PRICE v. INNODATA PHILS. INC.

1 since there employment was not coterminous with any project or
September 30, 2008| CHICO-NAZARIO undertaking.
By: Justin  Innodata argued that almost half of the employees was engaged in data
encoding. Due to the wide range of services rendered to its clients, it was
SUMMARY: Price were hired as formatters by Innodata. Under their employment constrained to hire new employees for a fixed period of not more than one
contract they were hired only for a fixed period. When last day of said period came, year (started on Sept 1999 and ended on feb 16 2000). That Price and the
innodata informed them of the termination of their services. Employees filed a others were not illegally dismissed for their employment was merely
complaint for illegal dismissal. They argued that they are regular employees due to terminated. That Price et al are estopped from a position contrary to the
the fact that their work was necessary and desirable for the business of Innodata. SC contracts which they signed knowingly, voluntarily and willfully.
held that the fixed-term contract was invalid. An employee may be considered a  LA ruled in favor of Price. That their jobs were necessary, desirable, and
regular employee if his work was necessary and desirable to the usual business of indispensable to the data processing and encoding business of INNODATA.
the employer or if s/he already worked for more than a year. In this case the court They were entitled to security of tenure and thus should only be terminated
found that their job as formatters was necessary for the data encoding business of for just or authorized cause.
Innodata. Court also found that the fixed term in the contract was a way for Innodata  NLRC reversed. They were not regular employees but fixed-term
to deprive the employees of security of tenure. SC held that they are regular employees. The determining factor of such contracts(fixed term contracts) is
employees, entitled to security of tenure and could not be removed except for just or not the duty of the employee but the day certain agreed upon by the parties
authorized cause. Entitled to backwages and separation pay, instead of reinstatement for the commencement and termination of the employment relationship.
since Innodata ceased its operations already. Price entered into the contract freely hence there was no illegal dismissal.
 CA sustained NLRC ruling. Only employed for a year and for a project called
DOCTRINE:
earthweb. That there was no showing that they entered into the contracts
 Regular employees:
unknowingly and involuntarily or that innodata forced them into it.
o (1) those who are engaged to perform activities which are ISSUES/HELD:
necessary or desirable in the usual business or trade of the 1. Whether petitioners were hired by INNODATA under valid fixed-term employment
employer regardless of length of their employment contracts. NO
o (2) those who were initially hired as casual employees, but have
rendered at least 1 year service, whether continuous or broken, RATIO:
with respect to the activity in which they are employed. 1. NO. They were regular employees of Innodata who could not be dismissed
 test to determine whether an employment should be considered regular or except for just or authorized cause.
non-regular is the reasonable connection between the particular activity  employment status of a person is defined and prescribed by law and not by
performed by the employee in relation to the usual business or trade of the what the parties say it should be. A contract of employment is impressed
employer with public interest such that labor contracts must yield to the common good.

 Regular employment has been defined by Article 280 of the Labor Code
FACTS:
 Innodata, a company that deals with data encoding and data conversion o Art. 280. Regular and Casual Employment. The provisions of
hired the Price and the others as formatters. written agreement to the contrary notwithstanding and regardless of
 Under the employment contract they were hired for a fixed period (one year) the oral agreement of the parties, an employment shall be deemed
which would end on Feb 16, 2000 to be regular where the employee has been engaged to perform
activities which are usually necessary or desirable in the usual
 On Feb 16, 2000 the HR Manager informed them of their last day of work
business or trade of the employer, except where the employment
due to the end of their contract
has been fixed for a specific project or undertaking the completion
 Price et al filed a complaint for illegal dismissal and damages against or termination of which has been determined at the time of
Innodata. That they should be considered regular employees since their engagement of the employee or where the work or services to be
positions as formatters were necessary and desirable to the usual performed is seasonal in nature and employment is for the duration
business of Innodata. That they could not be considered project employees of the season.

1 An employment shall be deemed to be casual if it is not covered by
CHERRY J. PRICE, STEPHANIE G. DOMINGO AND LOLITA the preceding paragraph. Provided, That, any employee who has
ARBILERA, v. INNODATA PHILS. INC.,/ INNODATA rendered at least one year of service, whether such service is
CORPORATION, LEO RABANG AND JANE NAVARETTE continuous or broken, shall be considered a regular employee with

1

respect to the activity in which he is employed and his employment down as being contrary to law, morals, good customs, public order and
shall continue while such activity exists public policy

 ‘Regular employees:  In this case, the court is convinced that the term was meant only to
circumvent the rights of Price et al to security of tenure and is therefore
o (1) those who are engaged to perform activities which are invalid. The contracts of employment were ambiguous and tampered with
necessary or desirable in the usual business or trade of the
employer regardless of length of their employment o The date of their employment was originally Feb 17, 1999 but was
crossed out and replaced with sept. 6 1999. Innodata alleged that
o (2) those who were initially hired as casual employees, but have the original project for which they were hired in Feb, was completed
rendered at least 1 year service, whether continuous or broken, earlier than expected and that the sept employment was for a new
with respect to the activity in which they are employed. project.
 Price et al belong to the first type. o SC: if these were truly fixed term contracts then a change in the
term or period would already constitute a novation of the original
 test to determine whether an employment should be considered regular or contract.
non-regular is the reasonable connection between the particular activity
performed by the employee in relation to the usual business or trade of the  Innodata wanted to make it appear that petitioners worked for less than a
employer year to preclude them from gaining regular status. But the SC already ruled
that they are regular employees under the first type of regular employees.
 they were hired as formatters. The primary business of Innodata is data Even if we assume otherwise, the fact that the contract of employment was
encoding, and the formatting of the data entered into the computers is an ambiguous it would be construed strictly against the party who prepared it. \
essential part of the process of data encoding. They make it easier for
clients to understand the data. The work performed by petitioners was  Innodata also argued that they are project employees
necessary or desirable.
o Project employees: those workers hired (1)for a specific project or
 But there are also forms of employment which although necessary and undertaking and wherein (2) the completion or termination of such
desirable, and exceed one year would still not result in regular employment. project has been determined at the time of the engagement of the
Fixed-term employment contracts: seasonal or for specific projects with employee.
predetermined dates of completion AND wherein parties by free choice have
assigned a specific date of termination o SC; Innodata failed to name nor describe the project. Also there
was no evidence to prove that such project has already been
 The decisive determinant in term employment is the day certain agreed completed or terminated to justify dismissal.
upon by the parties for the commencement and termination of their
employment relationship, day certain: that which must necessarily come,  SC also noted the provisions in the contract wherein petitioners have no
although it may not be known when (ex. Seasonal employment and right at all to expect security of tenure, even for the supposedly one-year
employment for a particular project) period of employment provided in their contracts, because they can still be
pre-terminated (1) upon the completion of an unspecified project; or (2) with
 Fixed-term contracts: exception rather than the general rule. or without cause, for as long as they are given a three-day notice. Such
contract provisions are repugnant to the basic tenet in labor law that no
 Some examples wherein a fixed-term is essential and natural: overseas employee may be terminated except for just or authorized cause
employment contracts; dean, assistant dean, college secretary, principal,
and other administrative offices in educational institutions; certain company o This would be against the state policy to assure workers of security
officials may be elected for what would amount to fixed periods, they may of tenure and free them from the bondage of uncertainty of tenure
lose their jobs as president, executive vice-president or vice president, etc. woven by some employers into their contracts of employment. This
because the stockholders or the board of directors for one reason or another was the purpose of Art. 280 of the Labor Code
did not re-elect them
 Petitioners have security of tenure. Illegally dismissed employees are
 In Brent School v. Zamora: the court issued an admonition that where, from entitled to reinstatement without loss of seniority rights and other privileges
the circumstances, it is apparent that the period was imposed to preclude with full backwages. In this case since Innodata ceased its operations,
the acquisition of tenurial security by the employee, then it should be struck separation pay equivalent to 1 month pay for every year of service instead.

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and absolved SMC from liability. on the other hand. G. Case is complaint. August 3. FACTS: On October 16. Maliksi was terminated on that date. SMC SUMMARY: alleged that PHILSSEC exercised exclusive managerial prerogative over the Maliksi filed a complaint against SMC and PHILSSEC to compel the companies to complainant as to hiring. Guarin v. National Labor Relations Commission. G. SMC v. 86010.R. DOCTRINE: When the activity/job that the employee does is necessary/desirable to the business CA: Affirmed NLRC decision in toto. asserting that PHILSSEC control over his work. the Court took judicial notice of the fact that both Lipercon and  with Skillpower. They alleged that PHILSSEC supervisors controlled Maliksi’s work. G.pay. a span of two to four years to do the same type of work conclusively shows the Moreover. January 29. No. therefore not his employers. dismissal and most importantly. Court of Appeals. It must also be considered that he was Maliksi considered himself as a regular employee of SMC-Magnolia. National Labor Relations Commission. Petition of SMC denied. payment of salary. 110731. Palmeria v. employee of SMC when he entered into SMC’s computerization project as part of the PHILSSEC project complement. alleging that hired and re-hired by SMC to perform administrative and clerical work that was Lipercon. 254 SCRA 294. 247 SCRA 57. 7mos. SMC was interested only in the result of the work specified in is an independent contractor. 113290-91. SMC denied liability. 111501. later amending it to include a ISSUES/HELD: charge of illegal dismissal due to his termination 14 days after filing the original WON Maliksi is a regular employee of SMC—YES. October 3. where December 6. and therefore. His dismissal was illegal as there was no cause of action against him. 13 th month. 114952. and Phil. them as regular employees evidences bad faith on the part of the principal/employer. holding Maliksi as a regular employee.. the recognize him as a regular employee.The Petition for Review on Certiorari is GRANTED his salary was paid by the agency and he reported directly to PHILSSEC. as it was catering to servicing computer systems and 1996. Maliksi was one of those Magnolia Dairy Products v. such contracts with SMC under Lipercon and Skillpower. 3 . Inc. Having served SMC for an aggregate period of more than three (3) years  Overall total: 3 years. Maliksi should be considered as SMC’s regular employee. 153660. Rafael Maliksi filed a complaint against SMC-Magnolia Division Hence. March 5.R. 142001. Coca-Cola Bottlers Phils. G. NLRC: Reversed LA decision.R. Maliksi was already a regular employee is considered as a regular employee. NLRC and Rafael Maliksi SMC. 403 SCRA 699. stating that hiring and re-hiring in the contract but not as to the means and methods of accomplishing the same. No. According to him. No. 1989 to October 1990 with SMC-Magnolia that an employer-employee relationship existed between SMC’s subsidiaries and Finance as accounting clerk Maliksi. the appeal to the SC. The employment record of Maliksi showed that he rendered service:  with Lipercon Services from April 1981 to February 1982 (10 mos. alleged that it entered in a contract with PHILSSEC. 463 SCRA 298. 252 SCRA 483. 1996. stating that on account of his past employment of the employer that the employee is hired and rehired over a period of time. No. sep. National Labor Relations Commission. National Labor Relations Commission.R. Bantolino v. 2003. July 26. June 10. through employment contracts with these two labor-only contractors. accorded due process. 1990. one of which was Maliksi. he alleged that he was not 2 .  with Skillpower Services from October 1988-1989 (1 year) with SMC- Magnolia Finance as accounting clerk. 178 SCRA 267. and that the act of hiring and re-hiring the petitioners over a period of time without considering LA: Maliksi was a regular employee of PHILSSEC. necessity of petitioners’ service to the respondent company’s business.R. In finding for Maliksi. Furthermore. No. PHILSSEC utilized 3 computer programmers and the rest were data encoders. Skillpower and PHILSSEC were all labor-only contractors and were necessary to SMC’s business on a daily basis. Shoppers Gain Supermart v. and neither was his dismissal reported to DOLE. 1989. the latter undertook to set up the computerization of the provincial sales reporting By: Rose Ann system of Magnolia. July 14. computerization.) as RATIO: budget head assigned to SMC-Beer Division. The computerization project was completed on October 1990. 259 SCRA 411. Also. G. According to them. 2006 || Garcia. from July 1983-April 1985 as accounting clerk assigned Skillpower were already declared to be labor-only contractors from previous cases2 in to SMC-Magnolia Division the Supreme Court. SC found for Maliksi. G.R. he was dismissed in retaliation for his filing of the complaint for regularization in service. employed by PHILSSEC to provide manual controlling of data during the G. programs for business enterprise.R. Atty’s fees and other monetary awards. PHILSSEC has substantial capital of its own. remanded to LA for computation of backwages. 1996. No. 1995. To carry out the task. 2005. J. Philippine Fuji Xerox Corporation v. Nos. Lipercon. Madriaga v. The Court gave due deference to the factual findings of both the NLRC and the CA  With PHILSSEC from Oct. PHILSSEC denied liability. Software Services and Education Center (PHILSSEC) to compel both companies to recognize him as a regular employee.

