deices, redundancy, closure or cessation
of operation or to preent financial losses to the business of the employer, the re(uired preious
notice to the @!L3 is not necessary as the employee thereby acknowledged the e#istence of a alid
cause for termination of his employment (Ismael E Santos vs CA, '( )o 141947 1ul! 2,
,**1).
B). Is d"e ,ro%ess re:"ired before an e,lo#ee a# be deoted'
>ES. @emotions, like dismissals, affect the employment of a worker whose right to
continued employment, under the same terms and conditions, is also protected by law. 4oreoer,
considering that demotion is, like dismissal, also a punitie action, the employer being demoted
should be gien a chance to contest the same (%eonardo v )%(C '( )o 1,2+*+, 1une 18, ,***).
B@. Is ;ISRE7RESENTATION of essential fa%ts eno"+! to &itiate t!e &ol"ntariness of a
RESIHNATION' E$,lain.
;espondent companyMs lack of candor and good faith in informing B*;T<I: that he was
being terminated due to a alid retrenchment and not because it sought to aoid compliance with
the mandated wage increases amounted to a deception which led B*;T<I: to the mistaken belief
that that there was legal ground for retrenchment and prompted him to ac(uiesce to his
termination and sign the (uitclaim. 2etitioners correctly point out that such an act has been
declared by this Court in the case of 9rendline &mplo!ees Association;Southern Philippines
=ederation o" %a.or vs )%(C. as tainted with bad faith and should not be countenanced as being
pre'udicial and oppressie to labor.? Verily, had the respondent company not misled B*;T<I: into
belieing that there was a ground to retrench, it is not difficult to beliee that he would hae
thought twice before signing the (uitclaim inasmuch there was no reason for the termination of his
employment.

Contrary to the assumption of both the Court of *ppeals and the oluntary arbitrator, the
mere fact that B*;T<I: was not physically coerced or intimidated does not necessarily imply that
he freely or oluntarily consented to the terms of the (uitclaim. <nder *rticle 588C of the Ciil
Code, consent may be itiated not only through intimidation or iolence but also by mistake, undue
influence or fraud (?arJuin v Philippine Carpet /nu"acturin0 Corp, '( )o 14*,89,
Septem.er 14, ,***).
BB. a. Distin+"is! between ba%5 wa+es. "n,aid wa+es. and se,aration ,a#.
Backwages is the relief gien to an employee to compensate him for lost earnings during
the period of his dismissal.
<npaid 9ages are wages earned prior to the illegal dismissal but are not yet paid to the
employee.
&eparation 2ay is monetary amount intended to proide the employee money during the
period in which he will be looking for another employment.
b.W!at e%onoi% %o,onents %onstit"te ba%5wa+es for a ran5 and file e,lo#ee' Are
t!ese %o,onents e:"all# a,,li%able to a ana+erial e,lo#ee'
The Labor Code -*rt. +,60 proides that an employee who is un'ustly dismissed from work
is entitled to reinstatement and also to his full backwages, inclusie of allowances, and to his other
benefits or their monetary e(uialent computed from the time his compensation was withheld from
him up to his actual reinstatement.
*n employee is entitled to all the aboe benefit regardless if he is a rank and file employee
or a managerial employee. Aoweer, backwages may also include the 58th month pay which is paid
to rank and file employees, as well as benefits arising from the CB* gien only to the employees in



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the bargaining unit. 4anagerial employees cannot be gien the same since they are ineligible to
'oin the labor organi"ation.
100. Does Re,"bli% A%t No. )961. t!e Retireent Law. a,,l# to e,lo#ees %o&ered wit! a &alid
retireent ,lan' Can it be +i&en a retroa%ti&e effe%t'
Oes. The said law intends to gie the minimum retirement benefits to employees not
entitled thereto under collectie bargaining and other agreements. Its coerage applies to
establishments with e#isting collectie bargaining, or other agreements or oluntary retirement
plans whose benefits are less than those prescribed under the proiso in (uestion.
The said law is a curatie social legislation, which, by their nature, may be gien
retroactie effect, unless it will impair ested rights. It has a retroactie effect to include in its
coerage the employees= serices to an employer rendered prior to its effectiity. It applies to
employees in the employee of employers at the time the law took effect and who are eligible to
benefits under that statute (/%I< vs )%(C, '( )o 14187+, $cto.er 17, ,**1).
4REQUENTL> ASAED QUESTIONS
TO7IC? LABORQ SOCIAL =USTICE
;a# so%ial D"sti%e as a +"idin+ ,rin%i,le in labor law be so "sed b# t!e %o"rts in s#,at!# wit!
t!e wor5in+ an if it %ollides wit! t!e e:"al ,rote%tion %la"se of t!e Constit"tion' E$,lain.
S"++ested Answer?
Oes. The &tate is bound under the Constitution to afford full protection to Labor$ and when
conflicting interests collide and they are to be weighed on the scales of social 'ustice, the law
should accord more sympathy and compassion to the less priileged working man (=uentes v
)%(C, ,88 SC(A ,4, 1997). Aoweer, it should be borne in mind that social 'ustice ceases to be an
effectie instrument for the %e(uali"ation of the social and economic forces) by the &tate when it
is used to shield wrongdoing (CoraFan 1amer v )%(C, ,78 SC(A 8+,, 1997).
Alternati&e Answer?
:o. &ocial 'ustice as a guiding principle in law may not be used by the courts if it collides
with the e(ual protection clause of the Constitution. &ocial 'ustice is not a magic wand applicable
in all circumstances. :ot all labor cases may be automatically decided in faor of the worker.
4anagement also has rights which are entitled to recognition and protection$ 'ustice must be
dispensed according to facts and the law$ and social 'ustice is not designed to destroy or oppress
the employer.
Anot!er Alternati&e Answer?
&ocial 'ustice as a guiding principle in Labor Law can be implemented side by side with the
e(ual protection clause of the Constitution.
In the implementation of the principle of social 'ustice, the Constitution commands that
the &tate shall afford full protection to labor. Thus, Labor Law may be pro-labor in the sense that
labor is gien certain benefits not gien to management. But this is not necessarily iolatie of the
e(ual protection clause of the Constitution because said clause allows reasonable classification.
TO7IC? CONSTITUTIONAL 7ROMISIONS RELATED TO LABOR LAW
W!at are t!e salient feat"res of t!e ,rote%tion to labor ,ro&ision of t!e Constit"tion'
The salient features of the protection to labor proisions of the Constitution -*rticle PIII,
&ection 80 are as followsH









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*"tent of Protection - 1ull protection to labor$
'overage of Protection - Local and oerseas, organi"ed and unorgani"ed$
*mployment Policy - 1ull employment and e(uality of employment opportunities for all.
2uarantees .nionisms and 3ethod of 4etermination 'onditions of *mployment - ;ight of
all workers to self-organi"ation, collectie bargaining and negotiations.
'oncerted Activities - ;ight to engage in peaceful concerted actiities, including the right
to strike in accordance with law.
+or,ing 'onditions - ;ight to security of tenure, humane conditions of work and a liing
wage.
4ecision 3a,ing Processes - ;ight to participate in policy and decision making process
affecting their rights and benefits as way to proide by law.
Share in 5ruits of Production - ;ecognition of right of labor to its 'ust share in fruits of
production.
ALTERNATIME ANSWER?
The Constitution in -*rticle PIII, &ection 80 proides that the &tate shall afford protection to
labor, local and oerseas, organi"ed unorgani"ed.
The &tate shall afford protection to labor by promoting full employment and e(uality of
employment opportunities for all.
9orkers are entitled to security of tenure, humane conditions of work and a liing wage.
The &tate shall guarantee the right of all workers to self-organi"ation, collectie bargaining
and negotiations, and peaceful concerted actiities, including the right to strike, in accordance by
law.
9orkers shall also participate in policy and decision-making processes affecting their rights
and benefits as may be proided by law.
The &tate shall promote the principle of shared responsibility between workers and
employers and the preferential use of oluntary modes in setting labor disputes, including
conciliation, and shall enforce mutual compliance therewith to foster industrial peace.
The &tate shall regulate the relations between workers and employers recogni"ing the right
to its 'ust share in the fruits of production and the right of enterprises to reasonable returns on
inestments, and to e#pansion and growth.
1. LABOR STANDARDS
9$PICK &/P%$L&(;&/P%$L&& (&%A9I$)S-IP
SU;;AR> O4 T<E RULE? 9hat determines employer-employee relationship is the power of the
employer to control the employee regarding the manner of how the work should be done.
Na,ato C"sto*ade a5e s!oes to %"stoer s,e%ifi%ations and re,aired t!e. As a ser&i%e to
%"stoers. a s!oe s!ine stand was o,erated on its ,reises. T!ere were 10 s!oe s!ine bo#s at
t!e stand. T!e# owned t!eir s!oe s!ine bo$es wit! %leanin+ a+ent ,olis!. br"s!es. and ra+s.
Wal5*in %"stoers willin+ to wait were led b# t!e s!oe s!ine bo#s to a seat at t!e stand w!ere
!e waited w!ile t!e bo# as5ed t!e %"stoer to ,a# to t!e re%e,tionist. C"stoers not willin+
to wait left t!e s!oes wit! t!e standCs re%e,tionist w!o +a&e a re%ei,t wit! t!e ,ri%e for t!e
ser&i%e and ,i%5*", date and tie indi%ated. T!e bo#s were free to +et s!oes to be s!ined for
t!e re%e,tionist w!en t!ere were no waitin+ wal5*ins. 4or ea%! ,air s!ined. t!e bo#s +ot
ar5ers %orres,ondin+ to t!e ,ri%e for t!eir ser&i%e. NaCSICs staff did not interfere wit!. nor
s",er&ise. !ow t!e bo#s went abo"t t!eir tas5s. At da#Cs end. t!e ar5ers !eld b# ea%! bo#
were tallied and ,aid for. T!e bo#s si+ned a re%ei,t to a%5nowled+e f"ll ,a#ent for wor5
done.
A labor federation or+ani3ed NaCSI and filed a ,etition for a %onsent ele%tion. T!e bo#s.
s#,at!i3in+ wit! t!e wor5ers. Doined t!e "nion. At t!e ,re*ele%tion %onferen%e. t!e law#er
for NaCSI o&ed to e$%l"de t!e bo#s as &oters.
As ;ed*Arbiter !andlin+ t!e %ase. r"le on t!e obDe%tion. Wo"ld #o" r"lin+ be different if in t!is
%ase. NaCSI ,ro&ided t!e bo#s wit! t!e s!oe s!ine bo$es and t!eir %ontents' E$,lain.



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*s 4ed-arbiter, I will rule that the shoe shine boys should be e#cluded as oters in the
consent election. The shoe shine boys are not employees of UaC&I and thus could not be considered
as employees belonging to bargaining unit who will designate or select a bargaining representatie.
They are not employees of UaC&I because according to the gien facts, they are not under the
control of UaC&I which is an essential element for the e#istence of employer-employee relationship.
In the statement of facts, it is said that %UaC&I=s staff did not interfere with, nor superise how the
boys went about their task.)
4y ruling will not be different een if UaC&I proided the boys with the shoe shine bo#es
and their contents. UaC&I, by this act, is not yet e#ercising control that is determinatie of the
e#istence or non-e#istence of control oer them. It is the e#istence of employer-employee
relationship.
9$PICK /A)A'&/&)9 P(&($'A9IE&
SU;;AR> O4 T<E RULE? The management has the right to use its discretion and 'udgment in the
determination of policies regarding the aspects of employment. Contracting out serices or
functions being performed by union members becomes illegal only when it interferes with, restrains
or coerces employees in the e#ercise of their right to self-organi"ation.
<arbor Miew <otel !as an e$istin+ Colle%ti&e Bar+ainin+ A+reeent /CBA2 wit! t!e "nion of
ran5*and*file e,lo#ees %onsistin+. aon+ ot!ers. of bartenders. waiters. roobo#s. !o"seen
and stewards. D"rin+ t!e lifetie of t!e CBA. <arbor Miew <otel. for reasons of e%ono# and
effi%ien%#. de%ided to abolis! t!e ,osition of !o"seen and stewards w!o do t!e %leanin+ of
t!e !otelCs ,"bli% areas. O&er t!e ,rotest of t!e Union. t!e <otel %ontra%ted o"t t!e
aforeentioned Dob to t!e Cit# Ser&i%e =anitorial Co,an#. a .ona"ide inde,endent %ontra%tor
w!i%! !as a s"bstantial %a,ital in t!e for of Danitorial tools. e:"i,ents. a%!ineries and
%o,etent an,ower.
Is t!e a%tion of t!e <arbor Miew <otel le+al and &alid'
The action of Aarbor View Aotel is legal and alid. The alid e#ercise of management
prerogatie, discretion and 'udgment encompasses all aspects of employment, including the hiring,
work assignments, working methods, time, place and manner of work, tools to be used, processes
to be followed, superision of workers, working regulations, transfer of employees, work
superision, lay-off of workers, and discipline, dismissal and recall of workers, e#cept as proided
for, or limited by special laws.
Company policies and regulations are, unless shown to be gross oppressie or contrary to
law, generally binding and alid on the parties and must be complied with until finally reised or
amended unilaterally or preferably through negotiation or by competent authority -San 3iguel
'orporation vs% .baldo and 'ru$, 61! S'RA 6789%
ALTERNATIME ANSWER?
The action of the Aarbor View Aotel is legal and alid. Contracting out serices or functions
being performed by union members is not illegal per se. In fact, it is the prerogatie of
management to adopt cost-saing measures to ensure economy and efficiency. Contracting out
serices or functions being performed by union members becomes illegal only when it interferes
with, restrains or coerces employees in the e#ercise of their right to self-organi"ations.
The action of Aarbor View Aotel would, at first glance, appear to be an unfair labor
practice under *rticle +E7 -c0 e.g. %to contract out serices or functions being performed by union
members if such will interfere with, restrain or coerce employees in the e#ercises of their right to
self-organi"ation.)
Considering, howeer, that in the case at bar, there is no showing that the hotel=s action is
a alid e#ercises of its management prerogaties and the right to make business 'udgments in
accordance with law.
9$PICK C$)9(AC9$(M >A'&S
SU;;AR> O4 T<E RULE? * labor-only contract is a contract between an employer and a person
who supplies workers and does not hae substantial capital or inestment in the form of tools,









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e(uipment, machineries, work premises. The employer who contracts the serices of the labor-only
contractor is directly liable to the employees of the labor-only contractor as if such employees had
been directly employed by the employer. In an independent contract, the employer who contracted
out the 'ob is 'ointly and seerally liable with the contractor only to the e#tent of the work-
performed under the contract.
*n award of backwages is gien to an employee who is un'ustly dismissed. !n the other
hand, an award of unpaid wages is gien to an employee who has not been paid his salaries or
wages for serices actually rendered. The cause of action here is non-payment of wages or salaries.
/a2 W!at is a Flabor*onl#G %ontra%t'
%Labor-only) contract is a contract between an employer and a person who supplies
workers and does not hae substantial capital or inestment in the form of tools, e(uipments,
machineries, work premises, among others, and the workers recruited and placed by such person
are perfoming actiities which are directly related to the principal business of such employer. -*rt.
5CG, Labor Code0
(b) Distin+"is! t!e liabilities of an e,lo#er w!o en+a+es t!e ser&i%es of a .onaN"ide
Finde,endent %ontra%torG fro one w!o en+a+es a Flabor*onl#G %ontra%tor'
* person who engages the serices of a bona:fide % independent contractor) for the
performance of any work, task, 'ob or pro'ect is the indirect employer of the employees who hae
been hired by the independent contractor to perform said work, task, 'ob or pro'ect.
In the eent that the independent contractor fails to pay the wages of his employees, an
indirect employer, in the same manner and e#tent that he is liable to employees directly employed
by him, is 'ointly and seerally liable with the independent contractor to the employees of the
latter to the e#tent of the work performed under the contract.
*s for the person who engages the serices of a %labor only) contractor, the latter is
considered merely as an agent of the former who shall be responsible to the workers hired by the
%labor only) contractor in the same manner and e#tent as if the directly employed such workers.
ALTERNATIME ANSWER?
*n employer who engages the serices of a bona fide % independent contractor) is solidarily
liable with his contractor or sub-contractor only for non-payment or under-payment of wages and
other labor standards proisions of the Labor Code, whereas an employer that it normally grants to
its regular or direct employees.
*n employer who deals with a bona-fide independent contractor shall only be subsidiary
liable, if the contractor or sub-contractor fails to pay the wages to the workers in accordance with
the Labor Code.
<pon the other hand, an employer who deals with a %labor-only) contractor shall be
primarily responsible to the workers in the same manner and e#tent as if the latter were directly
employed by him. -*rt 5CG-5C,, Labor Code0
/%2 Distin+"is! between an award for ba%5 wa+es and an award for "n,aid wa+es.
*n award for backwages is to compensate an employee who has been illegally dismissed,
for the wages, allowances and other benefits or their monetary e(uialent, which said employee
did not receie from the time he was illegally dismissed up to the time of his actual reinstatement.
!n the other hand, an award for unpaid wages is for an employee who has actually worked
but has not been paid the wages he is entitled to receie for such work done. -*rts. +,6 and 6, -10,
Labor Code0.
ALTERNATIME ANSWER?
*n award of backwages is gien to an employee who is un'ustly dismissed. !n the other
hand, an award of unpaid wages is gien to an employee who has not been paid his salaries or
wages for serices actually rendered. The cause of action here is non-payment of wages or salaries.
;2eneral <aptist <ible 'ollege vs% &=R' 617 S'RA >79%
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SU;;AR> O4 T<E RULE? <ndertime work on any particular day shall not be offset by oertime
work on any other day.
Danilo 4lores a,,lied for t!e ,osition of dri&er in t!e otor,ool of Hold Co,an#. a
"ltinational %or,oration. Danilo was infored t!at !e wo"ld fre:"entl# be wor5in+ o&ertie
as !e wo"ld !a&e to dri&e for t!e %o,an#Cs e$e%"ti&es e&en be#ond t!e ordinar# ei+!t*!o"r
wor5 da#. <e was ,ro&ided wit! a %ontra%t of e,lo#ent w!erein !e wo"ld be ,aid a ont!l#
rate e:"i&alent to -8 ties !is dail# wa+e. re+"lar si%5 and &a%ation lea&es. 8 da#*lea&e wit!
,a# e&er# ont! and tie off wit! ,a# w!en t!e %o,an#Cs e$e%"ti&es "sin+ t!e %ars do not
need DaniloCs ser&i%e for ore t!an ei+!t !o"rs a da#. in lie" of o&ertie.
Are t!e abo&e ,ro&isions of t!e %ontra%t of e,lo#ent in %onforit# wit!. or &iolati&e of. t!e
law'
3#cept for the proision that @anilo shall hae time off with pay when the company=s
e#ecuties using the cars do not need @anilo=s serice for more than eight hours a day, in lieu of
oertime, the proisions of the contract of employment of @anilo are not iolatie of any labor law
because the instead improe upon the present proisions of pertinent labor laws. Thus, the monthly
rate e(uialent to 8. times the daily wage may be sufficient to include oertime pay.
There is no labor law re(uiring the payment of sick and acation leaes e#cept for a fie-
day serice incentie leae in the Labor Code.
The fie-day leae with pay eery month has no counterpart in Labor Law and is ery
generous.
*s for the proision in @anilo=s contract of employment that he shall receie time off with
pay in lieu of oertime, this iolates the proision of the Labor Code which states that undertime
work on any particular day shall not be offset by oertime work on any other day. 2ermission gien
to the employer to go on leae on some other day of the week shall not e#empt the employer from
paying additional compensation re(uired by the Labor Code.
9$PICK -$<S&-&%P&(SM >A'&S
SU;;AR> O4 T<E RULE? :o house helper shall be assigned to work in a commercial, industrial or
agricultural enterprise at a wage or salary rate lower than proided by law for agricultural or non-
agricultural workers. * family drier who dries the family an to fetch merchandise from suppliers
and deliers the same to bouti(ue in a mall owned by the family for whom he works should be paid
the minimum daily wage of a drier in a commercial establishment.

