DIWATA NOTES

Labor Relations

LABOR RELATIONS refers to the interactions between
employer and employees or their representatives and
the mechanism by which the standards and other terms
and conditions of employment are negotiated, adjusted
and enforced.
MODULE 2
EMPLOYER-EMPLOYEE RELATIONSHIP AND THE
RIGHT TO SELF-ORGANIZATION
Employer, Defined

includes any person acting in the interest of an
employer, directly or indirectly. The term shall not
include any labor organization or any of its officers
or agents except when acting as employer.
Employee, Defined

includes any person in the employ of an employer.
The term shall not be limited to the employees of a
particular employer, unless the Code so explicitly
states. It shall include any individual whose work has
ceased as a result of or in connection with any
current labor dispute or because of any unfair labor
practice if he has not obtained any other
substantially equivalent and regular employment.
Four Fold Test in Employer-Employee Relationship
1.
2.
3.
4.

Selection and engagement of employees
Payment of wages or salaries
Exercise of the power of dismissal
Exercise of the power of control

The “control test” is the controlling test. It
addresses the issue of whether the employer
controls or has reserved the right to control the
employee not only as to the result of the work to be
done but also as to the means and methods by
which the same is to be accomplished.

Principles on Employer-Employee Relationship
1.

2.

3.

4.

T h e e x i s t e n c e o f t h e e m p l o y e r- e m p l o y e e
relationship is essential in that it comprises as the
jurisdictional basis for recovery under the law. Only
cases arising from said relationship are cognizable
by the labor courts.
The relationship of employer and employee is
contractual in nature. It may be an oral or written
contract. A written contract is not necessary for the
creation and validity of the relationship.
Stipulation in a contract is not controlling in
determining existence of the relationship. The
employment status of a person is defined and
prescribed by law and not by what the parties say it
should be.
Labor laws apply only in particular cases where
employer-employee relationship is present. The
existence of this relationship is oftentimes tested by

/wncverder 2016

5.

6.

a set of criteria established by law and
jurisprudence.
Rights and obligations between employers and
employees arise only in the presence of such
relationship.
The question of where employer-employee
relationship exists is a primordial consideration
before extending labor benefits under the
workmen’s compensation, social security, medicine,
termination pay, and labor relations law.

Constitutional Provisions on the Right to SelfOrganization

Section 8, Article III, 1987 Constitution

The right of the people, including those employed in the
public and private sectors, to form unions, associations,
or societies for purposes not contrary to law shall not be
abridged.

Paragraph 2, Section 3, Article XIII, 1987
Constitution

It shall guarantee the rights of all workers to selforganization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike
in accordance with law. They shall be entitled to security
of tenure, humane conditions of work, and a living wage.
They shall also participate in policy and decision-making
processes affecting their rights and benefits as may be
provided by law.
The Right to Self-Organization, Meaning and Scope

Such right shall include the right to form, join, or
assist labor organizations for the purpose of
collective bargaining through representatives of
their own choosing and to engage in lawful
concerted activities for the same purpose for their
mutual aid and protection (Article 246, Labor Code)
WHO ARE ELIGIBLE TO JOIN, FORM OR ASSIST A
LABOR ORGANIZATION FOR PURPOSES OF
COLLECTIVE BARGAINING?

In the private sector:
a. All persons employed in commercial,
industrial and agricultural enterprises;
b. Employees of gover nment-owned or
controlled corporations without original
charters established under the Corporation
Code;
c. Employees of religious, charitable, medical
or educational institutions, whether
operating for profit or not;
d. Front-line managers, commonly known as
supervisory employees;
e. Alien employees

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DIWATA NOTES
Labor Relations



a.

General Rule: Alien employees are not
allowed to join unions in the Philippines
Exceptions:
a. He should have a valid working
permit issued by the DOLE; and
b. He is a national of a country which
grants the same or similar rights to
Filipino workers or which has ratified
either ILO Convention No. 87 or ILO
Convention No. 98, as certified by
the Philippine Department of Foreign
Affairs (DFA). 


f.
g.
h.
i.

Working children
Homeworkers
Employees of cooperatives, and
Employees of legitimate contractors not
with principal but with the contractor

Employees of job contractors can join, form,
or assist a labor organization but not for the
purpose of collective bargaining with the
principal but with their direct employer – the
job contractor.

As to COOPERATIVES:

Members who are co-owners cannot join,
form, or assist a labor organization

Employees can join a labor organization
since they have employer-employee
relationship with the cooperative.
Self-employed persons are allowed to join, form, or
assist a labor organization for their mutual aid and
protection but not for collective bargaining
purposes since they have no employers but
themselves. This rule applies as well to ambulant,
intermittent and other workers, rural workers and
those without any definite employers. The reason
for this rule is that these persons have no employers
with whom they can collectively bargain.
A labor dispute may exist even in the absence of
employer-employee relationship provided that the
controversy concerns, among others, the terms and
conditions of employment or a change or
arrangement thereof.
The absence of employer-employee relationship
prohibits a person from joining, forming, or assisting
a labor organization. An person who is not an
employee of the company is not entitled to the
constitutional right to self-organization.

In the public sector:
All rank-and-file employees of all branches,
subdivisions, instrumentalities, and agencies of
government, including government-owned and/or
controlled corporations with original charters, can
form, join or assist employees‟ organizations of their
own choosing.

The labor organization in the government sector is
technically called an “employees’ organization.
In the public sector, the sole and exclusive
bargaining union is called an “accredited
employees’ organization.” In the private sector, this
is in principle known as a “recognized or certified
collective bargaining agent.

NOTEWORTHY:
Any employee, whether employed for a definite
period or not, shall, beginning on the first day of
his service, be eligible for membership in any labor
organization.

In the case of Iglesia ni Cristo, the Supreme Court
ruled that the right to self organization embraces
only the right to form, join, or assist labor
organizations, but the concomitant, converse NOT
to form, join, or assist any labor organization.

Right to join a union cannot be made subject of a
CBA stipulation.
Front-line managers or supervisors are eligible to
join, form, or assist a labor organization BUT ONLY
AMONG THEMSELVES. They cannot join the rankand-file union.
A mixed-membership of supervisors and rank-andfile employees in a union is not a ground for
cancellation of union registration. In case there is
mixed membership of supervisors and rank-and-file
employees in one union, the new rule enunciated in
Article 245-A of the Labor Code, unlike in the old
law, is that it cannot be invoked as a ground for the
cancellation of the registration of the union. The
employees so improperly included are automatically
deemed removed from the list of members of said
union. In other words, their removal from the said
list is by operation of law.
/wncverder 2016

WHO CANNOT FORM, JOIN, OR ASSIST LABOR
ORGANIZATIONS

In the private sector:

a.

Managerial employees: is one who is vested with
powers or prerogatives to lay down and execute
management policies and/or hire, transfer, suspend,
layoff, recall, discharge, assign, or discipline
employees.
Top Management: This is composed of a
comparatively small group of executives. It
responsible for the overall management of the
organization. It establishes operating policies and

Page 2 of 46

DIWATA NOTES
Labor Relations

guides is the organization’s interactions with its
environment.

Middle Management: This refers to more than one
level in an organization. Middle managers direct the
activities of other managers and sometimes also
those of operating employees. The middle
managers’ principal responsibilities are to direct the
activities that implement their organization’s policies
and to balance the demands of their superiors with
the capacities of their subordinates.
First-Line Management: This is the lowest level in
an organization at which individuals are responsible
for the work of others. First-line managers direct
operating employees only; they do not supervise
other managers. They are usually called the
supervisors.

b.

SUPERVISORS - are those who, in
t h e i n t e re s t o f t h e e m p l o y e r,
effectively recommend such
managerial actions, if the exercise of
such authority is not merely routinary
or clerical in nature but requires the
use of independent judgment.

Confidential employees: Within the context of
labor relations, confidential employees are those
who meet the following criteria:
They assist or act in confidential capacity
To persons or officers who formulate,
determine, and effectuate management
policies specifically in the field of labor
relations

The two (2) criteria are cumulative and both must be
met if an employee is to be considered a “confidential
employee” that would deprive him of his right to form,
join or assist a labor organization.
However, mere access of an employee to confidential
labor relations information which is merely incidental to
his duties and, therefore, knowledge thereof is not
necessary in the performance of said duties, does not
make such employee a confidential employee.
While Article 245 of the Labor Code limits the
ineligibility to join, assist or form a labor organization to
managerial employees, jurisprudence has extended this
prohibition to confidential employees or those who, by
reason of their positions or nature of work, are required
to assist or act in a fiduciary manner to managerial
employees and, therefore, are likewise privy to sensitive
and highly confidential records.

Article 245 of the Labor Code does not
directly prohibit confidential employees from
engaging in union activities. Their
disqualification proceeds merely from the
application of the “doctrine of necessary
implication” because what Article 245
singles out as ineligible to join, assist or form
any labor organization are managerial
employees. By necessary implication,
confidential employees are similarly
disqualified. This doctrine states that what
is implied in a statute is as much a part
thereof as that which is expressed.
Simply stated, in the collective bargaining
p ro c e s s , m a n a g e r i a l e m p l o y e e s a re
supposed to be on the side of the employer
to act as its representatives and to see to it
that its interests are well protected. The
employer is not assured of such protection if
managerial employees themselves are union
members.
Moreover, unionization of confidential
employees for the purpose of collective
bargaining would mean the extension of the
law to persons or individuals who are
supposed to act “in the interest of” the
employers. It is not far-fetched that in the
course of the collective bargaining
negotiations, they might jeopardize that
interest which they are duty-bound to
protect.

In the public sector.

The following are not eligible to form employees’
organizations:
a.

b.
c.
d.
e.
f.
g.

High-level employees whose functions are
normally considered as policy-making or
managerial or whose duties are of a highly
confidential nature;
D
Members of the Armed Forces of the
Philippines;
Police officers;
Policemen;
Firemen; and
Jail guards.

Doctrine of Necessary Implication in relation to
Confidential Employees:

/wncverder 2016

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DIWATA NOTES
Labor Relations

L A B O R O N LY C O N T R A C T I N G V S . J O B
CONTRACTING
Labor Only Contracting

Job Contracting

arrangement whereby a
principal agrees to put
out or farm out to a
contractor
or
subcontractor the
performance
or
completion of a specific
job, work or service within
Absence of substantial a
definite
or
capital is an indicator of predetermined period,
labor-only contracting.
regardless of whether
such job, work or service
is to be performed or
completed within or
outside the premises of
the principal.

MODULE THREE
LABOR UNIONISM, PROCEDURE, AND RIGHTS
I.

a.
b.

an arrangement where
the contractor or
s u b c o n t r a c t o r m e re l y
recruits, supplies or
places workers to perform
a job, work or service for
a principal

Prohibited by law

Allowed by law

❉❉❉❉❉❉❉❉
End of Module Two
❉❉❉❉❉❉❉❉

SPECIFIC COVERAGE (STAG-SIN)

c.
d.
e.
f.
g.
II.

Supervisors
Terminated employees who are contesting
their termination
Aliens with valid work permit and with
reciprocity
Government employees
Security guards
Iglesia ni Cristo members
New employees

EXCLUSIONS (HE-MAC-EN)
a.
b.
c.
d.
e.
f.
g.

High level government employees
Employees of cooperatives who are
members
Managerial employees
AFP and police personnel
Confidential employees
Employees of international organizations
with immunity
Non-employees

III. REQUIREMENTS FOR UNION REGISTRATION
(CAM-PORN)
a.
b.
c.
d.
e.
f.
g.

Constitution and by-laws
Annual financial report
Minutes of organizational meeting
Principal address of union
Officers’ names and addresses
Registration fee of P50
Names of workers constituting 20% of the
appropriate bargaining unit

IV. GROUNDS FOR CANCELLATION OF UNION
REGISTRATION (FACE-MA)
a.

b.
c.
d.
e.

f.

/wncverder 2016

Failure to:

Submit documents per Article 239

Submit annual financial report

Submit list of members

Comply with Article 237 and 238
Acting as labor contractor
Checking off of special assessment without
individual authorization
Entering into a sweetheart CBA
Misrepresentation in the:

Adoption/ ratification of CBA

Election Officers
Asking for negotiation/ attorney’s fees

Page 4 of 46

c. e. POLITICAL RIGHTS OF UNION MEMBERS (DINNER) a. housing. c. etc. MISCELLANEOUS RIGHTS OF LEGITIMATE LABOR ORGANIZATION (USER) a. b. d. assessment on income properties. To sue and be sued To exclusively represent the ABU for collective bargaining To represent its union members VIII. d. e. f. and exclusively used by unions IX. RIGHTS OF UNION MEMBERS ON FINANCIAL MATTERS (STAR-NUN) a. Unorganized Establishment • Petition • Filed an LLO b. directly. additional compensation for officers. REPRESENTATION ISSUES (Quiz) a. c. welfare. excessive initiation fees and fines. Determination by secret ballot of all major policies Information on CBL and on rights and obligations No imposition of other qualifications for positions except membership in good standing No election or appointment of persons convicted of crimes involving moral turpitude Election of officers directly. which are actually. endowments. f. Salaries of officers should be authorized by the CBL or general membership resolution True and correct accounting by treasurer Accounts shall be open to inspection during office hours Reports on all financial transactions. full and detailed • records on all incomes showing the sources • receipts of all payments signed by collector • records of all expenditures showing payee and purpose No arbitrary. To be furnished by management with annual financial statements that are audited To own properties for union use To be exempt from tax. d. special assessment unless validated by a general resolution No check-off unless ok’d by individual written resolution gifts. b. collection of fees. Organized Establishment • Verified Petition • Filed by a LLO • Freedom period • Written consent of 25% of ABU c. b. To u n d e r t a k e re l a t e d a c t i v i t e s l i k e cooperative. grants. duties. c. FINANCIAL RIGHTS OF LABOR ORGANIZATION (FOE) a. b. /wncverder 2016 Page 5 of 46 . by secret ballot every 5 years or less Right against knowing admission of subversives VI.DIWATA NOTES Labor Relations V. Employer as Petitioner • The ABU is organized • There is a request to bargain ❉❉❉❉❉❉❉❉ End of Module Three ❉❉❉❉❉❉❉❉ VII. etc.

Defined • • II. IN CASES WHERE THE PETITION WAS FILED BY A NATIONAL UNION OR FEDERATION. It may also refer to the group or cluster of jobs or positions within the employer‟ s establishment that supports the labor organization which is applying for registration. otherwise. 2. • What are the requisites for certification election in organized establishments? The following are the requisites for certification election in organized establishments. when a verified petition questioning the majority status of the incumbent bargaining agent is filed by any legitimate labor organization including a national union or federation which has already issued a charter certificate to its local chapter participating in the certification election or a local chapter which has been issued a charter certificate by the national union or federation before the Department of Labor and Employment within the sixty (60)-day period before the expiration of the collective bargaining agreement. That the petition is supported by the written consent of at least twenty-five percent (25%) of all employees in the bargaining unit. or An employer. To have a valid election. However. a RUN-OFF ELECTION shall be conducted between the labor unions receiving the two highest number of votes: Provided. The labor union receiving the majority of the valid votes cast shall be certified as the exclusive bargaining agent of all the workers in the unit. the employer shall not be considered a party thereto with a concomitant right to oppose a petition for certification election. The Page 6 of 46 . That a petition questioning the majority status of the incumbent bargaining agent is filed before the DOLE within the 60-day freedom period. IT SHALL NOT BE REQUIRED TO DISCLOSE THE NAMES OF THE LOCAL CHAPTER’S OFFICERS AND MEMBERS. In all cases. A legitimate labor organization.DIWATA NOTES Labor Relations MODULE FOUR REPRESENTATION ISSUE AND INTER-UNION DISPUTES I. Who may file a petition for certification election? 1. When an election which provides for three or more choices results in no choice receiving a majority of the valid votes cast. 
 III. comprised of all or less than all of the entire body of employees in the employer unit or any specific occupational or geographical grouping within such employer unit. Bargaining Unit. at least a majority of all eligible voters in the unit must have cast their votes. but only when requested by a labor organization to bargain collectively and the status of the union is in doubt. 1. the employer shall continue to recognize the majority status of the incumbent bargaining agent where no petition for certification election is filed. whether the petition for certification election is filed by an employer or a legitimate labor organization. 3. Unorganized Establishment (Article 257) In any establishment where there is no certified bargaining agent. a certification election shall AUTOMATICALLY be conducted by the Med-Arbiter upon the filing of a petition by any legitimate labor organization. Organized Establishment (Article 256) In organized establishments. the Med-Arbiter shall automatically order an election by secret ballot when the verified petition is supported by the written consent of at least twenty-five percent (25%) of all the employees in the bargaining unit to ascertain the will of the employees in the appropriate bargaining unit. That the total number of votes for all contending unions is at least fifty percent (50%) of the number of votes cast. A “bargaining unit” refers to a group of employees sharing mutual interests within a given employer unit. including a national union or federation which has already issued a charter certificate to its 1ocal/ chapter participating in the certification election or a local/chapter which has been issued a charter certificate by the national union or federation. In unorganized establishments. /wncverder 2016 That such petition is verified. Employer as Petitioner (Article 258) Employer as Bystander. 2. it has no legal personality to file the petition for certification election. IV. it must be emphasized that the petitioner-union should have a valid certificate of registration. IT SHALL NOT BE REQUIRED TO DISCLOSE THE NAMES OF THE LOCAL CHAPTER’S OFFICERS AND MEMBERS. certification election shall be "automatically" conducted upon the filing of a petition for certification election by a legitimate labor organization. At the expiration of the freedom period. IN CASES WHERE THE PETITION WAS FILED BY A NATIONAL UNION OR FEDERATION.

the collective bargaining history of the school also shows that these groups were always treated separately. same duties and responsibilities and substantially similar compensation and working conditions. 79526. it would not be for the best interests of these employees if they would further be fractionalized. Laguesma. Certification year-bar rule. that in a case where the company’s production workers can be considered either as a single bargaining unit appropriate for purposes of collective bargaining or as three (3) separate and distinct bargaining units. Dec. company that each sales office consists of one bargaining unit. The exceptions when no certification election may be held are as follows: a. the existence of a prior collective bargaining history has been held as neither decisive nor conclusive in the determination of what constitutes an appropriate bargaining unit. No. Bargaining deadlock-bar rule. The adage ‘there is strength in number’ is the very rationale underlying the formation of a labor union. Moreover. Said the Court: “What greatly militates against this position (of the company) is the meager number of sales personnel in each of the Magnolia sales office in Norther n Luzon. in the absence of a collective bargaining agreement duly registered in accordance with Article 231 of the Labor Code. or c. submitting the list of employees during the pre-election conference should the MedArbiter act favorably on the petition. the determining factor is the desire of the workers themselves. R. where it was ruled. despite the history of said two divisions being treated as separate units and notwithstanding their geographical distance. 1990]. Certification Election Refers to the process of determining through secret ballot the sole and exclusive bargaining agent of the employees in a particular bargaining unit for purposes of collective bargaining and negotiations. declared that there is mutuality of interest among the workers in the sawmill division and logging division as to justify their formation of a single bargaining unit. Quisumbing. The Principle of Self-Determination (The Globe Doctrine) • This principle is based on the will of the employees. In the case of International School Alliance of Educators [ISAE] vs. WHERE TO FILE: A petition for CE is filed at the Regional Office which issued the certificate of Page 7 of 46 . V. 21. This. a petition for certification election may be filed at any time. For instance. WHEN TO FILE: The general rule is.DIWATA NOTES Labor Relations employer’s participation in such proceedings shall be limited to: 1. • VI. the Supreme Court ruled that foreign-hired teachers do not belong to the same bargaining unit as the local-hires because the former have not indicated their intention to be grouped with the latter for purposes of collective bargaining. In the case of San Miguel Corporation vs. the Supreme Court applied this principle in a petition of the union which seeks to represent the sales personnel in the various Magnolia sales offices in Northern Luzon. b.” Determination of Appropriate Bargaining Unit a. The Bargaining History Rule • This principle puts premium to the prior collective bargaining history and affinity of the employees in deter mining the appropriate bargaining unit. The Mutuality of Interest Rule • Under this doctrine. [G. contrary to the position taken by the • /wncverder 2016 c. It is called Globe doctrine because this principle was first enunciated in the United States case of Globe Machine and Stamping Co. Consequently. Mainit Lumber Development Company Workers Union. Contract-bar rule. • • b. a certification election should be held separately to choose which representative union will be chosen by the workers. Even the bargaining unit sought to be represented by respondent union in the entire North Luzon sales area consists only of approximately fifty-five (55) employees. in defining the appropriate bargaining unit. It is characterized by similarity of employment status. Surely. However. the employees sought to be represented by the collective bargaining agent must have community or m u t u a l i t y o f i n t e re s t i n t e r m s o f employment and working conditions as evinced by the type of work they perform. the Supreme Court in National Association of Free Trade Unions vs. and 2. being notified or informed of petitions of such nature.