Court of Appeals. necessary and indispensable to the usual business or computerization program to be considered a regular employee of SMC at the time. Moreover. DOCTRINE: (4-fold Test) A project employee is one (1) whose employment has been fixed for a specific The Court also cited the case of Madriaga v. In that case.). Therefore. TNS hiring and re-hiring the petitioners over a period of time without considering them as filed termination reports. Is engaged primarily in the business of marketing research and nature and necessary to the development of SMC’s business (ie. NLRC held that they have become regular PHILSSEC. v. Lourdes Fernandez. TNS informed them not to report to work anymore since they were being pulled out from their projects.  TNS hires persons as field personnel on project-to-project basis whose functions are: 1) to gather data on consumer goods. Posting manually information. At the beginning of their petitioners’ service to the respondent company’s business. and b) to submit the gathered data to the company for evidences bad faith on the part of the employer. as opposed to intermittently. contrary to morals. they signed project employment contracts and upon termination. through continuous bid to circumvent labor laws. comparing manual totals with the computer generated totals. which involved SMC. August 2008 – TNS met with its Field Interviewers (FI) where they were informed Nov. Manalo et al. it conducts public sureys about consumer the daily account balances in the worksheet. SC affirmed. everytime their contract ends. trade of the employer. in this case. project was for the purpose of circumventing labor laws. TNS files with the DOLE the corresponding termination report. morals. project or undertaking the completion or termination of which has been Lipercon and Skillpower. Where it is apparent that periods have been imposed to preclude the acquisition of Starting 1996 and subsequently on various dates – petitioners Jeanette Manalo. NLRC. They were repeatedly hired under this scheme by TNS from regular employees evidences bad faith on the part of the principal/employer. law. SMC did not make any insinuation that the services of Maliksi with SMC employees. any person who willfully causes loss or injury to another in a manner that is  They were made to sign a project to project employment contract. Upon filing a complaint for regularization. products. agreement or practice should be struck Vilma Barrios.As found in the case of Bustamante v. Once a project or work pool employee has been (1) continuously. rehired by the same employer for the same tasks or nature of tasks. SMC itself admits that Maliksi’s work under the computerization program did "not require the operation of a computer system.” Given such admission. tenurial security by the employee. and that the act of hiring and re-hiring personal interviews.  Likewise. of the season AND (2) whose termination of employment contract is reported to only contracting with respect to Maliksi. merchandise and service of its clients. Old FIs would by: Paola 4 . and such other products as requested by clients. evaluation and/or analysis. was service to be performed is seasonal in nature and the employment is for the duration inclined to believe that these two contracting agencies were also involved in labor. They It was also found by the Court that.  However. and Leila Taino were hired by TNS as field down as contrary to public policy. hiring and re-hiring in a span of two SUMMARY: to four years to do the same type of work conclusively shows the necessity of Petitioners were hired as field personnel by TNS. fitting the daily totals into the monthly goods. etc. except for the computerization project of filed a complaint for illegal dismissal. In point of personnel. was project-related such that an employment contract with Lipercon and Skillpower was necessary. | Mendoza J that old FIS would be pulled out eventually and replaced with new Fis. FACTS: Furthermore. SMC’s act of juggling Maliksi from one employment contract to another was a merchandise. Maliksi’s placement in the cannot co-exist with each other. and that the act of employment. then the employee must be deemed a regular employee. telephone interviews and/or such other modes akin to workers over a period of time without considering them as regular employees the foregoing. the Court held that that the finding DOLE everytime the project he was engaged in is completed. SC also found that there was no need for Maliksi to be employed under PHILSSEC’s and (2) these tasks are vital. commodities. 14. TNS Phils Inc. good customs or public order. and therefore the Court. 1996-2008. such as the software program Project employment and probationary employment are distinct from one another and being developed by PHILSSEC. the policy. As a market research facility. Maliksi’s work under the PHILSSEC project was mainly administrative in TNS Phils Inc. totals. the Court found that Lipercon and Skillpower determined at the time of the engagement of the employee or where the work or were involved in labor-only contracting. of the NLRC and the CA as to SMC’s resorting to labor-only contracting is entitled to consideration in its full weight. good customs or public policy shall be liable for the damage. they were also assigned officed-based tasks not on a per project basis that required them to be in the office from 9 am to 6 pm (sometimes beyond) with no corresponding overtime pay and which were not reported to DOLE. 2014.

Pursuant to this. One of the terms and conditions in the said contract stated that: ISSUES/HELD: 1. v. was hired for a specific undertaking or in fact tasked to perform functions vital. without any corresponding remuneration. Though there is a rule that provisions of  TNS claims that NLRC acnhored its decision on the supposed lack of contract should be harmonzed. firmly manifested the necessity and desirability of their work in the usual business of  Case records show that the last termination report filed by TNS was in Nov. Under this provision TNS can extend or pre-terminate seasonal in nature and the employment is for the duration of the season. 30. 2008 another and cannot co-exist with each other. one whose employment has been fixed for a specific project or undertaking the completion or termination of which has been determined at the time of the The last phrase refers to probationary employment and runs counter to the very engagement of the employee or where the work or service to be performed is nature of project employment. 2007. namely Project ___________ which is expected to be finished on _____________. employee has been: (1) continuously.  Contract is therefore highly doubtful. Additionally. then the agreed with full understanding that the contracts they signed would lapse upon employee must be deemed a regular employee completion of projects stated in their contracts. the contract not because of the project but because of the employee’s ability to qualify a project employee is one whose termination of his employment contract is reported or not for the job. Further. and (2) these tasks are vital. 5 . harmonization is impossible because project compliance of TNS with the termination report requirement. it is vital in determining whether he or undertaking and its completion was predetermined. 20. Petitioners are deemed to project starting ____________ your employment will be for the have become regular employees duration of said project of the Company. CONTRACT SIGNED BY PETITIONERS ESSENTIALLY NOT FOR PROJECT accomplished project. BUT petitioners assigned office-based tasks from 9:00 o’clock in the morning up to 6:00 o’clock in the were allowed to continue working even after Nov. NLRC. THEY HAVE BECOME REGULAR EMPLOYEES: complete the project or because we need further time to determine Article 280 of the Labor Code. then they are considered to have become have been pulled out from their asignment and were not being lined up for any regular employees. II. clearly defined a project employee as your competence on the job. the employment was fixed for a specific project controlling determinant of project employment. continuing or new projects because TNS no longer needed their services. the Court held that once a project or work pool complaint for regularization. the period indicated in that report. They were required to sign project-to-project employment contracts. at the earliest. On its MR to employment and probationary employment are distinct from one NLRC – TNS attached its belated termination report dated Nov. NLRC – Initially regular employees but subsequently became regular. Dismissal is Petitioners’ successive re-engagement in order to perform the same kind of work therefore illegal .  No project contracts were adduced by TNS. 2007. CA – Project employees. petitioners then filed with the Labor Arbiter complaint for regularization against TNS. RATIO: The Company shall have the option of renewing or extending the period of this agreement for such time as it may be necessary to I. rehired by the same employer for the same tasks or nature of tasks.the LA required the parties to submit their position papers. as opposed to intermittently. 30 2007. Their repeated hiring by TNS does not make them regular because determining factor Althoughit is true that the length of time of the employee’s service is not a was whether. Undisputed also is the fact that the petitioners were 2007 indicating that project ended on Nov. Jr. NLRC is therefore correct in saying that absent proof that subsequent employment of petitioners were on Oct 21. Absent proof that they were  TNS’s use of project empolyement scheme circumvented the law and hired on a project-to-project basis after that date petitioners are precluded petitioners from retaiing regular status despite performing exacty considered to have become regular employees after Nov. to the DOLE everytime the project for which he was engaged has been completed. The need for your services being determinable and for a specific WON petitioners were still project employees of TNS – No. LA – Project Employees – petitioners at the time of their employment knew and necessary and indispensable to the usual business or trade of the employer. be assigned only to seasonal “ad hoc”projects. AS TO THE CONTINUOUS REHIRING OF PETITIONERS: Petitioners filed a complaint for illegal dismissal which was consolidated with the In Maraguinot. CA stated that the repeated re-hiring of petitioners for EMPLOYMENT at least one (1) year did not ipso facto convert their status to regular employees. TNS as a market research facility. 30. evening. the same function which were vital and necessary to the business of TNS over several years. 2008 – TNS informed petitioners to not report to work anymore because they a project-to-project basis. despite this belated termination reports TNS failed to show corresponding project employment contracts of petitioners covering Oct. at the time of hiring.  HOWEVER. as amended. necessary and indispensable to the usual business or trade of the employer. and that a corresponding termination report was made to DOLE for every III. 2008 .