T!e wee5l# wor5 s%!ed"le of a dri&er is as follows?
/onda!, >ednesda!, and =rida! R Dri&e t!e fail# %ar to brin+ t!e and fet%! t!e %!ildren to
and fro s%!ool.
9uesda!, 9hursda!, and Saturda! R Dri&e t!e fail# &an to fet%! er%!andise fro s",,liers
and deli&er t!e sae to a bo"ti:"e in a all owned b# t!e fail#.
(a) Is t!e dri&er a !o"se !el,er'
The drier is a house helper. * person is a house helper or is engaged in domestic or
household serice if heQshe renders serices in the employer=s home which are usually necessary or
desirable to the maintenance and en'oyment thereof and which includes ministering to the
personal comfort and conenience of the members of the employer=s household including the
serices of family driers.
(b) T!e sae dri&er %lais t!at for wor5 ,erfored on T"esda#. T!"rsda# and Sat"rda#. !e
s!o"ld be ,aid to t!e ini" dail# wa+e of a dri&er of %oer%ial establis!ent. Is t!e
%lai of t!e dri&er &alid'
* family drier who dries the family an to fetch merchandise from suppliers and deliers
the same to bouti(ue in a mall owned by the family for whom he works should be paid the
minimum daily wage of a drie in a commercial establishment.









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The Labor Code -in *rticle 5E80 proides that no house helper shall be assigned to work in a
commercial, industrial or agricultural enterprise at a wage or salary rate lower than proided by
law for agricultural or non-agricultural workers.
9$PICK (&'<%A( &/P%$L&&S A)# P($1&C9 &/P%$L&&S
SU;;AR> O4 T<E RULE? *n employment shall be deemed to be regular where the employee has
been engaged to perform actiities which are usually necessary or desirable in the usual business or
trade of the employer, e#cept where the employment has been fi#ed for a specific pro'ect or
undertaking the completion of which has been determined at the time of the engagement of the
employee.
A %onstr"%tion +ro", !ired En+ineer FAG as a 7roDe%t En+ineer in 1B@). <e was assi+ned to fi&e
/82 Contra%ts of E,lo#ent !e si+ned. s,e%ified t!e nae of t!e ,roDe%t. its d"ration and t!e
te,orar#*,roDe%t nat"re of t!e en+a+eent of !is ser&i%es. U,on %o,letion of t!e fift!
,roDe%t in A"+"st 1BB@. !is ser&i%es were terinated. <e wor5ed for a total of ten /102 #ears
/1B@)*1BB@2 in t!e fi&e se,arate ,roDe%ts.
Si$ ont!s after !is se,aration. t!e Hro", won a bid for a lar+e %onstr"%tion ,roDe%t. T!e
Hro", did not en+a+e t!e ser&i%es of En+ineer FAG as a 7roDe%t En+ineer for t!is new ,roDe%tQ
instead. it en+a+ed t!e ser&i%es of En+ineer FB.G En+ineer FAG %lais t!at b# &irt"e of t!e
nat"re of !is f"n%tions. i.e.. En+ineer in a Constr"%tion Hro",. and !is lon+ #ears of ser&i%e !e
!ad rendered to t!e Hro",. !e is a lon+ #ears of ser&i%e !e !ad rendered to t!e Hro",. !e is a
re+"lar e,lo#ee and not a ,roDe%t en+ineer at t!e tie !e was first !ired. 4"rt!erore. t!e
!irin+ of En+ineer FBG s!owed t!at t!ere is a %ontin"in+ need for !is ser&i%es. Is t!e %lai of
En+ineer FAG %orre%t'

The claim of 3ngineer %*) that he is a regular employee and not a pro'ect employee is not
correct. The Labor Code proidesH
*rt. +7C. ;egular and casual employment. - *n employment shall be deemed to be
regular where the employee has been engaged to perform actiities which are usually
necessary or desirable in the usual business or trade of the employer, e#cept where the
employment has been fi#ed for a specific pro'ect or undertaking the completion of which
has been determined at the time of the engagement of the employee.
In all the fie -.0 successie contracts of employment of 3ngineer %*) the name of the
pro'ect, its duration, and the temporary pro'ect nature of the engagement of his serices are
clearly stated$ hence, 3ngineer %*) falls within the e#emption of *rt. +7C.
The fact that the petitioners worked for seeral pro'ects of priate respondent company is
no basis to consider them as regular employees. By the ery nature of their employee=s business,
they will always remain pro'ect employees regardless of the number of pro'ects in which they hae
worked (3anansag v% &=R', 61! S'RA ?66, 17789
2ro'ect employees are not considered regular employees, their serices, being needed only
when there are pro'ects to be undertaken. The rationale for this rule is that if a pro'ect has
already been completed, it would be un'ust to re(uire the employer to maintain them in the
payroll while they are doing absolutely nothing e#cept waiting for another pro'ect ;4e @campo v%
&=R', 1!A S'RA 8A1, 177B9.
ALTERNATIME ANSWER?
The claim of 3ngineer %*) is not correct. The fact that he has been working for
Construction Broup for a total of ten -5C0 years does not make him a regular employee when it is
ery clear from the Contracts of 3mployment that he signed that he has always been engaged as a
pro'ect employee.
The tenure of pro'ect employee is co-terminus with the pro'ect in connection with which
his serices were engaged. Thus, after the end of the pro'ect, the employer-employee relationship
ceases to e#ist. &uch pro'ect employee has no legal rights to insist that the Construction Broup for
a subse(uent pro'ect of said Broup should employ him.

9$PICK -$<(S >$(O&#



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SU;;AR> O4 RULE? *n employee who is re(uired to remain on call in the employer=s premises or
so close thereto that he cannot use the time effectiely and gainfully for his own purpose shall be
considered as working while on call.
*n employee who is not re(uired to leae word at his home or with company officials where
he may be reached is not working while on call.
Lito A"lan+5"lan+ and Bon+ Uron+s"lon+ are e,lo#ed as tr"%5 dri&ers of Line ;o&ers. In%.
Us"all#. Lito is re:"ired b# t!e ,ersonnel ana+er to D"st sta# at t!e !ead offi%e after offi%e
!o"rs be%a"se !e %o"ld be %alled to dri&e t!e tr"%5s. W!ile at t!e !ead offi%e. Lito erel#
waits in t!e ana+erCs re%e,tion roo. On t!e ot!er !and. Bon+ is allowed to +o !oe after
offi%e !o"rs b"t is re:"ired to 5ee, !is %ell"lar ,!one on so t!at !e %o"ld be %onta%ted
w!ene&er !is ser&i%es as dri&er be%oe ne%essar#.
Wo"ld t!e !o"rs t!at Lito and Bon+ are on %all be %onsidered %o,ensable wor5in+ !o"rs'
The hours of Lito and Bong while on call can be considered compensable hours. The
applicable rule isH % *n employee who is re(uired to remain on call in the employer=s premises or so
close thereto that he cannot use the time effectiely and gainfully for his own purpose shall be
considered as working while on call. *n employee who is not re(uired to leae word at his home or
with company officials where he may be reached is not working while on call.) Aere Bong is
re(uired to stay at the office after office hours so he could be called to drie the trucks of the
Company. *s for Bong, he is re(uired to keep his cellular phone so that he could be contacted
wheneer his serices as drier as needed. Thus, the waiting time of Lito and Bong should be
considered as compensable hours.
)oteK It could .e ar0ued that in the case o" ?on0 7ho is not reJuired to sta! in the
o""ice .ut is allo7ed to 0o home, i" he is not actuall! as@ed .! cellular phone to report to the
o""ice to drive a car, he can use his time e""ectivel! and 0ain"ull! to his o7n purpose, thus,
the time that he is at home ma! mean that the! are not compensa.le hours
9$PICK 1$? C$)9(AC9I)'
SU;;AR> O4 T<E RULE? There is %'ob contracting) where -50 the contractor carries on an
independent business and undertakes the contract work on his own account, under his own
responsibility according to his own manner and method, free form the control and direction of his
employer or principal in all matters connected with the performance of the work e#cept as to the
results thereof$ and -+0 the contractor has substantial capital or inestment in the form of tools,
e(uipment, machineries, work premises and other materials which are necessary in the conduct of
the business ;=im v &=R', 6B6 S'RA >A,17719.
Sta. ;oni%a 7l#wood Cor,oration entered into a %ontra%t wit! Arnold for t!e illin+ of l"ber
as well as t!e !a"lin+ of waste wood ,rod"%ts. T!e Co,an# ,ro&ided t!e e:"i,ent and tools
be%a"se Arnold !ad neit!er tools and e:"i,ent nor %a,ital for t!e Dob. Arnold. on t!e ot!er
!and. !ired !is friends. relati&es and nei+!bors for t!e Dob. T!eir wa+es were ,aid b# Sta.
;oni%a 7l#wood Cor,oration to Arnold. based on t!eir ,rod"%tion or t!e n"ber of wor5ers
and t!e tie "sed in %ertain areas of wor5. All wor5 a%ti&ities and s%!ed"les were fi$ed b# t!e
%o,an#'
-a0 Is *rnold a 'ob contractorV 3#plain briefly.
No. In two cases decided by the &upreme Court, it was held that there is %'ob contracting)
when -50 the contractor carries on an independent business and undertakes the contract work on
his own account, under his own responsibility according to his own manner and method, free form
the control and direction of his employer or principal in all matters connected with the
performance of the work e#cept as to the results thereof$ and -+0 the contractor has substantial
capital or inestment in the form of tools, e(uipment, machineries, work premises and other
materials which are necessary in the conduct of the business.
In the problem gien, *rnold did not hae sufficient capital or inestment for one. 1or
another *rnold was not free from the control and direction of &ta. 4onica 2lywood Corporation









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because all the work actiities and schedules were fi#ed by the company. Therefore, *rnold is not
'ob contractor Ae is engaged in labor-only contracting.
/b2 W!o is liable for t!e %lais of t!e wor5ers !ired b# Arnold' E$,lain briefl#.
&ta. 4onica 2lywood Corp. is liable for the claims of the workers hired by *rnold. * finding
that *rnold is a labor only contractor is e(uialent to declaring that there e#ist an employer-
employee relationship between &ta. 4onica 2lywood Corp. and workers hired by *rnold. This is so
because *rnold is considered a mere agent of &ta. 4onica plywood Corp ;=im v &=R', 8B8 S'RA
>86, 17770 <aguio et% al% v% &=R', 6B6 S'RA >A 17719.

9$PICK S$CIA% S&C<(I9L AC9 $= 1997M C$E&(A'&
SU;;AR> O4 T<E RULE? Coerage under the &&& is compulsory where employer-employee relations
e#ist. :eertheless, %integration) of other benefits is allowed.
T!e %olle%ti&e bar+ainin+ a+reeent of t!e Holden Cor,oration In%. and t!e Holden Cor,oration
Wor5ers Union ,ro&ides a ,a%5a+e of welfare benefits far s",erior in %o,arison wit! t!ose
,ro&ided for in t!e So%ial Se%"rit# A%t of 1BB). T!e welfare ,lan of t!e %o,an# is f"nded
solel# b# t!e e,lo#er wit! no %ontrib"tions fro t!e e,lo#ees. Adittedl#. it is t!e best
welfare ,lan in t!e 7!ili,,ines. T!e %o,an# and t!e "nion Dointl# filed a ,etition wit! t!e
So%ial Se%"rit# S#ste for e$e,tion fro %o&era+e. Will t!e ,etition for e$e,tion fro
%o&era+e ,ros,er'
:o, because coerage under the &&& is compulsory where employer-employee e#ists.
Aoweer, if the priate plan is superior to that of &&&, the plan may be integrated with the &&&
plan. &till it is integration and not e#emption from &&& law. ;Philippine <looming 3ills 'o% Cnc% v
SSS, 1? S'RA 1B?9
9$PICK C$/P(&-&)SIE& A'(A(IA) (&=$(/ %A>
1.a. W!at is t!e fo"ndation of t!e a+rarian refor ,ro+ra "nder t!e 1B@) Constit"tion' W!o
are t!e dire%t benefi%iaries of t!e ,ro+ra'
The 567, Constitution enunciates in *rticle II as one of the state policies that the &tate
shall promote comprehensie rural deelopment and agrarian reform.)
In *rticle PII of the Constitution, in dealing with the national economy and patrimony, it is
also stated that %the &tate shall promote industriali"ation and full employment based on sound
agricultural deelopment and agrarian reform.)
Then in *rticle PIII of the Constitution, in dealing with social 'ustice and human rights,
there is this proision, among othersH the state shall, by law, undertake an agrarian reform
program founded on the right of framers and regular farm I workers, who are landless, to own
directly or workers, to receie a 'ust share of the fruits thereof. To this end, the state shall
encourage and undertake the 'ust distribution of all agricultural lands, sub'ect to such priorities
and reasonable retention limits as the congress may prescribe, taking into account ecological,
deelopmental, or e(uity considerations, and sub'ect to the payment of 'ust compensation. In
determining the retention limits, the state shall respect the right of small landowners. The state
shall further proide incenties for oluntary landsharing.)
Taken together, the aboe proisions could be considered as the foundation of the agrarian
reform program.
<nder the Comprehensie *grarian ;eform Law, the lands coered by the C*;2 shall be
distributed as much as possible to landless residents of the same barangay, or in the absence
thereof, landless residents of the same municipality in the following order of priorityH
1% agricultutral lessees and share tenants0
6% regular farmwor,ers0
8% seasonal farmwor,ers0
>% other farmwor,ers0
% actual tillers or occupants of public lands0
A% collectives or cooperatives of the above beneficiaries0 and
?% others directly wor,ing on the land%



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The children of landowners, who are (ualified to be awardees of not more than three
hectares, shall be gien preference in the distribution of the land of their parents. *ctual tenant
tillers in the landholding shall not be e'ected or remoed therefrom.
Beneficiaries under 2@ +, who hae culpably sold, disposed of or abandoned their land are
dis(ualified to became beneficiaries under the C*;2.
* basic (ualification of a beneficiary shall be his willingness aptitude and ability to
cultiate and make the land as productie as possible. The @*; shall adopt a system of monitoring
the record or performance of each beneficiary, so that any beneficiary guilty of negligence or
misuse of the land or any support e#tended to him shall forfeit his right to continue as such
beneficiary. The @*; shall submit periodic reports on the performance of the beneficiaries to the
C*;2.
If, due to the landowner=s retention rights or to the number o tenants, lessees, or workers
on the land, there is not enough land to accommodate any or some of them, they may be granted
ownership of other lands aailable for distribution under the C*;L, at the option of the
beneficiaries.
1armers already in place and those not accommodated in the distribution of priately
owned lands will be gien preferential rights in the distributions of lands from the public domain.
1.b. Distin+"is! D"st %o,ensation "nder t!e CARL of 1B@@ for D"st %o,ensation "nder t!e
Bill of ri+!ts' <ow it is deterined "nder t!e forer'
In the Bill of ;ights it is proided that priate property shall not be taken for public use
without 'ust compensation.
In the proisions of the 567, constitution on agrarian reform, it is proided that in the 'ust
distribution of all agricultural lands, the same shall be sub'ect, among others, to the payment of
'ust compensation.
The concepts of 'ust compensation in the Bill of ;ights and in agrarian reform are similar in
the sense that in both situations, the person who is depried of his property should be gien the fir
and full e(uialent alue of the property that is taken from him. In both situations, ultimately, it is
the courts, which may determine ultimately 'ust compensation.
<nder the C*;L, howeer, the Land Bank of the 2hilippines shall compensate the
landowner in such amount as may agreed upon by the landowner and the @epartment of *grarian
;eform and the Land Bank of the 2hilippines.
*lso, under the C*;L, compensation could be in cash and in goernment financial instruments
like Land Bank of the 2hilippines bonds. *t the option of the landowner, the compensation may be
in shares of stock in goernment owned and controlled corporations, or in ta# credits. The C*;L
proides that in determining 'ust compensation, the cost of ac(uisition of the land the current
alue of like properties, its nature, actual use of income, the sworn aluation by the owner, the ta#
declarations, and the assessment made by the goernment assessors shall be considered. The social
and economic benefits contributed by the farmers and the farm-owners and by the goernment to
the property as well as the non-payment of ta#es or loans secured from any goernment financing
institution on the said land shall be considered as additional factors to determine its aluation.
9$PICK %A?$( S9A)#A(#SM C$)#I9I$)S $= &/P%$L/&)9 %A?$( (&%A9I$)SM I%%&'A%
#IS/ISSA%
SU;;AR> O4 T<E RULE? *ny woman who is permitted or suffered to work, with or without
compensation in any nightclub, cocktail lounge, massage clinic, bar or other similar establishment,
under the effectie control and superision of the employer for a substantial period of time as
determined by the &ecretary of Labor shall be considered as an employee of such establishment for
purposes of labor and social legislation.
2regnancy is not a alid cause for dismissal because, as proided under the Code, it shall be
unlawful for an employer to discharge a woman employee on account of her pregnancy.
Cl"b 7aris is an entertainent entit# t!at o,erates a ni+!t %l"b alon+ Ro$as Bo"le&ard. T!e
%l"b ,ro&ides food and drin5s w!i%! are ser&ed b# woen w!o are dressed li5e 7la#bo#
B"nnies. In t!e e,lo#ent %ontra%t of ea%! woan. t!e ff. ,ro&isions a,,ear?
ACompensation ;; All tips, commissions and other "orms o" pa!ment received "rom
customers minus 1*5









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-ours o" 7or@ : 8 pm to + am, dail!, includin0 Sunda!s and -olida!s
$ther conditions : /ust remain sin0leM marria0e or pre0nanc! is valid cause "or
dismissalB
Bit"in a,,lied and was !ired b# t!e Cl"b. S!e si+ned t!e e,lo#ent %ontra%t. %ontainin+ t!e
aforesaid ,ro&isions. 9 ont!s later. s!e as5ed for a aternit# lea&e wit! ,a#. Instead of
+rantin+ !er aternit# lea&e. t!e ana+eent of t!e %l"b fired !er. Bit"in s"ed t!e Cl"b for
ille+al disissal. ba%5wa+es. OT ,a#. and !olida# ,a#. De%ide.
Bituin is an employee of the Club. <nder *rt.587, / any woman who is permitted or
suffered to wor,, with or without compensation in any nightclub, coc,tail lounge, massage clinic,
bar or other similar establishment, under the effective control and supervision of the employer
for a substantial period of time as determined by the Secretary of =abor shall be considered as an
employee of such establishment for purposes of labor and social legislation%1
Bituin was illegally dismissed. 2regnancy is not a alid cause for dismissal because, as
proided under the Code, it shall be unlawful for an employer to discharge a woman employee on
account of her pregnancy.
&he is entitled to backwages. The compensation gien to Bituin was %all tips.) These can=t
be considered compensation, at most, they could be considered as serice charges which Bituin can
keep. &he is thus entitled to be paid at least the minimum wage.
&ince her working hours are from G pm to 8 am, &he works 6 hours a day. &he is also
entitled to !T pay, and also from 5C pm, to a night differential pay. &he is also entitled to premium
pay since she works , days a week, and thus, works on her weekly rest day, and also on regular
holidays. 1or the latter, she should be paid at +CC/ of her basic rate.
(. LABOR RELATIONS
TO7IC? ASSU;7TION ORDER
In a labor dis,"te. t!e Se%retar# of Labor iss"ed an FAss",tion Order.G Hi&e t!e le+al
i,li%ations of s"%! an order.
<nder *rt. +G8-g0 of the Labor Code, such assumption shall hae the effect of automatically
en'oining the intended or impending strike or lockout as specified in the assumption order. If one
had already taken place at the time of assumption, all striking or lockout employees shall
immediately return to work and the employer shall immediately resume operations and re-admit all
workers under the same terms and conditions preailing before the strike or lockout. The &ecretary
of Labor and 3mployment may seek the assistance of law enforcement agencies to ensure
compliance with this proision as well as he may issue to enforce the same. The mere issuance of
an assumption order by the &ecretary of Labor automatically carries with it a return to work order,
een if the directie to return to work is not e#pressly stated in the assumption order. Those who
iolate the foregoing shall be sub'ect to disciplinary action or een criminal prosecution.
<nder *rt. +GE of the Labor Code, no strike or lockout shall be declared after the
assumption of 'urisdiction by the &ecretary.
TO7IC? STRIAELLOCAOUTQ CO;7ULSOR> ARBITRATION
SU;;AR> O4 T<E RULE? The &ecretary of Labor may e#ercise the power of compulsory arbitration
oer the labor dispute when such dispute may cause or likely cause a strike or lockout in an
industry indispensable to national interest. ;4ivine +ord .niversity vs% Secretary of =abor, 618
S'RA ?79%
=enson S =enson /=S=2 is a doesti% %or,oration en+a+ed in t!e an"fa%t"rin+ of %ons"er
,rod"%ts. Its ran5*and*file wor5ers or+ani3ed t!e =enson E,lo#ees Union /=EU2. a d"l#
re+istered lo%al "nion affiliated wit! 7A4LU. a national "nion. After !a&in+ been %ertified as
t!e e$%l"si&e bar+ainin+ a+ent of t!e a,,ro,riate bar+ainin+ "nit. =EUT7A4LU s"bitted its
,ro,osals for a Colle%ti&e Bar+ainin+ A+reeent wit! t!e %o,an#.