• The petitioner union is not listed in the DOLE Registry of legitimate labor organization. iv. Contract Bar (Article 232) • A petition for certification election may not be filed when a CBA between the employer and a duly recognized or certified bargaining agent has been registered with the Bureau of Labor Relations (BLR) in accordance with the Labor Code. “Collective bargaining deadlock” refers to a situation where there is a failure in the collective bargaining negotiations between the collective bargaining agent and the employer resulting in an impasse or stalemate. When there is a schism in the union resulting in an industrial dispute wherein the 
 collective bargaining agreement can no longer foster industrial peace. that the petition is filed within the sixty-day freedom period of such agreement. b. contains provisions lower than the standards 
 fixed by law. a petition for certification election may not be entertained when: • a bargaining deadlock to which an incumbent. • If another union had been previously recognized voluntarily or certified in a valid certification. the bargaining unit to be represented. The purpose of this rule is to ensure stability in the relationship of the workers and the employer by preventing frequent modifications of any CBA earlier entered into by them in good faith and for the stipulated original period. consent or run-off election. or • The legal personality of the petitioner-union has been revoked or cancelled with finality. the signature of at least twenty-five (25%) percent of all employees in the appropriate bargaining unit shall be attached to the petition at the time of its filing WHAT HAPPENS AFTER RECEIPT OF PETITION: The petition will be raffled to the Med-Arbiter for preliminary conference to determine.DIWATA NOTES Labor Relations petitioning union’s certificate of registration/ certificate of creation of chartered local. and the possibility of consent election. • If there exists a duly registered CBA. iii. the parties have failed to resolve the • • Page 8 of 46 . When the collective bargaining agreement was entered into prior to the 60-day 
 freedom period. • In an organized establishment. When the collective bargaining agreement is not complete as it does not contain any 
 of the requisite provisions which the law requires. Despite their efforts at bargaining in good faith. During the 60-day freedom period. a petition for certification election may be filed only within the 60-day freedom period prior to its expiry. When the CBA is not registered with the BLR or DOLE Regional Offices. VII. v. Bars to Certification Election /wncverder 2016 a. or • certified bargaining agent is a party has been submitted to conciliation or arbitration or has become the subject of a valid notice of strike or lockout. as well as the number and location of polling places. Deadlock Bar • Under this rule. REQUIREMENTS IN FILING PETITION FOR CE: • Among the important requirements are the following: • A statement indicating any of the following: • That the bargaining unit is unorganized or that there is no registered CBA covering the employees in the bargaining unit. When the documents supporting its registration are falsified. vi. time and place of election will be identified. Where the CBA is duly registered. the contending unions. among others. • • EXCEPTIONS TO THE CONTRACT BAR RULE ii. When the CBA. PETITION FOR CE MAY BE DENIED IF: • It was filed before or after the freedom period of a registered CBA. vii. although registered. fraudulent or tainted with misrepresentation. that the petition is filed outside the one-year period from entry of voluntary recognition or conduct of certification or run-off election and no appeal is pending thereon. viii. WHAT HAPPENS UPON APPROVAL OF THE CONDUCT OF CERTIFICATION ELECTION BY THE MEDIATOR-ARBITER: The PCE will be endorsed to an election officer for the conduct of pre-election conference wherein the date. the list of challenged and eligible voters will be made.

F r o m t h e d a t e o f v o l u n t a r y recognition. in view of the discriminatory acts committed by the employer against the said union prior to the holding of the certification election . NOT VALID The voluntary recognition by the employer of a union while a petition for certification election filed by a rival union is pending does not have any valid effect. in the case of local chapter.DIWATA NOTES Labor Relations issues and it appears that there are no other definite options or plans in sight to break it. R E Q U I R E M E N T S F O R V O L U N TA R Y RECOGNITION: The notice of voluntary recognition should be accompanied by the original copy and two (2) duplicate copies of the following documents: a.that the results of the certification election where the petitioner-union lost cannot be said to constitute a repudiation by the affected employees of said union’s right to represent them. it was held in Me-Shurn Corporation v. Certificate of posting of the joint statement of voluntary recognition for fifteen (15) consecutive days in at least two (2) conspicuous places in the establishment or bargaining unit where the union seeks to operate. the employer and the union should submit a notice of voluntary recognition to the DOLE Regional Office which issued the recognized labor union‟ s certificate of registration or. 12 Months Post Certificate Election Bar • Under the certification year-bar rule. Simply stated. c. where the charter certificate and the other documents required under Article 234-A were submitted and filed. consent or run-off election. Voluntary Recognition Refers to the process by which a legitimate labor union is voluntarily recognized by the employer as the exclusive bargaining representative or agent in a bargaining unit and reported as such with the Regional Office in accordance with the Rules to Implement the Labor Code. and A statement that the labor union is the only legitimate labor organization operating within the bargaining unit. ❉❉❉❉❉❉❉❉ End of Module Four ❉❉❉❉❉❉❉❉ A joint statement under oath attesting to the fact of voluntary recognition. It cannot be done in case there are two or more unions in contention. WHEN AND WHERE FILED: Within thirty (30) days from such voluntary recognition. It is further required that all accompanying documents of the notice of voluntary recognition should be certified under oath by the employer-representative and president of the recognized labor union. The approximate number of employees in the bargaining unit. From the date of a valid certification.acts that included the employer’s immediate grant of exclusive recognition to another union as a bargaining agent despite the pending petition for certification election. /wncverder 2016 Page 9 of 46 . VIII. d. Thus. or b. Me-Shurn Workers Union . there is a deadlock when there is a complete blocking or stoppage in the negotiation resulting from the action of equal and opposing forces c. WHEN PROPER: Voluntary recognition is proper only in cases where there is only one legitimate labor organization existing and operating in a bargaining unit. a certification election petition may not be filed within one (1) year: a. VOLUNTARY RECOGNITION OF A UNION MADE DURING PENDENCY OF A PETITION FOR CERTIFICATION ELECTION FILED BY ANOTHER UNION. accompanied by the names of those who support the voluntary recognition comprising at least a majority of the members of the bargaining unit. b.

a bargaining unit must involve a grouping of employees who have substantial. Scho case) • The Secretary of Labor may decide that the Management should declare a lockout or the Union may stage a strike. concerning wages. indicate to be best suited to serve the reciprocal rights and duties of the parties under the collective bargaining provisions of the law. II.DIWATA NOTES Labor Relations MODULE FIVE COLLECTIVE BARGAINING I. for a period of at least five (5) days prior to its ratification. Collective Bargaining Agreement • Refers to the negotiated contract between a duly recognized or certified exclusive bargaining agent of workers and their employer. Written notice of intent with written proposals Written reply within ten (10) calendar days Conference within ten (10) calendar days from receipt of request NCMB to intervene through conciliation Settle the dispute or have it submitted for voluntary arbitration • Submit for voluntary arbitration • Submit for compulsory arbitration (NLRC) • Assumption of jurisdiction by the DOLE Secretary (St. Purposes of Collective Bargaining • To protect workers • To empower the workers • To make the right of self-organization useful and meaningful • To be the preferred mode of settling labor disputes before resorting to strikes • To be the preferred mode over that of compulsory arbitration IV. hours of work. To be appropriate. It shall also be the duty of both parties to keep the status quo and continue in full force and effect the terms and conditions of the existing agreement during the 60-day period and/or until a new agreement is reached by the parties. The moment a union is recognized or certified. which the collective interest of all the employees. working conditions and other subjects of collective bargaining VI. VIII. • • immediately before the expiry date of the 5-year term of the CBA. 4. including proposals for adjusting any grievances or questions arising under such agreement and executing a contract incorporating such agreements if requested by either party but such duty does not compel any party to agree to a proposal or to make any concession. agree on a compromise. the duty to bargain collectively shall also mean that neither party shall terminate nor modify such agreement during its lifetime. • Posting is a mandatory requirement. and no petition questioning its majority status shall be entertained nor shall certification election be conducted outside of the 60-day freedom period /wncverder 2016 • V. to the exclusion of other labor organizations. 5. hours of work and all other terms and conditions of employment. Page 10 of 46 . VII. However. and Registration of CBA • The general rule is that the CBA is required to be posted in two (2) conspicuous places in the work premises. A process where the parties discuss their demands and counter-demands and. mutual interests in wages. Sole and Exclusive Bargaining Agent • A labor union recognized or certified as the “sole and exclusive bargaining agent” means that it shall remain as such during the existence of the CBA. reflecting concessions mutually given. 3. III. Defined • • A method of resolving disputes over collective interests of labor vis-a-vis those of capital arrived at through negotiation. Mandatory Requisites of Publication. what the bargaining union represents are not only its members but also its non-members who are included in the bargaining unit Appropriate Bargaining Unit A group of employees of a given employer. 2. either party can serve a written notice to terminate or modify the agreement at least sixty (60) days prior to its expiration date. resulting on a contract. WHEN THERE IS A CBA (Article 253) When there is a collective bargaining agreement. after haggling. Ratification. Duty to Bargain • • • • WHEN THERE IS NO CBA (Article 251) It means the performance of a mutual obligation to meet and convene promptly and expeditiously in good faith for the purpose of negotiating an agreement with respect to wages. hours of work and all other terms and conditions of employment in the appropriate bargaining unit. including mandatory provisions for grievances and arbitration machineries It is executed not only upon the request of the exclusive bargaining representative but also by the employer. Collective Bargaining. comprised of all or less than all of the entire body of employees. Procedures in Collective Bargaining (Quiz) 1. consistent with equity to the employer.

loses its statutory right to negotiate or renegotiate the terms and conditions of the draft CBA proposed by the union. when one of the parties abuses this grace period by purposely delaying the bargaining process. stock and barrel. It ruled that the former had thereby lost its right to bargain the terms and conditions of the CBA.DIWATA NOTES Labor Relations • • • Posting is the responsibility of the employer. • For refusing to send a counter-proposal to the union and to bargain anew on the economic terms of the CBA.com As held in General Milling Corporation vs. XI. • • CASES: a. However. NLRC: The Supreme Court found that petitioner therein. General Milling Corporation vs. Refusal of a Party to Negotiate • The refusal of the employer to bargain with the collective bargaining representative. The rule necessarily presupposes that all other things are equal. by ignoring all notices for negotiations and requests for counterproposals so much so that the union had to resort to conciliation proceedings. a departure from the general rule is warranted. Page 11 of 46 . the High Tribunal upheld the unilateral imposition on the university of the CBA proposed by the Divine Word University Employees Union. • X. IX. Thus. Sweden Ice Cream Plant. imposed on the employer. the management’s refusal to make a counterproposal to the union’s proposal for CBA negotiation is an indication of its bad faith. Divine Word University of Tacloban vs. CA: The Supreme Court imposed on the employer the draft CBA proposed by the union for two years commencing from the expiration of the original CBA. Where the employer did not even bother to submit an answer to the bargaining proposals of the union. The CBA shall be registered with the Department of Labor and Employment. Secretary of Labor and Employment: Petitioner therein refused to perform its duty to bargain collectively. lock. the union lived up to this obligation when it presented proposals for a new CBA to the management within three (3) years from the effectivity of the original CBA. consequently. by questioning the existence of the union and the status of its membership to prevent any negotiation. CBA in Case of Closure of Business An employer which has already decided to close shop cannot be compelled to enter into a new CBA. there is a clear evasion of the duty to bargain collectively. stock and barrel. already exists. Can a CBA proposed by the union be imposed lock. the employer which violates the duty to bargain collectively. alter or modify the existing CBA. The general rule is that when a CBA /wncverder 2016 b. the company commits an unfair labor practice act under Article 248 [g] of the Labor Code (violation of the duty bargain collectively). Hence. refused to submit any counter proposal to the CBA proposed by its employees’ certified bargaining agent. According to Colegio De San Juan De Letran vs. NLRC) • Under this situation. ” It is denominated as such because it is the only time when the law allows the parties to freely serve a notice to terminate. Thus. That is. c. CA. that neither party is guilty of bad faith. the High Court did not hesitate to impose on the erring company the CBA proposed by its employees’ union lock. XII. The Supreme Court said in the same case of San Pedro Hospital that it cannot impose upon the employer the directive to enter into a new CBA with the union for the very simple reason that to do so would be to compel the employer to continue its business when it had already decided to close shop. stock and barrel on employer who refused to negotiate a CBA? • Article 253 basically mandates the parties to keep the status quo while they are still in the process of working out their respective proposals and counter proposals. This was because of the employer’s refusal to counter-propose to the union’s proposals which constitutes unfair labor practice under Article 248 [g] of the Labor Code. and that would be judicial tyranny on its part. It is also the time when the majority status of the bargaining agent may be challenged by another union by filing the appropriate petition for certification election. What it did was to devise a flimsy excuse. the proposals of the union may be adopted as the CBA and. chanrobles. Kiok Loy vs. The ratification of the CBA should be made not by the majority of the members of the bargaining union but by the majority of the members of the bargaining unit which is being represented by the bargaining union in the negotiations. (Kiok Loy vs. Association of Employees and Faculty of Letran. its provision shall continue to govern the relationship between the parties until a new one is agreed upon. may indicate bad faith. Freedom Period • The last sixty (60) days of the 5-year lifetime of a CBA immediately prior to its expiration is called the “freedom period. But the employer failed in its duty under Article 252.

no person may be employed unless he or she is. XVI. Automatic Renewal Clause • “Automatic renewal clause” means that at the expiration of the freedom period. XV. Union Security Clause • The stipulation in a CBA based on the second sentence of paragraph [e] of Article 248 of the Labor Code commonly known as the “union security clause” allows the parties thereto to enter into an agreement requiring membership in the bargaining agent which successfully negotiated said CBA as a condition for continued employment with the exception of employees who are already members of another union at the time of the signing of the CBA. • Examples: • Closed Shop: A “closed-shop” may be defined as a scheme in which. • All other provisions (which refer to both economic and non-economic provisions except /wncverder 2016 representation): Shall be renegotiated not later than three (3) years after its execution. Lifetime of a CBA • Representation aspect (sole and exclusive status of certified union): . A party must not have a predetermined resolve not to budge from an initial position. c. In other words. Referral of case to compulsory or voluntary arbitration. b. Conciliation and mediation by the NCMB. XVII. there is no requirement for non-members of the bargaining agent to become its members. • Union Shop: There is “union shop” when all new regular employees are required to join the union within a certain period as a condition for their continued employment. the employer shall continue to recognize the majority status of the incumbent bargaining agent where no petition for certification election is filed. the purpose of a union security arrangement is to guarantee the continued existence of the union through enforced membership for the benefit of the workers. becomes. In case of arbitral awards. by agreement between the employer and its employees through their bargaining union/agent. Inc. it is required that such non-union members should pay to the bargaining agent an agency fee as a condition for their continued employment. Pier 8 Arrastre and Stevedoring Services. • If any such agreement is entered into beyond six (6) months. XIV.The term is 5 years which means that no petition questioning the majority status of the incumbent bargaining agent shall be entertained by DOLE and no certification election shall be conducted outside of the 60-day freedom period. vs. Good faith bargaining requires that claims made by either bargainer should be honest Page 12 of 46 .” “maintenance of membership” or any other form of agreement which imposes upon the employees the obligation to acquire or retain union membership as a condition to their continued employment. • “Union security” is a generic term which is applied to and comprehends “closed shop. Roldan-Confesor: the effective date of the new CBA should be the date the Secretary of Labor and Employment has resolved the labor dispute. Torres: the effectivity date was made retroactive to the date of the expiration of the previous CBA. Declaration of a strike or lockout. However. remains a member in good standing of the bargaining union. XVIII. It is not surface bargaining accompanied by a purpose to defeat it.” “union shop. • Agency Shop: Under this scheme. DOLE. Rule involving CBAs concluded by the parties through negotiation (not concluded through arbitral award) • The collective bargaining agreement or other provisions of such agreement entered into within six (6) months from the date of expiry of the term of such other provisions as fixed in the collective bargaining agreement shall retroact to the day immediately following such date. • • St Lukes vs. Rule involving CBAs concluded through arbitral awards by DOLE Secretary.DIWATA NOTES Labor Relations XIII.Remedies in Case of Bargaining Deadlock (Quiz) • In case of a deadlock in the negotiation or renegotiation of the collective bargaining agreement. • Bargaining in bad faith It is essential that the employer and the employees should both act in good faith. NLRC or Voluntary Arbitrator (Jurisprudence varies). It is not shadow boxing to a draw. as the case may be. 
 b. But it is not necessarily incompatible with stubbornness. Collective bargaining is not merely going through the motions of negotiating a CBA. and. for the duration of the agreement. the retroactivity of the CBA provided under Article 253-A of the Labor Code (enumerated above) has no application.Retroactivity of CBA a.Unfair Labor Practice in Collective Bargaining a. the parties may exercise the following rights under the Labor Code: a. the parties shall agree on the date of effectivity thereof.