undertaking the completion or termination of which has been determined at the time of (c) Plugging of station promo. The next day to finality of this decision. NLRC: reversed LA stating that the respondents were regular employees with respect By: Cate Alegre to the particular activity to which they were assigned until it ceased to exist and thus entitled to separation pay. and the contrary notwithstanding and regardless of the oral agreement of the parties. Respondents through their counsel wrote a letter to Alino requesting that they be recalled back to work. admitting non-payment of benefits but didn’t mention the request to be allowed to go back to work. shall be considered a regular employee with 4) Acting as Cameramen respect to the activity in which he is employed and his employment shall continue while such activity actually exist. – The provisions of written agreement to (a) Responsible for the airing of local commercials. and whether such service is continuous or broken. On July 19. their services may be terminated only for just or authorized causes FACTS:  The nature of employment is determined by law. A project employee performs activities that may or may not be usually necessary or desirable in the usual business or trade of the RATIO: employer. respondents were summoned to the office of the GMA Area  Petitioners are therefore entitled to 1) backwages from time of dismissal up Manager (Alino) and were made to explain why they filed the complaint. GMA’s Engineering  Petitioners are deemd to have becomer regular employees of TNS Manager (Villacastin) confronted the respondents. 2) Illegal Dismissal. 2009. On October 8. GMA denies this. An employment shall be deemed to be casual if it is not covered by the preceding (b) Warming up of generator. On August 9. Regular and casual employment. Respondents filed a complaint for illegal dismissal against GMA claiming they are CA: denied GMA’s Petition for Certiorari regular employees. WON respondents are regular employees and thus entitled to separation DOCTRINE: pay– YES. 2009. paragraph: Provided. GMA’s head of Personnel and Labor Relations (Bustria) replied. They are also entitled to 13 th month pay. respondents filed an amended complaint raising the following: 1) Unfair Labor Practice. (c) Filling of oil.YES employer’s usual business or trade. and 2) separation pay they were barred from entering and reporting for work without any notice stating the reasons. terminated when the project ends or is completed. Geoffrey Arias et al month pay November 27. SC ruled that respondents are regular employees. Carlos Pabriga. LA: dismissed the complaint for illegal dismissal and ULP but held GMA liable for 13 th GMA Network v. forced to file a complaint against GMA before the NLRC assailing theur respective IN SUM: employment circumstances. an (b) Logging/monitoring of national commercials (satellite) employment shall be deemed to be regular where the employee has been engaged to 2) Acting as Transmitter/VTR men: perform activities which are usually necessary or desirable in the usual business or trade (a) Prepare tapes for local airing. ISSUES/HELD: 1. Respondents sent another letter to Bustria reiterating the same but this was ignored. fuel. Therefore. J. (a) Checking of equipment. the engagement of the employee or where the work or services to be performed is (d) Logging of transmitter reading. WON respondents were entitled to night shift differential pay .  TNS not being able to prove legality of their dismissal – it is liable for illegal dismissal. except where the employment has been fixed for a specific project or (b) Actual airing of commercials. That. and water in radiator. and 3) Damages and Attorney’s fees. respondents were from Article 2804 of the Labor Code which also speaks of casual and seasonal 3 1) Manning of Technical Operations Center: 4 ARTICLE 280. night shift SUMMARY: differential and service incentive leave pay. any employee who has rendered at least one year of service. The services of the project employees are legally and automatically 1. Regular employment and project employment are taken tasks3. 1999 due to miserable working conditions. 6 . They are regular employees and entitled to security of tenure. (e) In case of power failure. 3) Acting as Maintenance staff. of the employer. Upon receipt of the complaint. regardless of any contract Respondents were employed by GMA Network as TV Technicians performing various expressing otherwise. and seasonal in nature and employment is for the duration of the season. 2013 | Leonardo-De Castro. start up generator set to resume program. Regular Employees and were illegally dismissed A regular employee performs activities that are usually necessary or desirable in the 2.

The 5th classification (fixed term employment) is not expressly mentioned in the Code but in Brent School v. The decisive  Employees performing activities which are usually necessary or desirable in the determinant in fixed-term employment is not the activity that the employee is employer’s usual business or trade can either be regular. and acting as cameramen equivalent to one (1) month pay for every year of service. necessary or desirable in the employer’s usual business or trade are casual  Indications or criteria under which "term employment" cannot be said to be in employees. continuously rehired them. There is a continuous rehiring of project employees even after cessation of a project 2. namely: Security of Tenure. acting as  Since respondents were illegally dismissed they are entitled to separation pay transmitter/VTR men. or "specific project or undertaking.” The Court observed that Pabriga and his co- is not within the regular business of the corporation. are not undertakings separate or distinct from the business of a broadcasting  They are entitled to night shift differential ((10%) of his regular wage for each company. is unjustifiable. Respondents are entitled to Separation Pay and Night Shift Differential o The manning of the operations center to air commercials. Pabriga and his co- employer is in constant need of the services of the specified employee. 2. without end. but which is o To prove the fixed term contracts. GMA7 presented cash disbursement distinct and separate. Both elements are present in this case. and identifiable as such. the regular or usual business of the employer company. maintaining the equipment.  A project employee may acquire the status of a regular employee when the following concur: 1. employment. as a general rule. those performing activities not usually employment relationship to commence and terminate. 20 of the Department of Labor and Employment. Zamora. designated in employment contracts and reflected in vouchers. The principal test is brought to bear upon the employee and absent any other circumstances whether or not the "project employees" were assigned to carry out a vitiating his consent. hour of work performed between ten o’clock in the evening and six o’clock in the o Even if Pabriga and his co-workers are to be considered as project morning) but the computation will be determined by the Regional Arbitration employees. 7 . as refusal o The purpose of this requirement is to delineate whether or not the would entail not getting paid for their services. workers were in no position to refuse to sign these vouchers. project or seasonal called upon to perform but the day certain agreed upon by the parties for the employees. Plainly. business of the employer company and are not identifiably distinct or separate from the other undertakings of the company. Based on jurisprudence. o GMA did not report the completion of its projects and the dismissal of Pabriga and his co-workers in its finished projects to the nearest Public Employment Office as required by Policy Instruction No. from the other vouchers signed by Pabriga and his co-workers. they attained regular employment status because GMA Branch. The reason for the distinction is found in Article 279 of the LC on circumvention of the law on security of tenure. the failure of an employer to report to the nearest Public Employment Office the termination of its workers’ services every time a project or a phase is completed indicates that the workers are not project employees. duress. The tasks performed by the alleged project employee are vital. workers as “pinch-hitters” cannot be considered to be on equal footing  AS APPLIED: the jobs of the respondents are clearly within the regular or usual as GMA in the negotiation of their employment contract. necessary and indispensable to the usual business or trade of the employer. or (2) a particular job or undertaking that merely hired as “pinch-hitters. each other on more or less equal terms with no moral dominance exercised o Project could either be (1) a particular job or undertaking that is within by the former or the latter." the duration (and scope) of which were 2) It satisfactorily appears that the employer and the employee dealt with specified at the time the employees were engaged for that project. or improper pressure being desirable in the usual business or trade of the employer. while. stating that they were undertakings of the company. o GMA’s practice of hiring and rehiring of workers on fixed terms. 1) The fixed period of employment was knowingly and voluntarily agreed  The activities of project employees may or may not be usually necessary or upon by the parties without any force. the Court said that it is a  GMA also can’t claim that they employed respondents on a fixed period allegedly contract which specifies that employment will last only for a definite period.

as Brent School filed MR. or stated otherwise. and signed a receipt containing the phrase “in full payment of o where the nature of the engagement is such that. present Article 280 of the Labor Code clearly appears to have been." to his former position without loss of seniority rights and with full presumption that undesirable consequences were never intended by a back wages. where it is indeed the expiration of the definite period of employment”.." seasonal or for a specific project. Brent appealed to the Office of the President. he accepted the employee himself who insists upon a period. for a fixed period of 5 years. he contested the Held: No. employment. He has acquired the status of a regular employee because his employer the duration of his engagement. some three  But the period should be upheld where. etc. Considered the report as an application for clearance to terminate employers' using it as a means to prevent their employees from employment (not a report of termination). and it was not meant to circumvent the security of tenure of Alegre. 1976. or amount of P3. No. Hence. a definite date of termination is a sine qua non. morals.177. 8. he could not be literal interpretation should be eschewed or avoided. of 5 years (July 18. Inc. to July 17. a reasonable interpretation. Regional Director. mischievous. but would also appear to restrict. among other circumstances: months before the expiration of the 5-yr. more relevantly. The law must be given removed except for valid cause. 48494| February By: Ian Issue: WON Alegre is a regular employee despite the fixed period of employment stipulated in the employment contract. On April 20. 1971-July 17. His services were necessary and desirable in the usual business of his fixed period would be an anomaly." and. refused to give such clearance or. and injurious consequences. quite oddly.affirmed Regional Director. The Director pronounced "the ground relied upon by the respondent (Brent) susceptible is favored. to preclude absurdity in its application. ZAMORA Office of the President. When he was about to be terminated. and his employment had lasted for 5 years.g. o the reason for the law does not exist. of the Bureau of Private Schools. and reasonable distinctions. and instead required the reinstatement of Alegre. He argued that despite the stipulation of the fixed period: 280 of the Labor Code. 1976 as full payment of contract. Inc. was voluntarily entered into by Alegre. evil. 1976. BRENT SCHOOL vs. legislative measure. under a narrow and literal interpretation.  As it is evident from even only the three examples already given that Article Alegre protested his termination. it contract. On May 26. 442. G. . secure in his tenure. without employer.denied appeal for lack of merit and upheld SOLE. as prohibited by Circular No. 1976) at P20K/yr.D. SOLE. not only fails to exhaust the gamut of employment contracts to which the lack of a a. e.71.  The entire purpose behind the development of legislation culminating in the series of 1969.R. for a fixed period or disregarded as contrary to public policy. and that a construction of which the statute is fairly .. wrongful. reminding him of his termination by July by reason of “completion of contract. the clause in said article indiscriminately and completely ruling out all written or oral agreements conflicting with the 8 . The SC ruled that the employment contract should Ratio: The law weighed the Labor Code and the general right of parties to freely be followed because the parties have stipulated the fixed term during its execution. he was given a report o no such intent to circumvent the law is shown. forthcoming termination claiming that his services were necessary and desirable in the usual business of the employer and in the course of 5 years he already acquired the status of a regular employee. it logically follows that such a employment already lasted for five years.ruled in favor of Alegre:  Outlawing the whole concept of term employment and subverting to boot the principle of freedom of contract to remedy the evil of . (as) not undefensible. which will avoid all objectionable. Denied by Regional Director and forwarded the case to the already observed. . Alegre was engaged as athletic director by Brent School. Summary: Doroteo R. At the investigation of the Labor Conciliator of the report of termination. without being services for the period May 16. sanctioned by P. they should be struck down Facts: Alegre was engaged as athletic director by Brent School.  There can of course be no quarrel with the proposition that where from the circumstances it is apparent that periods have been imposed to preclude acquisition of tenurial security by the employee. as a "permanent  It is a salutary principle in statutory construction that there exists a valid employee. the right of an employee to freely stipulate with his b. to prevent circumvention of the employee's right to be Secretary of Labor for review. and accepting the obtaining security of tenure is like cutting off the nose to spite the face recommendation of the Labor Conciliator. curing a headache by lopping off the head. in terminating the services of the complainant (Alegre) .