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In t!e eantie. a ,ower*str"++le o%%"rred wit!in t!e national "nion 7A4LU between its
National 7resident. ;ann# 7a5#ao. and its National Se%retar# Heneral. Habriel ;iro. T!e
re,resentation iss"e wit!in 7A4LU is ,endin+ resol"tion before t!e Offi%e of t!e Se%retar# of
Labor.
B# reason of t!is intra*"nion dis,"te wit!in 7A4LU. =S= obstinatel# and %onsistentl# ref"sed to
offer an# %o"nter*,ro,osal and to bar+ain %olle%ti&el# wit! =EU*7A4LU "ntil t!e re,resentation
iss"e wit!in 7A4LU s!all !a&e been resol&ed wit! finalit#. =EU*7A4LU filed a Noti%e of Stri5e.
T!e Se%retar# of Labor s"bse:"entl# ass"ed D"risdi%tion o&er t!e labor dis,"te.
Can t!e Se%retar# of Labor de%ide t!e labor dis,"te b# awardin+ t!e =EU CBA 7ro,osals as t!e
Colle%ti&e Bar+ainin+ A+reeent of t!e ,arties' E$,lain briefl#.
Oes. The &ecretary of Labor can decide the labor dispute by awarding the D3< CB* proposals as the
Collectie Bargaining *greement of the parties because when the &ecretary of Labor -*rticle +G8
>g?0 assumes 'urisdiction oer a labor dispute causing or likely to cause a strike or lockout in an
industry indispensable to the national interest, the &ecretary of Labor e#ercises the power of
compulsory arbitration oer the labor dispute, meaning, that as an e#ception to the general rule,
the &ecretary of Labor now has the power to set or fi# wages, rates of pay, hours of work or terms
and conditions of employment by determining what should be the CB* of the parties ;4ivine +ord
.niversity vs% Secretary of =abor, 618 S'RA ?79.
ALTERNATIME ANSWER?
No. W!at is in&ol&ed in t!e %ase in :"estion is a %or,oration en+a+ed in t!e
an"fa%t"rin+ of %ons"er ,rod"%ts. If t!e %ons"er ,rod"%ts t!at are bein+ an"fa%t"red
are not s"%! t!at a stri5e a+ainst t!e %o,an# %annot be %onsidered a stri5e in an ind"str#
indis,ensable for t!e national interest. t!en t!e ass",tion of D"risdi%tion b# t!e Se%retar# of
Labor is not ,ro,er. T!erefore. !e %annot le+all# e$er%ise t!e ,owers of %o,"lsor# arbitration
in t!e labor dis,"te.
TO7IC? 7ROBATIONAR> E;7LO>EESQ CERTI4ICATION ELECTION
SU;;AR> O4 T<E RULE? *ll rank-and-file employees, probationary or permanent, hae substantial
interest in the selection of the bargaining representatie. The Code makes no distinction as to their
employment status as bases for eligibility to ote in the petition for certification election. ;Airtime
Specialists, Cnc% vs% 5errer-'alleja, 1!B S'RA ?>79%
Are ,robationar# e,lo#ees entitled to &ote in a %ertifi%ation ele%tion' W!#'
In a certification election, all rank-and-file employees in the appropriate bargaining unit
are entitled to ote. This principle is clearly stated in *rticle +.. of the Labor Code which states
that the %labor organi"ation designated or selected by the ma'ority of the employees in such unit
shall be the e#clusie representatie of the employees in such unit for the purpose of collectie
bargaining.) Collectie bargaining coers all aspects of the employment relation and the resultant
CB* negotiated by the certified union binds all employees in the bargaining unit. Aence, all rank-
and-file employees, probationary or permanent, hae substantial interest in the selection of the
bargaining representatie. The Code makes no distinction as to their employment status as bases
for eligibility to ote in the petition for certification election. The law refers to %all) the
employees in the bargaining unit. *ll they need to be eligible to ote is to belong to the bargaining
unit. ;Airtime Specialists, Cnc% vs% 5errer-'alleja, 1!B S'RA ?>79%
ALTERNATIME ANSWER?
2robationary employees may not be entitled to ote in a certification election where only
regular employees belong to a bargaining unit and probationary employees do not belong to such
bargaining unit. It is the belonging to a bargaining unit that entitles an employee to ote in a
certification election.
ANOT<ER ALTERNATIME ANSWER?









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Oes. *ny employee, whether employed for a definite period or not, shall, beginning on his
first day of serice, be considered an employee for purposes of membership in any labor union.
>*rticle +,, -c0?.
9$PICK S9(IO&S
SU;;AR> O4 T<E RULE? 1or a strike to be legal, it should either be an economic strike, i.e.,
caused by a bargaining deadlock or an unfair labor practice strike, i.e., caused by the commission
of an unfair labor practice by an employer.
On ;a# (6. 1B@B. t!e UA; "r+ed its eber*"nions to Doin a FWel+a n+ Ba#anG in s",,ort of
its efforts to ,ress"re Con+ress to in%rease t!e dail# ini" wa+e. Union FIG is a eber of
t!e UA; and re,resents all t!e ran5 and t!e file e,lo#ees of t!e 7"ritan ;inin+ Co,an#.
4ollowin+ t!e %all for a nationwide stri5e. Union FIG sta+ed a stri5e and ,"t a ,i%5et t!e
followin+ da#. As a res"lt. t!e %o,an#Cs o,erations were ,aral#3ed alt!o"+! %o,an# offi%ials
and s",er&isor# e,lo#ees were allowed in+ress and e+ress to and fro t!e %o,an# ,reises.
T!e ,i%5et was li5ewise ,ea%ef"l. On ;a# (@. 1B@B. t!e UA; leaders!i, anno"n%ed t!e end of
t!e FWel+a n+ Ba#an.G Union FIG iediatel# %o,an# so"+!t #o"r le+al ad&i%e on t!e le+alit#
of t!e stri5e and t!e liabilit#. if an#. of t!e "nion offi%ers and t!e ,arti%i,atin+ ebers. W!at
is #o"r o,inion' E$,lain.
The strike was illegal. 1or a strike to be legal, it should either be an economic strike, i.e.,
caused by a bargaining deadlock or an unfair labor practice strike, i.e., caused by the commission
of an unfair labor practice by an employer.
The strike by <nion %P) was neither an economic strike or an unfair strike. Thus, it was an
illegal strike.
Because it was an illegal strike, any union officer who knowingly participated in it may be
declared to hae lost his employment status, meaning such union officer could be legally
terminated.
*s for the union members who participated in the strike, the facts show that no illegal acts
were committed. They allowed ingress and egress to and from the company premises. The picket
was peaceful. The mere participation of the union members, without their committing illegal acts,
does not constitute sufficient ground for the termination of their employment.
ALTERNATIME ANSWER?
The strike is legal and the union officers and participating union members incur no liability
for calling and participating in the strike respectiely. *pplying the rule in 2hilippine Blooming 4ills
to the effect that the workers only personally assembled to influence the decision making process
of the goernment which is a constitutionally guaranteed right.
)oteK Credit should .e 0iven to ans7er that "ocus on the procedural reJuirement "or a
stri@e to .e le0al, ie stri@e vote, notice, coolin0 o"" period
7orfirio. Estela. Crisostoo. ;arita. and =ose Raire3 were brot!ers and sisters. All were
sto%5!olders. dire%tors and offi%ers of t!e 7a+as,as ;ar5etin+ Co.. In%. /7;CI2. 7;CI sold offi%e
a%!ines and s",,lies. It e,lo#ed (0 sales ,ersons. 10 deli&er# en. (0 ser&i%e ,ersonnel.
and 10 adinistrati&e e,lo#ees. On De%eber 10. 1B@). 68 ran5 and file wor5ers of t!e
%o,an# fored and re+istered a labor "nion. T!e# sent a letter to 7a+as,as deandin+
re%o+nition as bar+ainin+ a+ent of all wor5ers. en%losin+ %!e%5*off a"t!ori3ation fors of t!e
"nion ebers. and a set of e%onoi% deands. 7;CI ref"sed to re%o+ni3e t!e "nion. T!e
"nion ,resident went to #o". as labor ad&iser of t!e federation w!i%! t!e# were ,lannin+ to
affiliate wit!.
<e wants #o"r o,inion on w!at t!e "nion a# lawf"ll# do to %o,el ana+eent to %oe to
t!e bar+ainin+ table at t!at ,oint. W!at will #o"r ad&i%e be'
T!e "nion ,resident tells #o" t!at t!e# ,refer to +o on stri5e. <e wants to 5now t!e le+al
re:"ireents t!at t!e "nion "st %o,l# wit! so t!e stri5e will be le+al. W!at ad&i%e will #o"
+i&e'



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I will adice the union president to file a petition for certification so that after being
certified as the collectie bargaining representatie, the union could go back to 24CI and ask it to
bargain collectiely with the <nion. If 24CI persists in its refusal to bargain collectiely, I will
adice the <nion to file a case of unfair labor practice against 24CI since a refusal to bargain
collectiely is a <L2.
I will tell the union president that these are the re(uisites that should be complied with if a
strike is to be legalH The union should file a notice of strike with the Bureau of Labor ;elations
-assuming 24CI is in 4etro 4anila0. * copy of the notice should also be sered upon 24CI. The union
should not actually go on strike until after 8C days -if the strike is because of the <L2 committed by
24CI, i.e., its refusal to bargain collectiely0 after filing a notice of strike.
There should be a strike ote, either at a meeting or through a referendum. * ma'ority of the union
members on the bargaining unit should approe the declaration of strike. The union should furnish
the Bureau of Labor ;elations of the :otice of meeting where a strike ote will be taken. The union
should also inform the Bureau about the result of the oting at least seen -,0 days before the
intended strike.

9$PICK C$)#I9I$)S =$( A EA%I# (&9(&)C-/&)9
W!at %onditions "st ,re&ail and w!at re:"ireents. if an#. "st an e,lo#er %o,l# wit! to
D"stif# L effe%t a &alid retren%!ent ,ro+ra'
In the case of Asian Alcohol 'orporation vs% &=R', 2%R% &o% 1811B!, 3arch 6, 1777, The &C
stated that the re(uirements for a alid retrenchment must be proed by clear and conincing
eidenceH
-50 that the retrenchment is reasonably necessary and likely to preent business losses which,
if already incurred, are not merely de minimis, but substantial, serious, actual and real or if only
e#pected, re reasonably imminent as perceied by ob'ectiely and in good faith by the employer$
-+0 that the employer sered written notice both to the employees and to the @epartment of
Labor and 3mployment at least one month prior to the intended date of retrenchment$
-80 that the employer pays the retrenched employees separation pay e(uialent to one month
pay or at least one month pay for eery year of serice, whicheer is higher$
-E0 that the employer e#ercises his prerogatie to retrench employees in good faith for the
adancement of its interest and not to defeat or circument the employee=s right of security of
tenure$ and
-.0 that the employer used fair and reasonable criteria in ascertaining who would be dismissed
and who would be retained among the employees, such as status -i.e., whether they are
temporary, casual, regular, or managerial employees0, efficiency, seniority, physical fitness, age,
and financial hardship for certain workers.
9$PICK I%%&'A% #IS/ISSA%M #<& P($C&SS (&I<I(&/&)9S
SU;;AR> O4 T<E RULE? To meet the re(uirements of due process, the law re(uires that an
employer must furnish the workers sought to be dismissed with two written notices before
termination of employment can be legally effected, that is, -50 a notice which apprises the
employee of the particular acts or omissions for which his dismissal is sought$ and -+0 subse(uent
notice, after due hearing, which informs the employee of the employers decision to dismiss him.
Ass"in+ t!e e$isten%e of &alid +ro"nds for disissal. w!at are t!e re:"ireents before an
e,lo#er %an terinate t!e ser&i%es of an e,lo#ee'
The employer should gie the employee being terminated due process. 1or termination of
employment based on any of the 'ust causes for termination, the re(uirement of due process that
the employer must comply with areH
-50 * written notice should be sered on the employer specifying the ground or grounds for
termination and giing to say employee reasonable opportunity within which to e#plain his
side.









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-+0 * hearing or conference should be held during which the employee concerned, with the
assistance or counsel if the employee so desires, is gien opportunity to respond to the charge,
present his eidence and present the eidence presented against him.
-80 * written notice of termination, if termination is the decision of the employer, should be
sered on the employee indicating that upon due consideration of all the circumstances, grounds
hae been established to 'ustify his termination.
1or termination of employment based on authori"ed causes, the re(uirements of due
process shall be deemed complied with upon serice of a written notice to the @epartment of Labor
and 3mployment at least thirty -8C0 days before the affectiity of the termination specifying the
ground or grounds for termination.
ALTERNATIME ANSWER?
*ssuming that there is a alid ground to terminate employment, the employer must comply
with the re(uirement of procedural due processH written notice of intent to terminate stating the
cause of termination$ hearing$ and notice of termination. *rt. +,, of the Labor Code readsH
### 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 representatie if he so desiresW.
:ot only must the dismissal be for a alid or unauthori"ed cause as proided by law but the
rudimentary re(uirements of due process I notice and hearing I must also be obsered before an
employee must be dismissed ;Salaw v% &=R', 6B6 S'RA ?9. To meet the re(uirements of due
process, the law re(uires that an employer must furnish the workers sought to be dismissed with
two written notices before termination of employment can be legally effected, that is, -50 a notice
which apprises the employee of the particular acts or omissions for which his dismissal is sought$
and -+0 subse(uent notice, after due hearing, which informs the employee of the employers
decision to dismiss him ;Danala v% &=R', 66 S'RA 81>9.
9$PICK 1<(IS#IC9I$)
SU;;AR> O4 T<E RULE? ;egular courts hae 'urisdiction oer cases arising from slanderous
language uttered against an employee by an employer. This is a simple action for damages for
tortious acts allegedly committed by defendant-employer ;3edina vs% 'astro-<artolome, 11A S'RA
7?9.
;ariet Deetrio was a %ler5*t#,ist in t!e Offi%e of t!e 7resident of a "ltinational %or,oration.
One da# s!e was berated b# t!e 7resident of t!e %o,an#. t!e latter s!o"tin+ in&e%ti&es at !er
in t!e ,resen%e of e,lo#ees and &isitors for a inor infra%tion s!e %oitted. ;ariet was
red"%ed to tears o"t of s!ae and felt so bitter abo"t t!e in%ident t!at s!e filed a %i&il %ase for
daa+es a+ainst t!e %o,an# ,resident before t!e re+"lar %o"rts. Soon t!ereafter. ;ariet
re%ei&ed a eorand" transferrin+ !er to t!e Offi%e of t!e Heneral ;ana+er wit!o"t
deotion in ran5 or diin"tion in ,a#. ;ariet ref"sed to transfer.
<owe&er. wit! res,e%t to t!e %i&il s"it for daa+es. t!e %o,an# law#er filed a ;otion to
Disiss for la%5 of D"risdi%tion %onsiderin+ t!e e$isten%e of an e,lo#er*e,lo#ee relations!i,
and t!erefore. it is %laied t!at t!e %ase s!o"ld !a&e been filed before t!e Labor Arbiter.
R"le on t!e ;otion to Disiss. S!o"ld it be +ranted or denied. E$,lain briefl#.
The 4otion to @ismiss should be denied. It is a regular court and not a Labor *rbiter that
has 'urisdiction on the suit for damages. The damages did not arise from the employer-employee
relations which would not hae placed the suit under the 'urisdiction of a Labor *rbiter. The suit
arises from the fact that the 2resident of the company shouted inecties at 4ariet @emetrio in the
presence of employees and isitors. Aer complaint for damages is against an officer of the Company
based on slanderous language alleged made by the latter. This falls under the 'urisdiction of the
ordinary courts. There is here a simple action for damages for tortious acts allegedly committed by
the defendant. &uch being the case, the goerning statue is the Ciil Code and not the Labor Code.
-4edina s. Castro-Bartolome, 55G &C;* .6,0



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ALTERNATIME ANSWER?
The 4otion to dismiss should be granted. *ccording to the Labor Code -*rticle +5, -a0E0,
the Labor *rbiter has original and e#clusie 'urisdiction to hear and decide, among others, claims
for actual, moral and e#emplary and other forms of damages arising from the employer-employee
relations. The claim for damages in the case in (uestion arose from the fact that the 2resident of
the Company shouted inecties at 4ariet @emetrio in the presence of employees and isitors for a
minor infraction she committed. If the infraction has something to do with her work, then, the
claim for damages could be considered as arising from employer-employee relations. Thus, the
claim is under the e#clusie 'urisdiction of the Labor *rbiter.
9$PICK 1<(IS#IC9I$)
SU;;AR> O4 T<E RULE? *rticle ++8 of the Labor Code proides thatH % @ecisions, awards, or
orders of the Labor *rbiter are final and e#ecutory unless appealed to the Commission by any or
both parties within 5C calendar days from the receipt of such decisions, awards, or orders.)
T!e affe%ted ebers of t!e ran5*and*file e,lo#ees ele&ated t!e Labor ArbiterCs de%ision to
t!e NLRC &ia a ,etition for re&iew filed after t!e la,se of t!e 10*da# re+leentar# ,eriod for
,erfe%tin+ an a,,eal. S!o"ld t!e NLRC disiss t!e ,etition o"tri+!t or a# t!e NLRC ta5e
%o+ni3an%e t!ereof'
The :L;C should dismiss the appeal outright because the same was filed beyond the
reglementary period of appeal. *rticle ++8 of the Labor Code readsH % @ecisions, awards, or orders
of the Labor *rbiter are final and e#ecutory unless appealed to the Commission by any or both
parties within 5C calendar days from the receipt of such decisions, awards, or orders.)
ALTERNATIME ANSWER?
The :L;C could dismiss outright the appeal for being filed out of time. But if there are
good reasons that may 'ustifiably e#plain why there was a delay in the filing of the appeal,
substantial 'ustice may be the basis for the :L;C to take cogni"ance of the appeal.
-. SELECTED (006 BAR QUESTIONS AND ANSWERS
A. RS. a se%"rit# +"ard. filed a %o,laint for ille+al disissal a+ainst Star Se%"rit#
A+en%#. <e alle+ed !e was %onstr"%ti&el# disissed after ten #ears of ser&i%e to t!e a+en%#.
<a&in+ been ,la%ed on Foff*detailG and Ffloatin+ stat"sG for 9 ont!s alread#. !e %laied t!e
A+en%# D"st reall# wanted to +et rid of !i be%a"se it re:"ired !i to ta5e a ne"ro*,s#%!iatri%
e&al"ation test b# ;a!"sa# ;edi%al Center. RS said !e alread# s"bitted t!e res"lt of !is
e&al"ation test b# Brent ;edi%al Clini% as ,re%ondition to a new assi+nent. b"t t!e re,ort was
reDe%ted b# t!e A+en%#. RS added t!at ;a!"sa# ;edi%al Center !ad %lose ties wit! StarCs
,resident. It %o"ld ani,"late tests to fa&or oT!nl# +"ards w!o t!e A+en%# wanted to retain.
Star defended its ,oli%# of relian%e on ;a!"sa# ;edi%al Center be%a"se it !as been d"l#
a%%redited b# t!e 7!ili,,ine National 7oli%e. It is not one of t!ose d"bio"s testin+ %enters
iss"in+ read#*ade re,orts. Star %ited its sad e$,erien%e last #ear w!en a +"ard ran a"%5
and s!ot an e,lo#ee of a %lient*ban5. Star %laied ana+eent ,rero+ati&e in assi+nin+ its
+"ards. and ,ra#ed t!at RSC %o,laint be disissed.
W!at are t!e iss"es' Identif# and resol&e t!e.
&<BB3&T3@ *:&93;H
The facts in the (uestion raise these issuesH
5. 9hen ;& was placed on off detail or floating status for more than G months, can ;& claim that he
was terminatedV
+. Is there a alid reason for the termination of ;&V