• • • c. While the law does not compel the parties to reach an agreement. Blue-sky bargaining This kind of bargaining means making exaggerated or unreasonable proposals. This kind of unfair labor practice may only be committed by the employer. • claims. There can be no surface bargaining. it being an active interference with the right of collective bargaining through dealing with the employees individually instead of through their collective bargaining representatives. by itself. e. The adamant insistence on a bargaining position to the point where the negotiations reach an impasse does not establish bad faith. While the law makes it an obligation for the employer and the employees to bargain collectively with each other. However. which tend to show that it did not want to reach an agreement with the union or to settle the differences between it and the union. such compulsion does not include the commitment to precipitately accept or agree to the proposals of the other. Association of Employees and Faculty of Letran. both at and away from the bargaining table. /wncverder 2016 Page 13 of 46 . In the case of Colegio de San Juan de Letran v. • In Standard Chartered Bank Employees Union [NUBE] v. Confesor. the act of an employer in notifying absent employees individually during a strike following unproductive efforts at collective bargaining that the plant would be operated the next day and that their jobs were open for them should they want to come in has been held to be an unfair labor practice. absent any evidence that management had done acts. it cannot be said that the union was guilty of an unfair labor practice for bluesky bargaining. it does contemplate that both parties will approach the negotiation with an open mind and make a reasonable effort to reach a common ground of agreement. the minutes of the meeting show that the union based its economic proposals on data of rank-and-file employees and the prevailing economic benefits received by bank employees from other foreign banks doing business in the Philippines and other branches of the bank in the Asian region. It would not be far-fetched to reach the conclusion that bargaining lacks good faith when an employer mechanically repeats claim of inability to pay without making the slightest effort to substantiate the claim. Refusal to bargain The failure of the employer to submit its counterproposals to the demands of the bargaining union does not. constitute refusal to bargain. In this case. the petitioner school was declared guilty of unfair labor practice when it failed to make a timely reply to the proposals of the certified bargaining union more than a month after the same were submitted to it. • ❉❉❉❉❉❉❉❉ End of Module Five ❉❉❉❉❉❉❉❉ Individual bargaining To negotiate or attempt to negotiate with individual workers rather than with the certified bargaining agent is an unfair labor practice. Neither can bad faith be inferred from a party’s insistence on the inclusion of a particular substantive provision unless it concerns trivial matters or is obviously intolerable. • • d. it is different if the employer refuses to submit an answer or reply to the written bargaining proposals of the certified bargaining union. unfair labor practice is committed. the school merely offered the feeble excuse that its Board of Trustees had not yet convened to discuss the matter. Hence. For instance. In explaining its failure to reply. • Surface bargaining Defined as “going through the motions of negotiating” without any legal intent to reach an agreement.DIWATA NOTES Labor Relations • • b.

• • 4. however. • • • • II. No criminal prosecution may be instituted. • Article 263 [c] which refers to union-busting. work or service being performed by union members will interfere with. • Restraint. or public policy. or coerce employees in their right to self-organization TEST: The test of whether an employer has interfered with or restrained or coerced employees within the meaning of the law is whether the employer has engaged in conduct which may /wncverder 2016 • • 2. Specific ULP Acts of Employers (Art 248) 1. is that it must be shown that the employer’s act was motivated by ill will. Such union is called“company union” as its formation. work or service is clearly an exercise by the employer of its business judgment a n d i t s i n h e re n t m a n a g e m e n t r i g h t s a n d prerogatives. ULP is not only a violation of the civil rights of both labor and management. Defined means any unfair labor practice as expressly defined by the Code. involving the dismissal from employment of union officers duly elected in accordance with the union constitution and by-laws. or attempt to organize one during their period of employment or that they shall withdraw therefrom in case they are already members of a labor organization. disrupt industrial peace and hinder the promotion of healthy and stable labor-management relations. and • A promise by the employee that upon joining a labor organization. interfere. • Article 248 which enumerates the ULPs that may be committed by employers. wounded feelings or grave anxiety resulted. dominate. Elements of Unfair Labor Practice Before an employer or labor organization may be said to have committed ULP. function or administration has been assisted by any act defined as unfair labor practice under the Labor Code Page 14 of 46 . • A promise by the employee that he will not join a union. • Article 249 which enumerates the ULPs that may be committed by labor organizations. Interference is ALWAYS ULP. restrain or coerce employees in the exercise of their right to self. ULPs are offenses committed by the employer or labor organization which violate the constitutional right of workers and employees to self-organization. to wit: • Article 247 which describes the concept of ULPs and prescribes the procedure for their prosecution. ULP acts are inimical to the legitimate interests of both labor and management. • reasonably tend to interfere with the free exercise of the employees’ rights. but also a criminal offense against the State. restrain. that social humiliation. where the existence of the union is threatened thereby. without a final judgment from the NLRC that an unfair labor practice was committed. or Assisted Union Paragraph [d] of Article 248 considers it an unfair labor practice to initiate. Contracting out services or functions being performed by union members when such will interfere with. • • 3. Dominated. III. assist or otherwise interfere with the for mation or administration of any labor organization.organization that it shall constitute an unfair labor practice. The significant point to consider. • Article 261 which considers violations of the CBA as no longer ULPs unless the same are gross in character which means flagrant and/ or malicious refusal to comply with the economic provisions thereof. including the giving of financial or other support to it or its organizers or supporters.DIWATA NOTES Labor Relations MODULE SIX UNFAIR LABOR PRACTICE I. This is so because contracting-out of a job. (Paragraph B of Article 248) Common Stipulations in a Yellow Dog Contract • A representation by the employee that he is not a member of a labor organization. of course. or done in a manner contrary to morals. or coerce employees in the exercise of their right to self-organization As a general rule. It is only when the contracting out of a job. the following elements must concur: There should exist an employer-employee relationship between the offended party and the offender. or fraud. for a charge of unfair labor practice to prosper. • Unfair Labor Practice. a form of ULP. and. or was oppressive to labor. good customs. Yellow Dog Contract It is one which exacts from workers as a condition of employment that they shall not join or belong to a labor organization. Criminal ULP cases may be filed with the regular courts. the act of an employer in having work or certain services or functions being performed by union members contracted out is not per se an unfair labor practice. Under the Labor Code. there are only five (5) provisions related to ULP. he will quit his employment. bad faith. and The act complained of must be expressly mentioned and defined in the Labor Code as an unfair labor practice. Company Initiated.

CIR: it was ruled that even assuming that business conditions justify the dismissal of employees. What is prohibited as unfair labor practice under the law is to discriminate in regard to wages. Manila Pencil vs. Discrimination should be distinguished from classification. discharge or otherwise prejudice or discriminate against an employee for having given or being about to give testimony under the Labor Code. It becomes Page 15 of 46 . Paying Negotiation or Attorney’s Fees to the Union Article 248(h) of the Labor Code considers as an unfair labor practice the act of the employer in paying negotiation fees or attorney‟ s fees to the union or its officers or agents as part of the settlement of any issue in collective bargaining or any other dispute The law uses negotiation fees to justify payment of fees to non-lawyers who are not entitled to attorney’s fees. While discrimination is considered an unfair labor practice.236violations of a CBA. Case: Itogon-Suyoc Mines. Under Article 261. it is an unfair labor practice of employer to dismiss permanently only union members and not non-unionists. The significance in the omission of this term lies in the grant of unrestricted license to the labor organization. /wncverder 2016 6. agents or representatives to interfere with the exercise by the employees of their right to self-organization. • Retaliatory Dismissal or Discrimination due to Adverse Testimony Under paragraph [f] of Article 248 of the Labor Code. • • • 8. CIR: several employees were forced by company officers to join a union. It was ruled that their dismissal because of their union activities is unfair labor practice. except those which are gross in character. it is an unfair labor practice for an employer to dismiss. Philippine Blooming Mills Co. All these circumstances indicate that the union is company-dominated. as amended. hours of work. shall no longer be treated as an unfair labor practice and shall be resolved as grievances under the CBA. and other terms and conditions of employment in order to encourage or discourage membership in any labor organization. notably lacking is the use of the word “interfere” in the exercise of the employees‟ right to self-organize. Inc.DIWATA NOTES Labor Relations • 5. Attorney’s fees and negotiation fees should be paid from union funds To violate a CBA Article 248(i) of the Labor Code should be read in relation to Article 261 thereof.: the employer reserved its right under the CBA to grant better bonus to those who are exceptionally good or efficient. Inc. Discrimination Discrimination has been defined as the failure to treat all persons equally when no reasonable distinction can be found between those favored and those not favored. its officers. Cases: Philippine Blooming Mills Employees Organization [PAFLU] v. No member of the union had been dismissed despite the implementation of a retrenchment policy which resulted in the dismissal of other employees who are officers and members of another union. CIR: several employees were dismissed because of their refusal to resign from their union and join the other union being supported and aided by the company. v. the company hired several laborers. Oceanic Air Products vs. it being clear that many union members were also given the bonus and it was purely a valid exercise of management prerogative. There is discrimination only when one is denied privileges which are granted to others under similar conditions and circumstances.. After the dismissals. Such interference is not unlawful since without it. Specific ULP Acts of Labor Organizations (Art 249) 1. classification is not because it merely differentiates the employees in accordance with their respective jobs and accords them the appropriate levels of pay or benefits due them by reason thereof. • • 7. It was held that it is neither discriminatory nor an unfair labor practice for said employer to give such bonus to nonunion members. Restraint or coercion of employees in the exercise of their right to self-organization • Compared to similar provision of Article 248(a) of the Labor Code. Gross violations of CBA shall mean flagrant and/or malicious refusal to comply with the economic provisions of such agreement
 IV. • • • • • Cases: Progressive Development Corporation vs. Baldo: it was declared that an unfair labor practice was committed by the employer when it dismissed the worker who had testified in the hearing of a certification election case despite its prior request for the employee not to testify in the said proceeding accompanied with a promise of being reinstated if he followed said request. no labor organization can be formed as the act of recruiting and convincing the employees is definitely an act of interference.

have actually participated in. A union commits an unfair labor practice under this provision by causing or attempting to cause an employer to pay or agree to pay for standby services. Payments for “standing-by. But it must be noted that under Article 261 of the Labor Code. • Featherbedding Under Article 249(d) . representatives or agents or members of labor associations or organizations who: a. 6. Violation of the duty to bargain collectively The obvious purpose of the law is to ensure that the union will negotiate with management in good faith and for the purpose of concluding a mutually beneficial agreement regarding the terms and conditions of their employment relationship. This is done by the employees to unduly secure their jobs in the face of technological advances or as required by minimum health and safety standards. among other justifications.” or for the substantial equivalent of “standing-by. for services which are not performed or not to be performed. VI. its officers. Moreover. it is ULP for a labor organization. Penalties for ULP • Article 247: Recovery of damages under the Labor Code bars any recovery from the Civil Code Final judgment in labor proceedings. • Asking or accepting negotiation or attorney’s fee from management The reason for this policy of the law is to prevent undue influence by the employer on the independence of the union in its decision over any issues it may have with the former. • Who are liable for ULP? Article 249 is explicit in its provision on who should be held liable for ULPs committed by labor organizations. This act violates the employer’s right to collectively bargain only with the sole and exclusive representative of the majority of its workers. including discrimination against an employee with respect to whom membership in such organization has been denied.000 or imprisonment of 3 months to 3 years. violation of the CBA is generally considered merely a grievable issue. ratified unfair labor practices shall be held criminally liable. or to terminate an employee on any ground other than the usual terms and conditions under which membership or continuation of membership is made available to other members. no negotiation has taken place Page 16 of 46 . V. • To violate the CBA This is the counterpart provision of Article 248(i) regarding the employer‟ s act of violating a CBA. agents or representatives to cause or attempt to cause an employer to discriminate against an employee. b. /wncverder 2016 5. its officers.” are not payments for “services performed” within the meaning of the law. For instance. It becomes an unfair labor practice only if the violation is gross in character which means that there is flagrant and/or malicious refusal to comply with the economic (as distinguished from non-economic) stipulations in the CBA.DIWATA NOTES Labor Relations unlawful within the context of paragraph [a] of Article 249 only when it amounts to restraint or coercion which is expressly prohibited thereunder. This principle applies not only to the employer but to the labor organization as well. 2. in the nature of an exaction. Causing or attempting to cause an employer to discriminate against an employee Under Article 249(b) . It states that only the officers. it is possible that the matter of fixing the amount of negotiation fees or attorney’s fees alone would present a problem much complicated than the more substantive issues involving the terms and conditions and welfare of the workers. authorized or c. This practice of the union is commonly known as “featherbedding” as it unduly and unnecessarily maintains or increases the number of employees used or the amount of time consumed to work on a specific job. These featherbedding practices have been found to be wasteful and without legitimate justifications. • • • 3. members of governing boards. • 4. including the demand for fee for union negotiations. it is ULP for a labor organization. is a prejudicial issue to criminal prosecution Final judgment in labor proceedings is not binding evidence of guilt but merely of compliance or prejudicial issue • Article 288: Fine of P1000 to P10. or both • Article 290: Prescriptive Period is one (1) year from accrual NOTEWORTHY: BOULWARISM • take-it-or-leave-it bargaining strategy • A labor law principle in which management opens the negotiation with a generous offer that is not meant to be negotiated. it is unfair labor practice for a labor organization to demand that the employer should negotiate a CBA with it at a time when it has yet to be certified as the sole and exclusive bargaining agent of the employees since the certification election case is still pending. • Considered as ULP because technically. agents or representatives to cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other things of value.

• • State Policy on Free Trade Unionism and Free Collective Bargaining It is the policy of the State to encourage free trade unionism and free collective bargaining. Must be based on a valid and factual grounds • collective bargaining deadlock (economic strike) [30-days cooling period] Page 17 of 46 . As defined in law. LOCKOUTS.” III. force. workers shall have the right to engage in concerted activities for purposes of (a) collective bargaining or (b) for their mutual benefit and protection. the right of legitimate labor organizations to strike and picket and of employers to lockout consistent with the national interest should continue to be recognized and respected.Exclusive Bargaining Agent • Consistent with National Interest If there is no defiance of Assumption Order Certification Order Return-to-Work Order Injunction Order Restraining Order If there is no pending case involving the same issue in: Compulsory Arbitration Voluntary Arbitration Other pending cases V. In the same vein. the existence of a bargaining deadlock is an impossibility. only the recognized or certified collective bargaining union can validly stage a strike. In unorganized establishment where there is no certified bargaining agent. A strike conducted by a minority union is patently illegal because no labor dispute which will /wncverder 2016 • justify the conduct of a strike may exist between the employer and a minority union. A strike conducted by a union which has not been shown to be a legitimate labor organization is illegal. To permit the union‟ s picketing activities would be to flaunt at the will of the majority.any LLO Deadlock . In this situation. For obvious reason. coercion If there is no obstruction of ingress. threat. • In organized establishment where there is a certified bargaining agent. maintaining. fixing. changing or arranging the terms and conditions of employment regardless of whether the disputants stand in the proximate relation of employer and employee. and public thorougfare Following the legal procedure Notice of Strike Strike Vote (Simple majority) Submission of Strike Vote Results Cooling-Off Period • Done in accordance with the law Based on legal grounds ULP Deadlock Union-Busting Staged by a legitimate party ULP . the term industrial or labor dispute includes any controversy or matter concerning the terms and conditions of employment or the association or representation of persons in negotiating. • • II. Defined • means any temporary stoppage of work by the concerted action of employees as a result of an industrial or labor dispute. In legal parlance. Strike. the employer may conduct a lockout to redress its grievance against the commission by the certified bargaining union of unfair labor practice or to resolve a bargaining impasse. When Strike is Legal • Peaceful If there is no illegal acts.32 The only other ground of bargaining deadlock cannot be invoked in support of a strike in an unorganized establishment for the simple reason that no CBA can be negotiated and concluded absent such recognized or certified collective bargaining agent. egress. intimidation.DIWATA NOTES Labor Relations MODULE SEVEN RIGHT TO PEACEFUL CONCERTED ACTIONS STRIKES. an actual existing labor dispute subject of a notice of strike or lockout or a case of actual strike or lockout is referred to as a “conciliation case. Pursuant thereto. Requisites of a Valid Strike 1.any LLO Union-Busting . Under the law. PICKETING STRIKE I. IV. Existence of an Industrial or Labor Dispute Necessary A strike or lockout may only be justified if there exists an industrial or labor dispute. • As to the personality of the union. the employer cannot. A minority union cannot stage a strike. • Only a legitimate labor organization may declare a strike. any legitimate labor organization in the establishment may declare a strike but only on the ground of unfair labor practice. the following requirements should be shown before a strike may be validly declared and staged: • The union should be legitimate.