duress or SUMMARY: improper pressure being brought to bear upon the employee and absent any Judy Daquital and the other petitioners sue LM Camus Engineering Corporation for other circumstances vitiating his consent. Ricardo Digamon. On to purposes other than those explicitly stated by its framers.  Daquital goes to the SC through a petition for review. filed a complaint for illegal dismissal and non-payment of  1975. The NLRC affirmed. Jonathan Ayaay.Termination Pay law and New Civil Code  Petitioners (Judy Dacuital/Daquital. Helyto Reyes. Eugenio Mondano Jr. Upon its termination. which are usually necessary or desirable in the usual business or trade of Most did not comply. both parties to the employment relationship were free to renew it or to let it lapse. entered into precisely to circumvent security of tenure. prior employee was not informed of the nature and duration of their employment. Since they were regular employees. Raulito Palad. adding reinstatement the latter. NLRC affirmed the validity of fixed execution based on its petition with the CA and the reinstatement of some employment. Evaristo Vigori. pointless and arbitrary. vs. holding that Daquital et al. The terms with no moral dominance whatever being exercised by the former over LA held that they were illegally dismissed. or where it satisfactorily appears illegal dismissal. Mariano Morales. (NCC) applicable and both recognized the validity of term employment/ Roberto Ruance. when the contract was executed. Eulogio Tutor. the employer”  Daquital et al. the CA found for LMCEC.) “whether or not a voluntary agreement on a fixed term or period  January – March. They were terminated.case of Biboso vs. the NCC continues to recognize the freedom to contract of parties. unjust in its effects and apt to lead to absurd and were presumed to be regular employees since the employment contract did not show unintended consequences. concept of regular employment as defined therein should be construed to Daquital v.. 319: Corporation. without any force. Epondol. the J. it was perfectly valid to stipulate a Garcia. to the Labor Code. employees involved. Prisco. and Restituto Tapanan) are welders. Joseph Porcadilla. service implying the validity of fixed term employment. promulgated in 1974. Nonito freedom to contract in the case of NCC. J. that they were informed of their employment’s nature and duration.PD 850 amended the Labor Code but it still contained provisions monetary benefits (holiday pay. – NO. holding that the dismissal was legal. "What is decisive is that petitioners (teachers) were well aware all the  Daquital et al. time that their tenure was for a limited duration. rest day. Prior to the Termination Pay Law. FACTS:  1971 (contract was executed). Aris Hence.BP 130 amended the Labor Code following PD 850 this time  Meanwhile.  1977. Roy Garcia. and mechanical employees of LMCEC (LM Camus Engineering  1974. incentive leave pay. school held that fixed period employment was valid  NLRC modified – Ordered reinstatement with backwages. Felipe Erilla. To surrender their would be valid where the employee "has been engaged to perform activities IDs and ATM cards. they were entitled to security of tenure. Camus refer to the substantive evil that the Code itself has singled out: agreements September 1. The Code of Commerce was repealed by the NCC.Labor Code recognized fixed employment under Art. Alberto the Code of Commerce. DOCTRINE: Non-presentation of an employment contract raises the presumption that an Note that in employment contract in the case at bar was executed in 1971. and there was no showing that the company filed the required termination reports each time an Some history: employment was terminated due to a project’s completion. premium pay for holiday. the SC reversed the CA. Moved for execution of the NLRC decision. holding that the dismissal was valid eliminating all together the reference to employment without a definite and legal. 2001 – LMCEC required Daquital et al. for terminating them after they did not comply with the company’s that the employer and employee dealt with each other on more or less equal order to surrender their Ids and ATM cards and execute contracts of employment. Randolf Baludo. the law would be made to apply with backwages. The CA reversed the NLRC.  1981. period. pipefitters. and 13th month pay. ISSUES/HELD: 1) WON the petitioners are project employees. Walter Thompson Co. Note that all these amendments are being applied. Rodelo Susper. and ordered them to execute contracts of employment. consistent with civil law and labor law. 2010 | Nachura. they are regular employees. tinsmiths. Victorias Milling also pertain to teachers in private  LA sustained Petitioners. The SC engaged in a historical survey on how fixed period employment vis-à- vis freedom to contract has been treated under our laws/jurisprudence.  NLRC granted LMCEC’s motion. it thus becomes Daquital’s petition for review."  LMCEC filed a Clarificatory Motion and Opposition to the motion for In 1983. fixed period. [TOPICAL] 2) WON the dismissal was legal. setting aside the backwages award. It should have no By: Jadd application to instances where a fixed period of employment was agreed upon knowingly and voluntarily by the parties. – NO 9 . Unless thus limited in its purview. Melvin Pepito.

Camus is not personally liable as LMCEC’s president because there is Co. A specific provision of law makes them liable. Ramirez.) bad faith or gross negligence in directing its affairs. 2. raising the presumption that they were other employees were also informed. They assent to a corporation’s patently unlawful act. (Citing Goma v. (Court cited no authorities for this statement. Pamplona 2) The dismissal was illegal. Effect of presumption – presumed to be regular employees. LMCEC only presented Daquital’s employment contract. 2008) A) Regular employees enjoy security of tenure so they can only be B) Employees working under different employment contracts for several dismissed: years do not automatically become regular employees.) determining the nature of employment. trustees. 5) WON Camus is personally liable as the President of the corporation. or officers G) It is presumed that employees were not informed of the nature and (Citing Lowe v. can be either project or regular employees. Rationale – Length of service is not a controlling factor in 2) Upon compliance with due process (notice and hearing. work pool members decision. project employees at the beginning of their employment. 20068) 3. its burden of proving the dismissal’s validity with clear. Possible basis: In illegal dismissal cases. CA. (Citing their written objection to the issuance of such. the employer has the a conflict of interest resulting in damages to the corporation. 3) WON backwages should be computed from unjust dismissal up to actual terminated due to a project’s completion. not project employees. The others also had regular employees. because the 4. (2) Serves the interest of justice. Visca. Pamplona Plantation. or when there is 1. accurate. are regular employees. 2008) 4) The SC is not barred from ordering the NLRC decision’s modification. – NO 2. Thus. Ramirez. (Citing Hanjin Heavy Industries and Construction 5) No. The duration of the employment was not even specified. termination reports to the nearest public office every time employment is 10 . 2006) 3) Backwages should be computed from unjust dismissal until actual C) Possible rationale for rehiring – Natural consequence that experienced reinstatement to the former position. v. or (1) assigned to carry out a specific project or undertaking. 1) For just or authorized cause. (Citing Abesco Construction B) In this case: LMCEC failed to prove the dismissal was legal. 2. or are guilty of employment contracts. Hanjin Heavy Industries and Construction Co. to the fact that a project was completed. D) In relation to work pool membership – Employees part of a work pool A) Basis: Exception to general rule that party that has not appealed is not from which a company draws workers for deployment to projects do not entitled to affirmative relief other than what was granted in the assailed become regular employees due to this factor alone. Additionally. A) Rule on personal liability of corporate directors. 2006) 1. (Citing Abesco Construction B) Rationale: (Citing Cocomangas Hotel Beach Resort v. v. bad faith. Substantive rights (such as the award of backwages in illegal F) A written employment contract may prove that an employee was dismissal cases) should not be prejudiced by a rigid and technical informed of the nature and scope of their work and their status as application of the rules. They consent to the issuance of watered down stocks or do not file 2. and Development Corporation v. or (2) the duration or scope of which was specified at the time the (3) Avoids dispensing piecemeal justice employee was engaged for the project. his personality is considered as distinct and separate from whether employees were properly informed of their status as LMCEC. Pamplona reinstatement to former position. 2008) and Development Corporation v. 1) Daquital et al. (Citing Goma v. 2009) – Attaches only when: duration of their employment due to the non-presentation of the 1. or specific provision of law making him personally 1. The employment contract did not show that Daquital was informed of the nature and duration of the employment. The Court has authority and discretion to review matters not E) Test of determining whether an employee is a project employee – otherwise assigned as errors on appeal if this: Whether the employee is (citing Goma v. There was no showing that LMCEC filed the required termination A) Definition of project employee – Assigned to project beginning and reports. H) DO 19 and Policy Instructions 20 require employers to submit 4. Basis: LC 279. project employees. construction workers are preferred. (Citing Hanjin Heavy Industries and 1. Ibañez. ending at determined or determinable times. stockholders. 5. – YES Plantation. They agree to hold themselves personally and solidarily liable. Plantation. 1. there is insufficient evidence to show that the employment’s nature and duration. – NO 1. or other persons. except as to Palad. consistent. 2008) no malice. Not presenting employment contracts raises a serious question of liable. Construction Co. Ibañez. 2008) 4) WON the LA’s decision attained finality because of the petitioners’ failure to I) In this case: appeal. RATIO: 3. and convincing evidence. Assuming the contract informed Daquital of the nature and duration employment contract did not show that they were informed of their of the employment. there was no showing that LMCEC filed the employment contracts but LMCEC’s lame excuse was that they requisite termination reports each time an employment was terminated due were similarly situated. v. 2008): (1) Completely and justly resolves a case. Ibañez.