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!n the first issue, ;& can be considered as terminated because he has been placed on %off
detail) or %floating status) for a period which is more than G months.
!n the second issue, it is true that disease is a ground for termination. But the neuro-
psychiatric ealuation test by 4ahusay 4edical Center is not the certification re(uired for disease
to be a ground for termination. The ;ules and ;egulations implementing the Labor Code re(uire a
certification by a public health authority that the disease is of such nature or at such a stage that it
cannot be cured within a period of G months een with proper medical treatment.
*:!TA3; &<BB3&T3@ *:&93;H
The issues inoled are as followsH
5. Is there constructie dismissalV
+. Is there a alid e#ercise of management prerogatieV
!n the first issue, there is constructie dismissal. ;& cannot be placed on %off detail) or
%floating status) indefinitely. If it lasts for more than G months, ;& shall be deemed to hae been
constructiely dismissed thus entitling him to separation benefits. -&uperstar &ecurity *gency s.
:L;C, 57E &C;* ,E0
!n the second issue, there is no alid e#ercise of management prerogatie. &tar=s claim of
management prerogatie in assigning its guards cannot be e#ercised to defeat or circument ;&=
right to security of tenure.
B. A s,inster s%!ool tea%!er too5 ,it# on one of !er ,",ils. a rob"st and ,re%o%io"s 1(*#ear old
bo# w!ose ,oor fail# %o"ld barel# afford t!e %ost of !is s%!oolin+. S!e li&es alone at !er
!o"se near t!e s%!ool after !er !o"seaid left. In t!e afternoon. s!e lets t!e bo# do &ario"s
%!ores as %leanin+. fet%!in+ water and all 5inds of errands after s%!ool !o"rs. S!e +i&es !i
ri%e and 7-0.00 before t!e bo# +oes !oe at )?00 e&er# ni+!t. T!e s%!ool ,rin%i,al learned
abo"t it and %!ar+ed !er wit! &iolatin+ t!e law w!i%! ,ro!ibits t!e e,lo#ent of %!ildren
below 18 #ears of a+e. In !er defense. t!e tea%!er stated t!at t!e wor5 ,erfored b# !er
,",il is not !a3ardo"s. and s!e in&o5ed t!e e$%e,tion ,ro&ided in t!e D.O. of DOLE for t!e
en+a+eent of ,ersons in doesti% and !o"se!old ser&i%e.
Is !er defense tenable' Reason.
&<BB3&T3@ *:&93;H
:o. Aer defense is not tenable. <nder *rt. 56 of the Labor Code on minimum employable
age, no child below 5. years of age shall be employed e#cept when he works directly under the
sole responsibility of his parents or guardian, the proisions of the alleged @. !. of @!L3 to the
contrary notwithstanding. * mere @epartment !rder cannot preail oer the e#press prohibitory
proisions of the Labor Code.
>:.B. &ec. 8, ;* 6+85 allows a child below 5. years of age to work for not more than +C
hours a week$ proided that the work shall not be more than E hours at any gien day$ proided
further, that he does not work between 724 and G*4 of the following day$ and proided, finally,
that the work is not ha"ardous or deleterious to his health or morals. This is a law approed only
on Duly +7, +CC8, which is beyond the cut-off period of the then +CCE Bar 3#aminations.?
C. W!i%! of t!e followin+ a# be %onsidered aon+ ind"stries ost &ital to national interest as
to be s"bDe%t of iediate ass",tion of D"risdi%tion b# t!e Se%retar# of Labor or %ertifi%ation
for %o,"lsor# arbitration in %ase of stri5e or wor5 sto,,a+e arisin+ fro a labor dis,"te'
1. B"lletin dail# news,a,er ,"blis!in+ %o,an#
(. Lo%al fran%!ise of =olibee and Starb"%5s
-. S!i,,in+ and ,ort ser&i%es in Ceb" and ;anila
6. En%!anted Ain+do. Ele,!ant Island and Bora%a# Resort
8. LBC. D<L and 4edEI %enters



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="stif# #o"r answer or %!oi%e.
&<BB3&T3@ *:&93;H
Certification of labor dispute for immediate assumption of 'urisdiction by the &ecretary
refers to industries indispensable to national interestH
5. Bulletin @aily :ewspaper, since access to information is a re(uirement for an
informed citi"enry.
+. &hipping and port serices, since the country needs domestic sea transport due
to our topography and for the smooth flow of business and goernment operations.
8. LBC, @AL and 1ed3P centers, since couriers are essential to foreign and domestic
business and goernment operations.
D. E,lo#ees of ABC de%lared a stri5e after filin+ a Noti%e of Stri5e wit! t!e DOLE. T!e#
barri%aded %o,an# +ates and daa+ed &e!i%les enterin+ %o,an# ,reises. On t!e se%ond
da# after t!e stri5e. ABC filed a ,etition wit! t!e DOLE Se%retar# to inter&ene t!ro"+! t!e
iss"an%e of an ass",tion of D"risdi%tion order t!at t!e Se%retar# a# iss"e w!en a stri5e or
lo%5o"t will ad&ersel# affe%t national interest. ABC f"rnis!ed t!e Se%retar# wit! e&iden%e to
s!ow t!at %o,an# &e!i%les !ad been daa+edQ t!at ele%tri% ,ower !ad been %"t offQ and
e:"i,ent and aterials were daa+ed be%a"se ele%tri% ,ower was not iediatel# restored.
ABC fore%ast t!at t!e %o"ntr#Cs s",,l# of %!lorine for water treatent /w!i%! t!e %o,an#
,rod"%es2 wo"ld be affe%ted ad&ersel# if ABCCs o,erations were %losed down b# t!e stri5ers.
Co"ld t!e DOLE Se%retar# inter&ene. ass"e D"risdi%tion and iss"e a TRO' Briefl# D"stif#
#o"r answer.
&<BB3&T3@ *:&93;H
Oes, the &ecreatry can assume 'urisdiction oer the dispute because *BC could be
considered as an industry indispensable to the national interest since it produces the country=s
supply of chlorine for water treatment.
The assumption of 'urisdiction by the &ecretary has the effect of ending the strike. The
strikers will be sub'ect to ;eturn to 9ork !rder by the &ecretary upon his assumption of
'urisdiction.
E. Be%a"se of alle+ed F"nfair labor ,ra%ti%esG b# t!e ana+eent of H4I s#ste. a
+o&ernent*owned and %ontrolled finan%ial %or,oration. its e,lo#ees wal5ed o"t fro t!eir
Dobs and ref"sed to ret"rn to wor5 "ntil t!e ana+eent wo"ld +rant t!eir "nion offi%ial
re%o+nition and start ne+otiations wit! t!e.
T!e leaders of t!e wal5*o"t were disissed. and t!e ot!er ,arti%i,ants were s"s,ended
for 9o da#s. In ar+"in+ t!eir %ase before t!e Ci&il Ser&i%e Coission. t!e# %ited t!e ,rin%i,le
of so%ial D"sti%e of wor5ers and t!e ri+!t to self*or+ani3ation and %olle%ti&e a%tion. in%l"din+
t!e ri+!t to stri5e. T!e# %laied t!at t!e Constit"tion s!ielded t!e fro an# ,enalt# be%a"se
t!eir wal5*o"t was a %on%erted a%tion ,"rs"ant to t!eir ri+!ts +"aranteed b# basi% law.
Is t!e ,osition ta5en b# t!e wal5*o"t leaders and ,arti%i,ants le+all# %orre%t' Reason
briefl#.
&<BB3&T3@ *:&93;H
:o. They are goernment employees, and as such, they do not hae the right to strike.
&ec 8 of *rt PIII of the Constitution states, %The &tate shall guarantee the rights of all workers to
self-organi"ation, collectie bargaining and negotiations, and peaceful concerted actiities
including the right to strike in accordance with law.)









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The last clause is ery clear$ the right to strike is not constitutional. It is statutory because
the right should be in accordance with law. *nd there is as yet no law giing goernment
employees the right to strike.
*:!TA3; &<BB3&T3@ *:&93;H
:o.
*ssuming that what we hae is a originally chartered B!CC, they cannot, under 3o 57C and
related 'urisprudence, stage such walk-out which is basically a case of strike.
3en if B1I was organi"ed under the Corporation Code, still no such walk-out is allowed
without complying with the re(uirements of a alid strike, among which is that said strike should
be alidly grounded on a -a0 deadlock in collectie bargaining, or -b0 <L2.
CASE DOCTRINES
BOOA ONE
7OEAQ 7OWERS AND 4UNCTIONS.
*22;!V*L !1 !V3;&3*& C!:T;*CT&
*n agreement that changes the employee=s pay and benefits to make them lesser than
those contained in a 2!3*-approed contract is oid, unless such subse(uent agreement is
approed by the 2!3* ;'have$ vs% <onto-Pere$9.
;3I4B<;&343:T !1 !V3;2*I@ 133&
2!3* has the power to order refund or reimbursement of fees fraudulently or illegally
collected, or in e#cess of what is legally allowed. ;*astern Assurance E Surety 'orporation vs%
Secretary of =abor9%
I&&<*:C3 !1 &3*;CA *:@ &3IU<;3 !;@3;&
<nder the Constitution, only a 'udge may issue warrants of search and arrest. The labor
authorities must go through the 'udicial process. The &ecretary of Labor, not being a 'udge, may no
longer issue search or arrest warrants. To that e#tent, *rticle 87, paragraph -c0, of the Labor Code,
is declared of no force and effect ;Sala$ar vs% Achacoso and 3ar(ue$9.
ILLEHAL RECRUIT;ENTQ CONCE7T.
ILL3B*L ;3C;<IT43:T is-X-is 3&T*1*



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* person conicted for illegal recruitment under the Labor Code can be conicted for
iolation of the ;eised 2enal Code proisions on estafa proided the elements of the crime are
present ;People vs% 'alon$o9.
BOOA TWO
A77RENTICES<I7 AHREE;ENTS? C$)C&P9.
C!:C32T
*n apprenticeship program needs prior approal by the @epartment of Labor and
3mployment. If employed without a pre-approed apprenticeship program, the apprentice is not an
apprentice but a regular employee ;&itto *nterprises v% &=R'9.
*22;3:TIC3&AI2 is-X-is 342L!O3;-342L!O33 ;3L*TI!:&AI2
There is no employer-employee relationship between students on one hand, and schools,
colleges or uniersities, on the other, where there is written agreement between them under which
the former agree to work for the latter in e#change for the priilege to study free of charge,
proided, the students are gien real opportunities, including such facilities as may be reasonable
and necessary to finish their chosen courses under such agreement.L ;Cmplementing Rules of <oo,
CCC, Rule F, Sec% 1>9
If the student referred to in *rt. ,+ of the Labor Code, in the course of doing a task in
behalf of the school, causes in'ury to a third person, the school can be held liable. The
Implementing ;ules proision that there is no employer-employee relation between the school and
the student pertains to obserance of labor regulations, such as payrolls to be kept, working
conditions or rest periods. It is not the decisie law in a ciil suit for damages instituted by an
in'ured third person. The applicable law is *rticle +57C of the Ciil Code ;5ilamer 'hristian
Cnstitute v% 'A9.
BOOA T<REE
;ANAHE;ENT 7REROHATIME. #&=I)&#.
3#cept as limited by special laws, an employer is free to regulate, according to his own
discretion and 'udgment, all aspects of employment, including hiring, work assignments, working
methods time, place and manner of work, tools to be used, processes to be followed, superision of
workers, working regulations, transfer of employees, work superision, layoff of workers and the
discipline, dismissal and recall of workers ;San 3iguel <rewery Sales vs% @ple9.
CONDITIONS O4 E;7LO>;ENTQ C$E&(A'&
I:&<;*:C3 *B3:T&
*n insurance company may hae two classes of agents who sell its insurance policiesH -50
salaried employees who keep definite hours and work under the control and superision of the
company$ and -+0 registered representaties who work on commission basis. The agents who belong
to the first category are regular employees. Those who belong to the second category are not
regular employees for they do not hae to deote their time e#clusiely to or work solely for the
company since the time and the effort they spend in their work depend entirely upon their own will
and initiatie ;2reat Pacific =ife Cnsurance 'orporation vs% Gudico9%
T3*CA3;&
College teachers are regular employees. The principal consideration in determining
whether a workman is an employee or an independent contractor is the right to control the manner
of doing the work, and it is not the actual e#ercise of the right by interfering with the work, but









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the right to control, which constitutes the test ;5eati .niversity vs% Hon% Gose S% <autista, and
5eati .niversity 5aculty 'lub9%
D332:3O @;IV3;& <:@3; B!<:@*;O &O&T34
3mployer-employee relationship e#ists between the owner of the 'eepneys and the driers
een if the latter work under the boundary system. :ot haing any interest in the business because
they did not participate in the management thereof, their serice as driers of the 'eeps being
their only contribution to the business, relationship of lessor and lessee cannot be sustained
;'iti$enIs =eague of 5ree +or,ers, et al% vs% Abbas, 2R &o% =-616169%
2I3C3-;*T3 9!;N3;&
2iece-rate workers who work inside the company premises under the close superision and
control of their employers are regular employees -=abor 'ongress of the Philippines vs% &=R'9%
2iece-rate workers who work outside the company premises and are unsuperised or whose
time spent in their work cannot be reasonably ascertained are :!T regular employees -4akati
Aaberdashery, Inc. s. :L;C0.
1I&A3;43:
1ishermen who work not under the orders of the boat-owners as regards their employment$
that they go out to sea not upon directions of the boat-owners, but upon their own olition as to
when, how long, and where to go fishing$ that the boat-owners do not in any way control the crew
members with whom the former hae no relationship whatsoeer$ that they simply 'oin the trip for
which the pilots allow them, without any reference to the owners of the essel$ and that they only
share in their own catch produced by their own efforts I are :!T regular employees ;Pajarillo vs%
SSS9.
1ishermen who conduct fishing operations under the control and superision of the boat-
owner=s operations manager are regular employees. 4atters dealing on the fi#ing of the schedule of
the fishing trip and the time to return to the fishing port were the prerogatie of the boat-owner
;Ruga, et al% vs% &=R'9%
CONDITIONS O4 E;7LO>;ENTQ -$<(S $= >$(O
9*ITI:B TI43
9aiting spent by an employee shall be considered as working time if waiting is considered
an integral part of his work or if the employee is re(uired or engaged by an employer to wait
;Japanta v% &ational Alliance of Deachers and @ffice +or,ers Assoc, Sept% , 17!B9%
43*L TI43
4eal time is :!T working time if the employee is completely freed from duties during his
meal period een though he remains in the workplace ;Pan American +orld Airways System KPhil%L
vs% Pan American *mployment Association9.
9here work is continuous for seeral shifts, the mealtime breaks should be counted as
working time for purposes of oertime compensation ;&ational 4evIt 'ompany vs% 'CR and the
&ational De"tile +or,ers .nion9.
9!;NI:B 9AIL3 &L332I:B
&leeping time may be considered working time if it sub'ect to serious interruption or takes
place under conditions substantially less desirable than would be likely to e#ist at the employee=s
home ;S,idmore vs% Swift and 'o%9.



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!: C*LL
*n employee who is re(uired to remain on call on the employer=s premises or so close
thereto that he cannot use the time effectiely for his own purposes is working while %on call). The
time he stays in the place of work is considered hours worked ;&ational =abor .nion vs% 2otamco
=umber 'o% vs% 'CR9%
:IBAT &AI1T @I113;3:TI*L
*dditional compensation for nighttime work is founded on public policy, hence the same
cannot be waied. It is argued that that laborer can rest during the day after haing worked the
whole night. But can the repose by day produce to the human body the same complete
recuperatie effects which only the natural rest at night can gie himV It is belieed that since time
immemorial the uniersal rule is that a man works at night due to some driing necessity rather
than for reasons of conenience ;3ercury 4rug co%, Cnc% vs% &ardo 4ayao, et al%9%
!V3;TI43 2*O
The right to oertime pay cannot be waied. The right is intended for the benefit of the
laborers and employees. *ny stipulation in the contract that the laborer shall work beyond the
regular 7 hours without additional compensation for the e#tra hours is contrary to law and null and
oid ;'ru$ vs% Mee Sing9%
9*IV3; !1 !V3;TI43 2*O
9aier may be permitted when it is in consideration of benefits and priileges which may
be more than what will accrue to the employee in oertime pay ;3eralco +or,ers .nion vs% 3anila
*lectric 'ompany, et al%9.
:IBAT &AI1T @I113;3:TI*L *:@ !V3;TI43 2*O
The receipt of oertime pay will not preclude the right to night differential pay. The latter
is payment for work done during the night while the other is payment for the e#cess of the regular
eight-hour work ;&aric vs% &aric +or,ers .nion9.
!V3;TI43 2*O B*&3@ !: B*&IC 2*O
In the computation of oertime pay, premium pay for work done on &undays, holidays and
at night and other fringe benefits which are occasionally, not regularly, receied and not by all
employees, should not be added to the basic pay.
CONDITIONS O4 E;7LO>;ENTQ -$%I#AL PAL A)# S&(EIC& I)C&)9IE& %&AE&S
3:TITL343:T !1 4!:TALO-2*I@ 342L!O33& T! A!LI@*O 2*O
4onthly-paid employees are not e#cluded from the benefits of holiday pay. The Labor Code
clearly states that eery worker shall be paid his or her regular holiday pay ;Cnsular <an, of Asia
and America *mployees .nion vs% Hon% Amado Cnciong and Cnsular <an, of Asia and America9%
3:TITL343:T !1 2*;T-TI43 !; C!:T;*CT<*L 9!;N3;&
T! &3;VIC3 I:C3:TIV3 L3*V3
?ureau o" >or@in0 Conditions, Advisor! $pinion to Philippine Inte0rated &4porters, Inc on
the Juer! a.out Conditions o" &mplo!ment o" Part;time >or@ers
2art-time workers are entitled to the full benefit of the yearly . days serice incentie
leae with pay. The reason is that the proisions of *rticle 6. of the Labor Code and its
implementing rules, speak of the number of months in a year for entitlement to said benefit.