the coolingoff period is fifteen (15) days from the filing of the notice of strike. in case of unfair labor practices of the employer. union bossism and even corruption. it is meant to discourage wildcat strikes. Illegal Strike . all the other requisites must be fully complied with. the coolingoff period is thirty (30) days from the filing of the notice of strike. 5. • Reckoning of Cooling-Off Periods • The start of the cooling-off periods should be reckoned from the time the notice of strike is filed with the NCMB-DOLE. must approve it. Page 18 of 46 . and The 7-day waiting period/strike ban reckoned after the submission of the strike vote report to the NCMB-DOLE should also be fully observed in all cases. or 30 days. • Purpose of the Cooling-Off Periods • The purpose of the cooling-off periods is to provide an opportunity for mediation and conciliation of the dispute by the NCMBDOLE with the end in view of amicably settling it. • A decision to declare a strike must be approved by a majority of the total union membership in the bargaining unit concerned. Exception: In case of Union-Busting • In case of an unfair labor practice involving the dismissal from employment of union officers (not ordinary members) duly elected in accordance with the union constitution and by-laws which may constitute unionbusting because the existence of the union is threatened by reason of such dismissal. A strike vote must be taken where a majority of the members of the union obtained by secret ballot in a meeting called for the purpose. except when gross. Cooling-Off Period • • General Rule: The cooling-off periods provided under the law before the intended date of the actual mounting of the strike are as follows: • In case of bargaining deadlock. 4. A strike vote report should be submitted to the NCMB-DOLE at least seven (7) days before the intended date of the strike. is not an unfair labor practice.DIWATA NOTES Labor Relations • 2. Strike Vote • No labor organization shall declare a strike without the necessary strike vote first having been obtained and reported to the NCMB-DOLE.one called for a valid purpose and conducted through means allowed by law. Legal Strike . the 15-day cooling-off period does not apply and the union may take action immediately after the strike vote is conducted and the results thereof duly submitted to the regional branch of the NCMB. ARE MANDATORY. 3. the cooling-off period of 15 days. obtained by secret ballot in meetings or referenda called for that purpose. should be fully observed. hence. • Violation of labor standards is not a valid ground • Wage distortion is not a valid ground. Ordinary violation of a CBA is no longer treated as an unfair labor practice but as a mere grievance which should be processed through the grievance machinery and voluntary arbitration • Inter-union or intra-union dispute is not a valid ground. 6. it is conducted through means not sanctioned by law. Kinds of Strike 1. Notice of strike must be filed with the NCMB-DOLE A notice must be served to the NCMBDOLE at least 24 hours prior to the taking of the strike vote by secret balloting. only the 15-day cooling-off period need not be observed. if for a valid purpose. or • In case of unfair labor practice. and time thereof. • In cases of union-busting. VII. /wncverder 2016 • • The purpose of a strike vote is to ensure that the decision to strike broadly rests with the majority of the union members in general and not with a mere minority. in case of collective bargaining deadlock. AND FAILURE OF THE UNION TO COMPLY WITH ANY OF THEM WOULD RENDER THE STRIKE ILLEGAL. place. NOTE: ALL THE FOREGOING REQUISITES. VI. may not be cited as ground for a valid strike. informing said office of the decision to conduct a strike vote. and the date. At the same time. The majority decision to stage a strike is valid for the duration of the dispute based on substantially the same grounds considered when the strike vote was taken. VIII. a copy thereof having been served on the other party concerned. • unfair labor practice (political strike) [15-days cooling period] • BAR NOTES: • Violation of CBA. ALTHOUGH PROCEDURAL IN NATURE. 7.one staged for a purpose not recognized by law or. 2. Except in cases of union-busting (0 days).

placards and banners intended to inform the public about the dispute.” 7. 4. and The 7-day waiting period/lockout ban reckoned after the submission of the lockout vote report to the NCMB-DOLE should also be fully observed in all cases.e. A picket simply means to march to and fro in front of the employer’s premises. Strike To strike is to withhold or to stop work by the concerted action of employees as a result of an industrial or labor dispute.one declared and staged without the majority approval of the recognized bargaining agent. 10. Requisites of a Valid Lockout 1. 5. vacation and sick leaves. • It consists of the following: • Shutdowns. The cooling-off period of 15 days. a including gross violation of the CBA under Article 261 and union-busting under Article 263(c) of the Labor Code. A lockout vote report should be submitted to the NCMB-DOLE at least seven (7) days before the intended date of the lockout. holiday pay. Boycott of Products . b. • The employer may declare a lockout based on any of the two (2) grounds that may similarly be invoked by the union in staging a strike. VII. IX. 3. • Based on Article 264 (e). Picketing. Sitdown Strike . 2. LOCKOUTS VI. • The employer’s act of excluding employees who are union members. informing said office of the /wncverder 2016 4. Defined • “Picketing” is the act of workers in peacefully marching to and fro before an establishment involved in a labor dispute generally accompanied by the carrying and display of signs. 6. • Only the employer can declare and stage a lockout. usually accompanied by the display of placards and other signs making known the facts involved in a labor dispute. It is but Page 19 of 46 . must approve it. place. • Mass retrenchment and dismissals initiated by the employer. picketing focuses on publicizing the labor dispute and its incidents to inform the public of what is happening in the company being picketed. resorted to as a means to coerce the employer to yield to their demands. (1) bargaining deadlock. The ingress to (entrance) or egress from (exit) the company premises should not be obstructed. Lockout. PICKETING VIII. Economic Strike . decision to conduct a lockout vote. Wildcat Strike . or 30 days. Mass Leaves . There should be no act of violence. etc. inter alia. X. Slowdown Strike . The picket should be peacefully carried out. in case of unfair labor practices of the labor organization. no union can. A notice of lockout must be filed with the NCMB-DOLE. vacation pay.one where the workers stop working but do not leave their place of work 9. in case of collective bargaining deadlock. coercion or intimidation attendant thereto.one declared to demand higher wages.one which involves the concerted refusal to patronize an employer's goods or services and to persuade others to a like refusal. Requisites of Lawful Picketing • The most singular requirement to make picketing valid and legal is that it should be peacefully conducted. It is one which is declared for the purpose of forcing wage or other concessions from the employer for which he is not required by law to grant. While a strike focuses on stoppage of work. A lockout vote must be taken where a majority of the members of the Board of Directors of the corporation or association or of the partners in a partnership obtained by secret ballot in a meeting called for the purpose. • • • Picketing vs. i. A notice must be served to the NCMBDOLE at least twenty-four (24) hours prior to the taking of the lockout vote by secret balloting. Overtime Boycott . For obvious reason. 8. and d.one called to protest against the employer‟ s unfair labor practices enumerated in Article 248 of the Labor Code. 5. Defined • means any temporary refusal of an employer to furnish work as a result of an industrial or labor dispute.one involving the act of the workers in refusing to render overtime work in violation of the CBA.DIWATA NOTES Labor Relations 3.One where the employees simultaneously filed leaves of absence based on various reasons such as. The work stoppage may be accompanied by picketing by the striking employees outside of the company compound.one staged without the workers quitting their work but by merely slackening or reducing their normal work output. It must be based on a valid and factual ground. the requisites may be summed up as follows: a.. c. Unfair labor practice (ULP) or Political Strike . Public thoroughfares should not be impeded. overtime pay. It is also called “a strike on the installment plan. 6. should be fully observed. and/or (2) unfair labor practice. 7. and the date. and time thereof.

and Such other industries as may be recommended by the National Tripartite Industrial Peace Council (TIPC) XIII. the DOLE Secretary. Series of 2013: Hospital sector. Upon assumption or certification. To implement the return-to-work order. Water supply services. The issue of legality of strike is immaterial in enforcing the return-to-work order. Accordingly. the norm is a c t u a l r e i n s t a t e m e n t . The Supreme Court affirmed the validity of the payroll reinstatement order of the NLRC96 and ruled that the NLRC did not commit grave abuse of discretion in providing for the alternative remedy of payroll reinstatement. his assuming jurisdiction over a labor dispute or his certification thereof to the NLRC for compulsory arbitration is not intended to impede the workers’ right to strike but to obtain a speedy settlement of the dispute. Tomas v. p a y r o l l reinstatement in lieu of actual reinstatement may properly be resorted to when special circumstances exist that render actual reinstatement impracticable or otherwise not conducive to attaining the purposes of the law. The DOLE Secretary is mandated to act to maintain industrial peace. to exclude small water supply services such as bottling and refilling stations. • Section 16 of Dept. the parties should revert to the status quo ante litem which refers to the state of things as it was before the labor dispute or the state of affairs existing at the time of the filing of the case. Electric power industry. upon the determination by the DOLE Secretary that such industry is indispensable to the national interest. Case: University of Sto. The worker must return to his job together with his co-workers so that the operation of the company can be resumed and it can continue serving the public and promoting its interest. the exercise of which should be strictly limited to national interest cases. It is executory in character and should be strictly complied with by the parties even during the pendency of any petition questioning its validity in /wncverder 2016 • • • • order to maintain the status quo while the determination is being made. he is empowered to do either of two (2) things: He may assume jurisdiction over the labor dispute and decide it himself. Nature of Assumption Order • The power to issue assumption or certification orders is an extraordinary authority granted to the President and to his alter ego. • It is in the nature of a police power measure. it will be the NLRC which shall hear and decide it. Air traffic control. in which case. Return-to-Work Order • Return-to-work order is compulsory in character. • This power may be exercised by the DOLE Secretary even before the actual staging of a strike or lockout since Article 263(g) does not require the existence of a strike or lockout but only of a labor dispute involving national interest. or He may certify it to the NLRC for compulsory arbitration.DIWATA NOTES Labor Relations one strike activity separate and different from the actual stoppage of work. • It must be discharged as a duty even against the worker’s will. What Constitutes a National Interest Case? • The Labor Code vests in the DOLE Secretary the discretion to determine what industries are indispensable to the national interest. H o w e v e r. Page 20 of 46 . Order 40-H-13. It is the last actual. When DOLE Secretary May Assume or Certify Labor Dispute • Article 263(g) of the Labor Code provides that when in the opinion of the DOLE Secretary. It observed that the NLRC was only trying its best to work out a satisfactory ad hoc solution to a festering and serious problem. which it normally incurs during a work stoppage or slowdown. It is not offensive to the constitutional provision against involuntary servitude. XIV. It is an error to view the assumption order of the DOLE Secretary as a measure to protect the striking workers from any retaliatory action from the employer. This is done for the promotion of the common good considering that a prolonged strike or lockout can be inimical to the national economy. peaceful and uncontested status that preceded the actual controversy. nor was it written to ease management from expenses. the labor dispute causes or will likely to cause a strike or lockout in an industry indispensable to the national interest. he has authority to assume jurisdiction over the labor dispute in the said industry or certify it to the NLRC for compulsory arbitration. Thus. ASSUMPTION OF JURISDICTION BY THE DOLE SECRETARY OR CERTIFICATION OF THE LABOR DISPUTE TO THE NLRC FOR COMPULSORY ARBITRATION XI. XII. • It is clear that Article 263(g) was not written to protect labor from the excesses of management. NLRC: where the teachers ordered to return to work could not be given back their academic assignments since the return-to-work order of the DOLE Secretary was issued in the middle of the first semester of the academic year.

14. • Legislated wage orders (wage distortion) 4. Without first having bargained collectively. it is not required. • The reason for this distinction is that the union officers have the duty to guide their members to respect the law. it must be shown by clear evidence that he has committed illegal acts during the strike.When is a Strike Considered Illegal? 1. Their responsibility as main players in an illegal strike is greater than that of the ordinary union members and. therefore. In defiance of an assumption or certification or return-to-work order. From the moment a worker defies a returnto-work order. 8. 12. Civil and Criminal Liabilities of Persons Committing Any Prohibited Acts Under Article 264 • Where filed? Any person performing any of the prohibited activities mentioned in Article 264 of the Labor Code may be charged before the appropriate civil and criminal courts. After the conversion of the notice of strike into a preventive mediation case. the workers have forfeited their right to be readmitted to work. temporary restraining order or an injunction order. a prosecution under the Labor Code Page 21 of 46 . ARE DEEMED DISMISSED. The defiant striking union officers and members.184 • Rule in case person charged or convicted is an alien: If the person so convicted is a foreigner. By an illegitimate union. During the pendency of a case involving the same ground/s cited in the notice of strike 10. XVIII. T h e m e re f i n d i n g o r declaration of illegality of a strike will not result in termination of ordinary union members. • Violation of labor standards. are deemed to have lost their employment status for having knowingly participated in an illegal strike. a violation of the Revised Penal Code. he shall be subjected to immediate and summary deportation and will be permanently barred from reentering the country without the special permission of the President of the Philippines. Unlike ordinary members. 15.DIWATA NOTES Labor Relations XV. 7. While conciliation and mediation proceeding is on-going at the NCMB. 2. Based on non-strikeable or invalid grounds such as: • Inter-union or intra-union disputes. 13. Based on issues already brought to voluntary or compulsory arbitration. CONSEQUENCES OF ILLEGAL STRIKES XVI. Against the prohibition by law. 5. By a minority union. • The following are the justifications: A strike that is undertaken after the issuance by the DOLE Secretary of an assumption or certification order becomes a prohibited activity and thus illegal. For an ordinary union member to suffer termination. If instead of doing so. 3. By dismissed employees. that the officers should commit an illegal act during the strike. 9. as a result. its officers and members of the Labor Secretary's assumption of jurisdiction or certification order constitutes a valid ground for dismissal. limiting the penalty of dismissal only to the former for their participation in an illegal strike is in order. • Prosecution under the Labor Code bars prosecution under the Revised Penal Code: If the act is. XVII. 6. no lockout” clause in the CBA.In violation of a /wncverder 2016 11. In violation of the “no strike. • ALL DEFIANT STRIKERS. the officers urged the members to violate the law and defy the duly constituted authorities. at the same time. REGARDLESS OF WHETHER THEY ARE OFFICERS OR ORDINARY MEMBERS. Without complying with the procedural but mandatory requisites. their dismissal from the service is a just penalty or sanction for their unlawful act. for purposes of termination. For unlawful purpose such as to compel the dismissal of an employee or to force recognition of the union or for trivial and puerile purpose or to circumvent contracts and judicial orders. Effect of Defiance of Assumption or Certification Orders • The defiance by the union. • Simple violation of CBA in contrast to gross violation thereof which is deemed ULP. By so defying. Distinction in the Liability Between Union Officers and Ordinary Union Members UNION OFFICER UNION MEMBER T h e m e re f i n d i n g o r declaration of illegality of the strike will result in the termination of all union officers who knowingly participated in the illegal strike. Without submitting the issues to the grievance machinery or voluntary arbitration or failing to exhaust the steps provided therein. he is deemed to have abandoned his job.

any worker members who did not whose employment participate in the has been terminated commission of illegal acts as a consequence during the conduct of the thereof shall be illegal strike may be reinstated with ordered. payment of full back • No reinstatement for wages and other strikers who benefits. /wncverder 2016 Page 22 of 46 .DIWATA NOTES Labor Relations will preclude prosecution for the same act under the Revised Penal Code. Strikes. ❉❉❉❉❉❉❉❉ End of Module Seven ❉❉❉❉❉❉❉❉ Back wages • In strike cases. the award of separation pay in lieu of reinstatement is proper only when the strikers did not participate in the commission of illegal acts in the course thereof. the third-party employers or “innocent bystanders” who have no employeremployee relationship with the picketing strikers. XX. Injunction in Picketing. Payment of separation pay • In strike cases. • Strikers who failed to return to work forfeit reinstatement. this policy applies even if the strike appears to be illegal in nature. In the case of strikes. strikes and lockouts that are validly declared enjoy the protection of the law and cannot be enjoined unless illegal acts are committed or threatened to be committed in the course thereof. may apply for injunction with the regular courts (not with the NLRC) to enjoin the conduct of the picket.Innocent By-stander Rule • Under this rule. and Lockouts • As a general rule. XIX. the award of separation pay in lieu of reinstatement is proper only when the strikers did not participate in the commission of illegal acts in the course thereof. no back wages should be paid. • If strike is illegal. or vice-versa. The rationale for this policy is the protection extended to the right to strike under the Constitution and the law. • Employer who fails to reinstate strikers who were ordered to be reinstated by the LA is liable to pay them back wages. ILLEGAL STRIKE ILLEGAL LOCKOUT Attorney’s Fees • The strikers whose dismissal is declared illegal are entitled to attorney‟ s fees by reason of their being compelled to litigate in order to seek redress and protect their rights. It is basically treated as a weapon that the law guarantees to employees for the advancement of their interest and for their protection. committed illegal acts. XXI.Liability of Employer ILLEGAL STRIKE ILLEGAL LOCKOUT Reinstatement (without Reinstatement backwages) of ordinary • In case of an illegal rank-and-file union lockout.

Gambling within company premises is a serious misconduct. • Procedural means that the employee must be accorded due process. (Aris vs. Act of falsification is a valid ground to terminate employment. • Some Principles On Insubordination Filing of a case questioning the validity of rules and policies does not prevent employer from enforcing them. is not a just ground to terminate employment. redundancy. Selling products of a competitor is a just cause for termination. when put together. NLRC) I. Another notice is required in case of termination on the ground of failure to answer memo to explain. in order for serious misconduct to be a just cause for dismissal. /wncverder 2016 III. The exception is when such immoral conduct is prejudicial or detrimental to the interest of the employer. as a general rule. and The order violated must be based on a reasonable and lawful company rule. Authorized Causes • A dismissal based on a just cause means that the employee has committed a wrongful act or omission. Challenging superiors to a fight is a just cause for termination. the willfulness being characterized by a wrongful and perverse attitude. retrenchment. • Substantive means that the dismissal must be for any of the (1) just causes provided under Article 282 of the Labor Code or the company rules and regulations promulgated by the employer.DIWATA NOTES Labor Relations MODULE EIGHT POST-EMPLOYMENT Possession or use of shabu or other drugs is a valid ground to terminate employment. the elements of which are notice and the opportunity to be heard and to defend himself. Immoral act committed beyond office hours is a valid ground to terminate employment. Case in Book: In a case where there was a slapping and punching incident between two employees. Serious Misconduct • • • Requisites: It must be serious It must relate to the performance of the employee’s duties It must show that he has become unfit to continue working for the employer Some Principles Involving Serious Misconduct Serious misconduct implies that it must be of such grave and aggravated character and not merely trivial or unimportant. Failure to answer memo to explain constitutes willful disobedience. The act of a teacher in pressuring a colleague to change the failing grade of a student is serious misconduct. Making false allegations in complaint does not constitute insubordination. may constitute serious misconduct. Insubordination or Willful Disobedience to Lawful Orders • Requisites The employee’s assailed conduct must have been willful or intentional. Homicide inside and outside the company. closure or cessation of business operations or disease. Employer need not suffer any damages resulting from a serious misconduct committed by an employee against a customer. Examples Sexual act within the company premises Sexual harassment by a manager against a female employee Committing libel against an immediate superior constitutes serious misconduct. while a dismissal based on an authorized cause means that there exists a ground which the law itself allows or authorizes to be invoked to justify the termination of an employee even if he has not committed any wrongful act or omission such as installation of labor-saving devices. JUST CAUSES UNDER ARTICLE 282 III. Page 23 of 46 . regulation or policy and made known to the employee and must pertain to the duties for which he has been engaged to discharge. Just Causes vs. Series of irregularities. Theft of funds or property not owned by employer is not a ground to terminate. Immorality. or (2) authorized causes under Articles 283 and 284 thereof 2. II. it is necessary that the act complained of must be related to the performance of the duties of the employee such as would show him to be thereby unfit to continue working for the employer. Two Fold Due Process Requirement 1. Simple or minor misconduct would not justify the termination of the services of an employee.