6) Miscellaneous discussion on the other parties: A) Tapanan – Not a party to this case since he was not a complainant with the NLRC B) Reyes – Voluntarily withdrawn his case so not affected by this decision 11 . B) In this case: There is no showing of any of the circumstances that would make Camus personally liable.

1999. It argued that it hired Jamin on a project-to-project basis. ISSUES/HELD: NLRC dismissed the appeal. Consunji. ESTELITO JAMIN CA reversed the NLRC’s ruling and held that Jamin’s dismissal was illegal as it was without a valid cause and without due process. MR denied. hired respondent Estelito L. whether such service is continuous or broken. employee. J. WON Jamin was a regular employee and was thus illegally dismissed? Yes. rendered at least one year of service. It based its conclusion on: (1) Jamin’s April 18. It DOCTRINE: Jamin’s continuous rehiring and the nature of his work unmistakably further noted that DOLE Department Order No. Series of 1993. repeated and successive rehiring in DMCI’s various projects. DMCI’s business. LA Robles dismissed the complaint. DMCI denied liability. In addition to the schedule of projects (where he was assigned)  DMCI’s appeal was filed three days beyond the 15-day reglementary period submitted by DMCI to the labor arbiter. he alleged that he worked for three for filing an appeal. ng. which made him a regular employee. his work at DMCI was sufficient evidence of the necessity and indispensability of such services to terminated due to the completion of an on-going project. CONSUNJI. at the very least. 20. There was no need to furnish him a written  Jamin alleged that DMCI terminated his employment without a just and notice of the grounds for the dismissal and neither is there a need for a heari authorized cause. DM Consunji argues: FACTS:  CA misapplied the phrase “usually necessary or desirable in the usual On December 17. the Court explained that the proviso in the the start of his engagement in 1968 until the completion of its SM Manila project. Instructions No. against DMCI  Jamin was not dismissed for cause. completion of a phase of work. On appeal. ruling that he was a project employment. INC. D. This termination marked the end of his employment with DMCI as  While the report is an indicator of project he was not rehired again. 1968. that although Jamin started as a project employee. as noted by the CA. He maintains that even the NLRC noted that there assigned. finding that Jamin’s employment history with  DMCI failed to submit a report to the DOLE Regional Office everytime DMCI stands out for his continuous.M. 19. AND/OR DAVID M. With second paragraph of Article 280 of the Labor Code relates to casual the completion of the project. Jamin’s employment ceased to be coterminous with superseded DOLE Policy Instructions No.  He claimed that he rendered service to DMCI continuously for almost 31 Jamin argues for the dismissal of the petition: years. r Code does not apply to project employment or “employment which has been fixed for a specific project. the circumstances of his LA dismissed the complaint on the finding that Jamin is a regular employee. the completion of the project. Since his initial hiring. 2012 | Brion. as required by DOLE Policy company’s construction projects. Jamin as a laborer. (DMCI). a key indicator of regular employment. SM Manila project.” On March 20. The definition of a regular employee under Article 280 of theLabo number of times. repeated and successive rehiring in the Jamin’s employment was terminated. In March 1999. employment. 12 . Sometime in 1975. Jamin’s employment contract had been renewed a employee. has ripened into a regular dismissed the appeal. a construction company. his work at DMCI was terminated due to the completion of the  There is no work pool in DMCI’s roster of project employees. Consunji. CONSUNJI v. The CA opined that DMCI’s failure to submit the reports to the DOLE is an indication that Jamin was not a project employee. SC upheld the CA decision. provides that the termination specific projects when he was repeatedly re-hired for 31 years due to the demands of report is one of the indicators of project employment. He actually has no more job because of and its President/General Manager. ruling that Jamin was a project employee whose  Jamin disputes DMCI’s submission that it committed only few lapses in the services had been terminated due to the completion of the project where he was reportorial requirement. NLRC employment made it regular or. Jamin became a helper business or trade of the employer” when it considered Jamin a regular carpenter. it terminated Jamin’s employment.D. from  In a previous case. it is only one of several indicators under the rules. other DMCI projects  CA committed no error in nullifying the rulings of the labor arbiter and the NLRC. with several money claims. Inc. It opined dismissal. Jamin filed for illegal DMCI’s business or trade. David M. It alleged that it employees who shall be considered regular employees if they have submitted a report to DOLE everytime it terminated Jamin’s services. Jamin filed a complaint for illegal dismissal. 20. CA declared that: SUMMARY: Jamin was continuously hired and rehired by DMCI through successive  The pattern of Jamin’s rehiring and the recurring need for his services are employment contracts from 1968 to 1999.M. and (2) the nature of his By: Kiko work in the projects — he was performing activities necessary or desirable in DMCI’s construction business. The labor arbiter also noted that Jamin had to file an application if he were no termination reports with the DOLE Regional Office after every wanted to be re-hired. CA however found for Jamin.

1968 or for a total of 38 times (35 as shown by the schedule of projects submitted by DMCI to the labor arbiter and three more projects or engagements added by Jamin. there was an almost unbroken string of Jamin’s rehiring from December 17. considering that for almost 31 years. continuously and successively engaged Jamin’s services since he was hired on December 17. which he claimed DMCI intentionally did not include in its schedule). Jamin’s employment history with DMCI stands out for his continuous. the repeated re-hiring and continuing need for his services As there is no express finding of Mr. 1984 (the start of the IRRI Dorm IV project). but it when he was repeatedly re-hired for 31 years due to the demands of DMCI’s was filed only on March 22. necessary and indispensable to the usual business or trade of The deadline for the filing of the motion for reconsideration was on March 19. Nevertheless. 2010. is not liable projects or undertakings. The Liganza ruling squarely applies to this case. without granting. the for over eight (8) years have undeniably made him a regular employee. DMCI’s date of receipt of a copy of the decision). While the history of Jamin’s employment (schedule of projects) relied upon by DMCI shows a gap of almost four years in his employment for the period between July 28. 1982) and the New Istana Project (June 23. necessary and indispensable to the usual business or trade of the employer 13 . the issue of submission of its motion for reconsideration filed in due time.” SC deemed it proper to absolve him of liability in this case. a project or work pool employee must be deemed a regular employee once: (1) continuously. it RATIO: is vital in determining if the employee was hired for a specific undertaking or tasked to CA decision has become final and executory perform functions vital. RBL Shipyard Corporation. that the petitioner was initially hired for specific David M. 2010 or three days late. the gap was caused by the company’s omission of the three projects. As Jamin explains. but his continuous rehiring and the nature of his work unmistakably made him a regular employee. the Ritz Tower Project (July 29. Jamin’s employment ceased to be coterminous with specific projects (15 days from March 4. 1980 (the supposed completion date of the Midtown Plaza project) and June 13. Consunji. While length of time is not the controlling test for project employment. the submissions started Jamin was a regular employee and he was illegally dismissed only in 1992. He might not have been a member of a work pool as DMCI insisted that it does not maintain a work pool. DMCI’s President/General Manager. 2010 the employer. repeated and successive rehiring in the company’s construction projects. thereby rendering the CA decision final and executory. rehired by the same employer for the same tasks or nature of tasks (2) these tasks are vital. 1968 up to the termination of his employment on March 20. the tasks he performed as a carpenter were indisputably necessary and desirable in DMCI’s construction business. the Court held that “assuming. the motion for business. 1980 to June 12. DMCI had repeatedly. DMCI’s petition for review on certiorari is also late as it had Re: termination reports only fifteen (15) days from notice of the CA decision to file the petition or the denial of By the finding that Jamin is a regular employee. 1999. In Maraguinot v. Necessarily. as opposed to intermittently. In Liganza v. While Jamin’s employement contracts indeed show that Jamin had been engaged as a project employee. 1982 to February 16. In all the 38 projects where DMCI engaged Jamin’s services. termination reports has become academic. Clearly. NLRC. The SC agrees with the CA. reconsideration was filed out of time. Consunji’s involvement in Jamin’s dismissal. SC noted however that DMCI indeed submitted reports to the DOLE but as pointed out by Jamin. 1984) would explain the gap.

according to Art III. such as fraud and protected and shall not be abridged. They alleged that: What about the participation of the 82 members in the organizational meeting? a) The Union deliberately and maliciously included the names of more or less 1. It becomes mandatory for the BLR to check if the requirements under registered with the DOLE. and the list of the members who participated in it. Also. it to say. P filed a patition to cancel Union’s certificate of registration. It manufactures sports shoes. shall be 4. Suffice attended the organizational meeting. in presumed voluntary. join. Union was a legitimate labor union inside P’s premises. the written statements were submitted by While a certificate of registration confers a union with legitimacy with the concomitant SS Ventures 7 months after filing its petition for cancellation of registration. Union filed petition for 3. the certificate of registration may be cancelled or the Union may be certification election.—Any applicant labor Union filed MR but filed it to the Bureau of Labor Relations. a union is considered a legitimate labor organization endowed with 1. withdrawal after the filing of the petition is involuntary and which case the union is divested of the status of a legitimate labor organization. Requirements of registration. the Ct has ruled that the Union in its application. Once registered Was there fraud or misrepresentation on the part of the Union? NO with the DOLE. absent a showing of fraud on the part of misrepresentation in documents. Such is not fatal to the Union’s cause. The issuance of the March 21. x x x the minutes of the organizational meetings and the list of the ISSUES/HELD: workers who participated in such meetings. In the 1 st place. right to participate in or ask for certification election in a bargaining unit. and internal to the union and flow from its right to self-organization. 246 of the Labor Code. 2000: Union filed with the DOLE-Region III a PCE in behalf of the rank. III. Hence. Sec. April 6. it must also be shown that there was misrepresentation. The Court emphasized that the registration/recognition of a labor union after it Petitioner is a PEZA-registered export firm which does business in Mariveles. according to the Constitution. J. (if it does not affect the petition. Among the grounds for cancellation is set forth in 239(a) LC. according to Art. SS Ventures Union 1. has submitted the papers is not ministerial on the part of the Bureau of Labor Bataan. 234. then the Court assumed that such cannot nullify the registration of the org) FACTS: 3. besides showing that the Union includes ineligible EEs in its membership. XIII. (adoption or ratification of the Constitution and by-laws) Section 3 of the Constitution and such right. Once registered with the DOLE. Although it would later organization x x x shall acquire legal personality and shall be entitled to rule that such MR was filed late. of union membership of the 82 EEs. certificate of registration necessarily implies that its application for registration and-file EEs of SS Ventures. false statement. requirements: (a) Fifty pesos (P50. d) The Union’s application for registration was not supported by at least 20% of the rank-and-file EEs. 8 of the Constitution and Art. the 2. or fraud DOCTRINE: (Basis of Right to self-organization) in connection with the application for registration and the supporting documents.00) registration fee. a Union is considered a legit labor org SUMMARY: endowed with the right and privileges granted by law to such organization. minutes of its The Court first discussed the basis of the right to self-organization: adoption or ratification. the procedure for acquiring or losing union membership and the b) Entering twice the signatures of 3 of its members. determination of who are qualified or disqualified to be members are matters c) No organizational meeting and ratification too place. SS Ventures Labor Union (Union) is labor org Relations. The right to form. 82 of which belong to terminated and the supporting docs thereof are prima facie free from any vitiating Ventures EEs. (c) the names of all its Should the Union’s certificate of registration be cancelled? NO. members comprising at least twenty percent (20%) of the employees in the bargaining unit where it seeks to operate. its registration cannot be cancelled. 2001: Regional Director Ana Dione of DOLE-Region III ruled for Petitioner. 5 Art. it still gave due course to the MR and treated it as an the rights and privileges granted by law to legitimate labor organizations appeal. 21. does not affect the petition. Reversed Dione’s decision. join or assist a union is specifically protected by Article 29 October 2008 | Nachura. decertified as a bargaining unit (not legit labor org anymore) Court ruled that the EEs right to self-org. 14 . August 2000: Petitioner filed a Petition to cancel the Union’s certificate of registration invoking Article 239(a) of the LC. the Court has already 82 EEs no longer connected with SS Ventures as in its list of members who ruled that the alleged falsification of their signatures are without basis. 2000. But such were executed after the Union’s filing of a PCE on Mar.SS Ventures International v. Art 2345 of the LC have been SEDULOUSLY complied with. (b) The names of its officers. shall not be abridged. 2. However. (d) x x x. The written statements submitted by Petitioner were actually proof of withdrawal the right and privileges granted by law to such organization. irregularities. The Court is of the view that withdrawal made before the filing of a PCE is registration may be canceled or the union may be decertified as the bargaining unit. 542 signatures. and (e) Four (4) RATIO: copies of the constitution and by-laws of the applicant union. appeared on the docs supporting the petition. or assist a union is specifically protected by Art. Sec 8 shall not By: Jocs Dilag be abridged. The right to form. XIII of the Constitution and such right. upon issuance of the certificate of registration based on the following BLR Director grated the Union’s appeal. In previous cases.

