EMPLOYER-EMPLOYEE

RELATIONS WITH LABOR LAWS

AND CBA
Lecture notes PART II

GENERAL LABOR
CONCEPTS

TOPICAL GUIDE
1. ART 4 LC, Construction in Favor of Labor
2. Management Prerogatives
3. No Work- No Pay principle
4. Last in, First Out (LIFO) Rule
5. One Union-One Company Policy
6. Equal Pay Equal Work Principle
7. Non-Diminution of Benefits

ART 4: CONSTRUCTION IN FAVOR

OF LABOR
In interpreting Labor Code provisions, the workingmans

welfare should be the primordial and paramount

consideration.
In the interpretation of contracts relating to
employment, the constitutional policy of according
utmost protection and justice to labor should be upheld.
Employment contracts being in the nature of contracts of

adhesion , ambiguities should be resolved in favor of labor as an

employment status of a person is defined by law and not by the
parties.
Ex. One year of continuous service to qualify for separation
benefits it did not require the service to be immediately prior
the day of separation

ART 4: CONSTRUCTION IN FAVOR

OF LABOR
CASES:
1. PLDT V NLRC , 276 CSRA 1 [1997
2. Cherry J. Price et al v Innodata Phils Inc, G.R. 178505,

30 Sept 2008
3. Marcopper Mining Corp v NLRC, 255 SCRA 322 [1996]
4. Asuncion v NLRC, 362 SCRA 56 [2001]
5. Penaflor v Outdoor Clothing Manufacturing Corp. GR
177114, Jan 21, 2010
6. Fukitsa Computer Products Corp of the Phil v Court of
Appeals, 494 Phil 697 [2005]
7. PNCC v NLCR, 277 SCRA 91 [1997]

MANAGEMENT PREROGATIVES
The free will of management to conduct its

own affairs to achieve its purpose cannot be

denied except as limited by special laws,
CBAs or the general principles of justice and
fair play
Employer is given leeway to manage his
business and control the variables for profit
purposes as long as the same is done in good
faith and without circumventing the rights of
employees.

MANAGEMENT PREROGATIVES
Examples:
1. The reduction of personnel
2. Reasonable terms and conditions upon hiring of

personnel is prescribed by employer; must not be

discriminatory; Bona fide occupational qualification
A. BAN OF SPOUSES IN SAME COMPANY to be valid, it

should be a bonafide occupational qualification exception;

not discriminatory; employer must prove two factors: (1)
the qualification is reasonably related to the essential
operation of the job involved and (2) there is a factual basis
for believing that the persons meeting the qualification
would be unable to perform the duties of the job

MANAGEMENT PREROGATIVES
Examples:
Bona fide occupational qualification
The SC held valid the policy of a pharmaceutical

company prohibiting employees of any competitor

company to protect trade secrets and processes.
Obesity of an international flight steward is a ground
for termination for failure to adhere to weight
standard of airline company. His obesity may be
unintended but is voluntary. A common carrier is
required to observe extraordinary diligence for the
safety of its passengers and must rely of its crew to
carry out that diligence so they must be physically fit.

MANAGEMENT PREROGATIVES
Examples:
Bona fide occupational qualification
The exclusivity clause of Avon in prohibiting its

supervisors from selling products other than those

manufactured by Avon is valid.
The State is justified in requiring x-ray technicians
to have passed the required examination and
obtain the corresponding registration from the
Board of Radiologic Technology.

MANAGEMENT PREROGATIVES
Examples
4. Discipline of employees but penalty must be
commensurate to the act and due process is
observed.
5. Transfer of employees where he can be most
useful is allowed as long as done in good faith.
6. Abolition of position due to company reorganization or streamlining operations to avert
losses is allowed
7. Change of working hours if necessary for its
operations

MANAGEMENT PREROGATIVES
Examples
8. Grant of bonus
BONUS an amount granted and paid to an
employee for his industry and loyalty which
contributed to the success of the employers
business and made possible the realization of
profits. It is an act of generosity by an enlightened
employer to spur the employee to greater efforts for
the success of the business and realization of bigger
profits. It is not demandable unless part of the wage
or integrated in the CBA

MANAGEMENT PREROGATIVES
CASES:
1. Bisig sa Tryco et al v Tryco Pharma Corp et al, G.R. No. 151309, 15 Oct
2008
2.
Manila Jockey Club Employees Labor Union (PTGWO) v Manila Jpckey
Club Inc, G.R. No. 166760, 07 March 2007
3.
Capitol Medical Center v Meris, G.R. No. 155098, 470 SCRA 125 [2005]
4.
Phil Airline Inc v NLRC, 225 SCRA 301 [1993]
5.
Sorreda v Cambridge Electronics Corp, G.R. No. 172927, 11 Feb 2010
6.
Star Paper v Simbol, G.R. No. 154774, 487 SCRA 228 [2006]
7.
Duncan Association of Detailman-PTGWO v Glaxo Wellcome Phils ,
G.R. No. 162994, 17 Sept 2004, 438 SCRA 343
8.
Armando Yrasuegui v PAL, G.R. No. 168081, 17 Oct 2008
9.
Acon Cosmetics v Leticia Luna, G. R. No. 153674, 20 Dec 2006
10. St. Lukes Medical Center Employees Union-AFW v NLRC, G.R. No.
162053, 517 SCRA 677 [2007]