which the employees had been engaged to discharge No negligence if the act alleged to be so is in accordance with standing company practice. loss or injury is not an essential requisite. and It must be work-related as would make him unfit to work for his employer. Service of the notices of abandonment of work after the six-month period of “floating status’ is not valid. Tardiness or absenteeism. Refusal to undergo random drug testing constitutes both serious misconduct and insubordination. in connection with the duties. Higher degree of diligence is required in the banking industry. Tardiness or absenteeism. if habitual. may be cited as a ground to terminate employment. cannot be cited as a ground to terminate employment. • Some Principles on Abandonment Mere absence is not enough to constitute abandonment. Case in Book: Insubordination cannot be condoned. As a general rule. VI. or instructions.employee relationship manifested by some overt act. Clear intention to sever employment relationship is necessary. The negligence must be gross in character which means absence of that diligence that an ordinarily prudent man would use in his own affairs. reasonable and lawful 2. Hence. Negligence is a question of fact. and Second notice to inform him of the employer’s decision to dismiss him on the ground of abandonment. To condone such conduct will certainly erode the discipline that an employer would uniformly enforce so that it can expect compliance with said rules and regulations by its other employees. Case in Book: In order that an employer may terminate an employee on the ground of willful disobedience to the former’s orders. regulations. The employer need not look for the employee‟ s current whereabouts. may be tantamount to serious misconduct. negligence must be both gross and habitual to be a valid ground to dismiss. There is no abandonment when it was the employer who prevented the workers from reporting for work. the dismissal is illegal. Lapse of time between dismissal and filing of a case is not a material indication of abandonment. it must be established that the said orders are: 1. lapse of 2 years and 5 months or 20 months or 9 months before filing the complaint for illegal dismissal is not an indication of abandonment. Actual damage.DIWATA NOTES Labor Relations Willfulness of conduct may be deduced from the manner the reply is written. Habituality may be disregarded if negligence is gross or the damage or loss is substantial “Habitual negligence” implies repeated failure to perform one’s duties for a period of time. No hearing is required to validly dismiss an employee for abandonment. Prolonged practice. Some Principles on Gross and Habitual Neglect of Duties Simple negligence is not sufficient to terminate employment. viz: First notice directing the employee to explain why he should not be declared as having abandoned his job. Under the V.
 Notices in abandonment cases must be sent to employee’s last known address per record of the company. Gross negligence may result to loss of trust and confidence. In the absence of any form of negligence. /wncverder 2016 Page 24 of 46 . sufficiently known to the employee 3. An employee who stopped working because of her mistaken belief that she has been dismissed is not guilty of abandonment. Abandonment is a factual issue. Refusal to render overtime to meet production deadline constitutes insubordination. Employer has the burden of proof to prove abandonment. if not habitual. and There must have been a clear intention on the part of the employee to sever the employer. depending upon the circumstances. Abandonment of Work • Requisites The employee must have failed to report for work or must have been absent without valid or justifiable reason. (intent to never return) • Due process in abandonment cases consists only of the service of 2 notices to the employee. Tardiness or absenteeism. not an excuse for commission of wrongful acts. if habitual. Gross and Habitual Neglect of Duties • • Requisites There must be negligence which is gross and/or habitual in character.

by the nature of their position. knowingly and purposely.” They are fiduciary rank-and-file employees who. The second class includes “cashiers. . which means that the act that betrays the employer’s trust must be real. Willful Breach of Trust and Confidence • Willful breach by the employee of the trust reposed in him by his employer or duly authorized representative under Article 282 (c) refers to any fault or culpability on the part of the employee in the discharge of his duty rendering him absolutely unworthy of the trust and confidence demanded by his position. The fact that the employer did not suffer losses from the dishonesty of the dismissed employee because of its timely discovery does not excuse the latter from any culpability.e. There exists an act justifying the loss of trust and confidence. The first class consists of managerial employees or those who. or with the custody. It should not be used as a subterfuge for causes which are illegal. not a mere afterthought. in the normal and routine exercise of their functions. Lack of misappropriation or shortage is immaterial in case of unauthorized encashment of personal checks by teller and cashier. • However. • • Requisites The employee has committed an intentional deception and used dishonest methods for personal gain or to damage the employer. though rank-and-file. or those who. improper or unjustified. i. that is. and The act must be in relation to his work which would render him unfit to perform it. came up with the following guidelines for the application of the doctrine: The loss of confidence must not be simulated. VII. VIII. “Position of trust and confidence” is one where a person is entrusted with confidence on delicate matters. /wncverder 2016 • Some Principles on the Doctrine of Loss of Trust and Confidence Employee’s position must be reposed with trust and confidence. and The fraud is work-related and rendered him unfit to work for his employer. to justify earlier action taken in bad faith. • Requisites The employee holds a position of trust and confidence. or entrusted with confidence on delicate matters. it was done intentionally. It must be genuine. Restitution does not have absolutory effect. Page 25 of 46 . or care and protection of the employer’s property. • Guidelines As a safeguard against employers who indiscriminately use “loss of trust and confidence” to justify arbitrary dismissal of employees. in addition to the above elements. . are routinely charged with the custody. loss of trust and confidence. property custodians.e. without justifiable excuse.DIWATA NOTES Labor Relations law. the ground of willful breach by the employee of the trust and confidence reposed in him by the employer may not necessarily involve fraud but some other acts that would similarly result in the loss of such trust and confidence. Two Classes of Positions of Trust 1. founded on clearly established facts. Filing of a case to pre-empt investigation of administrative case is tantamount to abandonment. handling. and are thus classified as occupying positions of trust and confidence. Some Principles on Fraud Failure to deposit collection constitutes fraud.Fraud (and Loss of Trust and Confidence) • Fraud is separate and distinct from the other ground provided in the same paragraph. the Supreme Court. i. On the other hand. The employee’s breach of the trust must be willful. are entrusted with confidential and delicate matters and from whom greater fidelity to duty is correspondingly expected. the employee has a 4-year prescriptive period within which to institute his action for illegal dismissal. 2. It may not be arbitrarily asserted in the face of overwhelming evidence to the contrary. handling or care and protection of the employer's money or property. regularly handle significant amounts of [the employer’s] money or property. the commission of fraud by an employee against the employer will necessarily result in the latter’s loss of trust and confidence in the former. Lack of damage or losses is not necessary in fraud cases. Their primary duty consists of the management of the establishment in which they are employed or of a department or a subdivision thereof. auditors.

Effects of the Application of the Union Security Clause • On members of the bargaining union/agent. It was committed against any of the following persons: His employer Any immediate member of his employer’s family His employer’s duly authorized representative • Some Principles on the Commission of Crime Because of its gravity. The phrase “immediate members of the family” refers to those persons having family relations under Article 150 of the Family Code. Any member of the bargaining agent who resigns or is expelled therefrom may be recommended to the employer by the bargaining agent for termination of his employment. work-relation is not necessary. TERMINATION DUE TO ENFORCEMENT OF UNION SECURITY CLAUSE XI. Commission of Crime or Offense • Requisites A crime or offense was committed by the employee. they cannot be compelled to resign from their union/s in order to join the bargaining agent. Among other ascendants and descendants. But as regards a managerial employee.a n d . They are not allowed to resign or terminate their membership therefrom. If not a member of the bargaining agent or any other unions in the bargaining unit at the time of the signing of the CBA by reason of the fact that he is excepted from the coverage of the bargaining unit. Neither is it necessary to show that the commission of the criminal act would render the employee unfit to perform his work for the employer. Between parents and children. As a general rule. • “Attitude problem” is analogous to loss of trust and confidence. IX. They can be compelled to join the bargaining agent.fi l e employees. they can be recommended for termination. with respect to rank-and-file personnel. mere accusations by the employer will not be sufficient. Thus. • Failure to comply with weight standards of employer. which allows the parties thereto to enter into an agreement requiring membership in the exclusive collective bargaining agent which successfully negotiated said CBA as a condition for continued employment with the exception of employees who are already members of another union at the time of the signing of the CBA. This means that the rules on termination of employment applicable to managerial or fiduciary employees are different from those involving ordinary employees not holding positions of trust and confidence. inefficiency or ineptitude. If they refuse. • On new employees hired after the signing of the CBA containing the union security clause. In the latter case. /wncverder 2016 X. • On non-members of the bargaining union/agent or of any minority union/s. as distinguished from theft of property owned by the employer.DIWATA NOTES Labor Relations Rules on termination of managerial and supervisory employees different from t h o s e a p p l i c a b l e t o r a n k . • Incompetence. • On non-members of the bargaining union/agent but members of the minority union/s. and Among brothers and sisters. They are not bound by the union security clause if they are members of the minority or other unions at the time of the signing of the CBA. the doctrine of “trust and confidence” is restricted to managerial employees. the mere existence of a basis for believing that he has breached the trust of his employer would suffice for his dismissal. • Failure to attain work quota. XIII. whether of the full or half-blood. XII. Other Analogous Cases • Violation of company rules and regulations. Hence. (Example: Iglesia ni Cristo) Page 26 of 46 . • Dismissal due to violation of union security clause. to wit: Between husband and wife. Exception to Application of the USC • Religious ground is the only exception that may effectively be invoked against the application of the union security clause. loss of trust and confidence as a ground for valid dismissal requires proof of involvement in the alleged events in question and that mere uncorroborated assertions and accusations by the employer will not be sufficient. the employee cannot be compelled to join the bargaining agent. Nature of the Stipulation The “union security clause” is a stipulation in a CBA. • Theft of property owned by a co-employee.

XX. decreased volume of business. • • GROUNDS UNDER ARTICLE 283 XIX. discipline. enhance efficiency and other justifiable economic reasons. AUTHORIZED CAUSES UNDER ARTICLE 284-285 XVI. but not limited to: nature of work. XV. efficiency. Redundancy exists under any of the following circumstances: Where the services of employees are in excess of what is reasonably demanded by the actual requirements of the enterprise. Failure to follow fair and reasonable criteria in selecting who to terminate would render the termination invalid. Proof of losses is not required.Business Related Causes (Article 283) • Installation of labor-saving device. damages and attorney’s fees in illegal dismissal cases based on the union security clause. It has to conduct its own hearing independent and separate from any hearing conducted by the union. job performance. • Redundancy. full back wages. Where there is duplication of work. Redundancy • Additional Requisite Unique to this Ground The fact of redundancy must be proved. /wncverder 2016 Separation pay is paid to the affected employees Fair and reasonable criteria in ascertaining what positions are to be affected by the termination. • Retrenchment. arbitrariness.Installation or Labor-Saving Device • Additional Requisite Unique to this Ground In addition to the five (5) common requisites above. such as over-hiring of workers. temporary or regular) . dependability. adaptability. The installation of laborsaving device will result in making the positions being held by employees who will be adversely affected thereby redundant and unnecessary. Modernization program through introduction of high-speed machines is valid. Redundancy results from installation of laborsaving device.DIWATA NOTES Labor Relations XIV. Commonality of Requisites of Authorized Causes under Article 283 and 284 • • • There is good faith in effecting the termination. Two (2) separate written notices are served on both the affected employees and the DOLE at least one (1) month prior to the intended date of termination. • Employer should afford due process to the expelled unionist. • Closure or cessation of business operations NOT due to serious business losses or financial reverses. Requisites for Valid Ter mination due to enforcement of Union Security Clause The union security clause is applicable. Some Relevant Principles • Dismissal effected by the employer pursuant to a labor union’s demand in accordance with a union security agreement does not constitute an unfair labor practice. The bargaining union is requesting for the termination of employment due to enforcement of the union security provision in the CBA. • Employer has the liability for reinstatement. or malice on the part of management. • Employer is obligated to act upon being demanded by the union to terminate the employment of its errant members. • The employee sought to be terminated should be afforded an “independent and separate hearing” which means that the employer is not duty-bound to immediately implement the recommendation to terminate made by the union. and • Closure or cessation of business operations due to serious business losses and financial reverses. The termination is a matter of last resort. there being no other option available to the employer after resorting to cost-cutting measures. in any well-organized Page 27 of 46 . such as to save on cost. Where the position is superfluous because of a number of factors. dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise or phasing out of service activity priorly undertaken by the business. XVII. status of employment (whether casual. the unique requisite for this ground is that the purpose for such installation must be valid. such as. flexibility. and attitude towards work. Indeed. and There is sufficient evidence to support the union‟ s decision to expel the employee from the union. • The employer has the right to be reimbursed for payment of any claims arising out of dismissals made upon demand of the union under the union security clause. seniority. experience. Health Related Causes (Article 284) XVIII. trainability. • Some Relevant Principles The installation of these devices is a management prerogative and the courts will not interfere with its exercise in the absence of abuse of discretion.

Retrenchment must be reasonably necessary and likely to effectively prevent the expected losses. Redundancy resulting from use of high technology equipment is valid. Hiring of casuals or contractual employees after redundancy is valid. whichever is higher. if already realized.DIWATA NOTES Labor Relations • • business enterprise. i. or seasonal fluctuations. LIFO rule is not controlling as employer has the prerogative to choose who to terminate. must be proved by sufficient and convincing evidence through presentation of externally audited financial statements. (See Caltex vs. • Standard to Determine Validity of Losses as Justification for Retrenchment The losses expected should be substantial and not merely de minimis or insubstantial and inconsequential in extent. Burden of proof in redundancy rests on the employer. Contracting out of abolished positions to independent contractors is valid. may be declared redundant. or of automation. The substantial loss apprehended must be reasonably imminent. Where two or more persons are performing the same work which may be effectively accomplished by only one. or during lulls occasioned by lack of work or orders. cut other costs than labor costs. First Out) rule. The fact that there has been economic or other crisis besetting a particular sector or Page 28 of 46 . may terminate the excess personnel and retain only one. it would be surprising to find duplication of work and two (2) or more people doing the work of one person. and the expected imminent losses sought to be forestalled. Where it is validly resorted to as a cost-cutting measure and to streamline operations so as to make them more viable. • Some Relevant Principles The retrenchment must be done in good faith.” Some Relevant Principles The wisdom. Positions which overlapped each other. NLRC. Requirements of a Valid Redundancy Program A written notice served on both the employees and the Department of Labor and Employment (DOLE) at least one month prior to the intended date of retrenchment as required by the Labor Code. the nature of work and experience of the employees should still be taken into account by the employer. soundness or characterization of service as redundant by the employer is not subject to review. 2007) XXI. or considerable reduction in the volume of the employer‟ s business. Elimination of undesirables. Reorganization through redundancy is valid. Even if there is a seniority rule. and Fair and reasonable criteria in ascertaining what positions are to be declared redundant and accordingly abolished. The alleged losses. Retrenchment Retrenchment has been defined as “the termination of employment initiated by the employer through no fault of the employees and without prejudice to the latter. The act of the employer in hiring replacements is not an indication of bad faith if the positions have no similar job descriptions. This is the only statutory ground in Article 283 which requires this kind of proof. The LIFO or FILO (First In. abusers and worst performers through redundancy is not an indication of bad faith.e. such as the LIFO (Last In. industrial depression. as such imminence can be perceived objectively and in good faith by the employer. . Evidence of losses is not required. Payment of separation pay equivalent to at least one month pay or at least one month pay for every year of service. or which are in excess of the requirements of the service. conversion of the plant for a new production program or the introduction of new methods or more efficient machinery. shortage of materials. resorted by management during periods of business recession. Last Out) rule has no basis in law. The other grounds of closure or cessation of business operations may be resorted to with or without losses. Abolition of positions or departments is valid. The employer should have taken other measures prior or parallel to retrenchment to forestall losses. Good faith in abolishing the redundant positions. the employer /wncverder 2016 • Additional Requisite Unique to this Ground Proof of losses or possible imminent losses is the distinctive requisite of retrenchment. The only exception is when there is a showing that the same was done in violation of law or attended with arbitrary and malicious action. Redundancy to save on labor costs is valid.

The employer need not keep all his employees until after his losses shall have materialized. Relocation of business may amount to cessation of operations. The phrase “retrenchment to prevent losses” means that retrenchment must be undertaken by the employer before the losses anticipated are actually sustained or realized. Principle of closure under Article 283 applies in cases of both total and partial closure or cessation of business operations. or b) prejudicial to his health. held valid. it having been issued not by a “competent public health authority. Employer bears the burden of proof to show business losses or financial reverses. Period covered by financial statements. There is a certification by a competent public health authority that the disease is of such nature or at such stage that it cannot be cured within a period of six (6) months even with proper medical treatment. the law could be vulnerable to attack as undue taking of property for the benefit of another. or a shop. It is the best evidence of illness. If the disease or ailment can be cured within the period of six (6) months with proper medical treatment. a fraction of at least six (6) months being considered as one (1) whole year.DIWATA NOTES Labor Relations the country as a whole is not sufficient justification for retrenchment. Audited financial statements necessary only in closure due to losses. In case of death. XXII. Management may choose to close only a branch. Article 284 does not apply. Disease • Requisites The employee is suffering from a disease. the employer may terminate his services on the ground of insubordination or willful disobedience of lawful order. court cannot order employer to continue its business. His continued employment is either: a) prohibited by law. • • Closure involves two (2) situations: When NOT due to serious business losses or financial reverses. The employer should reinstate him to his former position immediately upon the restoration of his normal health. XXIII. Medical certificate is an indispensable requisite. Closure of department or section and hiring of workers supplied by independent contractor as replacements is valid. Closure may constitute an unfair labor practice if it is resorted to as a ruse or /wncverder 2016 Page 29 of 46 . whichever is greater. A medical certificate issued by a company‟ s own physician is not an acceptable certificate for purposes of terminating an employment based on Article 284.” the person referred to in the law. • Some Principles on Disease Burden of proof rests on the employer. a department.financial statements audited by COA. material. scheme to get rid of employees on account of their union activities. Closure of business to merge or consolidate with another or to sell or dispose all of its assets. Income tax returns. not valid since they are self-serving documents.
 The burden of proving that the closure or cessation of business operations is bona-fide falls upon the employer. the employer should not terminate the employee but merely ask him to take a leave of absence. Best evidence of losses in a governmentcontrolled corporation . or When due to serious business losses or financial reverses Some Principles on Closure Employer may close its business whether it is suffering from business losses or not.Closure or Cessation of Business Operation • Concept Closure or cessation of business is the complete or partial cessation of the operations and/ shutdown of the establishment of the employer. Otherwise.financial statements audited by independent auditors (not by internal auditors). It is carried out to either stave off the financial ruin promote the business interest of the employer. and Separation pay should be paid to the employee in an amount equivalent to at least one (1) month salary or to one-half (1⁄2) month salary for every year of service. Best evidence of losses . Notice of termination based on this ground should be separately served both to the employee and the Department of Labor and Employment at least one (1) month prior to the effectivity of the termination. In case the employee unreasonably refuses to submit to medical examination or treatment upon being requested to do so. or c) prejudicial to the health of his coemployees. a plant.