Even if there are 1. Here. The Union submitted 542 names. did the Union meet the requirements of submitting the signatures of 20% of its members. the Union submitted enough names. 460 would still be within 20% of the total number of rank-and-file EEs. 4. 15 .928 or 2. the nature of the fraud and misrepresentation must be grave and compelling enough to vitiate the consent of a majority of the union members. Even if 82 was subtracted. the Court observed that no certification election has taken place for almost 7 years. 2. 3. What is important to consider is even in the absence of the 82 members. since the former is the central registry of union and CBA records (231 LC). What about the three signatures that twice appeared in the list of those who participated? 1. These are mere human errors effected without malice. For fraud and misrepresentation to be grounds for cancellation of union registration. the Bureau of Labor Relations looked into the records of the Union.202 EEs in the establishment. Lastly. Petitioner should not interfere in such. A certification election is exclusively the concern of EEs and the ER lacks the legal personality to challenge it. 2.

DOLE-NCR.UST FACULTY UNION v. alleging that the COMELEC was not constituted in accordance with USTFU's constitution and by-laws (CBL) and that no rules had been issued to BLR Director Bitonio agreed with med-arbiter. 131235. FACTS: Med-arbiter issued a TRO directing the respondents to cease and desist from Private respondents are the duly-elected officers of the UST Faculty Union (USTFU). J. as well as the Philippine Constitution and the UST. new CBA by the general membership of the USTFU. and set to expire on 31 May 1998. nullification of the results of the 04 October 1996 election. were even disqualified from becoming union members. issued notices allowing all faculty members to hold a faculty members. 1994 was void for having been conducted in violation of the union's CBL. petitioners and UST allegedly entered into another some. by the USTFU. Atty. 1995. this Petition. Lopez (non-member) moved that the USTFU CBL and election rules 1) WON the Collective Bargaining Unit of all the faculty members in that be suspended.R. Arbiter. 04 October 1996 – the general faculty assembly was held.  The October 4. transmitted the records of the case to the Bureau of Labor Relations. performing any and all acts pertaining to the duties and functions of the officers and which has a subsisting 5-yr CBA with UST. posted a notice addressed overwhelming majority of UST's academic community on 12 December 1996. They to all USTFU members announcing a general assembly to be held on 05 October moved for the dismissal of private respondents’ petition for prohibition on the ground 1996 to elect USTFU's next set of officers. who On 01 October 1996. It was attended by Hence. petitioners claimed that the new CBA was purportedly ratified by an On 21 September 1996. Also mentioned Constitution of a that this had become moot and academic. Meanwhile on 03 December 1996. represented management. COMELEC to oversee the elections. No. since that assembly had not been convened or authorized convocation on 04 October (General Faculty Assembly). ISSUES/HELD: In the GA. members of the USTFU and non-USTFU members who are members in good standing of the UST Academic Community Collective Bargaining Unit. some of petitioners filed a separate petition with the Med. On 02 October 1996. 1999 | Panganiban. the Secretary General of USTFU. 16 . BITONIO OF BUREAU OF LABOR RELATIONS Hence private respondents filed the instant petition seeking injunctive reliefs and the G. Petitioners appealed the med-arbiter's Decision to the labor secretary. Petitioners moved to dismiss the original petition and the subsequent motion on DOCTRINE: jurisdictional grounds. govern the conduct of the election. Private respondents again moved for the issuance of a TRO to prevent petitioners The election of union officers should be conducted in accordance with the provisions from making further representations that they had entered into a new agreement with of the union's constitution and bylaws. alleging that the election was spurious for being violative of USTFU's CBL: SUMMARY: In a general faculty assembly attended by members and non-members of the UST Faculty Union. General Faculty Assembly had the right to suspend the provisions of the Constitution and By-Laws of the USTFU regarding the elections of officers of Petitioners were elected as USTFU's new set of officers by acclamation and clapping the union – NO of hands.  USTFU officers' purported election held on October 4. 1996 GA of all UST faculty club presidents. The CBA was registered on 20 February directors of USTFU. apparently. and should be stopped from continuing such acts. The general faculty assembly was not the proper forum to conduct the election of USTFU officers. and that election be held that day. this time alleging an election for USTFU’s new set of officers. SC held that it was not a forum that petitioners had served them a notice to vacate the union office. In the meantime. 1996 election could not be legitimized by the recognition of Med-arbiter issued a TRO against private respondents enjoining them from the newly "elected" set of officers by UST or by the alleged ratification of the conducting the election. | November 16. Also reiterated that petitioners were usurping the former's duties and functions Labor Code. appropriate for transacting union matters. the CBL and election rules were suspended in order to hold Private respondents filed another urgent ex-parte motion for a TRO. the Secretary General of UST. Not all who attended the assembly were members of the union. upon the request of the various  The CBL could not be suspended during the October 4. since they CBA covering the period from 01 June 1996 to 31 May 2001.

join or assist labor organizations for the purpose of general membership meetings as found in the USTFU's CBL. 1996 election of by the CBL. secretary general. ILO Convention No. By no legal fiat was such assembly To to become a union member. as mandated by Sections obligations that go with this new status and becomes bound by the union's rules and 1 and 2 of Article IX of the USTFU's CBL. It is the organic law that determines the validity of acts done by any officer or member of the union. Certification Election A union election is held pursuant to the union's constitution and bylaws. for purposes of collective bargaining. The purpose of a certification election is to ascertain whether or not a majority of the employees wish to be represented by a labor organization and. unless otherwise authorized respondents during the latter's incumbency impelled the October 4. powers. The freedom conferred by the provision is expansive. Self-organization is a fundamental right guaranteed by the Philippine as indicated in the memorandum sent to all faculty members by UST’s Constitution and the Labor Code. the sole and exclusive bargaining agent of the employees in the appropriate bargaining unit. in violation of If a member of a union dislikes the provisions of the by-laws. all employees belonging to the appropriate bargaining unit can vote. regulations. 2) WON the overwhelming ratification of the new CBA has rendered moot and Article 3. A certification election is the process of determining. he may seek to have them amended or may withdraw from the union. as a rule. Article IX of the USTFU's CBL. the new set of USTFU officers. free from any interference from public authorities. In a certification election. otherwise. provides that workers' organizations shall have the right to draw up their constitution and rules and to elect their representatives in full freedom. The assembly was merely a gathering that was called and participated in by management and non-union members. collective bargaining or for their mutual aid and protection. as well as Article 241 (c) of the is not the function of courts to decide the wisdom or propriety of legitimate by-laws of Labor Code. not only signify the transformed into a union activity by the participation of some union intent to become one. But an employee belonging to the appropriate bargaining unit but non- 17 . through secret ballot. It was not convened in accordance with the provision on Employees have the right to form. 1996 election was tainted with irregularities because of the following reasons: SC: Petitioners’ method not justified  It was not called by the USTFU. It was merely a convocation of faculty clubs. Union Election vs. It is where the rights. by which particular labor organization. the responsibility imposed on union members to respect the constitution and rules they themselves draw up equally so. An employee who becomes a union member acquires the rights and the concomitant  There was no COMELEC to oversee the election. They assert that such exercise was pursuant to their right to self-organization. and the right to vote in it is enjoyed only by union members. a trade union.  The purported election was not done by secret balloting. but also take some positive steps to realize that intent. cannot vote in the union election. The October 4.Petitioners claim that the numerous anomalies allegedly committed by the private member of the union. procedure for union membership is usually embodied in the union's CBL. affiliate with or assist a labor union. 87 (Freedom of Association and Protection of Right to academic the issue as to the validity of the suspension of the Organize). an employee must. The members. Corollary to this right is the prerogative not to join. The CBL is the fundamental law that governs the relationship between and among the members of the union. functions and authority of the officers as well as the members are defined. duties and obligations. in the affirmative case. It Section 6. he must abide by them.