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Conse(uently, part-time employees are also entitled to the full fie days serice incentie leae
benefit and not on a pro-rata basis.
CONDITIONS O4 E;7LO>;ENTQ WAHES
&*L*;O 3PCL<@3& *LL!9*:C3&
3#isting laws e#clude allowances from the basic salary or wage in the computation of the
amount of retirement and other benefits payable to an employee. The &upreme Court will not
adopt a different meaning of the terms %salaries or wages) to mean the opposite, that is to include
allowances in the concept of salaries or wages ;'ebu Cnstitute of Dechnology vs% @ple9.
B*&IC 9*B3 *:@ C!44I&&I!:&
If the commissions are in a wage-or sales- percentage type, they may properly be
considered part of the basic salary. These commissions are not oertime payments, nor profit-
sharing payments nor any other fringe benefit. Thus, the salesman=s commissions, comprising a pre-
determined percent of the selling price of the goods sold by each salesman, were properly included
in the term %basic salary) for purposes of computing their 58
th
month pay ;Philippine 4uplicators,
Cnc% vs% &=R' and Philippine 4uplicators *mployees .nion9.
In remuneratie schemes consisting of a fi#ed or guaranteed wage plus commission, the
fi#ed or guaranteed wage is patently the %basic salary) for this is what the employee receies for a
standard work period. Commissions are gien for e#tra efforts e#erted in consummating sales or
other related transactions. They are, as such, additional pay, which the Court has made clear do
not form part of the %basic salary) ;<oie-Da,eda 'hemicals, Cnc% vs% 4ionisio 4ela Serna9%
2;!2!;TI!:*T3 58
th
4!:TA 2*O
*n employee who has resigned or whose serices were terminated at anytime before the
time of payment of the 58
th
month pay is entitled to 58
th
month pay 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 serice ;Cnternational School of
Speech vs% &=R' and 3' 3amuyac9.
>A'&SM 7A>;ENT O4 WAHES
:!:-L*9O3;& :!T 3:TITL3@ T! *TT!;:3O=& 133&
*lthough the law allows, under certain circumstances, non-lawyers to appear before the
:ational Labor ;elations Commission or any Labor *rbiter, howeer, this does not mean that they
are entitled to attorney=s fees. Their act of representing, appearing or defending a party litigant in
a labor case does not, by itself, confer upon them legal right to claim for attorney=s fees.
3ntitlement to attorney=s fees presupposes the e#istence of attorney-client relationship. This
relationship cannot e#ist unless the client=s representatie is a lawyer ;5ive G Da"i, et al% vs%
&=R'9%
>A'&SQ 7RO<IBITION REHARDINH WAHES
9*B3 @3@<CTI!:&H &3TTI:B !11 !1 4!:3O CL*I4 !1 342L!O33 *B*I:&T :!:2*O43:T !1 &T!CN
&<B&C;I2TI!:&
*rticle 558 of the Labor Code allows such a deduction from the wages of the employees by
the employer, only in three instances, to witH -a0 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$ -b0 for union dues, in cases where the right of the workers or his
union to check-off has been recogni"ed by the employer or authori"ed in writing by the indiidual



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worker concerned$ and -c0 in cases where the employer is authori"ed by law or regulations issued
by the &ecretary of Labor ;Apodaca vs% &=R', et a%9.
9*B3 @I&T!;TI!:
The Court summari"es the principles relating to wage distortion, namelyH
-a0 The concept of wage distortion assumes an e#isting grouping or classification of
employees which establishes distinctions among such employees on some releant or legitimate
basis. This classification is reflected in a differing wage rate for each of the e#isting classes of
employees.
-b0 9age distortions hae often been the result of goernment-decreed increases in
minimum wages. There are, howeer, other causes of wage distortions, like the merger of two
companies -with differing classifications of employees and different wage rates0 where the
suriing company absorbs all the employees of the dissoled corporation.
-c0 &hould a wage distortion e#ist, there is no legal re(uirement that, in the rectification
of that distortion by read'ustment of the wage rates of the differing classes of employees, the gap
which had preiously or historically e#isted be restored in precisely the same amount. In other
words, correction of a wage distortion may be done by reestablishing a substantial or significant
gap -as distinguished from the historical gap0 between the wage rates of the differing classes of
employees.
(d) The reestablishment of a significant difference in wage rates may be the result of
resort to grieance procedures or collectie negotiations ;&ational 5ederation of =abor vs% &=R'9.
>$(OI)' C$)#I9I$)SQ S7ECIAL HROU7 O4 E;7LO>EES
&TI2<L*TI!: *B*I:&T 4*;;I*B3 -*rticle 58G0
*rticle 58G is not intended to apply only to women employed in ordinary occupations, or it
should hae categorically e#pressed so. The sweeping intendment of the law, be it on special or
ordinary occupations, is reflected in the whole te#t and supported by *rticle 58. that speaks of
nondiscrimination on the employment of women ;'laudine de 'astro Jialcita, et al% vs% PA=9.
A!<&3A3L23;
The criterion is the personal comfort and en'oyment of the family of the employer in the
home of said employer. 9hile the nature of work of a househelper, domestic serant or laundry
woman in a home or in a company staff house may be similar in nature, the difference in their
circumstances is that in the former instance they are actually sering the family while in the latter
case, whether it is a corporation or a single proprietorship engaged in business or industry or any
other agricultural or similar pursuit, serice is being rendered in the staff houses or within the
premises of the business of the employer. In such instances, they are employees of the company or
employer in the business concerned entitled to the priileges of a regular employee ;Ape" 3ining
'o%, Cnc% vs% &=R'9.
BOOA 4IME
7OWERS AND DUTIESQ 1<(IS#IC9I$) $= 9-& %A?$( A(?I9&(S A)# 9-& C$//ISSI$)
43*:I:B !1 C!42<L&!;O *;BIT;*TI!:
In its broad sense, arbitration is the reference of a dispute to an impartial third person,
chosen by the parties or appointed by statutory authority to hear and decide the case in
controersy. 9hen the consent of one of the parties is enforced by statutory proisions, the
proceeding is referred to as compulsory arbitration. In labor cases, compulsory arbitration is the
process of settlement of labor disputes by a goernment agency which has the authority to
inestigate and to make an award which is binding on all parties ;Philippine Airlines, Cnc% vs% &=R'9.
7OWERS AND DUTIESQ P$>&(S $= 9-& C$//ISSI$)
C!:T342T 2!93;









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The commission has the power to hold any person in contempt directly or indirectly. The
procedures and penalties thereof are proided under paragraph -d0 of *rt. +57. &ection +, ;ule P of
the :ew ;ules of 2rocedure of the :L;C proides that the Commissioner or any labor arbiter may
cite any person for indirect contempt upon grounds and in the manner prescribed under &ec. 8-b0,
;ule ,5 of the 566, ;ules of Ciil 2rocedure. The said section proides that %Indirect contempt is to
be punished after charge and hearing for any ### disobedience of or resistence to a lawful writ,
process, order, or 'udgment of a court ###) ;Cndustrial and transport *(uipment, Cnc%, et al% vs%
&=R'9.
C!42;!4I&3 *B;3343:T& *:@ R*S G.4C'ADA
It is true that a compromise agreement once approed by the court has the effect of res
judicata between the parties and should not be disturbed e#cept for ices of consent and forgery.
Aoweer, The :L;C may disregard technical rules of procedure in order to gie life to the
constitutional mandate affording protection to labor and to conform to the need of protecting the
working class whose inferiority against the employer has always been earmarked by disadantage
;Principe vs% Philippine-Singapore Dransport Services, Cnc%,9.
7OWERS AND DUTIESQ APP&A(A)C&S A)# =&&S
*223*;*:C3 !1 :!:-L*9O3;&
:on-lawyers may appear before the commission or labor arbiter onlyH /a2 if they represent
themseles$ /b2 if they represent their organi"ation or members thereof$ or /%2 if he is a duly-
accredited member of the legal aid office duly recogni"ed by the department of 'ustice or
integrated bar of the 2hilippines in case referred thereto by the latter.
The appearance of labor federations and local unions as counsel in labor proceedings has
been gien legal sanction and we need only to cite *rt. +++ of the Labor Code allowing non-lawyers
to represent their organi"ation or members thereof ;Radio 'ommunication of the Philippines, Cnc%
vs% Dhe Secretary of =abor *mployment9.
*TT!;:3O=& 133&
There are only two kinds of cases where attorney=s fees may be assessed? /12 cases arising
from unlawful withholding of wages and /(2 cases arising from collectie bargaining negotiations
;Reahs 'orporation vs% &=R'9.
2;!AIBITI!: !1 2*O43:T !1 *TT!;:3O=& 133&
*rt. +++ of the Labor Code prohibits the payment of attorneys fees only when it is effected
through forced contributions from the workers from their own funds as distinguished from the union
funds. The purpose of the proision is to preent imposition on the workers of the duty to
indiidually contribute their respectie shares in the fee to be paid the attorney for his serices on
behalf of the union in its negotiations with the management. The obligation to pay the attorney=s
fees belongs to the union and cannot be shunted to the workers as their responsibility ;<an, of the
Philippine Cslands vs% &=R', et al%9.
*TT!;:3O=& 133& *;I&I:B 1;!4 ;3C!V3;O !1 9*B3& *:@ !TA3; B3:31IT&
*rt 555 of the Labor Code regulates the amount recoerable as attorney=s fees in the
nature of damages sustained by and awarded to the preailing party. It may not be used therefore,
as the lone standard in fi#ing the e#act amount payable to the lawyer by his client for the legal
serices he rendered. 4oreoer, while it proides for the ma#imum allowable amount of attorney=s
fees, it does not direct the instantaneous and automatic award of attorney=s fees in such ma#imum
limit ;Draders Royal <an, *mployees .nion-Cndependent vs% &=R'9.
133& 1!; &3;VIC3& ;3:@3;3@ BO <:I!: !11IC3;&
*rt. +++-b0 prohibits attorney=s fees, negotiation fees and similar charges arising out of the
conclusion of a bargaining agreement from being imposed on any indiidual union member. The



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collection of the special assessment partly for the payment serices rendered by union officers,
consultants and other may not be in the category of %attorney=s fees or negotiations fees.) But
there is no (uestion that it is an e#action which falls within the category of a )similar charge) and
therefore, within the coerage of the prohibition in the aforementioned article ;Palacol vs% 5errer-
'alleja9
A77EALQ &X&C<9I$) $= #&CISI$)S, $(#&(S A)# A>A(#S
1*IL<;3 T! C!42LO 9ITA * 9;IT !1 3P3C<TI!:
If the employer fails or is unable to comply with a final and e#ecutory 'udgment for the
reinstatement of an employee, the plain and obious remedy is simply the compulsion of the
employer by writ of e#ecution to effect the mandated reinstatement and pay the amounts decreed
in the 'udgment, and disregard or oerrule the employer=s claim of inability to reinstate the
employee. If there be alid and unsuperable cause for such inability to reinstate, this factor must
be taken into account in the process of directing and effectuating the award of relief to the
employee consistent with the 'udgment. The remedy is certainly not the institution of a separate
action, whether in the regular courts or the labor arbiter=s branch. &uch recourse would iolate the
well-settled principle of res judicata. It would gie rise to multiplicity of actions which the law
abhors and e#erts eery effort to eschew ;3AC Philippines Cnc% vs% &=R' et al%9.

The remedy for refusal of the employer to reinstate employee despite seeral writs of
e#ecution is not the grant of additional backwages to sere as damages but to cite the employer in
contempt ;'hristian =iterature 'rusade v% &=R'9.
3P3C<TI!: !V3; 2;!23;TO !9:3@ !:LO BO TA3 D<@B43:T @3BT!;
If the property under ley does not belong to the 'udgment debtor in the :L;C case, it
could not be alidly leied upon by the sheriff for the satisfaction of the 'udgment therein. 3en
upon a prima facie showing of the ownership by the third-party claimant, if the third-party claim
does not inole nor grows out of, a labor dispute, a separate action for in'unctie relief against
such ley may be maintained in court ;Penalosa v% )illanueva9.
:!TI1IC*TI!:
In labor cases, both the party and its counsel must be duly sered their separate copies of
the order, decision, or resolution, unlike in ordinary 'udicial proceeding where notice to counsel is
deemed notice to the party ;P&@' 4oc,yard and *ngineering 'orp% vs% &=R'9.
BUREAU O4 LABOR RELATIONSQ 1<(IS#IC9I$)
N*T*;<:B*:B 2*4B*;*:B*O *:@ TA3 L*B!; C!@3
*rt ++G of the Labor Code grants original and e#clusie 'urisdiction oer the conciliation
and mediation of disputes, grieances or problems in the regional offices of the @epartment of
Labor and 3mployment. It is the aid bureau and its diisions and not the barangay lupong
tagapayapa which are ested by law with original and e#clusie authority to conduct conciliation
and mediation proceedings on labor controersies before their endorsement to the appropriate
labor arbiter ad'udication ;3ontoya vs% *scayo9.
BUREAU O4 LABOR RELATIONSQ C$/P($/IS& A'(&&/&)9S
!2TI!:& 9A3: C!42;!4I&3 *B;3343:T I& VI!L*T3@
<nder article +CE5 of the ciil code, should the party fail or refuse to comply with the
terms of a compromise agreement or amicable settlement, the other party could eitherH -50
enforce the compromise by a writ of e#ecution, or -+0 regard it as rescinded and so insist upon his
original demand ;3orales et al% vs% &=R'9.









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LABOR ORHANINATIONSQ (I'-9S A)# C$)#I9I$)S $= /&/?&(S-IP
:*T<;3 !1 ;3L*TI!:&AI2 B3T933: <:I!: *:@ IT& 434B3;&
The union has been eoled as an organi"ation of collectie strength for the protection of
labor against the un'ust e#actions of capital, but e(ually important is the re(uirement of fair
dealing between the union and its members, which is fiduciary in nature, and arises out of two
factorsH one is the degree of dependence of the indiidual employee on the union organi"ation$ and
the other, a corollary of the first, is the comprehensie power ested in the union with respect to
the indiidual. The union to be considered but the agent for the purpose of securing for them fair
and 'ust wages and good working conditions and is sub'ect to the obligation of giing the members
as its principals all information releant to union and labor matters entrusted ;Heirs of Deodoro
'ru$ vs% 'ourt of Cndustrial Relations9.
;3LI31 9ITAI: TA3 <:I!:
Benerally, redress must first be sought within the union itself in accordance with its
constitution and by-laws ;Napisanan ng mga 3angagawa sa 3RR vs% Hernande$9.
CA3CN-!11
*ttorney=s fees may not be checked-off or deducted from any amount due to an employee
without his written consent, e#cept for mandatory actiities under the Code%;)engco vs% Drajano9.
@3@<CTI!:& 1!; <:I!: &3;VIC3 133
@eductions for union serice fee are authori"ed by law and do not re(uire indiidual check-
off authori"ations ;Radio 'ommunications of the Philippines Cnc% vs% Sec% of =abor9.
LABOR ORHANINATIONSQ (I'-9S $= %&'I9I/A9& %A?$( $('A)IPA9I$)S
C!42;!4I&3 BI:@I:B <2!: 4I:!;ITO 434B3;& !1 <:I!:
* compromise agreement between the union and the company, pursuant to which the
complaint in an unfair labor practice case had been withdrawn and dismissed, is binding upon the
minority members of the union ;4ionela vs% 'ourt of Cndustrial Relations9.
RIH<T TO SEL4*ORHANINATIONQ C$E&(A'&
342L!O33-434B3;& !1 * C!!23;*TIV3
It is the fact of ownership of the cooperatie, and not the inolement in the management
thereof, which dis(ualifies a member from 'oining any labor organi"ation within the cooperatie.
Thus, irrespectie of the degree of their participation I the actual management of the cooperatie,
all members thereof cannot form, assist or 'oin a labor organi"ation for the purpose of collectie
bargaining ;<enguet *lectric 'ooperative vs% 5errer-'alleja9.
UN4AIR LABOR 7RACTICESQ &/P%$L&(S
*CC32T*:C3 !1 4*&& ;3&IB:*TI!:
*cceptance of a oluntary resignation is not <L2. 9hen persons oluntarily terminate their
employment relationship, they cannot claim that they were dismissed ;*nri(ue$ vs% Jamora9.
1!;C3@ V*C*TI!: L3*V3



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The forced acation leae without pay in iew of the economic crisis, being neither
malicious, oppressie or indictie, does not constitute <L2 ;Philippine 2raphic Arts, Cnc% vs%
&=R<9.
<L2 3V3: B31!;3 <:I!: I@ ;3BI&T3;3@
<nder *rt. +E7 of the Labor code of the 2hilippines, %to interfere with, restrain, or coerce
employees in their e#ercise of the right to self-organi"ation) is an unfair labor practice on the part
of the employer. 2aragraph d of said article also considers it an unfair labor practice for an
employer to %initiate, dominant, assist or otherwise interfere with the formation or administration
of any labor organi"ation, including the giing of financial %or other support to it.) ;Gudric 'anning
'orporation vs% Cnciong9

<L2 TA;!<BA VI!L3:C3 *:@ I:TI4I@*TI!:
*n employer unlawfully coerced employers by directing two indiiduals to his office at gun
point on the day of representation election after the indiiduals had informed the employer that
they were on the premises to ote in the election and they did in fact ote ;Holly Hill =umber vs%
&=R<9.
<L2 TA;!<BA &<;V3ILL*:C3
9hen an employer engages in sureillance or takes steps leading his employees to beliee it
is going on, a iolation results because the employees come under threat of economic coercion or
retaliation for their union actiities ;Henri$ 3fg% 'o vs% &=R<9.
<L2 TA;!<BA 3C!:!4IC I:@<C343:T&
* iolation results from an employer=s announcement of benefits prior to a representation
election, where it is intended to induce the employees to ote against the union ;ReO Hancoc,
5abric @utlet9.
T!T*LITO !1 C!:@<CT @!CT;I:3
The letter, e#hibits * and B, should not be considered by themseles alone, but should be
read in the light of the preceding and subse(uent circumstances surrounding. The letter should be
interpreted according to the %totality of conduct doctrine,) whereby the culpability of an
employer=s remarks were to be ealuated not only on the basis of their implicit implications, but
were to be appraised against the background of and in con'unction with collateral circumstances
;Dhe Cnsular =ife Assurance 'o%, =td%, *mployees Association-AD., et al% vs% Dhe Cnsular =ife
Assurance 'o%, =td%9.
L!CN!<T !; CL!&<;3 *4!<:TI:B T! <L2
The rule is that it is unlawful for the employer to threaten its employees with moing or
shutting down the plant and conse(uent loss of employment, as the result of their support for the
union ;&=R< vs% =ousiana 3529.
<L2 TA;!<BA C!42*:O @!4I:*TI!: !1 TA3 <:I!:
@omination of a labor union is usually manifested in the following formsH
a. Cnitiation of the company union idea . This may further occur in three stylesH /12
outright formation by the employer or his representaties$ /(2 employee formation on outright
demand or influence by employer$ and /-2 managerially motiated formation by employees.