It was not even shown that a PPSE form was completed to formally assess her performance. XXVI. and to decide on the defenses he will raise against the complaint. Nor did Abbott come up with the necessary Performance Improvement Plan to properly gauge Alcaraz’s performance with the set company standards. Nonetheless. a signed copy of the PPSE form should be submitted to Abbott‟ s HRD as the same would serve as basis for recommending the confirmation or termination of the probationary employment. civil or administrative proceedings.DIWATA NOTES Labor Relations DUE PROCESS TWIN NOTICE REQUIREMENT XXIV. For one. to gather data and evidence. Private actions. The employer’s failure to observe its own company-prescribed due process will make it liable to pay an indemnity in the form of nominal damages. this right equally demands that when it does create its own policies and thereafter notify its employee of the same. • • XXV. the employer should still comply with the due process procedure prescribed in its own company rules. was afforded both the statutorily-mandated substantive and procedural due process. w h o w a s h i re d a s a probationary managerial employee. Conduct of hearing. there lies a hiatus of evidence that a signed copy of Alcaraz’s PPSE form was submitted to the HRD. while “statutory due process” protects employees from being unjustly terminated without just cause after notice and hearing. Indeed. King of Kings Transport Doctrine: Procedural Due Process in JUST CAUSE Termination • Procedural Steps Service of first written notice. While it is Abbott’s management prerogative to promulgate its own company rules and even subsequently amend them. • The King of Kings Transport Doctrine 1. inter alia. Contain a directive that the employee is given the opportunity to submit his written explanation within the reasonable period of FIVE (5) CALENDAR DAYS from receipt of the notice: to enable him to prepare adequately for his defense. In addition. cannot violate the constitutional guarantees.000. a contrary interpretation would entail a disharmonious relationship in the work place for the laborer should never be mired by the uncertainty of flimsy rules in which the latter‟ s labor rights and duties would. it is apparent that Abbott failed to follow the above-stated procedure in evaluating Alcaraz. Page 30 of 46 . In this case. “Constitutional due process” protects the individual from the government and assures him of his rights in criminal. it was found that petitioner Abbott breached its contractual obligation to Alcaraz when it failed to abide by its own procedure in evaluating the performance of a probationary employee. Put differently. the amount of which is equivalent to the P30. Abbott is also required to come up with a Perfor mance Improvement Plan during the third month review to /wncverder 2016 b r i d g e t h e g a p b e t w e e n t h e e m p l o y e e ’s performance and the standards set. Records show that Abbott’s PPSE procedure mandates. It was found in this case of Abbott Laboratories that re s p o n d e n t A l c a r a z . First Written Notice Contain the specific causes or grounds for termination against him. it accords upon itself the obligation to faithfully implement them. on the fifth month from the date of employment. the Bill of Rights is not meant to be invoked against acts of private individuals like employers. and Service of second written notice. on the third month and second.00 awarded under the Agabon doctrine. Neither was the performance evaluation discussed with her during the third and fifth months of her employment. it is now the prevailing rule that it is not the due process provided in the Constitution that is required in termination of employment but the statutory due process provided under Article 277[b] of the Labor Code. to study the accusation against him. to consult a union official or lawyer. Company personnel policies create an obligation on the part of both the employee and the employer to abide by the same. The Abbot Laboratories Doctrine: Contractual Due Process • • • It is now required that in addition to compliance with the statutory due process. depend. The Agabon Doctrine: Due Process in Termination of Employment Refers to Statutory. despite the existence of a sufficient ground to terminate Alcaraz’s employment and Abbott‟ s compliance with the Labor Code termination procedure. no matter how egregious. to some extent. if any. when she was terminated for failure to qualify as a regular employee. that the job performance of a probationary employee should be formally reviewed and discussed with the employee at least twice: first. and Not Constitutional Due Process • • Per Agabon doctrine.

• Outright termination violates due process. viz: 1) First notice asking the employee to explain why he should not be declared as having abandoned his job. conference or some other fair. This is required in order to enable him to intelligently prepare his explanation and defenses. • The Foregoing Rule Does Not Apply in Abandonment Cases Abandonment is a just cause to terminate employment. just and reasonable way. 2. For obvious reason. the “ample opportunity to be heard” standard in the Labor Code prevails over the “hearing or conference” requirement in itsImplementing Rules and Regulations. due process in abandonment cases does not involve the conduct of hearing. • Investigation still required even if incident was witnessed by many. Second Written Notice After determining that termination of employment is justified. hearing should still proceed. During the hearing or conference. and rebut the evidence presented against him by the management. 2. Moreover. It is considered a form of gross neglect of duties under Article 282[b] of the Labor Code. Compliance with the following two (2) notices suffices. Book VI of the Implementing Rules of the Labor Code. • The Perez Doctrine 1. Some Principles On Hearing Requirement • If employee does not answer. are violated and/or which among the grounds under Article 282 i s b e i n g c h a rg e d a g a i n s t t h e employee. with the assistance of a representative or counsel of his choice. with the assistance of counsel. It becomes mandatory only under any of the following circumstances: When requested by the employee in writing. present evidence in support of his defenses. Page 31 of 46 . is given opportunity to respond to the charge. Rule I. whether in a hearing. if he so desires. the procedural due process is different from the process described above. Hearing Required explain and clarify his defenses to the charge/s against him. Specifically mention which company rules. and /wncverder 2016 2) Second notice informing him of the employer‟ s decision to dismiss him on the ground of abandonment. while Under Section 2(d) . present his evidence or rebut the evidence presented against him. • Prior consultation with union is not part of the due process requirement. the employer is required to afford to the employee a“hearing or conference during which the employee concerned. if any. This is how the Supreme Court resolved the conflict in the following provisions of the Labor Code and its implementing rules: Under Article 277(b) of the Labor Code. However. “Ample opportunity to be heard” means any meaningful opportunity (verbal or written) given to the employee to answer the charges against him and submit evidence in support of his defense.
 Cross-examination or confrontation of witnesses is not necessary in company investigations. this conference or hearing could be used by the parties as an opportunity to come to an amicable settlement. 3. or When similar circumstances justify it. A formal hearing or conference is no longer mandatory.” XXVII. the employee is given the chance to defend himself personally. or When a company rule or practice requires it.DIWATA NOTES Labor Relations Contain a detailed narration of the facts and circumstances that will serve as basis for the charge against the employee. the employer shall serve the employees a written notice of termination indicating that: all circumstances involving the charge/s against the employee have been considered grounds have been established to justify the severance of his employment. or When substantial evidentiary disputes exist. A general description of the charge will not suffice. the employer is required to afford the employee “ample opportunity to be heard and to defend himself with the assistance of his representative if he so desires”. 3.

Termination due to expiration of contractual employment in a legitimate contracting or subcontracting arrangement. Procedural Due Process in Definite-Period Employment • Procedural due process is not required in termination of the following: Project employment which automatically terminates upon completion of the project. Termination of probationary employment on the ground of failure of the probationary employee to qualify as a regular employee in accordance with /wncverder 2016 Page 32 of 46 . and the appropriate DOLE Regional Office. casual or fixedterm employment. Instances When Hearing is NOT Required • • • • • • • reasonable standards made known to him at the start of the employment. at least one (1) month before the intended date of the termination specifying the ground/s therefor and the undertaking to pay the separation pay required under Article 283 of the Labor Code. Termination due to abandonment of work. retrenchment or closure of business or cessation of operations) . Termination by the employee (resignation) under Article Termination after 6 months of bona-fide suspension of operation under Article 286. Procedural Due Process in Authorized Cause Termination • Due process in authorized cause termination is deemed complied with upon the separate and simultaneous service of a written notice of the intended termination to both: the employee to be terminated.DIWATA NOTES Labor Relations XXVIII. XXXII. no due process is required. if the employer has prescribed in its company rules a c e r t a i n p ro c e d u re f o r t h e t e r m i n a t i o n o f probationary employment. what is required is simply that the notices provided under Article 283 be served to both the affected employees and the Department of Labor and Employment at least one (1) month before the termination becomes effective. Fixed-term employment which automatically terminates upon the expiration of the fixed period. • However. in which case. XXXI. the employer will be penalized with an indemnity in the form of nominal damages in the amount of P30. In such cases. it is sufficient that a written notice of termination is served to the probationary employee within a reasonable time from the effective date thereof setting forth the justification of such termination. the same should be complied with. Termination due to authorized causes under Article 283 (installation of labor-saving device. Termination due to expiration of tenure made coterminous with lease. however. seasonal. Termination due to disease under Article 284. Termination of employee who has admitted his guilt for the offense charged. redundancy. Termination due to closure or stoppage of work by government authorities when non-compliance with the law or implementing rules and regulations poses grave and imminent danger to the health and safety of workers in the workplace.00. Termination due to retirement under Article 287. Seven Standard Situations in Termination Cases JUST/ AUTHORIZ ED CAUSE DUE PROCESS IS TERMINATI ON LEGAL OR NOT REMEDY ✅ ✅ LEGAL No Remedy ❎ ✅ ILLEGAL Reinstatem ent + Full Back Wages ✅ ✅ ILLEGAL Reinstatem ent + Full Back Wages ✅ ❎ DEFECTIVE Nominal Damages (30k) Non-existent Cause ILLEGAL Termination of project. Procedural Due Process in Termination of Probationary Employment • Probationary employment may be terminated prior to the lapse of the probationary period fur just or authorized cause. • • • • • XXIX.000. Seasonal employment which automatically terminates upon the end of the season. Casual employment which automatically terminates upon the lapse of the agreed period. For purposes of satisfying due process. otherwise. the appropriate. • Per Abbott Laboratories doctrine. there are no allegations which the employees should refute and defend themselves from. XXX. if the ground invoked is the failure of the probationary employee to qualify as a regular employee based on the reasonable standards made known to him at the time of his engagement. applicable procedural due process should apply.

The concept of reinstatement under Article 223 is to restore the illegally dismissed employee to a state or condition from which he has been removed or separated. Once an appeal is filed. CA. it is required that the employer should submit a report of compliance within ten (10) calendar days from receipt of the Labor Arbiter‟ s decision. no writ of execution is required to be issued to implement it. . and SC By way of distinction. or 2. provides that an order of reinstatement by the Labor Arbiter is self-executory and therefore immediately executory even pending appeal. . Reinstatement A. REMEDY RELIEFS FOR ILLEGAL DISMISSAL XXXIII. all pleadings and motions pertaining to the appealed case are required to be addressed to and filed with the Commission (NLRC) . as the case may be. immediately executory even pending appeal.e. Dismissal was brought about by implementation of law. it is necessary in case reinstatement is ordered by the NLRC on appeal or by the CA and the Supreme Court. i.9 while in the latter. . LEGAL subject of an appeal. • • Distinguished from Reinstatement Issued by NLRC. the employee should be reinstated to his position which he occupies prior to his illegal dismissal under the same terms and conditions prevailing prior to his dismissal or separation or. a writ of execution is not necessary to enforce the reinstatement order. while that in the latter.executory. Employer’s option to reinstate. the Labor Arbiter loses jurisdiction over the case. On necessity for issuance of writ of execution. disobedience to which clearly denotes a refusal to reinstate. no such option is available to the employer except to reinstate the employee to his former position or to a substantially equivalent position. This rule.The reinstatement under Article 223 has not attained finality as in fact it is the /wncverder 2016 Page 33 of 46 . to a substantiallyequivalent position. . When the employer refuses to reinstate the dismissed employee Distinguished from Reinstatement Under Article 279 Finality. while in the latter. . however. reinstatement of the employee in the payroll of the company without requiring him to report back to his work. When the employer disobeys the Rulesprescribed directive to submit a report of compliance within ten (10) calendar days from receipt of the decision. i.DIWATA NOTES Labor Relations JUST/ AUTHORIZ ED CAUSE DUE PROCESS IS TERMINATI ON LEGAL OR NOT Dismissal is not supported by any evidence of termination Neither legal nor illegal as there is no dismissal to speak of. while writ of execution is not required in case reinstatement is ordered by the Labor Arbiter. . • Instances When Writ of Execution of Labor Arbiter’s Reinstatement Order is Still Required 1. as amended. • Two Options of Employer Which Involve Reinstatement Actual reinstatement. Being self.In the former. while that contemplated under Article 279 has already become final and executory. On nature of duty of Labor Arbiter to implement order. Consequently. it is ministerial upon the Labor Arbiter to implement his order of reinstatement which is self-executory in character. or Payroll reinstatement.The reinstatement in the former is subject to the exercise of option by the employer. Reinstatement Pending Appeal The order of reinstatement issued by labor arbiter.e. a writ of execution is indispensable to effect reinstatement.In the former. Article 223 of the Labor Code. Only the Labor Arbiter’s reinstatement order is selfexecutory or immediately executory. cannot be invoked to prejudice the immediate reinstatement of an employee pending appeal. if no longer available. • Obligations of the Employer to Notify Reinstated Employee of his Choice of Option Under the 2011 NLRC Rules of Procedure. it is not ministerial as it requires the filing of a motion for the issuance of writ of execution before the Labor Arbiter can implement the order of reinstatement.

Undeniably. Where the continued relationship between the employer and the employee is no longer viable due to the strained relations and antagonism between them. the employee ordered reinstated under Article 223 should be admitted back to work in a substantially equivalent position. The failure of the illegally dismissed employee who was ordered reinstated to report back to work does not give the employer the right to remove him. • By reason of the injury suffered by the employee. • • • • • The employee has already reached retirement age under a Retirement Plan. not feasible or unwarranted for varied reasons and thus hardly in the best interest of the parties such as: • Where the employee has already been replaced permanently as when his position has already been taken over by a regular employee and there is no substantially equivalent position to which he may be reinstated. • B. however. dictates that the following should be included in its computation: Page 34 of 46 . Reinstatement to a position lower in rank is not proper. • When reinstatement of a security guard can no longer be ordered because he was past the age qualification for a security guard license. that it will not serve any prudent purpose as when supervening facts transpired which made execution unjust or inequitable Components of Separation Pay In Lieu of Reinstatement Per Prevailing Jurisprudence The amount of separation pay that should be paid in lieu of reinstatement is not provided under the Labor Code. But jurisprudence clearly enunciates the award of separation pay in the event reinstatement is not possible or feasible. Other circumstances such as: when reinstatement is inimical to the employer’s interest. 5. impracticable. • Takeover of the business of the employer by another company and there is no agreement regarding assumption of liability by the acquiring company. Separation Pay in Lieu of Reinstatement Article 279 expressly mandates only reinstatement and never the alternative remedy of separation pay in lieu thereof. When reinstatement proves impossible. The Labor Arbiter cannot exercise option of employer by choosing payroll reinstatement pending appeal. • Where the dismissed employee’s position is no longer available at the time of reinstatement for reasons not attributable to the fault of the employer. • In case the establishment where the employee is to be reinstated has closed or ceased operations To prevent further delay in the execution of the decision to the prejudice of private respondent. Where the employee decides not to be reinstated as when he does not pray for reinstatement in his complaint or position paper but asked for separation pay instead. such as: • Death of the illegally dismissed employee • Declaration of insolvency of the employer by the court • Fire which gutted the employer’s establishment and resulted in its total destruction. reinstatement does not serve the best interests of the parties involved. • When the general sales agency contract between the employer and its client has been terminated and reinstatement is no longer feasible. Jurisprudence. /wncverder 2016 3. • When the illegally dismissed employees are over-age or beyond the compulsory retirement age and their reinstatement would unjustly prejudice their employer.DIWATA NOTES Labor Relations • Some Principles Involving Reinstatement Pending Appeal It is similar to return-to-work order. • When there has been long lapse or passage of time that the employee was out of employer‟ s employ from the date of the dismissal to the final resolution of the case or because of the realities of the situation. it is a recourse based on equity that has been sanctioned by the Supreme Court in a catena of cases. If the former position is already filled up. he employer is prejudiced by the workers‟ continued employment. (Doctrine of Strained Relations) 2. When reinstatement is rendered moot and academic due to supervening events. especially when there is a reasonable explanation for his failure. 4.
 • Specific Instances Where Separation Pay in Lieu of Reinstatement Was Awarded 1. 6.

Concept Under Article 279. without loss of seniority rights and other privileges. a fraction of at least six (6) months being considered as one (1) whole year. without deducting from back wages the earnings derived elsewhere by the concerned employee during the period of his illegal dismissal. Hence. such as: Page 35 of 46 . but also to the payment of his full back wages. including the imputed service for which the employee is entitled to back wages. Back wages represent compensation that should have been earned by the employee but were lost because of the unjust or illegal dismissal. as a rule. When employer has ceased its business operations.e. Separation pay in lieu of reinstatement is computed from the commencement of employment up to the time of termination. Separation pay and back wages are not inconsistent with each other. it should be reckoned from the first day of employment until the finality of the decision. Actual reinstatement has the primacy as the proper relief to which an illegally dismissed employee is entitled. is only proper for reinstatement but not for back wages. When employer has already ceased its operations. both may be awarded to an illegally dismissed employee. 2. an employee whose dismissal is found to be illegal is considered not to have left his office so that he is entitled to all the rights and privileges that accrue to him by virtue of the office that he held. • Period Covered From start of employment up to the date of finality of decision. The payment of separation pay is in addition to payment of back wages. an employee who is unjustly dismissed is entitled not only to reinstatement. This is so because the principal remedy of reinstatement may only be granted in case the dismissal is illegal. Grant of separation pay in lieu of reinstatement converts the award of reinstatement into a monetary award. current wage level of the employee’s position. Separation pay.DIWATA NOTES Labor Relations The amount equivalent to at least one (1) month salary or to one (1) month salary for every year of service. the term “full back wages” should mean exactly that. Employer does not have the option to choose between actual reinstatement and separation pay in lieu thereof. Allowances and other benefits regularly granted to and received by the employee should made part of back wages. More definitively. BACKWAGES XXXIV. • Doctrine of Strained Relations The doctrine of strained relations or “antipathy and antagonism” or “irretrievable estrangement” applies when reinstatement will no longer be in the best interest of both the employee and the employer considering the animosity and antagonism that exist between them brought about by the filing of the labor case. Simply stated. Reason for payment of back wages is equity. . Allowances that the employee has been receiving on a regular basis. • The Bustamante Doctrine Under this rule. is from the time of his illegal dismissal) up to the time of his actual reinstatement. legal interest may be imposed thereon. • Salary Rate to be Used in the Computation The salary rate prevailing at the end of the period of putative service should be the basis for computation which refers to the period of imputed service for which the employee is entitled to back wages. hence. Reinstatement cannot be granted when what is prayed for by employee is separation pay in lieu thereof. inclusive of allowances and other benefits or their monetary equivalent. the separation pay in lieu of reinstatement should be computed only up to that date of closure. computed from the time his compensation was withheld from him (which. • Some Principles of Separation Pay in Lieu of Reinstatement Award of separation pay in lieu of reinstatement is not proper if there is no finding of illegality of dismissal. i. • Components of Back Wages 1. as a substitute remedy. Payment of separation pay should be ordered only in the event that there is a showing that reinstatement is no /wncverder 2016 longer possible by reason of the justifications allowed under established jurisprudence. Salaries or wages computed on the basis of the wage rate level at the time of the illegal dismissal and not in accordance with the latest. whichever is higher.