to elect their representatives in full freedom to 7. Ma. The Bank acceded. subject only to the rules of the organization concerned. It argued that the Bank opened the the negotiating panel. 16 June 2004. Nieves Confesor as a "family affair" was tantamount to suggesting that Federation (SOLE) and The Standard Chartered Bank President Jose Umali. 3. 2. The Union filed this R65 alleging that the SOLE acted with GAD when it organize their administration and activities and to formulate their programs. The Petition is hereby DISMISSED." which had the effect of excluded from the negotiating team. provides: ▪ It argued that. and demanded that she be 4. The Bank prayed that the petition be dismissed as the Union was estopped. shall have the right to second MR. be excluded from the Union’s negotiating panel. considering that it signed the CBA. Before the commencement of the negotiation. 87 FREEDOM OF ASSOCIATION AND PROTECTION OF THE RIGHT TO ORGANIZE to which the Philippines is a signatory. ▪ Contrary to the ruling of the SOLE. the Union. ULP was consolidated with the complaint over which the SOLE assumed jurisdiction. even after a request was made by the Union to validate its "guestimates. The Bank filed a complaint for ULP and Damages before the Arbitration excluded from the Bank’s negotiating team." bonuses based on the increased wage were distributed to the employees covered by the CBA. Whether the Union is estopped from filing the instant action. damage or injury to the public Digest prepared by Jethro Koon interest need not be present in order for unfair labor practice to I. Branch of the NLRC. and necessary data. II. Union declared a deadlock and filed a Notice of Strike before the NCMB. the Union/SEBA initiated the negotiations on the next CBA. Holding 5.Standard Chartered Bank Employees Union (NUBE) v. The Union filed a and employers. Facts prosper. NO dismissed. Both parties filed an MR. The complaint for Resolutions of then SOLE are AFFIRMED. the Union violated its no strike-no lockout clause by filing a notice of strike before the NCMB." indicative of blue-sky bargaining. 1. Cielito Diokno. Whether the SOLE acted with GAD. that the bank lawyers should be political provisions "up for grabs. 9. Callejo. the wage increase was effected and the signing organizations of their own choosing without previous authorization. Workers’ and employers’ organizations shall enjoy adequate protection against any 18 . J. "workers 6. Jr. The Bank merely went through the motions of collective bargaining without the intent to reach an agreement. and 2. NO notice of strike was an illegal act. suggested to Divinagracia that Jose Umali. Workers’ and employers’ organizations shall have the right to draw up their constitutions and rules. both of which were denied. Under ILO No. Meanwhile. the Union and the Bank failed to agree on the remaining economic provisions of the CBA. III. OSG: Union failed to prove its ULP charges and that the SOLE did not ▪ It contended that the Union demanded "sky high economic commit GAD." 3. Diokno’s suggestion that the negotiation be limited 1. ULP charges for both parties were dismissed. Except for the provisions on signing bonus and uniforms. 98 pertaining to the Right to Organize and choice of negotiator. Umali ▪ The Union also accused the Bank of refusing to disclose material was retained as a member of their panel. Whether the Union was able to substantiate its claim of ULP. Prior to the expiration of the three-year period but within the sixty-day ▪ SOLE failed to rule on the ULP charges arising from the Bank’s freedom period. suggested to the Bank’s HR Manager and head of should begin from a clean slate. However. be excluded as well. demands. Ratio her awards. She stated that ULP charges would prosper only if shown to have directly prejudiced the public interest. surface bargaining. to job Immediately thereafter. Issues ▪ Further. Diokno diminishing or obliterating the gains that the Union had made. establish and. It was the Union that committed ULP when Umali hurled invectives at Diokno. through its made bad faith proposals when it announced that the parties President Divinagracia. The 8. 1. Hon. explaining that Topic under syllabus: "Interference" under LC 248 (a) both parties failed to substantiate their claims. found that the Bank did not commit ULP when it interfered with the Union’s Article 2 of ILO Convention No. Considering that the filing of 1. the Union officers should be 2. the President of the National Union of Bank Employees (NUBE). without distinction whatsoever. The SOLE ordered the parties to execute a CBA incorporating IV. The Bank and the Union signed the CBA. also denied. Collective Bargaining. NO ▪ Nominal and actual damages and was forced to litigate and hire a lawyer. SOLE assumed jurisdiction over the dispute (LC 263(g)).

acts or interference by each other or each other’s agents or members in their 16. retained or were open for discussion. industrial and agricultural 1. charitable. collective any intent of reaching an agreement. The Union has not been able to show that the Bank had done acts. Parenthetically. 248. shall have the right to capricious and whimsical exercise of judgment. The aforcited ILO Conventions are incorporated in LC243 6. Moreover. it is herein emphasized that the duty to bargain "does not compel to yield adverse effects on the free exercise to right to self-organization or on either party to agree to a proposal or require the making of a concession. which tend to show that it did not want coerces the Union to exclude from its panel of negotiators a representative to reach an agreement. 4. made use of the aforesaid guestimates. The Union alleges that the Bank violated its duty to bargain. restrains or coerces employees in the exercise of whether an employer’s conduct demonstrates an unwillingness to bargain in their right to self-organization or the right to form association. self-employed people. self-organization necessarily includes the right to collective bargaining. 1993 after a deadlock was declared by the Union on June 15. especially considering that such was undertaken previous to the 6. The accusation 2. – All persons employed in commercial. accepted. Umali requested the Bank to validate its guestimates on commencement of the negotiation and simultaneously with Divinagracia’s the data of the rank and file. the fact that the Bank 8. As can be gleaned from the Bank’s counterproposal. It explained that of the 34 economic provisions it made. Admittedly. the Bank. such organizations under the control of employers or employers’ organizations within the meaning of this Article. which are all part of the friendly relations between the Union and Bank. committed ULP under Article 248(g) when it engaged in surface bargaining. considers it an unfair labor practice when without any legal intent to reach an agreement. declared it as a policy of the state to afford protection to It alleged that the Bank just went through the motions of bargaining without labor. The 1973 Constitution. It is clear that such ULP charge was merely an afterthought. and 249 1. However. promote industrial peace. writing (LC242(c))." devotes an entire section. of the Union. protection to labor as part of the general provisions. medical or educational for ULP charges to prosper. It involves the question of an employer interferes. aside from making it a policy to "protect only made 6 economic counterproposals. and if it can be inferred that the employer adopted the said act However. equivalent to lack of self-organization and to form. In particular. The said ILO Conventions were ratified on Dec. hence. as evident in the Bank’s counter- bargaining. The right to good faith or is merely hard bargaining. 9. The records show that after the initiation of the collective bargaining process. However. or assist labor organizations of their jurisdiction or excess thereof. 2. of the meetings. In the case at bar. 243. both at 6. and those without any definite employers may form labor organizations for their mutual aid and protection. it cannot be said that the SOLE acted in institutions whether operating for profit or not. there were many connection with 243 of the Labor Code is committed. amounts to a validation of the data it the negotiations pushed through. establishment. The complaint was made only on August had used in its presentation. the Union failed to 7. Estoppel not Applicable In the Case at Bar 19 . 1953. after indicating the economic provisions it had emphasizing its mandate to afford protection to labor. ULP under 248(a) in 5. and just and humane conditions of work would proposals. 3. It happened after the support workers’ organizations by financial or other means. the parties reached a deadlock. specifying that the workers’ rights to self-organization. Ambulant. Coverage And Employees’ Right To Self-Organization. as alleged by the Union. 4. Likewise. with the object of placing parties started to involve personalities. security of tenure." the right to collective bargaining of the employees. own choosing for purposes of collective bargaining. rural workers despotic manner by reason of passion or personal hostility. on the other hand. The 1987 Constitution. the suggestion made by Diokno to Divinagracia should be construed (ULP of employers and labor organizations) as part of the normal relations and innocent communications. Surface bargaining is defined as "going through the motions of negotiating" 5. Further. needed. If at all. as borne by the minutes the rights of workers and promote their welfare. functioning or administration. even as early as the 1935 Constitution. acts which are designed to promote the establishment of workers’ occurred after the arguments and differences over the economic provisions organizations under the domination of employers or employers’ organizations or to became heated and the parties had become frustrated. the Bank be assured. if an employer interferes in the selection of its negotiators or and away from the bargaining table. refused to make a principle of shared responsibility" between workers and employers to list of items it agreed to include in the economic package. While it is true that a showing of prejudice to public interest is not a requisite enterprises and in religious. 1993. provisions which it proposed to be retained. 29. No Grave Abuse of Discretion On the Part of the Public Respondent 6 ART. the State had already expressly bestowed 2. Article 248(a) of the Labor Code. Neither was it shown that the she exercised its power in an arbitrary and intermittent and itinerant workers. join. (Substantial evidence is the degree of evidence required) The circumstances substantiate its claim that the Bank refused to furnish the information it that occurred do not show that the suggestion is an anti-union conduct. Umali failed to put his request in suggestion that the bank lawyers be excluded from its negotiating panel. and highlights "the rejected. The Duty to Bargain Collectively 3.

The Union Did Not Engage In Blue-Sky Bargaining 1. 1. the Union twice filed an MR respecting its ULP charges. Moreover. The Bank failed to show that the economic demands made by the Union were exaggerated or unreasonable. 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. 20 . The conclusion of the CBA was included in the order of the SOLE. while the signing bonus was included in the CBA itself.