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b. 5inancial support to the union . *n employer commits unfair labor practice if he defrays
the union e#penses or pays the attorney=s fees to the attorney who drafted the constitution and by-
laws of the union.
c. *mployer encouragement and assistance . Immediately granting he union e#clusie
recognition as a bargaining agent without determining whether the union represents the ma'ority of
the employees is an illegal form of assistance amounting to unfair labor practice.
d. Supervisory assistance . This takes form of soliciting membership permitting union
actiities during working time or coercing employees to 'oin the ion by threats of dismissal or
demotion ;Philippine American 'igar E 'igarette 5actory +or,ers .nion vs% Philippine American
'igar E'igarette 35g% 'o%, Cnc%9.
<L2 TA;!<BA @I&C;I4I:*TI!: I: &*L*;O *@D<&T43:T&
There is unfair and un'ust discrimination in the granting of salary ad'ustments where the
eidence shows that -a0 the management paid the employees of unioni"ed branch$ -b0 where the
salary ad'ustments were granted to employees of one of its non-unioni"ed branches although it was
losing in its operations$ and -c0 the total salary ad'ustments gien one employee in the non-
unioni"ed branch ;3anila Hotel 'ompany vs% Pines Hotel *mployees Association9.
T3&T !1 @I&C;I4I:*TI!:
1or 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 aailable is not a defense where the employee is actually discharged because of his
union actiities. If the discharge is actually motiated by lawful reason, the fact that the employee
is engaged in union actiities at the time will not lie against the employer and preent him from
the e#ercise of his business 'udgment to discharge an employee for cause ;&=R< vs% Ace 'omb 'o%9.
<L2 TA;!<BA C!:&T;<CTIV3 @I&CA*;B3
*n employee was held to be constructiely discharged when she (uit her 'ob because of the
employee=s discriminatory assignment re(uiring heay lifting work which the employer knew she
was physically unable to perform ;&=R< vs% )acuum9.
V*LI@ITO !1 TA3 CL!&3@ &A!2 *B;3343:T
* closed shop agreement is alid form of union security, and such a proision in a collectie
bargaining agreement is not a restriction of the right of freedom of association guaranteed by the
Constitution ;3anila 3andarin *mployees .nion vs% &=R'9.
*@V*:T*B3& *:@ @I&*@V*:T*B3& !1 CL!&3@-&A!2 *B;3343:T
* closed-shop agreement is adantageous because itK
a. Increases the strength and bargaining power of labor organi"ations.
b. 2reents nonunion workers from sharing in the benefits of the union=s actiities
without also sharing its obligations.
c. 2reents the weakening of labor organi"ations by discrimination against union
members.
d. 3liminates the lowering of standards caused by competition with nonunion
workers.
e. 3nables labor organi"ations effectiely to enforce collectie agreements.
f. 1acilitates the collection of dues and the enforcement of union rules.
g. Creates harmonious relations between the employer and the employee ;&=. vs%
AguinaldoIs *chague9.
<L2 I: * BIV3: 23;I!@ &A!<L@ B3 I:CL<@3@ I: &I:BL3 CA*;B3



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9hen a labor union accuses an employer of acts of unfair labor practice allegedly
committed during a gien 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 subse(uent charges, and based upon acts committed during the same
period of time ;4ionela vs% 'ourt of Cndustrial Relations9%
COLLECTIME BARHAININH AHREE;ENTQ C$)C&P9
CB* @31I:3@
* collectie bargaining agreement -CB*0, as used n *rt +.+ of the labor code, refers to a
contract e#ecuted upon re(uest of either the employer or the e#clusie bargaining representatie
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 ad'usting
any grieances or (uestions under such agreement ;4avao Cntegrated Port Stevedoring Services vs%
Abar(ue$9.
2*;TI3& T! C!LL3CTIV3 B*;B*I:I:B
The duty to bargain collectiely arises only between the %employer) and its %employees.)
9here nether party is an %employer or employee of the other no such duty would e#ist. :eedless to
add, where there is no duty to bargain collectiely, the refusal to bargain iolates no rights ;Allied
5ree +or,ers .nion vs% 'ompania 3aritima9.
D<;I&@ICTI!:*L 2;3C!:@ITI!:& !1 C!LL3CTIV3 B*;B*I:I:B
*lthough bargaining is a mutual obligation of the parties, the employer is not under any
legal duty to initiate contract negotiation. The mechanics of collectie bargaining is set n motion
only when the following 'urisdictional preconditions namelyH /12 possession of the status of ma'ority
representation of the employees= representatie in accordance with any of the means of selection
or designation proided for by the labor code$ /(2 proof of ma'ority representation$ and /-2 a
demand to bargain under *rt. +.C, par. -a0 of the Labor Code ;=oy vs% &=R'9.
9*B3 *B;3343:T$ % S@=@3@&C' ) *22;!*CA I: 9*B3 @I&2<T3
The %middle ground approach) employed by the secretary in this case which the &upreme
Court does not necessarily find the best method of resoling a wage. 4erely finding the midway
point between the demands of the company and the union, and %splitting the difference) is a
simplistic solution that fails to recogni"e that the parties may already be at the limits of the wage
leels they can afford. It may lead to the danger too that neither of the parties will engage
principled bargaining$ the company may keep its low position while the union presents an
artificially high position, on the fear that a %&olomonic) solution cannot be aoided. Thus rather
than encourage agreement, a %middle ground approach) instead promotes a %play safe) attitude
that leads to more deadlocks than to successfully negotiated CB*s ;3anila *lectric 'o vs% Hon% Sec
of =abor and 3ewa9.
9!;N ;<L3&
Company rules relating to safety and work practices come within the meaning of the phrase
%other terms and conditions of employment) as used in the *ct and, therefore, constitute a
mandatory sub'ect of collectie bargaining ;&=R< vs% 2ulf Power 'o%9.
B*;B*I:I:B T! 2!I:T !1 I42*&&3
The (uestion as to what are mandatory and what are merely permissie sub'ects of
collectie bargaining is of significance on the right of a party to insist on his position to the point of
stalemate. * party may refuse to enter into a collectie bargaining contract unless it includes a
desired proision as to a matter which is a mandatory sub'ect of collectie bargaining$ but a refusal









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to contract in good faith that the insistence on the disputed clause was not the sole cause of the
failure to agree or that agreement was not reached with respect to other disputed clauses
-Samahang 3anggagawa sa Dop 5orm 3anufacturing-.nited +or,ers of the Philippines vs% &=R'9.
B*;B*I:I:B T! TA3 2!I:T !1 I42*&&3H B*@ 1*ITA
!er a non-mandatory sub'ect, on the other hand, a party may not insist on bargaining to
the point of impasse, otherwise his insistence can be construed as bargaining in bad faith ;&=R< vs%
+oorster 4ivision of <org-+arner 'orp%9.
;*TI1IC*TI!:$ 4*:@*T!;O ;3T<I;343:T&
The rules re(uire posting of the CB* in two conspicuous places for fie days. In one case,
the CB* was not posted for at east fie days in two conspicuous places n the establishment before
ratification, to enable the workers to clearly inform themseles of its proisions. 4oreoer, the CB*
submitted to the 4!L3 did not carry the sworn statement of the union secretary, attested by the
union president, that the CB* had been duly posted and ratified, as re(uired by section 5, ;ule 6,
Book V of the implementing ;ules and ;egulations. The court ruled that these re(uirements being
mandatory, noncompliance there with rendered the CB ineffectie -Associated Drade .nions vs%
Drajano9.
<:;*TI1I3@ B<T I42L343:T3@ CB*
The parties to a collectie agreement are re(uired to furnish copies to the appropriate
;egional !ffice with accompanying proof of ratification by the ma'ority of all the workers in the
bargaining unit. This was not done in the case at bar. 9e do not declare the CB* inalid or oid
considering that the employees hae en'oyed from it. They cannot receie benefits under the
proisions faorable to them and later insist that the CB* is oid simply because other proisions
turn out not to the liking of certain employees. It is ini(uitous to receie benefits from a CB* and
later on disclaim its alidity ;Planters Products, Cnc% vs% &=R'9.
C3;TI1IC*TI!: !1 TA3 CB* BO TA3 B<;3*< !1 L*B!; ;3L*TI!:&
:either is the certification of the CB* by the bureau of labor relations re(uired to put a
stamp of alidity to such contract. !nce it is duly entered into and signed by the parties, a
collectie bargaining agreement becomes effectie as between the parties regardless of whether
the same has been certified by the BL; ;=iberty 5lour 3ills *mployees vs% =iberty 5lour 3ills, Cnc%9.
COLLECTIME BARHAININH AHREE;ENT? 9&(/S
3113CTIVITO !1 CB* C!:CL<@3@ *1T3; &IP 4!:TA&
1;!4 3P2I;*TI!: !1 TA3 !L@ CB*
In the absence of a new CB*, the parties must maintain status (uo and must continue in
full force and effect the terms and conditions of the e#isting agreement until a new agreement is
reached. In this manner, the law preents the e#istence of a gap in the relationship between the
collectie bargaining parties. *nother legal principle that should apply is that in the absence of an
agreement between the parties, then, an arbitrated CB* takes on the nature of any 'udicial or
(uasi-'udicial award$ it operates and may be e#ecuted only prospectiely unless there are legal
'ustifications for its retroactie application ;3anila *lectric 'ompany vs% Puisumbing and 3*+A9.
*B;33@ B<T <:&IB:3@ CB* 9ITAI: &IP 4!:TA&
The renegotiated CB* retroacts if the parties reached agreement within si# months from
e#piry date. The determining point is the date they agreed, not the date they signed -3indanao
Derminal vs% 'onfesor and A=.-D.'P9.
COLLECTIME BARHAININH AHREE;ENT? &XC%<SIE& ?A('AI)I)' (&P(&S&)9A9I$)



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342L!O33&= 2*;TICI2*TI!: I: 1!;4<L*TI:B TA3 C!@3 !1 @I&CI2LI:3
Verily, a line must be drawn between management prerogaties regarding business
operations pers se and those which affect the rights of the employees. In treating the latter,
management should see to it that its employees are at least properly informed of its decisions or
modes of action.
The collectie bargaining agreement may not be interpreted as cession of employees= right
to participate in the deliberation of matter which may affect their rights and the formulation of
policies relatie thereto. *nd one such matter is the formulation of a code of discipline ;Philippine
Airlines, Cnc% vs% &=R'9.
BL!B3 @!CT;I:3
The desires of the employees are releant to the determination of the appropriate
bargaining unit. The releancy of the wishes of the employees concerning their inclusion or
e#clusion from a proposed bargaining unit is inherent in the basic right of self-organi"ation. 9hile
the desires of employees with respect to their inclusion in the bargaining unit is not controlling, it
is a factor which would be taken into consideration in reaching a decision ;2lobe 3achine E
Stamping 'o9%
&I:BL3 !; %342L!O3; <:IT) I& 1*V!;3@
The proliferation of unions in an employer unit is discouraged as a matter of policy unless
there are compelling reasons which would deny a certain class of employees the right to self-
organi"ation for purposes of collectie bargaining ;Philtranco Service *nterprises vs% <ureau of
=abor Relations9.
3PC32TI!:& T! !:3-<:IT 2!LICO
The usual e#ception, of course, is where the employer unit has to gie way to the other
units like the craft unit, plant unit, or a subdiision thereof$ the recognition of these e#ceptions
takes into account the policy to assure employees of the fullest freedom in e#ercising their rights.
!therwise stated, the one company-one union policy must yield to the right of the employees to
form unions or associations for purposes not contrary to law, to self-organi"ation and to enter into
collectie bargaining negotiations, among others which the Commission guarantees ;<arbi$on Phil%
)s% &ag,a,aisang Supervisor ng <arbi$on, et%al%9.
T9! C!42*:I3& 9ITA ;3L*T3@ B<&I:3&&
Two corporations cannot be treated as single bargaining unit een if their businesses are
related ;Cndophil De"tile 3ill +or,ers .nion-PD2+@ vs% )oluntary Arbitrator 'alica and CndoPhil
De"tile 3ills, Cnc%9.
&<B&I@I*;I3& *:@ &2<:-!11 C!;2!;*TI!:&
In determining an appropriate bargaining unit, the test of grouping is mutuality or commonality
of interests. The employees sought to be represented by the collectie bargaining agent must hae
substantial mutual interests in terms of employment and working conditions as einced by the type
of work they performed. Considering the spin-offs, the companies would conse(uently hae their
respectie and distinctie concerns in terms of the nature of work, wages, hours of work and other
conditions of employment. Interests of employees in the different perforce differ. The employees
of different companies see the need to group themseles together and organi"e themseles into
distinctie and different groups. It would then be best to hae separate bargaining units for the
different companies where the employees can bargain separately according to their needs and
according to their own working condition ;San 3iguel 'orp% *mployees .nion-PD2+@, etc vs%
'onfesor, San 3iguel 'orp%, 3agnolia 'orp%, and San 3iguel 5oods, Cnc%9.
COLLECTIME BARHAININH AHREE;ENT? C&(9I=ICA9I$) &%&C9I$)









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<L2 I: ;3L*TI!: T! 3L3CTI!:
It is unfair labor practice for the company to suspend the workers on the ground of
%abandonment of work on the day on which the pre-election had been scheduled. It is the
employee=s right to hold a certification election, the e#ercise of which is their sole prerogatie
;'==' *% 2% 2ochonco +or,ers .nion, et al% vs% &=R'9.
T93LV3-4!:TA B*;
:o petition for a C3 maybe filed within one year from the date of a alid certification,
consent, or run-off election or from the date of oluntary recognition. &uppose, for instance, that
an election has been held but not one of the unions won. The ne#t election cannot be held within
twele-months.
The prohibition presupposes that there was an actual conduct of election, i.e. ballots were
cast and there was a counting of otes. In case where there was no certification election conducted
precisely because the first petition was dismissed on the ground of a defectie petition which did
not include all the employees who should be properly included in the collectie bargaining unit, the
certification year bar does not apply ;R% Dranport 'orp% vs% =aguesma9.
@3*@L!CN B*; ;<L3
The %@eadlock) rule simply proides that a petition for certification can only be
entertained if there is no pending bargaining deadlock submitted to conciliation or arbitration or
had become the sub'ect of a alid notice of strike or lockout. The principle purpose is to ensure
stability in the relationship of the workers and the management ;&ational 'ongress of .nions in
the Sugar Cndustry of the Philippinines-D.'P vs% Drajano9.
@3*@L!CN ;<L3 9A3: :!T *22LIC*BL3
The deadlock rule does not apply where there is a certification of election ordered to be
conducted ;Naisahan ng 3anggagawang Pilipino vs% Drajano9.
1;33@!4 23;I!@ <:@3; +.8-* *:@ +.G
The freedom period under *rts +.8-* and +.G is different from and ought not to be
mistaken for the other GC-day period mentioned in art. +.8. The latter speaks of the right of the
parties to propose modifications in the e#isting CB*, as an e#ception of the rule that the CB*
cannot be modified during its lifetime. This GC-day period under *rt. +.8 does not and cannot refer
to the representatie status of the incumbent union since the ac(uisition or loss of representatie
status of a union is to be resoled through a certification election, and not through CB* negotiation
with the employer. Therefore, the GC-day period under +.8 refers to modifying or renegotiating the
CB* proisions other than the representational. Those stipulations, in practice, are called
%economic) or non-political. To clarify terms, the GC-days in +.8 may be called %renegotiation
proposal period) or simply %proposal period,) while under *rts +.8-* and +.G is, as already
established, the freedom period. The proposal period is the last GC days of the last year of the
nonrepresentational proisions$ the freedom period is the last GC days of the CB*=s fifth year ;San
3iguel 'orporation vs% Drajano9.
CB* &<;;32TITI!<&LO ;3BI&T3;3@
3en if the e#isting CB* is registered surreptitiously, as alleged by the petitioner union, but
no eidence is presented proing the alleged surreptitious registration, the petition for C.3. cannot
be granted. The contract bar rule applies. 9hether or not the CB* was indeed surreptitiously
registered is a factual matter whose determination is outside the ambit of a petition for certiorari
;Pambansang Napatiran ng mga Ana, Pawis sa 5ormey vs% Sec% of =abor9.
CB* &IB:3@ B31!;3 !; 9ITAI: 1;33@!4 23;I!@



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* collectie bargaining agreement which was prematurely renewed is not a bar to the
holding of a certification election. &uch indecent haste in renewing the CB* despite an order
en'oining them from doing so is designed to frustrate the constitutional right of the employees to
self-organi"ation ;Associated =abor .nions vs% 'alleja9.
V*LI@ITO !1 CB* &IB:3@ @<;I:B ;32;3&3:T*TI!: @I&2<T3
9hen a collectie bargaining agreement is entered into at the time when the petition for
certification election had already been filed by a union and was then pending resolution, the said
collectie bargaining agreement cannot be deemed permanent, precluding the commencement of
negotiations by another union with the management. In the meantime, howeer, so as not to
deprie the workers of the benefits of the said agreement, it shall be recogni"ed and gien effect
on a temporary basis, sub'ect to the results of the certification election. The agreement may be
continued in force if the union that negotiated it is certified as the e#clusie bargaining
representatie of the workers or may be re'ected and replaced in the eent the rial union emerges
as the winner ;Associated Drade .nions vs% Drajano9.
CB* 9AICA I& :!T *<T!4*TIC*LLO ;3:393@
* bargaining contract which proides for automatic renewal in the absence of notice by one
of the contracting parties to alter, modify or terminate it prior to a specified period preceding the
terminating date, will usually operate as a bar to a certification election. Aoweer, this rule does
not apply where the employer filed, with the Court of Industrial ;elations, reasonably prior to
specified date for automatic renewal, a petition or manifestation of its intention to terminate such
contract if and when it is found that the collectie bargaining agency with whom the employer had
the contract no longer represented the ma'ority of the employer=s workers ;P=4D *mployeesI .nion
vs% P=4D 'ompany and 5ree Delephone +or,ersI .nion9.
CB* TA*T @!3& :!T 1!&T3; &T*BILITO
Basic to the contract bar rule is the proposition that the delay of the right to select
representaties can be 'ustified only where stability is deemed paramount. 3#cepted from the
contract-bar rule are certain types of contracts which do not foster industrial stability, such as
contracts where the identity of the representaties is in doubt. *ny stability deried from such
contracts must be subordinated to the employees= freedom of choice because it does not establish
the type of industrial peace contemplated by the law ;Philippine Association of 5ree =abor .nions
vs% *strella9.
3113CT !1 9ITA@;*9*L !1 &IB:*T!;I3&
It appearing indisputably that the 8+5 union members had withdrawn their support to the
petition. It would be otherwise if the withdrawal was made after the filing of the petition for it
would then be presumed that the withdrawal was not free and oluntary. The presumption would
arise that the withdrawal was procured through duress, coercion or for aluable consideration. In
other words, the distinction must be that withdrawals made before the filing of the petition are
presumed oluntary unless there is conincing proof to the contrary, whereas withdrawals made
after the filing of the petition are deemed inoluntary.
The reason for such distinction is that if the withdrawal or retraction is made before the
filing of the petition, the names of employees supporting the petition are supposed to be held
secret to the opposite party. Logically, any such withdrawal or retraction shows oluntariness in
the absence of proof to the contrary. 4oreoer, it becomes apparent that such employees had not
gien consent to the filing of the petition$ hence the subscription re(uirement has not been met.
9hen the withdrawal or retraction is made after the petition is filed, the employees who
are supporting the petition become known to the opposite party since their names are attached to
the petition at the time of filing. Therefore, it would not be une#pected that the opposite party
would use foul means for the sub'ect employees to withdraw their support ;=a Suerte 'igar and
'igarete 5actory vs% Drajano9.