When reinstatement is granted without back wages. The justification is that along with the finality of the Supreme Court’s decision. The period of valid suspension is deductible from back wages. XXXV. He was ordered reinstated but he was denied back wages. Limited Back Wages • Grant of back wages may be as follows: a. Hence. h i s d i s m i s s a l w a s considered drastic and unwarranted considering that he had rendered twenty three (23) years of service without previous derogatory record and he was prematurely suspended during the pendency of the case. Some Principles on Back Wages The computation of said regularly paid allowances and benefits as part of back wages should be made up to the date of reinstatement as provided under Article 279 of the Labor Code or. Any other regular allowances and benefits or their monetary equivalent. Back wages should include period of preventive suspension. In case reinstatement is ordered. To allow the computation of the back wages to be based on a period beyond that would be an injustice to the employer. Pepsi-Cola Distributors of the Philippines. /wncverder 2016 If the illegally dismissed employee has reached the optional retirement age of 60 years. The High Court pronounced that “[t]he ends of social and compassionate justice would therefore be served if private respondent is reinstated but without Page 36 of 46 . NLRC. v. he took a rest for 25 days without prior leave. Inc. If employer has already ceased operations. Holiday pay. When reinstatement is granted with limited back wages • Reinstatement Without Back Wages 1. whether actual or in the payroll. 60 years is the optional retirement age. is from the time of illegal dismissal) up to the time of reinstatement. he was ordered reinstated but without granting him any back wages. the employee was found guilty of breach of trust for stealing ore with high gold content. The illegally dismissed fixedterm employee is entitled only to the payment of his salaries corresponding to the unexpired portion of his fixed-ter m employment contract. the issue on the illegality of the dismissal is finally laid to rest. The failure to claim back wages in a complaint for illegal dismissal is a mere procedural lapse which cannot defeat a right granted under substantive law. 2. he was told that he had been dismissed for being absent without leave. When the employer acted in good faith. where the employee filed a leave of absence for one day after he suffered stomach ache and upon the advice of his doctor. or In Itogon-Suyoc Mines. Transportation and emergency allowances. Fringe benefits or their monetary equivalent. vacation and sick leaves and service incentive leaves. full back wages should be computed only up to the date of the closure. as a rule. H o w e v e r. If separation pay is ordered in lieu of reinstatement. the illegally dismissed employee may still be awarded back wages despite said failure. Inc. When Labor Arbiter or NLRC failed to award any back wages. car and representation allowances. the employee could not be dismissed. Consequently. the same may be corrected on appeal even if worker did not appeal. b. full back wages should be computed from the time of illegal dismissal until the finality of the decision. if reinstatement be not possible. National Labor Relations Commission. Under Article 287.DIWATA NOTES Labor Relations • • • • • • • • Emergency living allowances and 13th month pay mandated under the law. full back wages should be reckoned from the time the compensation was withheld (which. Just share in the service charges. The rule is different if employment is for a definite period. his back wages should only cover the time when he was illegally dismissed up to the time when he reached 60 years. When he reported back for work. Back wages should be reckoned from end of valid suspension. up to the finality of the decision granting full back wages. When the dismissal is deemed too harsh a penalty. v. It was held that while he was at fault. Gasoline.

L e o n a rd o v. Welfare and Retirement Plan. but the award of back wages was limited to only one (1) year considering the mitigating circumstance of good faith attributed to the employer. had sufficient basis to reasonably and in good faith deem respondent resigned by 1998. Although it was found that the employee was indeed guilty of breach of trust and violation of company rules. Some Principles on Preventive Suspension • An employer has the right to preventively suspend the employee during the pendency of the administrative case against him as a measure of selfprotection. Preventive suspension may be legally imposed against an errant employee only when his alleged violation is the subject of an investigation. the High Court still declared the employee’s dismissal illegal as it was too severe a penalty considering that she had served the employer company for 21 years. (Award Limited to 5 years) In its resolution on the motion for reconsideration filed by the petitioner in Victory Liner.” 3. the NLRC. it was her first offense. (Award Limited to 2 years) In Dolores v. • If the basis of the preventive suspension is the employee’s absences and tardiness. It is justified only in cases where the employee’s continued presence in the company premises during the investigation poses a serious and imminent threat to the life or property of the employer or of the employee’s co-workers. the imposition of preventive suspension on him is not justified as his presence in the company premises does not pose any such serious or imminent threat to the life or property of the employer or of the employee‟ s co-workers simply “by incurring repeated absences and tardiness. given that the employer acted without malice or bad faith in terminating the employee’s services. by itself. • Preventive suspension should only be for a maximum period of thirty (30) days. • The failure by an employee to attend a meeting called by his supervisor will not justify his preventive suspension. Each party must bear his own loss. This remedy may thus be resorted to only while the errant employee is undergoing an investigation for certain serious offenses. Even so. • Preventive suspension does not mean that due process may be disregarded. Preventive suspension. does not signify that the company has already adjudged the employee guilty of the charges for which she was asked to answer and explain. Inc. Consequently. other than ordering the employee’s reinstatement. While petitioner’s argument that respondent had already abandoned his job in 1994 /wncverder 2016 was not upheld. Book V of the Rules to Implement the Labor Code. preventive suspension is not proper. As pointed out by the Court. in a case where the employee’s failure to work was occasioned neither by his abandonment nor by a termination. but the employer’s liability was mitigated by its evident good faith in terminating the employee’s services based on the terms of its Health. • Preventive suspension is not a penalty. the Court conceded that petitioner.145 the employee was terminated for her continuous absence without permission. Rule XXIII. the High Court affirmed the consistent findings and conclusions of the Labor Arbiter.” • The grounds of violation of the school rules and regulations on the wearing of uniform.DIWATA NOTES Labor Relations back wages in view of petitioner's good faith. Without this threat. the burden of economic loss is not rightfully shifted to the employer. Legal Basis. its purpose is to prevent him from causing harm or injury to the company as well as to his fellow employees. tardiness or a bsence. given the particular circumstances of this case. NLRC. Where there is no evidence that the employer dismissed the employee. Purpose. XXXVII. Javate. . v. The legal basis for the valid imposition thereof is found in Sections 8 and 9. and the Court of Appeals that the employee was illegally dismissed since he was still fit to resume his work. N L R C w h e re t h e Supreme Court ordered the reinstatement sans backwages of the employee who was declared neither to have abandoned his job nor was he constructively dismissed. the High Tribunal reduced and limited the original award of full back wages to five (5) years in the light of the evident good faith of the employer. PREVENTIVE SUSPENSION XXXVI. After the lapse Page 37 of 46 . • Reinstatement With Limited Back Wages Cases: (Award Limited to 1 year) In San Miguel Corporation v. the said employee was awarded back wages limited to a period of two (2) years. and her leave to study the French language would ultimately benefit the employer who no longer had to spend for translation services. Hence. and ma licio us ly s preading fals e accusations against the school. the employee was ordered reinstated to his former position without loss of seniority and other privileges appertaining to him prior to his dismissal. do not justify the imposition of preventive suspension. and Justification The Labor Code does not contain any provision on preventive suspension. Race. Jr. • Preventive suspension is neither equivalent nor tantamount to dismissal.

No extension thereof can be made based on whimsical. 3. Preventive suspension lasting longer than 30 days. Extension of period must be justified. insensibility or disdain by an employer which becomes unbearable to the employee that it could foreclose any choice by him except to forego his continued employment. unreasonable or unlikely. if there is no cessation of work. Inhumane and unbearable treatment accorded the employee by the employer or his representative. Serious insult by the employer or his representative on the honor and person of the employee. instead of doing the termination himself. and 4. A clear discrimination. XXXIX. 2. the employee who is constructively dismissed may be allowed to keep on coming to work.Forced Resignation • There is forced resignation where the employee is made to do or perform an involuntary act submission or tender of resignation . 2.DIWATA NOTES Labor Relations • • • • of the 30-day period. In fact. unreasonable or unlikely. or 3. the the the the XL. The law recognizes and resolves this situation in favor of the employees in order to protect their rights and interests from the coercive acts of the employer. facts or circumstances which render the continued employment impossible. capricious or unreasonable grounds. During the 30-day preventive suspension. the employer is required to reinstate the worker to his former position or to a substantially equivalent position. the worker is not bound to reimburse the amount paid to him during the extension if the employer decides to dismiss him after the completion of the investigation. Constructive dismissal is. An involuntary resignation resorted to when continued employment is rendered impossible.meant to validate the action of management in inveigling. A demotion in rank and/or a diminution in pay. However. luring or influencing or practically forcing the employee to effectuate the termination of employment. Commission of a crime or offense by employer or his representative against person of the employee or any of immediate members of his family. During the 30day period of preventive suspension. without the benefit of valid extension. In such a case. for a justifiable reason. XLI. Common Denominator between Involuntary and Forced Resignation • The common character pervading involuntary or forced resignation or constructive dismissal is the act of “quitting” from employment by the employee because of the attendant just causes. XLII. amounts to constructive dismissal. Definition Constructive dismissal contemplates any of the following situations: 1. he is obligated to pay the wages and other benefits due the worker during said period of extension. CONSTRUCTIVE DISMISSAL XXXVIII. an employee may put an end to the employment relationship without need of serving any notice on the employer for any of the following just causes: 1. Thus. /wncverder 2016 Page 38 of 46 . Test of Constructive Dismissal • The test of constructive dismissal is whether a reasonable person in the employee’s position would have felt compelled to give up his position under the circumstances. the employer is expected to conduct and finish the investigation of the employee’s administrative case. acts. if the employer decides. Indefinite preventive suspension amounts to constructive dismissal. to extend the period of preventive suspension beyond said 30-day period. It is an act amounting to dismissal but made to appear as if it were not. a dismissal in disguise. • Thus. the worker is not entitled to his wages and other benefits. there can be no constructive dismissal. Involuntary Resignation The termination initiated by the employee based on the just causes described and enumerated in Article 285 of the Labor Code is in the nature of involuntary resignation. The period of thirty (30) days may only be extended if the employer failed to complete the hearing or investigation within said period due to justifiable grounds. Other causes analogous to any of foregoing. therefore.

the employer would n o r m a l l y contend that t h e re w a s n o termination at all. ❉❉❉❉❉❉❉❉ End of Module Eight ❉❉❉❉❉❉❉❉ Page 39 of 46 . Employee who alleges that he was coerced or intimidated into resigning has the burden to prove such claim. and they were made to wait for a certain employee who would arrive in the office at around noon. Illegal Dismissal Voluntary Resignation Constructive Dismissal Illegal Dismissal An indication that the resignation was voluntary and does not constitute constructive dismissal is the act of the employee who resigned and took a leave of absence on the date of effectivity of his resignation and while on leave. A threat to enforce one’s claim through competent authority. if the claim is just or legal. It was only after almost one (1) year that the employer made known the findings in its investigation which was conducted ex parte. “ I l l e g a l dismissal” is readily shown by the act of the employer in openly and e x p r e s s l y seeking the termination of employment of an employee The employer in illegal dismissal cases would normally defend In constructive and justify the dismissal. Voluntary Resignation vs. Imposing indefinite preventive suspension without actually conducting any investigation. The employee retired and signed two (2) quitclaims entitled “Receipt and Release” in favor of the company. Forcing the employee to resign with threat that if he will not resign. XLIV. • Reducing the employee’s functions which were originally supervisory in nature and such reduction is /wncverder 2016 • • • • • • not grounded on valid grounds such as genuine business necessity. The employer’s refusal in bad faith to reemploy her despite its promise to do so amounted to illegal dismissal. he worked for the release of his clearance and the payment of his 13th month pay and leave pay benefits. he will file charges against him that would adversely affect his chances for new employment. but rather a valid and legal act to enforce a claim. • Implementing a rotation plan for reasons other than business necessity. “Constructive dismissal. • Barring the employees from entering the premises whenever they would report for work in the morning without any justifiable reason. there termination being no e x p r e s s dismissal to speak of. benefits and other privileges. Some Principles on Constructive Dismissal or Forced Resignation • • • • • Mere allegations of threat or force do not constitute evidence to support a finding of forced resignation or constructive dismissal. does not vitiate consent. A threat to sue the employee is not unjust and will not amount to forced resignation or constructive dismissal. For instance. Asking the employee to choose whether to continue as a faculty member or to withdraw as a lawyer against the mayor with whom the former owes certain favors. Changing the employee’s status from regular to casual constitutes constructive dismissal. is not readily indicated by any similar act of the employer that would openly and expressly show its desire and intent to ter minate the employment relationship. XLV. The facts of the case should be considered to determine if there is constructive dismissal. Asking the employee to file a resignation on the condition or promise that she would be given priority for re-employment and in consideration of immediately paying her two (2) months‟ vacation which she desperately needed then because she was ill.DIWATA NOTES Labor Relations XLIII. • Instructing the employee to go on indefinite leave and asking him to return to work only after more than three (3) years from the time he was instructed to go on indefinite leave during which period his salaries were withheld. after they had waited for a long time and had left.” being dismissal in disguise. not being an unjust act. Threatening a sickly employee with dismissal if he will not retire and promising employment to his son and daughter. cannot at all be considered as intimidation. Giving the employee the choice or option between resignation and investigation is not illegal. makes the cessation from employment of said employee not voluntary.Instances of Constructive Dismissal or Forced Resignation • Denying to the workers entry to their work area and placing them on shifts “not by weeks but almost by month” by reducing their workweek to three days. a threat to file estafa case. • Demoting a worker or re-assigning him involving a demotion in rank or diminution of salaries. Constructive Dismissal vs. Such act is in the nature of a contrivance to effect a dismissal without cause. • Sending to an employee a notice of indefinite suspension which is tantamount to dismissal.

Confidential Employees • “Position of trust and confidence” is one where a person is entrusted with confidence on delicate matters. Insubordination • Willful disobedience of the employer’s lawful orders. b. the willfulness being characterized by a wrongful and perverse attitude. omission. Loss of Confidence • To deter mine whether the ter mination of employment based on loss of confidence is justified. Retrenchment • Retrenchment is an economic ground to reduce the number of employees. handling. • Confidential employees are those who (1) assist or act in a confidential capacity. Just causes are usually serious or grave in nature and attended by willful or wrongful intent or they reflected adversely on the moral character of the employees. as a valid cause for the dismissal of an employee is simply defined as improper or wrongful conduct. • To be serious. and implies wrongful intent and not mere error in judgment. There is abandonment when the employee leave his job or position with a clear and deliberate intent to discontinue his employment without any intention of returning back. • It is the transgression of some established and definite rule of action. It is aimed at saving a financially ailing business establishment from eventually collapsing. To constitute just cause. is a just cause for termination of employment. f. It evinces a thoughtless disregard of consequences without exerting any effort to avoid them. c. fraud or breach of trust must be committed in connection with the employee’s work or related to the performance of the employee’s functions. made known to the employee and must pertain to the duties which he had been engaged to discharge. • Breach of trust refers to the violation by the employee of the trust and confidence reposed in /wncverder 2016 • • him by his employer or duly authorized representative. or confidence justly reposed and is injurious to another. Crimes Against Persons • Commission of a crime or offense by the employee against his employer or any immediate member of his family or his duly authorized representative. or with the custody. i. d. The basic premise for dismissal on the ground of loss of confidence is that the employee concerned holds a position of trust and confidence. a dereliction of duty. Serious Misconduct • Serious misconduct. a forbidden act. lawful. It is the breach of this trust that results in the employer’s loss of confidence in the employee. e. • Example: Habitual absenteeism and tardiness constitute gross and habitual neglect of duty. h.DIWATA NOTES Labor Relations JUST AND AUTHORIZED CAUSES FOR DISMISSAL ADDITIONAL INFORMATION FROM USEC’S BOOK Just causes for dismissal of employee may be defined as those lawful or valid grounds for termination of employment which arise from causes directly attributable to the fault or negligence of the erring employee. a. trust. or the entire absence of care. and effectuate management policies in the field of labor relations. • Habitual neglect implies repeated failure to form one’s duties for a period of time. the following elements are generally considered: Whether the fraud or breach of trust is in connection to the employee’s work. and Whether the employee concerned is holding a position of trust and confidence. or concealment which involves a breach of legal duty. willful in character. it must be in connection with the employees’ work to constitute just cause for his separation. and The order violated must have been reasonable. Page 40 of 46 . • Gross inefficiency is analogous to and closely related to gross neglect for both involve acts or omissions on the part of the employee resulting in damage to the employer or to his business. as a just cause for dismissal of an employee. It is sometimes also referred to as downsizing. g. Fraud and Breach of Trust • Fraud is any act. (2) to persons who formulate. Analogous Cases • Other causes analogous to the above grounds may also be a just cause for termination of employment. determine. envisages the concurrence of at least two requisites: The employee’s assailed conduct must have been willful or intentional. j. or care and protection of the employer’s property. Retrenchment is the reduction of personnel for the purpose of cutting down on costs of operations in terms of salaries and wages resorted to by an employer because of losses in operation of a business occasioned by lack of work and considerable reduction in the volume of business. Gross and Habitual Neglect • Gross negligence has been defined as the want or absence of or failure to exercise slight care or diligence. Abandonment • Abandonment of job is a form of neglect of duty. Repeated acts of absences without leave and frequent tardiness reflect indifferent attitude to and lack of motivation in his work.