NO WORK NO PAY PRINCIPLE

A FAIR DAYS WAGE FOR A FAIR DAYS

LABOR remains a basic factor in

determining wages of employees unless the
laborer who is willing and able is locked out,
suspended, dismissed or illegally prevented
from working or the pay relates for holiday
pays.

NO WORK NO PAY PRINCIPLE

CASES:
1. Neeland v Villanueva, 364 SCRA 2004

[2001]
2. University of Pangasinan Faculty Union v
Univ of Pangasinan, 127 SCRA 691 [1984]
3. Serrano v NLRC, 323 SCRA 445 [2000]

LAST IN- FIRST OUT [LIFO]

RULE
Basis of termination of work and is usually

provided in CBAs . Otherwise, the LIFO

method yields to the sound discretion of
management prerogative

LAST IN- FIRST OUT [LIFO]

RULE
CASES:
1. Maya Farms Employees Organization v

NLRC, 239 SCRA 508 [1994]

2. Dela Salle University v Dela Salle
Employees Association, 330 SCRA 363 [2000]

ONE UNION ONE COMPANY

POLICY
The proliferation of unions in one employer

unit should be discouraged to give the

employees a more potent voice.
EXCEPTIONS:
1. If there is substantial differences between
the employee groups in the company
The policy should yield to the Constitutional
right of the employees to form unions or
associations not contrary to law

ONE UNION ONE COMPANY

POLICY
CASES:
1. Philtranco Service Enterprises v BLR, 174 SCRA 388

[1989]
2. General Rubber and Footwear Corp V BLR, 155 SCRA 283
[1987]
3. Knitjoy Manufacturing Inc v Ferrer-Calleja, 214 SCRA 174
[1992]
4. Barbizon Phil Inc NAFLU, 261 SCRA 738 [1996]
5. Pagkakaisa ng mga Manggagawa sa trimph Intl- United
Lumber and Gen Workers of the Phil v Ferrer-Calleja, 181
SCRA 119 [1990]
6. Intl School Alliance of Educators [ISAE} v Quisumbing,
333 SCRA 13 [2000]

EQUAL PAY FOR EQUAL WORK

PRINCIPLE
Persons who work with substantially equal

qualifications, skill, effort and responsibility,

ceteris paribus, should be paid similar
salaries.

EQUAL PAY FOR EQUAL WORK

PRINCIPLE
CASES:
1. International School Alliance of Educators

v Quisumbing, 333 SCRA 13 [2000]

2. Philex Gold Phil Inc v Philex Bulawan
Supervisors Union, 468 SCRA 111 [2005]

NON-DIMINUTION OF BENEFITS
ART 100 , LC - Prohibition against

elimination or diminution of benefits

Nothing is this Book shall be construed to
eliminate or in any way diminish
supplements, or other employee benefits
being enjoyed at the time of promulgation of
this Code

NON-DIMINUTION OF BENEFITS
Voluntary employer practices cannot be

unilaterally withdrawn subject to the ff

requisites:
1. it should have been practiced over a long period

of time
- no hard-and-fast rule as to length of time
2. It must be shown to have been consistent and
deliberate
The benefit is an act of liberality of the ER and not
by reason of a legal or contractual obligation

NON-DIMINUTION OF BENEFITS
CASES:
1. Sevilla Trading Co v Semana, 428 SCRA 239 [2004]
2. Gloce Mackay Cable and Radio Corp v NLRC, 163

SCRA 71 [1988]
3. Oceanic Phramacal Employees Union (FFW) v
Inciong, 94 SCRA 270 [1979]
4. Davao Fruits Corp v Assocaited Labor Unions, 225
SCRA 562 [1993]
5. Tiangco v Leogardo Jr, 122 SCRA 267 [1983]
6. Pag-asa Steel Works Inc v CA, 486 SCRA 475
[2006]

REFERENCES
Abad, Jr., Antonio H. (2011). (4th ed).
Compendium on labor law. 4th ed. Manila: Rex.
Azucena, Jr. A. C. (2010). (7th ed.). The labor code
with comments and cases. Manila: Rex.
Azucena, C.A., Jr. (2007). (5th ed.). Everyone's
Labor Code. Manila:Rex.
Rex case digest. (2006). Labor law and social
legislation, legal ethics, mercantile law. Quezon
City: Rex.
Salao, Ernesto C. (2009). Law dictionary. Manila:
Rex.