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@I&4I&&3@ 342L!O33&
In 2hilippine 'urisprudence it is now settled that employees who hae been improperly laid
off but who hae a present, unabandoned right to an e#pectation of reemployment, are eligible to
ote in certification elections. Thus, and to repeat, if the dismissal is under (uestion, as in the case
now at bar, whereby the case of illegal dismissal andQor unfair labor practice is filed, the
employees concerned could sill (ualify to ote in the elections ;Phil% 5ruits and )egetables
Cndustries, Cnc% vs% Dorres9%
2;!B*TI!:*;O 342L!O33&
In certification election all rank-and-file employees in the appropriate bargaining unit are
entitled to ote. This principle is stated in *rticle +.. of the Labor Code, which states that the
%labor organi"ation designated or selected by the ma'ority of the employees in an appropriate
bargaining unit shall be the e#clusie representatie of the employees in such unit for the purpose
of collectie bargaining) ;Airtime Specialists, Cnc% vs% 4irector of =abor Relations9.
STRIAES AND LOCAOUTSQ C$)C&P9
!BD3CTIV3 !1 &T;IN3 *:@ L!CN!<T
!rdinarily, a strike is a coercie actiity resorted to by laborers to enforce their demands.
The idea behind a strike is that a company engaged in a profitable business cannot afford to hae
its production or actiities interrupted, much less paraly"ed. *ny interruption or stoppage of
production spells loss, een disaster. The capital inested in machinery, factory and other
properties connected with the business would be unproductie during a strike or stoppage of the
business. !n the other hand, the oerheard e#penses consisting of the salaries of its officials,
including real estate ta#es and licenses fees continue. Nnowing this, the strikers by going on strike
seek to interrupt and paraly"e the business and production of the company. The employer company
is on the defensie. It almost inariably wants the strike stopped and the strikers go back to work
so as to resume and continue production. Because of the threat or danger of loss to the company, it
does not infre(uently gie in to the demands of the strikers, 'ust so it can maintain the continuity
of its production ;Philippine 'an 'ompany vs% 'ourt of Cndustrial Relations and =iberal =abor
.nion9.
:*T<;3 !1 L!CN!<T
Lockout means the temporary refusal of any employer to furnish work as a result of an
industrial or labor dispute$ an employer=s act e#cluding employees who are union members from his
plant ;Sta% 3esa Slipways *ngineering 'o% vs% 'CR9.
T3;4& *:@ C!:@ITI!:& !1 B!V3;:43:T 342L!O43:T
In goernment employment, it is the legislature and, where properly gien delegated
power, the administratie heads of goernment, which fi# the terms and conditions of employment.
*nd this is effected through statutes or administratie circulars, rules, and regulations, not through
collectie bargaining ;Social Security System *mployees Association vs% 'ourt of Appeals9.
&3C!:@ 1*CT!; I: L3B*LITO !1 &T;IN3H 2;!C3@<;*L ;3T<I;343:T&
9hen the law says %the labor union may strike) should the dispute %remain unsettled until
the lapse of the re(uisite number of days -cooling-off period0 from the mandatory filing of the
notice,) the unmistakable implication is that the union may not strike before the lapse of the
cooling-off period. &imilarly, the mandatory character of strike ban after the report on the strike I
ote is manifest in the proision that %eery case,) the union shall furnish the 4!L3 with results of
the oting %at least seen days before the intended strike, sub'ect to the -prescribed0 cooling-off
period and ,-day strike ban must both be complied with, although the labor union may take a strike
ote and report the same within the statutory cooling-off period ;&ational 5ederation of Sugar
+or,ers vs% @vejera9.
L3B*LITO !1 &T;IN3 :!T @323:@3:T <2!: *BILITO !1 4*:*B343:T



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The demands that gae rise to the strike may not properly be granted under the
circumstances of this case, but the fact should not make said demands and the conse(uent strike
illegal. The ability of the Company to grant said demands is one thing, and the right of the laborers
to make said demands is another thing. The latter should be kept iniolate. There are ade(uate
instrumentalities which may be resorted to in case of e#cesses ;'entral )egetable @il
3anufacturing vs% Philippine @il Cndustry +or,ers .nion9.
&T;IN3 *B*I:&T 342L!O33=& <:1*I; L*B!; 2;*CTIC3&
<nion busting, or interference with the formation of a union, constitutes an unfair labor
practice act, hence a alid ground for the declaration of strike ;Jamboanga +ood Products, Cnc%,
vs% &=R'9.
T3&T& I: @3T3;4I:I:B TA3 3PI&T3:C3 !1 *: <:1*I; L*B!; 2;*CTIC3 &T;IN3
There are two tests in determining the e#istence of an unfair labor practice strikeH
5. !b'ectiely, when the strike is declared in protest of unfair labor practice which is
found to hae been actually committed$ and
2. &ub'ectiely, when a strike is declared in protest of what the union belieed to be
unfair labor practices committed by management, and the circumstances warranted such belief in
good faith, although found subse(uently as not committed ;&orton and Harrison 'o% =abor .nion v%
&orton and Harrison 'o%9.
4I:!;ITO <:I!: &T;IN3
By law, the right to be the e#clusie representatie of all the employees in an appropriate
collectie bargaining unit is ested in the labor union %designated or selected) for such purpose %by
the ma'ority of the employees) in the unit concerned. 9hen a union, after winning in an election,
is certified as the e#clusie bargaining representatie, any other union who participated in the
election thereby becomes a minority union. * minority union cannot demand collectie bargaining
with the employer. &uch right properly belongs to the union that commands the ma'ority.
4oreoer, the defeated union cannot lawfully undertake a strike against the employer$ if one is
being done, it must come to a halt. :either can it picket to compel bargaining. %To allow said
union to continue picketing for the purpose of drawing the employer to collectie bargaining table
would obiously be to disregard the results of the consent election. To further permit the union=s
picketing actiities would be to flaunt at the will of the ma'ority.) *fter a union has been certified
as the bargaining representatie, a strike by a minority union t compel an employer to bargain with
it is unlawful. :o labor dispute can e#ist between a minority union and an employer in such a case
;.nited RestaurorIs *mployees and =abor .nion v% Dorres and 4elta 4evelopment9.
@31I*:C3 !1 ;3T<;:-T!-9!;N-!;@3;
The return-to-work order should benefit not 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 hae actually performed. Conersely, those workers who refuse to obey said return-
to-work order and instead wage a strike are not entitled to be paid for work not done or to
reinstatement to the positions they hae abandoned by their refusal to return thereto as ordered
;Sarmiento vs% Duico9.
&T;IN3 !V3; *: <:1*I; L*B!; 2;*CTIC3 *CT @3&2IT3
* &@-SDRCN*/&@-=@'N@.D PR@)CSC@& I: TA3 CB*
* no-strike prohibition in a collectie bargaining agreement is applicable only to economic
strikes. In other words, <L2 strike is not coered and workers may go on strike based on <L2
despite the no-strike proision ;Philippine 3etal 5oundaries, Cnc% vs% 'CR9.









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The union brands as illegal the stipulation in the collectie bargaining agreements that %in
case of any unfair labor practice on the part of either party, there will be no strikes, lockouts, or
any pre'udicial action ### until the (uestion or grieance is resoled by the proper court if not
settled through a grieance procedure therein outlined.)
The authorities are numerous which hold that strikes held in iolation of the terms
contained in a collectie bargaining agreement are illegal, especially when they proide for
conclusie arbitration clauses. These agreements must be strictly adhered to and respected if their
ends hae to be achieed ;2@P-''P +or,ers .&C@& vs% 'CR9.
BOOA SII
TER;INATION O4 E;7LO>;ENTQ 1<S9 A)# A<9-$(IP&# CA<S&S
I:T;!@<CTI!: !1 L*B!; &*VI:B @3VIC3&
;eduction of the number of workers in a company=s factory made necessary by the
introduction of machinery in the manufacture of its products is 'ustified. There can be no (uestion
as to the right of the manufacturer to use new labor saing deices with a iew to effecting more
economy and efficiency in its method of production ;Philippine Sheet 3etal +or,ersI .nion vs%
'CR9.
;3T;3:CA43:T
;etrenchment is one of the economic grounds to dismiss employees. It is resorted to by an
employer primarily to aoid or minimi"e business losses. The law recogni"es this under *rt +78 of
the Labor Code. Aoweer, the employer bears the burden to proe his allegation of economic or
business reerses. The employer=s failure to proe it necessarily means that the employee=s
dismissal was not 'ustified ;Precision *lectronics 'orporation vs% &=R'9.
;3T;3:CA43:TH 9A!4 T! L*O-!11
There must be fair and reasonable criteria to be used in selecting employees to be
dismissed, on account of retrenchment, such as -a0 less preferred status -i.e., temporary
employees0$ -b0 efficiency rating, and -c0 seniority ;Asiaworld Publishing House, Cnc% vs% @ple9.
L*CN !1 9!;N
Lack of work is a 'ustifiable cause for termination of employment. 2rotection to labor does
not mean oppression or self-destruction of capital. 9here the continuation of the men in serice is
patently inimical to the interest of the employer, there is no alternatie but for the court to
authori"e the employer to lay off such number of workers as the circumstances may warrant. But
the court may impose the condition that the employer shall not admit any new laborer in case of
aailable work in the future before the laid-off men who are able, willing and aailable to do the
same shall hae been recalled to work ;3ayon *ngineering +or,erIs .nion vs% 3ayon *ngineering
and 3achine Shop9.
;3T;3:CA43:T *:@ C!:&3;V*T!;&AI2
The retrenchment of personnel as a conse(uence of conseratorship proceedings against an
insurance company in financial difficulties is a cost-saing measure resorted to by the conserator
to presere the assets of the company for the protection of not only the policyholders and creditors
but also the inestors and the public in general. Conseratorship proceedings contemplate, not the
li(uidation of the company inoled, but a conseration of company assets and business during the
period of stress by the commissioner of Insurance, who thereafter yields control to the regular
officers of the company ;2arcia vs% &=R'9.
1!<; &T*:@*;@& !1 ;3T;3:CA43:T
5irstly, the losses e#pected should be substantial and not merely de minimis in e#tent. If
the loss purportedly sought to be forestalled by retrenchment is clearly shown to be insubstantial



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and inconse(uential in character, the bona fide nature of the retrenchment would appear to be
seriously in (uestion.
Secondly, the substantial loss apprehended must be reasonably imminent, as such
imminence can be perceied ob'ectiely and n good faith by the employer. There should, in other
words, be certain degree of urgency for the retrenchment, which is, after all, a drastic recourse
with serious conse(uences for the lielihood of the employees retired or otherwise laid-off.
Dhirdly, there must be reasonably necessary and likely to effectiely preent the e#pected
losses. The employer should hae taken other measures prior or parallel to retrenchment to
forestall losses, i.e., cut other costs than labor costs.
=astly, but certainly not the least important, alleged losses if already reali"ed, and the
e#pected imminent losses sought to be forestalled, must be proen by sufficient and conincing
eidence. The reason for re(uiring this (uantum of proof is readily apparentH any less e#acting
standard of proof would render too easy the abuse of this ground for termination of serices of
employees ;=ope$ Sugar 'orporation vs% 5ederation of 5ree +or,ers, et al%9
;3@<:@*:CO @I&TI:B<I&A3@ 1;!4 ;3T;3:CA43:T
;edundancy e#ists where the serices of an employee are in the e#cess of what is
reasonably demanded by the actual re(uirements of the enterprise. * position is redundant where
it is superfluous, a superfluity of a position or positions may be the outcome of a number of factors,
such as oer hiring of workers, decreased olume of business, or dropping of a particular product
line or serice actiity preiously manufactured or undertaken by the enterprise.
;etrenchment, on the other hand, is used interchangeably with the term %lay-off.) It is the
termination of employment initiated by the employer through no fault of the employees and
without pre'udice to the latter= resorted to by management during periods of business recession,
industrial depression, or seasonal fluctuations, or during lulls occasioned by lack of orders, shortage
of materials, conersion of the plant machinery, or of automation. &imply put, it is an act of the
employer of dismissing employees because of losses in the operation of a business, lack of work,
and considerable reduction on the olume of his business a right consistently recogni"ed and
affirmed by this court ;Sebuguero, et al% vs% &=R'9.
CL!&<;3 !1 B<&I:3&&
<nder *rticle +7E of the Labor Code, three re(uirements may be seen to be established in
respect of cessation of business operations of an employer company not due to business reerses,
namelyH a0 serice of written notice to the employees and to the 4!L3 at east one month before
the intended date thereof$ b0 the cessation of or withdrawal from business operations must be bona
fide in character$ and c0 payment to the employees of termination pay amounting to at east one-
half month pay for each year of serice, or one month pay, whicheer is higher ;3obil *mployees
Association and Cnter-Csland =abor @rgani$ation9.
T342!;*;O &A<T@!9:
Temporary shutdown of one of the furnaces of a glass plant is not a good reason to
terminate employees where operations continued after such repairs, and it is apparent that the
closure of the company=s warehouse was merely a ploy to get rid of the employees who were then
agitating the company for benefits, reforms and collectie bargaining as a union. There is no
showing that petitioners had been remiss in their obligations and inefficient in their 'obs to warrant
their separation ;/<rotherhood1 =abor .nity 3ovement of the Philippines, et al% vs% Jamora9.
43;B3;
By the fact of merger, succession of employment rights and obligations occurs between the
absorbing corporation and the employees of the absorbed corporation. :ot only must the absorbing
corporation retain the employees, it should likewise recogni"e the length of serice in the preious
employer. In merger, like in sale in bad faith, the %successor employer) principle applies ;5ilipinas
Port Services, Cnc% vs% &=R'9.









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*IL43:T !; @I&3*&3
* medical certificate issued by the company=s own physician, is not certificate by
%competent public health authority) ;'ebu Royal Plant KSan 3iguel 'orporationL vs% 4eputy
3inister of =abor9.
2;3V3:TIV3 &<&23:&I!: *:@ I:V3&TIB*TI!:
@! :!T ;32L*C3 %T9!-:!TIC3 ;3T<I;343:T) !1 @<3 2;!C3&&
The notice of preentie suspension cannot be considered ade(uate notice since the
ob'ecties of the petitioner=s preentie suspension, as stated in the notice, were merely to
ascertain the e#tent of the loss to the bank and to pinpoint responsibility of the arties inoled,
and not to apprise the petitioner of the causes of is desired dismissal. Likewise, the subse(uent
interiew is not the %ample opportunity to be heard) contemplated by law. *mple opportunity to
be heard is especially accorded to the employee sought to be dismissed after he is informed of the
charges against him in order to gie him an opportunity to refute the accusations leeled against
him, and it certainly does not consist of an in(uiry conducted merely for the purpose of filing a
criminal case against another person ;&orman de )era vs% &=R' and <an, of the Philippine Cslands9.
The employer is mandated to furnish the employee sought to be dismissed two notices, the
written charge, and, if, after hearing, dismissal is indeed warranted.
I:&<11ICI3:T :!TIC3H C!:&<LT*TI!: 9ITA <:I!:
The employer=s %prior consultation) with the union with which the employee is affiliated is
legally insufficient. The rights of an employee whose serices are sought to be terminated to be
informed beforehand of his proposed dismissal -or suspension0 as well as of the reasons therefore,
and to be afforded an ade(uate opportunity to defend himself from the charges leeled against
him, are rights personal to the employee. Those rights are not satisfied by the employer=s obtaining
the consent of or consulting with the labor union. &uch consultation or consent is not substitute for
actual obserance of those rights of the employee. The employee can waie those rights, if he
chooses, but the union cannot waie them for him ;'entury De"tile 3ills, Cnc% vs% &=R', et% al%9.
@<3 2;!C3&& I: *<TA!;IU3@ C*<&3&
In employment termination due to authori"ed causes, the due process re(uirement is not
completely done away with. Inestigation and hearing need not be done by the employer, but the
one-month adance notices to the affected employee and to the @!L3 must be complied with,
otherwise the termination is illegal ;+ittshire 5ile 'o% vs% &=R'9.
B*&I& !1 C!42<T*TI!: !1 B*CN9*B3&
The base figure to be used in the computation of backwages due to the employee should
include not 'ust the basic salary, but also the regular allowances that he had been receiing such as
the emergency liing allowances and the 58
th
- month pay mandated by the law ;Paramount )inyl
Product 'orporation vs% &=R'9.
B*CN9*B3& <2 T! ;3TI;343:T *B3 !:LO
If the ordered reinstatement is no longer feasible because he employee has reached
retirement age, the court will not insist on reinstatement and een the backwages will not e#tend
beyond the employee=s retirement date ;*(uitable <an,ing 'orporation vs% &=R' and R%=% Salac9.
I:1L*TI!:
;egarding the argument that the inflation that has superened 'ustifies the imposition of
interest, the Court has held that the effects of e#traordinary inflation are not to be applied without
an agreement between the parties and without an official declaration thereof by competent
authorities ;=antion, et al% vs% &=R'9.
*22LIC*BILITO !1 TA3 &T;*I:3@ ;3L*TI!:& 2;I:CI2L3



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The rule is that %strained relations) may be inoked only against employees whose positions
demand trust and confidence, or whose differences with their employer are of such nature or
degree as to preclude reinstatement ;3aranaw Hotels vs% 'A9.
;3I:&T*T343:T &A!<L@ A*V3 B33: !;@3;3@ BO L*B!; *;BIT3;
If the labor arbiter has not ordered reinstatement of the employee, the :L;C cannot award
backwages for the period when the appeal was pending at the :L;C. *n order for reinstatement
must be specifically declared and cannot be presumed$ like backwages, it is separate and distinct
relief gien to an illegally dismissed employee. There being no specific order of reinstatement and
the order being for complainant=s separation, there can be no basis for the award of salariesQ
backwages during the pendency of appeal ;5ilfle" Cndustrial and 352% 'orp vs% &=R'9.
@*4*B3&
If the eidence adduced by the employee before the Labor *rbiter should establish that the
employer did indeed terminate the employee=s serices without 'ust cause or without according
him due process, the Labor *rbiter=s 'udgment shall be for the employer to reinstate the employee
and him backwages, or e#ceptionally, for the employee simply to receie separation pay. These are
reliefs e#plicitly prescribed by the labor code. But any award of moral damages by the Labor
*rbiter obiously cannot be based on the labor code but would be grounded on the Ciil Code. &uch
an award cannot be 'ustified solely upon the premise -otherwise sufficient for redress under the
Labor Code0 that the employer fired his employee without 'ust cause or due process ;Suario vs%
<an, of the Philippine Cslands9.
4!;*L @*4*B3&
4oral damages may be awarded to compensate one for dierse in'uries such as mental
anguish, besmirched reputation, wounded feelings and social humiliation. It is howeer, not enough
that such in'uries hae arisen. It is essential that they hae sprung from a wrongful act or omission
of the defendant which was the pro#imate cause thereof ;Suario vs% <PC9.
TER;INATION O4 E;7LO>;ENT? ?L &/P%$L&&
;3&IB:*TI!: *:@ ;3&IB:*TI!: :!TIC3
;esignation is the oluntary act of an employee who %finds himself is a situation where he
beliees that personal reason cannot be sacrificed in faor of the e#igency of the serice, then he
has no other choice but to disassociate himself from his employment) The employer has no control
oer resignations and so the notification re(uirement was deised in order to insure that no
disruption of work would be inoled by reason of the resignation. ;esignation, once accepted and
being the sole act of the employee may not be withdrawn without the consent of the employer
;Cntertrod 3aritime, Cnc% vs% &=R'9.
;3&IB:*TI!: 2*O
The general rule is that an employee who oluntarily resigns from employment is not
entitled to separation pay, unless there is a stipulation for payment in the employment contract or
Collectie Bargaining *greement, or payment of the amount is sanctioned by established employer
practice or policy ;Dravelaire E Dours 'orp% vs% &% 3edelyn9.









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B*;-TO23 T<3&TI!:&
5. Does t!e ,enal ,ro&isions of RA @06( &iolate t!e e:"al ,rote%tion %la"se of t!e Constit"tion'
The e(ual protection clause is directed principally against undue faor and indiidual or
class priilege. It is not to prohibit legislation which is limited to the ob'ect to which it is directed
and by the territory in which it is to operate. It does not re(uire absolute e(uality, but merely all
persons be treated under like conditions both as to priileges conferred and liabilities imposed.
;*F*'% S*'R*DARM )S% 'A, 3ay 6, 6BB>9
+. Is e&er# %ontro&ers# or one# %lai b# an e,lo#ee a+ainst t!e e,lo#er or &i%e &ersa
wit!in t!e e$%l"si&e D"risdi%tion of t!e labor arbiter'
:o. :ot eery controersy or money claim by an employee against the meployer or ice
ersa is within the e#clusie 'urisdiction of the labor arbiter. * money claim by a worker against
the employer or ice ersa is within the e#clusie 'urisdiction of the labor arbiter only if there is a
reasonable causal connection between the claim asserted and the employer-employee relation.