Closure • Closure of business is the reversal of fortune of the employer whereby there is a complete cessation of business operations and/or an actual locking-up of /wncverder 2016 • • • the doors of establishment. retrenchment is reduction of personnel usually due to poor financial returns so as to cut down on costs of operations in terms of salaries and wages to prevent bankruptcy of the company. or maliciousness on the part of management. The installation of these devices is a management prerogative. While closure of business and retrenchment are often used interchangeably and are interrelated. the device could then verily be considered one of retrenchment. • Requisites for termination on the ground of disease. arbitrariness. or of automation” is technically a ground for termination of employment by reason of installation of labor-saving devices but where the introduction of these methods is resorted to not merely to effect greater efficiency in the operations of the business but principally because of serious business reverses and to avert further losses.DIWATA NOTES Labor Relations k. Retirement • Retirement is one of the modes of termination of employment. The purpose of retrenchment is to save a financially ailing business establishment from eventually collapsing. A position is redundant where it superfluous. Under said program. or dropping of a particular product line or service activity previously manufactured or undertaken by the enterprise. The dismissal is proper. The dismissal was upheld as valid. Redundancy • Redundancy exists where the services of an employee are in excess of what is reasonably demanded by the actual requirements of the enterprise. • Example: An employee was terminated after the company instituted a modernization program. On the other hand. they are actually two separate and independent authorized causes for termination of employment. which the company has the right to do. Closure of business. • T h e i n s t a l l a t i o n o f l a b o r. Closure or cessation of business may mean either total closure or partial closure. The complainants who were hired as mechanics were terminated by the employer when their positions were abolished. Disease • An employer may terminate the services of an employee who has been found to be suffering from any disease and whose continued employment is prohibited by law or is prejudicial to his health as well as the health of his co-employees. Retrenchment is an authorized cause for termination of employment which the law accords an employer who is not making good in its operations in order to cut back on expenses for salaries and wages by laying off some employees. the operations of the quality control unit. n. l. is the reversal of fortune of the employer whereby there is a complete cessation of business operations and/or an actual locking-up of the doors of establishment. Closure of business as an authorized cause for termination of employment aims to prevent further financial drain upon an employer who cannot pay anymore his employees since business has already stopped. In either case. to which said employee was assigned. and therefore properly terminable. such as over hiring of workers. In contracting the services of Gemac. It must produce adequate proof of such redundancy to justify the dismissal of the affected employees. C l o s u re o f B u s i n e s s D i s t i n g u i s h e d f ro m Retrenchment.s a v i n g d e v i c e s contemplates the installation of machinery to effect economy and efficiency in the method of production. usually due to financial losses. • It is the employer’s burden to show that redundancy exists. By retirement. or after he has completed a certain number of years of service. • The institution of “new methods or more efficient machinery. It is not enough for a company to merely declare that it has become overmanned. Total or Partial Closure of Business. Closure of business as an authorized cause for termination of employment aims to prevent further financial drain upon an employer who cannot pay anymore his employees since business has already stopped. the employment is terminated when the employee has reached a certain age. and contracted out to Gemac Machineries. The employee suffers from a disease. o. Labor Saving Devices • The law authorizes an employer to terminate the employment of any employee due to the installation of labor saving devices. Termination of an employment may be predicated on one without need of resorting to the other. m. on one hand. Page 41 of 46 . the right of the employer to terminate employee affected by the closure has been recognized. as in the case of abolition of only a department or section of the establishment or of only a part of company activities. usually due to financial losses. decreased of volume business. and the courts will not interfere with its exercise in the absence of abuse of discretion. and superfluity of a position or positions may be the outcome of a number of factors. It is sometimes also referred to as down-sizing. the services rendered by the mechanics became redundant and superfluous. were all automated. • Example: The employer was engaged in the production of wooden doors and furniture.

Example: The requirement for a medical certificate under Article 284 of the Labor Code cannot be dispensed with. the finding of probable cause is not followed by automatic adoption of such finding by the labor tribunals. otherwise. and Bankruptcy • Employees are entitled to security of tenure. The surviving or consolidated entity must. u. therefore. and The disease is of such nature and at such a stage that it cannot be cured within a period of six months even with proper medical treatment. • The employee may resign even without serving any notice on the employer for any of the following reasons: Serious insult by the employer or his representative on the honor and person of the employee. especially one that is grounded on the existence of reasonable doubt. If the company suffered bankruptcy. This includes obligations or liabilities under valid agreements. Mergers and Consolidations • Under the Corporation Code (sec. whichever is higher. In the reverse. They enjoy security of tenure and should they be dismissed. Resignation • Resignation is defined as the voluntary act of an employee who finds himself in a situation where he believes that personal reasons cannot be sacrificed in favor of the exigency of the service and he has no other choice but to disassociate himself from his employment. he may be held liable for damages. • An employee who voluntarily resigns from his work is not entitled to separation pay. depending on the circumstances. Page 42 of 46 . v. recognize the security of tenure and length of service of the w o r k e r s o f t h e m e rg i n g o r c o n s o l i d a t i n g corporations. It does not cover cases where the employee is forced to resign with the use of threats. Full back wages is a form of penalty imposed by law on an employer who illegally dismisses his or her employee. t. Otherwise /wncverder 2016 stated. • In cases of illegal dismissal. a dismissed employee who has found another job may still be entitled to collect full back wages from his or her former employer. I n h u m a n a n d u n b e a r a b l e t re a t m e n t accorded the employee by the employer or his representative. intimidation. By the fact of merger or consolidation. the employees shall be entitled to separation pay. and that the employee must have knowingly and voluntarily dissociate himself from his employment for his own personal reasons. There is no provision in the Labor Code which grants separation pay to voluntarily resigning employees. it must be based on just cause. Full Back Wages • Full back wages refer to all compensations. The fact that the dismissed employee may already be employed and earning elsewhere does not extinguish the penalty. r. • If the employee fails to give the employer one month advance notice of his intention to resign. it would sanction the unilateral and arbitrary determination by the employer of the gravity or extent of the employee’s illness and thus defeat the public policy in the protection of labor. and Other causes analogous to any of the foregoing. It includes all the amounts he or she could have earned starting from the date of dismissal up to the time of reinstatement. or cessation of business or incurable disease. for every year service. closure. 80). assets and liabilities of the combining entities. including allowances and other benefits with monetary equivalent. that should have been earned by the employee but was not collected by him or her because of unjust dismissal. Take-Over. Sale • Employees should be carried over to the new owner of the corporation. Separation Pay • In authorized cause terminations. If the disease or ailment can be cured within six months. p. Spin-Off. or where resignation is imposed as a penalty for an offense. separation pay is the amount given to an employee terminated due to retrenchment. like labour contracts. s. will not preclude a determination in a labor case that he is guilty of acts inimical to the employers interests.DIWATA NOTES Labor Relations • • His continued employment is prohibited by law or prejudicial to his health or to the health of his co-employees. coercion or manipulation. The employee is entitled to receive the equivalent of one month pay or one-half month pay. Conviction • A criminal conviction is not necessary to find just cause for employment termination. q. the employer shall not terminate the employee but shall ask the employee to take a leave of absence. an employees acquittal in a criminal case. the surviving or consolidated entity in a merger or consolidation automatically assumes all rights and obligations. • The key is that resignation must be a “voluntary act”. a succession of employment rights and obligations occurs. Commission of a crime or offense by the employer or his representative against the person of the employee or any of the immediate members of his family.

which is his ‘last salary’ shall be the basis of the computation. separation pay shall be computed based on the provision of the Labor Code. Employee’s length of service refers to the duration of time that the employee has been under the employ of the same employer or company. thus. The amount of separation pay under the Labor Code depends on the following factors: The employee’s last salary. the award of attorney’s fees is legally and morally justifiable. 2004 (date of termination) until fully paid. w. It is settled that where an employee was forced to litigate and. A fraction of at least 6 months shall be considered as one whole year. Ten (10%) percent of the total award is usually the reasonable amount of attorney’s fees awarded. In addition.g. the salary rate before the reduction shall be used in the computation of separation pay. Finally. However. such reduced salary rate. that is. Company practice may likewise be used as basis for computation. The employee’s last salary refers to the salary rate of the employee at the time of his termination from service. The reason for employee’s separation from service Employees’ Last Salary. if the reduction of salary was made to circumvent the provision of the Labor Code. incur expenses to protect his rights and interest. For employee’s receiving salary below the minimum wage. or collective bargaining agreement. the award of attorney’s fees is legally and morally justifiable. It is computed beginning from the time of his engagement up to the date of his termination. But. the employee has been demoted resulting to a reduction of salary. to avoid payment of higher separation pay. separation pay is also the amount given to employees who have been dismissed without just cause and could no longer be reinstated. The employee’s length of service. When there is a reduction of the employee’s salary prior to his termination. It determines the based to be used in the computation of separation pay. if such practice has been established for years and has already ripened into a demandable right. Attorney’s Fees and 6% Interest on Monetary Awards • It is settled that in actions for recovery of wages or where an employee was forced to litigate and. the separation pay shall be computed based on the minimum wage in effect at the time of separation from service. Employee’s Length of Service. Separation pay may be computed based on the terms provided in the employment contract. or when the existing agreement or policy provides for a lower benefit. • • • incur expenses to protect his rights and interest. e.. company policy. legal interest shall be imposed on the monetary awards herein granted at the rate of 6% per annum from October 6.DIWATA NOTES Labor Relations • • • • • • In just cause terminations. Attorney’s fees may be awarded when a party is compelled to litigate or to incur expenses to protect his interest by reason of an unjustified act of the other party. the employee affected is also entitled to payment of salary differential equivalent to the difference between the employees actual salary and applicable minimum wage. thus. the award of attorney’s fee is warranted pursuant to Article 111 of the Labor Code. In the absence of contract or agreement. /wncverder 2016 Page 43 of 46 .

A. The NLRC is on the same level as the CA. 9. medicare and maternity benefits. exemplary and other forms of damages as provided by Section 10 of R. Unfair labor practice (ULP) cases. Exclusive jurisdiction over cases involving petition for relief from judgment from a decision/order from a labor dispute involving fraud. involving an amount exceeding Five Thousand Pesos (P5. accident.000. exemplary and other forms of damages arising from employeremployee relations. mistake or excusable negligence The NLRC sits en banc only to promulgate rules rules and regulation on the hearing and disposition of cases before any of its decisions and regional branches and formulating policies affecting its administration. 10022. Original exclusive jurisdiction as compulsory arbitration body over labor disputes certified to it by the DOLE secretary 4. rates of pay.A. those cases that workers may file involving wages.DIWATA NOTES Labor Relations MODULE NINE LABOR RELATIONS PROCEDURE • XLVI. Original exclusive jurisdiction over contempt cases committed against it or any of its members under Art. Termination disputes (or illegal dismissal cases). 218 (d) of the Labor Code (acts of contempt during proceedings) 6. 8042. as amended by R. and 11. Contested cases under the exception clause of Article 128(b) of the Labor Code. Jurisdiction and Procedures • NLRC has jurisdiction over the following: 1. From the ruling of the Court of the Appeals. 7. 6. as amended. 7730. cases before the NLRC are taken up in division. Original exclusive jurisdiction to issue labor injunctions and exercise contempt powers under Art.00). From the decision of the NLRC. In all other cases. No. XLVIII. Cases arising from any violation of Article 264 of the Labor Code. I f a c c o m p a n i e d w i t h a c l a i m f o r reinstatement. Except claims for employees compensation not included in the next succeeding paragraph. social security. Enforcement of compromise agreements when there is non-compliance by any of the parties pursuant to Article 227 of the Labor Code. hours of work and other terms and conditions of employment. No.A. Page 44 of 46 . Exclusive appellate jurisdiction over all cases decided by the regional directors or hearing officers involving the recovery of wages and other monetary claims and benefits arising from employer-employee relationships where the total money claim is Php5. moral. there is no appeal. Other cases as may be provided by law. Claims for actual. including questions involving the legality of strikes and lockouts. as amended by R. 10. 218 (e) of the Labor Code (illegal acts committed during a labor dispute) 5. 5. Wage distortion disputes in unorganized establishments not voluntarily settled by the parties pursuant to Republic Act No. whether or not accompanied with a claim for reinstatement. 4. Appeals and Reglementary Period • Modes of Appeal from Decision of Labor Arbiters Appeal from the decision of the Labor Arbiter is brought by ordinary appeal to the NLRC within ten (10) calendar days from receipt by the party of the decision. Appellate jurisdiction over all cases decided by the labor arbiter 2. 6627.The Philippine Labor Dispute Adjudication System XLVII. it may be elevated to the Supreme Court by way of ordinary appeal under Rule 45 of the Rules of Civil Procedure. involving Filipino workers for overseas employment. /wncverder 2016 Labor Arbiter Jurisdiction under Article 217 1.00 or less 3. 8. all other claims arising from employer-employee relations. including claims for actual. 3. The only way to elevate the case to the Court of Appeals is by way of the special civil action of certiorari under Rule 65 of the Rules of Civil Procedure. including those of persons in domestic or household service. 2.000. moral. Money claims arising out of employeremployee relationship or by virtue of any law or contract.

directing the employer to immediately reinstate the dismissed employee either physically or in the payroll. If made purely on questions of law. even pending appeal.27 The jurisdiction thereover remains within the original and exclusive ambit of the Labor Arbiter and not of the Voluntary Arbitrator. the amount pertaining to the period beyond the three-year prescriptive period is barred by prescription. is interrupted during the pendency of the labor case. In the form of a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof. 2. What are the Requisites of Appeal Filed within the reglementary period provided in Section 1 of the Rule. and to pay the accrued salaries as a consequence of such reinstatement at the rate specified in the decision. hence. If he disobeys the writ. and with a statement of the date the appellant received the appealed decision. In case the decision includes an order of reinstatement and the employer disobeys it or refuses to reinstate the dismissed employee. as amended. and proof of service upon the other parties. The Sheriff should serve the writ of execution upon the employer or any other person required by law to obey the same. the former’s jurisdiction shall prevail for the following reasons: Termination of employment is not a grievable issue that must be submitted to the grievance machinery or voluntary arbitration for adjudication. Can the Labor Arbiter issue a partial writ pending appeal? Yes. Such award does not require a writ of execution. Rule 7 of the Rules of Court. What is the reinstatement aspect of the Labor Arbiter’s decision? If reinstatement is ordered by the Labor Arbiter in an illegal dismissal case. CLAIMS FOR ALLOWANCES AND OTHER BENEFITS: In cases of nonpayment of allowances and other monetary benefits. • Prescriptive Periods As a rule. the relief prayed for. the partial execution for /wncverder 2016 reinstatement pending appeal is not affected by such perfection. the Labor Arbiter should immediately issue a writ of execution. However. Page 45 of 46 . whether the dismissal is for just cause or authorized cause. they shall be forever barred. 3. order or award was secured through fraud or coercion. The running of the 1 year period. such employer or person may be cited for contempt. Even if the CBA provides that termination disputes are grievable. If the decision. • In case of conflict of jurisdiction between Labor Arbiter and the Voluntary Arbitrator over termination cases. and Accompanied by proof of payment of the required appeal fee and legal research fee. and If serious errors in the findings of facts are raised which would cause grave or irreparable damage or injury to the appellant. ILLEGAL DISMISSAL: An action for illegal dismissal prescribes in four (4) years from accrual of cause of action. however. otherwise.DIWATA NOTES Labor Relations • • • • Grounds for Appeal If there is prima facie evidence of abuse of discretion on the part of the Labor Arbiter. the prescriptive period of all criminal offenses penalized under the Labor Code and the Rules to Implement the Labor Codeis three (3) years from the time of commission thereof. MONEY CLAIMS: Prescriptive period is three (3) years from accrual of cause of action.Some Principles on Jurisdiction over Termination Cases • The validity of the exercise of jurisdiction by Labor Arbiters over illegal dismissal cases is not dependent on the kind or nature of the ground cited in support of the dismissal. award or order. Verified by the appellant himself/herself in accordance with Section 4. 1. it is immediately executory even pending appeal. if it is established that the benefits being claimed have been withheld from the employee for a period longer than three (3) years. The amount that can only be demanded by the aggrieved employee shall be limited to the amount of the benefits withheld within three (3) years before the filing of the complaint. criminal cases arising from ULP which prescribe within one (1) year from the time the acts complained of were committed. XLIX. including graft and corruption. posting of a cash or surety bond as provided in Section 6 of this Rule. it is of no consequence. the same is merely discretionary on the part of the parties thereto. In three (3) legibly typewritten or printed copies. While the perfection of appeal will stay the execution of the decision of a Labor Arbiter.

Necessarily. jurisdiction is with the regular courts. Jurisdiction • Under Article 129 of the Labor Code. T h e t h i rd re q u i s i t e s i m p l y re f e r s t o t h e determination of whether the total amount being claimed is at least P5. To recapitulate.00 . Jurisdiction over Money Claims • Money claims must arise out of employer-employee relationship.00. • Award of statutory benefits even if not prayed for is valid. absent any of the requisites mentioned above will divest the DOLE Regional Directors of their authority to hear and decide said money claims. • • The first requisite is indispensable as labor authorities may only take cognizance of cases arising from employer-employee relationship or when the cause of action has a reasonable causal connection to such relationship under the “reasonable causal connection rule.is immaterial.00 or below. If it exceeds P5. the principal cause of action would be for illegal dismissal and not for /wncverder 2016 Page 46 of 46 . the jurisdiction is lodged with the DOLE Regional Director. and 3. in an illegal dismissal case. in a summary proceeding.” The second requisite means that the remedy of reinstatement should not accompany the monetary claim because if this is the case.000. Article 217 is deemed written into the CBA being an intrinsic part thereof. the jurisdiction over the same is vested upon the Labor Arbiters.000. to hear and decide claims for recovery of wages and other monetary claims and benefits. there is no doubt that the Labor Arbiter has jurisdiction thereover. The State policy of promoting voluntary arbitration does not foreclose filing of termination case with Labor Arbiter. LI.000. • The money claims lodged by an employee are not to be properly offset by his unpaid subscription of stocks. The claimant does not seek reinstatement. Regional Director. • Claim for notarial fees by a lawyer employed by a company is within the jurisdiction of the Labor Arbiter. The phrase “all other labor disputes” in Article 262 does not automatically confer jurisdiction on Voluntary Arbitrators.00. including legal interest.000. The aggregate money claim of each employee does not exceed P5. Interpretation of CBA and enforcement of company personnel policies are merely corollary to an illegal dismissal case. an action for illegal dismissal falls within the jurisdiction of the Labor Arbiter as provided under Article 217 of the Labor Code. in which case. • • monetary claim. jurisdiction is conferred upon Labor Arbiters by operation of law. the amount of any monetary claim asserted therein whether below or in excess the threshold amount of P5. Article 277(b) grants the right to the dismissed employee to contest his termination with the Labor Arbiter. DOLE Regional Directors or the duly authorized hearing officers. are empowered. Consequently. 2. provided the following requisites concur: 1. Failure of the employer to activate grievance machinery confers jurisdiction on Labor Arbiters.DIWATA NOTES Labor Relations Once there is actual termination. Needlessly. If not. The claim must arise from employeremployee relationship. L. Estoppel confers jurisdiction on Labor Arbiters.