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*bsent such link, the complaint will be cogni"able by the regular courts of 'ustice. ;*)C@DA )S% 'A,
Guly 67, 6BB89
8. Nati&idad wor5s wit! TC; Colle+e as a liaison offi%er wit! a ran5 of FAssistant Re+istrar.G <e
was arrested b# ,oli%e a"t!orities for &iolation of !e Dan+ero"s Dr"+s A%t wit!o"t warrant. and
a %riinal %o,laint was filed a+ainst !i. TC; Colle+e sent a ;eorand" to Nati&idad
inforin+ !i t!at !is e,lo#ent is alread# terinated. T!e %riinal %ase was disissed for
la%5 of erit. Nati&idad did not. !owe&er. file an# %o,laint to t!e NLRC a+ainst t!e %olle+e
on a%%o"nt of !is disissal.
Nati&idad was arrested anew for &iolation of t!e sae A%t. T!is tie. !e filed wit! t!e
NLRC a %o,laint for ille+al disissal. T!e Labor Arbiter and t!e NLRC denied Nati&idad b"t on
%ertiorari. t!e CA affired. wit! odifi%ation. !oldin+ t!at alt!o"+! t!ere was a &alid %a"se for
,ri&ate res,ondentCs disissal. t!e ,etitioner did not follow t!e ,ro%ed"re for t!e terination
of !is e,lo#ent. Was Nati&idad ille+all# disissed so as to entitle !i to ba%5wa+es'
The normal conse(uences of finding that an employee is illegally dismissed are, firstly, the
employee becomes entitled to reinstatement without loss of seniority rights and second, payment
of backwages to the period from his illegal dismissal up to actual reinstatement. The award of
backwages is not conditioned on the employer=s ability or inability to pay. 9hile it may be true
that :atiidad was detained, he was not conicted by final 'udgement in the Criminal Case.
Indeed, he is presumed innocent until his guilt is proed beyond reasonable doubt. ;D@3AS
'=A.4C@ 3*3@RCA= '@==*2*, C&'% )S% 'A, 5ebruary 1A, 6BB>9
E. Is an order of e$e%"tion of a final and e$e%"tor# D"d+eent in a labor %ase still a,,ealable'
:o. &ettled is the rule that after a 'udgemnt has become final, no additions can be made
thereto, and nothing can be done therewith e#cept e#ecution$ otherwise, there would be no end to
litigations, thus settling at naught the main role of courts of 'ustice, which is to assist in the
enforcement of the rule of law and the maintenance of peace and order, by setting 'usticeable
controersies with finality. ;NC&2 C&D*2RAD*4 S*'.RCDM S*R)C'*S, C&'% )S% 2A=@ S% 2ADA&, Guly
?, 6BB89
.. W!at e&iden%e is needed to s!ow t!at e,lo#er %oitted UL7 "nder t!e Labor Code'
&ubstantial eidence is re(uired to support the claim. &ubstantial eidence has been
defined as such releant eidence as a reasonable mind might accept as ade(uate to support a
conclusion. In the case at bar, the complaint was made only after a deadlock was declared by the
<nion. It is clear that such <L2 charge was merely an afterthought. ;SDA&4AR4 'HARD*R4 <A&N
*3P=@M**S .&C@& )S% '@&5*S@R, Gune 1A, 6BB>9
G. W!at is s"rfa%e bar+ainin+'
It is defined as %going through the motions of negotiating) without any legal intent to reach
an agreement. ;SDA&4AR4 'HARD*R4 <A&N *3P=@M**S .&C@& )S% '@&5*S@R, Gune 1A, 6BB>9
,. 7etitioner and res,ondent "nion entered into and si+ned a CBA %o&erin+ t!e ,eriod of ="l#
10. 1B@@ to ="l# B. 1BB1. On Se,teber (). 1BB0. t!e res,ondent "nion filed a noti%e of stri5e
based on &iolation of CBA. aon+ ot!ers. On O%tober 19. 1BB0. t!e ,etitionerJs +eneral
ana+er. wrote t!e A%tin+ Se%retar# of Labor and E,lo#ent /SOLE for bre&it#2 inforin+
!i of t!e ,etitionerJs de%ision to retren%! 1)1 e,lo#ees on a sta++ered basis. s,read o&er a
,eriod of 90 da#s. to lessen t!e dail# finan%ial losses bein+ in%"rred b# t!e ,etitioner. T!e ne$t
da#. t!e res,ondent "nion infored t!e DOLE*NCR t!at t!e "nion will %ond"%t a stri5e &ote
referend". T!e ebers of t!e res,ondent "nion &oted to sta+e a stri5e. DOLE*NCR was
t!ereafter infored of t!e res"lts of t!e stri5e &ote referend". On O%tober -1. 1BB0. t!e
SOLE iss"ed a stat"s :"o ante bell" order %ertif#in+ t!e %ase to t!e NLRC for %o,"lsor#
arbitration and enDoinin+ t!e ,arties fro en+a+in+ in an# stri5e or lo%5o"t.









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T!e ,etitioner wrote t!e SOLE of its de%ision to i,leent its retren%!ent ,ro+ra to
ste its !"+e losses. S"bse:"entl#. t!e ,etitioner terinated t!e e,lo#ent of 16@
e,lo#ees. T!e reainin+ e,lo#ees were also infored t!at it will %lose in si$ ont!s. T!e
res,ondent "nion ,rotested t!e a%tions of t!e ,etitioner in&o5in+ Se%tion 18. Arti%le MI of t!e
CBA. B# wa# of ri,oste. t!e res,ondent "nion filed on No&eber 19. 1BB0 anot!er noti%e of
stri5e be%a"se of w!at it ,er%ei&ed as t!e ,etitionerJs %ontin"in+ "nfair labor ,ra%ti%es /UL72.
On t!e sae da#. t!e offi%ers of t!e res,ondent "nion and soe ebers sta+ed a ,i%5et in
t!e ,reises of t!e !otel. obstr"%tin+ t!e free in+ress and e+ress t!ereto. T!e followin+ da#.
,etitioner terinated t!e e,lo#ent of t!e offi%ers and ebers of t!e res,ondent "nion.
On No&eber (@. 1BB0. t!e SOLE iss"ed an order %ertif#in+ t!e labor dis,"te to t!e NLRC. T!e
SOLE iss"ed a ret"rn*to*wor5 order. w!i%! t!e res,ondent offi%ers and ebers %o,lied.
7etitioner !owe&er filed a %o,laint wit! t!e Re+ional Arbitration Offi%e of t!e NLRC
for ille+al stri5e a+ainst t!e res,ondents on t!e +ro"nd t!at t!e latter failed to %o,l# wit! t!e
re:"ireents ,ro&ided "nder Arts. (9- and (96 of t!e Labor Code. In t!eir answer. t!e
res,ondents alle+ed t!at t!e ,etitioner %oitted UL7 ,rior to t!e filin+ of t!e No&eber 19.
1BB0 noti%e of stri5e. <en%e. t!ere was no need for t!e res,ondent "nion to %o,l# wit! Arts.
(9- and (96 of t!e Labor Code. as t!e noti%e filed b# t!e "nion on Se,teber (). 1BB0 was
s"ffi%ient %o,lian%e wit! t!e law. Is t!e stri5e sta+ed b# t!e res,ondent "nion on No&eber
19 le+al'
:!. The re(uisites for a alid strike are as followsH -a0 a notice of strike filed with the @!L3 thirty
days before the intended date thereof or fifteen days in case of <L2$ -b0 strike ote approed by a
ma'ority of the total union membership in the bargaining unit concerned obtained by secret ballot
in a meeting called for that purpose$ and -c0 notice gien to the @!L3 of the results of the oting at
least seen days before the intended strike. The re(uisite seen-day period is intended to gie the
@!L3 an opportunity to erify whether the pro'ected strike really carries the approal of the
ma'ority of the union members. The notice of strike and the cooling-off period were intended to
proide an opportunity for mediation and conciliation. The re(uirements are mandatory and failure
of a union to comply therewith renders the strike illegal. * strike simultaneously with or
immediately after a notice of strike will render the re(uisite periods nugatory. 4oreoer, a strike
that is undertaken, despite the issuance by the &!L3 of an assumption or certification order,
becomes a prohibited actiity and, thus, illegal pursuant to *rt. +GE of the Labor Code, as
amended. Conse(uently, the union officers and members are deemed to hae lost their
employment status for haing knowingly participated in an illegal act.
In this case, the respondent union filed its notice of strike with the @!L3 on :oember 5G,
566C and on the same day, staged a picket on the premises of the hotel, in iolation of the law.
The respondents cannot argue that since the notice of strike on :oember 5G, 566C were for the
same grounds as those contained in their notice of strike on &eptember +,, 566C which complied
with the re(uirements of the law on the cooling-off period, strike ban, strike ote and strike ote
report, the strike staged by them on :oember 5G, 566C was lawful. The matters contained in the
notice of strike of &eptember +,, 566C had already been taken cogni"ance of by the &!L3 when he
issued on !ctober 85, 566C a status (uo ante bellum order en'oining the respondent union from
intending or staging a strike. @espite the &!L3 order, the respondent union neertheless staged a
strike on :oember 5G, 566C simultaneously with its notice of strike, thus iolating *rt. +GE-a0 of
the Labor Code, as amended, which proides that % # # # :o strike or lockout shall be declared
after assumption of 'urisdiction by the 2resident or the &ecretary or after certification or
submission of the dispute to compulsory or oluntary arbitration or during the pendency of cases
inoling the same grounds for the strike or lockout.) ;2RA&4 <@.=*)AR4 H@D*= )S% 2*&.C&*
=A<@R @R2A&CJADC@& @5 +@RN*RS C& H@D*=, R*SDA.RA&D A&4 A==C*4 C&4.SDRC*S, Guly !, 6BB89
7. Res,ondents a,,lied for e,lo#ent in Taiwan wit! ,etitioner. 7!il. E,lo# Ser&i%es and
Reso"r%es. In%. /7SRI for bre&it#2. T!e res,ondents were de,lo#ed in Taiwan. W!en t!e#
en%o"ntered ,robles. t!e# bro"+!t t!eir attention to t!e ana+er w!o told t!e to for+et
abo"t it and refrain to air t!eir %o,laints.
Res,ondent Na&arra and anot!er e,lo#ee. 7io Habito. were s"oned b# t!e
ana+eent and told t!at t!e# were to be re,atriated. wit!o"t s,e%if#in+ t!e +ro"nd or %a"se
t!erefor. T!e# ,leaded t!at t!e# be infored of t!e %a"se or %a"ses for t!eir re,atriation. b"t



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t!eir re:"ests were reDe%ted. T!e ana+er of t!eir e,lo#er s"oned t!e ,oli%e. w!o
arri&ed and es%orted t!e to t!e air,ort. U,on res,ondent Na&arraJs arri&al in ;anila. t!e
,etitioner so"+!t to settle !is %o,laints. After t!e ne+otiations. t!e ,etitioner a+reed to ,a#
76B.000 to t!e said res,ondent b"t. in %onsideration t!ereof. t!e latter e$e%"ted a :"it%lai
releasin+ t!e ,etitioner fro an# or all liabilities for !is re,atriation. Were ,etitioners ille+all#
disissed w!en t!e# re,atriated b# t!eir Taiwan e,lo#ers' Was Na&arraCs e$e%"tion of
:"it%lai and re%ei,t of 7 6B. 000 s"ffi%ient to %on%l"de !is wai&er of ri+!t a+ainst ille+al
disissal'
Oes. ;espondents= dismissal was not based on 'ust, alid and legal grounds. *s such, the
rule le# loci contractus -the law of the place where the contract is made0 goerns. Therefore, the
Labor Code, its implementing rules and regulations, and other laws affecting labor, apply in this
case. In order to effect a alid dismissal of an employee, the law re(uires that there be 'ust and
alid cause as proided in *rticle +7+ and that the employee was afforded an opportunity to be
heard and to defend himself. @ismissal may also be based on any of the authori"ed causes proided
for in *rticles +78 and +7E of the Labor Code.
The petitioner failed to substantiate its claim that respondent :aarraMs repatriation was
based on a alid, legal and 'ust cause. 9e thus rule that the respondents were constructiely
dismissed from their employment. There is constructie dismissal if an act of clear discrimination,
insensibility, or disdain by an employer becomes so unbearable on the part of the employee that it
would foreclose any choice by him e#cept to forego his continued employment. It e#ists where
there is cessation of work because Lcontinued employment is rendered impossible, unreasonable or
unlikely, as an offer inoling a demotion in rank and a diminution in pay.L
9e rule that the deed of release e#ecuted by respondent :aarra did not completely
release the petitioner from its liability on the latterMs claim. *s a rule, (uitclaims, waiers or
releases are looked upon with disfaor and are commonly frowned upon as contrary to public policy
and ineffectie to bar claims for the measure of a workerMs legal rights. If -a0 there is clear proof
that the waier was wangled from an unsuspecting or gullible person$ or -b0 the terms of the
settlement are unconscionable, and on their face inalid, such (uitclaims must be struck down as
inalid or illegal. ;PHC= *3P=@M S*R)C'*S )S% PARA3C@, *D A=, April 1, 6BB>9

6. T!e ,etitioner is a doesti% %or,oration en+a+ed in t!e b"siness of ,ro&idin+ tele+ra,! and
%o"ni%ation ser&i%es t!r" its bran%!es all o&er t!e %o"ntr#. It e,lo#ed &ario"s e,lo#ees.
aon+ w!o were ,ri&ate res,ondents. T!e ,etitioner %ae ", wit! a Relo%ation and
Restr"%t"rin+ 7ro+ra. 7ri&ate res,ondents re%ei&ed se,arate letters fro t!e ,etitioner.
+i&in+ t!e t!e o,tion to %!oose t!e bran%! to w!i%! t!e# %o"ld be transferred. T!ereafter.
t!e ,ri&ate res,ondents and ot!er ,etitionerJs e,lo#ees were dire%ted to Krelo%ateK to t!eir
new 7TST Bran%!es.
The petitioner offered benefits/allowances to those employees who would agree to be
transferred under its new program. Moreover the employees who would agree to the transfers
would be considered promoted. The private respondents re!ected the petitioner"s offer. #ence
the petitioner sent letters to the private respondents re$uiring them to e%plain in writing why
no disciplinary action should be ta&en against them for their refusal to be
transferred/relocated. 'n their respective replies to the petitioner"s letters the private
respondents e%plained that the transfers imposed by the management would cause enormous
difficulties on the individual complainants. (issatisfied with this e%planation the petitioner
considered the private respondents" refusal as insubordination and willful disobedience to a
lawful order) hence the private respondents were dismissed from wor&. *ubse$uently the
private respondents" bargaining agent +T,T -or&ers .nion/0123./4M. filed a complaint
against the petitioner for illegal dismissal and unfair labor practice for and in behalf of the
private respondents. 1re the respective transfers of the private respondents considered
promotions5 'f so is the denial of a promotion a !ust and authori6ed cause for dismissal5
Oes. 9ith or without a corresponding increase in salary, the respectie transfers of the
priate respondents were in fact promotions, following the ruling enunciated in Aomeowners
&aings and Loan *ssociation, Inc. . :L;CH %2romotion, as we defined in 4illares . &ubido, is Sthe
adancement from one position to another with an increase in duties and responsibilities as
authori"ed by law, and usually accompanied by an increase in salary.= *pparently, the









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indispensable element for there to be a promotion is that there must be an Sadancement from one
position to another= or an upward ertical moement of the employeeMs rank or position. *ny
increase in salary should only be considered incidental but neer determinatie of whether or not a
promotion is bestowed upon an employee.
However, *n employee cannot be promoted, een if merely as a result of a transfer,
without his consent. * transfer that results in promotion or demotion, adancement or reduction or
a transfer that aims to Mlure the employee away from his permanent position cannot be done
without the employeesM consent. There is no law that compels an employee to accept a promotion
for the reason that a promotion is in the nature of a gift or reward, which a person has a right to
refuse. Aence, the e#ercise by the priate respondents of their right cannot be considered in law as
insubordination, or willful disobedience of a lawful order of the employer. *s such, there was no
alid cause for the priate respondentsM dismissal. ;PDED )S% 'A, September 67, 6BB89
5C. T!e ,etitioner is a doesti% %or,oration en+a+ed in +arents an"fa%t"rin+ "sin+ t!e
brand nae FAA;ISETA.G T!e ,etitioner e,lo#ed ,ri&ate res,ondent Torno as trier. T!e
,ri&ate res,ondent and a %o*e,lo#ee. ;ari%ar B"an. were tas5ed to !andle t!e in&entor# of
finis!ed ,rod"%ts. Soetie t!ereafter. t!e ,etitioner started to re%ei&e inforation fro t!e
!ead of its ,rod"%tion de,artent t!at. a%%ordin+ to ot!er e,lo#ees. B"an and t!e ,ri&ate
res,ondent !ad been stealin+ FAA;ISETAG ites fro t!e fa%tor#. On t!e basis of a re,ort. t!e
,etitioner iss"ed a dis%i,linar# a%tion for s"s,endin+ t!e ,ri&ate res,ondent indefinitel#
wit!o"t ,a#. A noti%e of disissal was addressed to t!e ,ri&ate res,ondent s,e%if#in+ t!e
%!ar+e a+ainst !er. t!e fa%t"al basis t!ereof and t!e i,osable ,enalties for t!e said %!ar+e if
,ro&en.
T!e ,ri&ate res,ondent failed to a,,ear d"rin+ t!e s%!ed"led !earin+. Conse:"entl#.
t!e ,etitioner de%ided to disiss t!e ,ri&ate res,ondent fro !er e,lo#ent. W!en notified
of t!e ,etitionerCs de%ision. t!e ,ri&ate res,ondent filed a %o,laint for ille+al disissal wit!
,ra#er for reinstateent and ,a#ent of ba%5wa+es. non*,a#ent of ser&i%e in%enti&e lea&e
,a# and 1-t!*ont! ,a# a+ainst t!e ,etitioner before t!e National Ca,ital Re+ional Arbitration
Bran%!. LA rendered a de%ision !oldin+ t!at t!e res,ondent was ille+all# disissed and
dire%ted t!e ,etitioner to ,a# ba%5wa+es and se,aration ,a# to t!e ,ri&ate res,ondent.
<owe&er. a%%ordin+ to t!e labor arbiter. reinstateent %o"ld no lon+er be effe%ted. as t!e
relations!i, between t!e ,ri&ate res,ondent and t!e ,etitioner !ad been strained and
r",t"red. A++rie&ed. t!e ,etitioner a,,ealed t!e de%ision to t!e NLRC. alle+in+ t!at it was
de,ri&ed of its ri+!t to a foral !earin+ before t!e labor arbiter rendered !er de%ision. LACs
fail"re to %ond"%t a !earin+ de,ri&ed t!e ,etitioner of its &ested ri+!tQ %onse:"entl#. !er
de%ision was n"ll and &oid. Does t!e absen%e of a foral !earin+ ao"nt to denial of
,etitionerCs ri+!t to d"e ,ro%ess' Is terination of t!e ,ri&ate res,ondentCs e,lo#ent based
on a D"st and &alid %a"se'
9e agree with the C* that the petitioner did not hae a ested right to a formal hearing
simply and merely because L* Tumanong granted its motion and set the case for hearing. 2ursuant
to &ection ., ;ule V of the :ew ;ules of 2rocedure of the :L;C, the labor arbiter has the authority
to determine whether or not there is a necessity to conduct formal hearings in cases brought before
him for ad'udication. The holding of a formal hearing or trial is discretionary with the labor arbiter
and is something that the parties cannot demand as a matter of right. It is entirely within his
authority to decide a labor case before him, based on the position papers and supporting
documents of the parties, without a trial or formal hearing. The re(uirements of due process are
satisfied when the parties are gien the opportunity to submit position papers wherein they are
supposed to attach all the documents that would proe their claim in case it be decided that no
hearing should be conducted or was necessary.
The priate respondent was illegally dismissed. In order to effect a alid dismissal, the law
re(uires that -a0 there be 'ust and alid cause as proided under *rticle +7+ of the Labor Code$ and
-b0 the employee be afforded an opportunity to be heard and to defend himself. *s stated by the
C*, the petitioner had failed to show that it had complied with the two-notice re(uirementH -a0 a
written notice containing a statement of the cause for the termination to afford the employee
ample opportunity to be heard and defend himself with the assistance of his representatie, if he
so desires$ -b0 if the employer decides to terminate the serices of the employee, the employer



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must notify him in writing of the decision to dismiss him, stating clearly the reason therefor.
;SH@PP*S 3A&C=A )S% &=R', Ganuary 1>, 6BB>9









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