PAFLU wrote to the Company telling the latter to ignore the said member who resigns from the union shall be dismissed from employment by the resolution submitted by the Petitioners. INC. that this was limited by a provision found in the Constitution and By-laws which employees pursuant to the letter sent by PAFLU thus prompting them to file an unfair states. the PAFLU lawyers.” company to immediately reinstate the said employees and held PAFLU liable to pay the backwages of the employees. The Court imposed upon the mother federation against the Company. The corporation dismissed the petitioner. and sought to disaffiliate themselves from PAFLU. a national union to act as its agent in the circumstances warrant. those employees which are members of the union or those summarily done. affiliated itself with PAFLU. The Liberty Cotton Mills Workers Union (the Union) adopted its Constitution and By- laws which among other things. the Company Company upon request in writing by the Union which shall hold the Company free terminated the employees. However. Later on. that as a condition for As to the dismissal of the employees. “that the Liberty Cotton Mills Workers Union-PAFLU shall be affiliated with the labor practice case against the corporation. the petitioners wrote to the PAFLU immediate reinstatement of the workers as the dispute revolved mainly around the complaining about the legal counsel assigned by PAFLU to assist them in a ULP case mother federation and its local union. members of the local union were alleged that the PAFLU was negligent in handling their ULP case against the corporation and thus sought to disaffiliate themselves from PAFLU. Esguerra By: Perry RULING: The Court found that PAFLU was acting for and in behalf of its affiliate. is controlling. Therefore. the Court found it fair to limit its liability to While the CBA was then in full force and effect. WON the dismissal of the complaining employees was justified. from any liability. WHEREFORE. The SC held that the disaffiliation was PAFLU. They expressed their dissatisfaction and loss of confidence in (PAFLU) the obligation to pay the workers their backwages. and any Then 2 days later. 32 out of 36 members signed the resolution for disaffiliation. It ordered the evidence their desire to continue the said local unions affiliation. represented by PAFLU. CBA that was entered into with the respondent corporation. Then on 30 May 1964. A CBA was then entered into between the Company and the Union. the Liberty Cotton Mills Workers Union. the Court found that it was hastily and continued employment. However. PAFLU wrote a letter to the corporation stating that the act of disaffiliation of the local PAFLU contends that the dismissal was proper owing to the existence of a Union union constituted grounds for the termination of the employees pursuant to the Union Security Clause provided for in the CBA. The Record shows that only 4 out of its members remained. NO. (30) days from notice of this decision and failure to so reinstate the workers without The Company followed the request of PAFLU and terminated the petitioners thus valid and just cause shall make respondent company liable to the workers for the prompting them to file a complaint for unfair labor practice. must remain members while the CBA is in force. within thirty disaffiliate themselves from PAFLU and requested that the Company terminate them. LIBERTY COTTON MILLS. 1975 | J. who may join the union. payment of their wages from and after the expiration of such thirty-day period. The PAFLU received the resolution to disaffiliate on 25 May 1964. The mother federation respondent PAFLU is sentenced to pay complainants-workers the equivalent of three (3) years backwages without deduction or qualification. the Court was quick to point out Security Clause provided for in the CBA. thereby an agent of the latter. ISSUE / HELD: 21 . which taken together with the CBA. as to the liability of the Company. and shall remain an affiliate as long as ten (10) or more of its members valid and that there was no cause for the termination of the petitioners. However. In the CBA. September 4. a Union Security Clause was included which stated in part. the disaffiliation was valid under the FACTS: local union’s Constitution and By-laws. the decision appealed from is reversed and set aside and the PAFLU then wrote a letter to the Company stating that the petitioners have no right to company is hereby ordered to immediately reinstate complainant workers.LIBERTY COTTON MILLS WORKERS UNION v. the Court opined SUMMARY: that the local union remained the basic unit of the association free to serve the common interest of all its members including the freedom to disaffiliate when the The local union affiliated itself with PAFLU.

The backwages of the workers involved be made for more than three (3) from the workers concerned and from PAFLU itself about the cause of the expulsion years without any deduction or qualification or at least 50% backwages or of the petitioner workers. were expelled from their union membership in the mother federation because they were found guilty of acts unbecoming of officers and members of the union and disloyalty to the mother federation for instigating union disaffiliation. is bound to dismiss any employee expelled by 2. upon its written request. The company acted in bad faith in dismissing petitioner at the same rates as those of their contemporaries in 1964. LIBERTY COTTON MILLS. Antecedent facts: Thirty-two (32) out of the thirty-six (36) members of the local union. under the Maintenance of Membership provision of the liable for the payment of backwages of the workers involved. their wages should be hastily and summarily. this undertaking should not be done and/or fringe benefits and. The workers involved be reinstated immediately. but not with FACTS: respect to 3. disaffiliated themselves from respondent PAFLU in accordance with Article X. While respondent company. 1979 | J. (1979) May 31. INC. LIBERTY COTTON MILLS WORKERS UNION v. The respondent company be made jointly and severally. Respondent PAFLU received the resolution of disaffiliation and immediately informed the respondent company that the disaffiliation was null and void and that it is taking over the administration of the local union in dealing with the management. Two days later. It did not even bother to inquire 3.Makasiar By: Ron ISSUE / HELD: WON the reliefs prayed for in the MR can be granted? Yes to 1 and 2. on Union Affiliation. the company immediately dismissed the workers 51/2 years. Liberty Cotton Mills Union. if not from the date of after its receipt of the request of PAFLU — in a span of only one day —thereby dismissal up to the date of actual reinstatement disregarding the right of the workers to due process. who were among those who signed the disaffiliation resolution. In this MR of the 1975 case. Instead. and workers without giving them the benefit of a hearing. and at the same time requested for their dismissal. Collective Bargaining Agreement. also without deduction or qualification. self-organization and security of 22 . without loss of seniority PAFLU for disloyalty. petitioners pray that: RULING: 1. PAFLU advised the company that the petitioner workers. upon their reinstatement. of the local union's Constitution and By-Laws. A day after. or at least jointly. the company terminated the employment of the petitioner workers pursuant to the Maintenance of Membership provision of the Collective Bargaining Agreement.

union pursuant to the CBA. J. The employer is bound to exercise caution in terminating the computing backwages enunciated in the case of Mercury Drug Co. between BPI and Far East Bank and Trust Company (FEBTC) and was approved by the Securities and Exchange Commission.. the antecedent facts of the case and his freedom of association — to join or not to join a union — are paramount and are as follows: ) should prevail over a contractual condition for continued union membership and over Bangko Sentral ng Pilipinas approved the Articles of Merger executed by and whimsical or arbitrary termination of his employment. erroneously contends that their disaffiliation and their refusal to retract amounted to disloyalty. Due process must be observed in dismissing an employee because it affects not only his position but also his means of livelihood. reconsideration without any valid reason. opportunity to be heard and to defend himself with the assistance of counsel. the respondent company should be jointly and regularized otherwise they will not have a continued employment. This apparent laxity or negligence employee sought to be dismissed with two written notices before termination of of PAFLU invites suspicion. PAFLU expelled only six (6) union members. Employers should BPI vs BPI Employees Union – Davao Chapter therefore respect and protect the rights of their employees. were hired by BPI as its own members. labor. The amount of backwages fixed by the Court in the main decision. if indeed their unrestricted disaffiliation were an act of disloyalty instead of employees. the records show that the disaffiliation of the local union members from the DOCTRINE: The twin requirements of notice and hearing constitute the essential PAFLU was cause by the alleged negligence of PAFLU and its lack of concern over elements of procedural due process. It was not disloyalty. Inc. consisting of three The power to dismiss is a normal prerogative of the employer. et al. This procedure is mandatory and its absence taints the Aid furthermore.tenure. Dismissals must not be arbitrary and capricious. Pursuant to the said Respondent PAFLU also overlooked the fact that only sixteen (16) out of the original Article and Plan of Merger. Now BPI has an existing Union Shop Clause agreement with the BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank (BPI Union) whereby it is Respondent company is therefore a party to the illegal dismissal of the petitioner a pre-condition that new employees must join the union before they can be workers. BPI has an The "scandalous haste" with which the company dismissed the workers. with their status and tenure recognized and salaries and benefits dissatisfaction with the PAFLU's failure to promote and defend their interests. Moreover. this is not (3) years backwages without deduction or qualification. maintained. However. The law requires the employer to furnish the the problems of the local union and its members. vs. The records also show that the local union members were employment can be legally effected: (1) a written notice apprising the employee of the dissatisfied with the way PAFLU negotiated the CBA with the company because it did particular acts or omissions for which his dismissal is sought in order to afford him an not fight for their demands and instead accepted the proposals of the company. instead of only the six those in its different branches across the country. Under such a situation.. and (2) a subsequent notice informing the employee of the employer's decision to dismiss him. The constitutional guarantee of security of tenure of the worker (This decision is on a Motion for Reconsideration. following the formula of without limitations. PAFLU should have also and absorbed by BPI as the surviving corporation. respondent severally liable with the respondent PAFLU for the payment of backwages to the company stood pat on its decision and immediately denied the request for petitioner workers. otherwise they will not have a continued employment. also existing Union Shop Clause agreement with the BPI Employees Union-Davao supports the conclusion that there was conspiracy or connivance between the Chapter-Federation of Unions in BPI Unibank (BPI Union) whereby it is a pre- respondent company and respondent PAFLU in the dismissal of the petitioner condition that new employees must join the union before they can be regularized workers. By: Sam SUMMARY: BPI and FEBTC merged. if he desires. CIR services of his employees especially so when it is made upon the request of a labor is just and reasonable under the facts and circumstances obtaining in the case. Likewise. BPI Union recommended to BPI their dismissal. FEBTC employees. By reason of the failure of the FEB employees to join the union. which include the right to 19 October 2011 | Leonardo-De Castro. including expelled the remaining sixteen members who did not retract. even after the workers had sought for reconsideration. all the assets and liabilities of FEBTC were transferred to thirty-two (32) signatories retracted their disaffiliation. The Articles of Merger and Plan of Merger did not contain any specific stipulation with respect to the employment contracts of existing personnel of the non-surviving entity which is FEBTC. By reason of the 23 . BPI refused. it was their dissatisfaction with PAFLU that compelled FACTS: them to disaffiliate. because PAFLU dismissal with illegality. as in the instant case. BPI being the surviving corporation.

the Union may request BPI to terminate their employment? YES covered by Union Shop Clause. and (c) become regular employees without distinguishing as to the manner they acquire their regular status. (Apart from the fresh thirty (30)-day period from notice of finality of the Decision given to the affected FEBTC employees to join the Union before the latter can request petitioner to terminate the formers employment) RATIO: By upholding the automatic assumption of the non-surviving corporations existing employment contracts by the surviving corporation in a merger. the absorbed employees from the application of the Union Shop Clause. ground for an employees dismissal. retire or otherwise sever his employment. the number of such employees may adversely affect the majority status of the Union and even its existence itself. This procedure is mandatory and its absence taints the dismissal with illegality. nothing in this Resolution shall impair the right of an employer to terminate the employment of the absorbed employees for a lawful or authorized cause or the right of such an employee to resign. and (b) new employees who. jurisprudence dictates that such a dismissal must BPI appealed to the Supreme Court. ordinary meaning of the terms of the Union Shop Clause. The issue went to voluntary arbitration where BPI won but the Court of Appeals Although it is accepted that non-compliance with a union security clause is a valid reversed the Voluntary Arbitrator. it covers employees who (a) enter the employ of BPI during the term of the CBA. The law requires the employer to furnish the employee The provision on the Union Shop Clause in contention is as follows: sought to be dismissed with two written notices before termination of employment can be legally effected: (1) a written notice apprising the employee of the particular acts or ARTICLE II omissions for which his dismissal is sought in order to afford him an opportunity to be heard and to defend himself with the assistance of counsel. by virtue of a merger. the Court strengthens judicial protection of the right to security of tenure of employees affected by a merger and avoids confusion regarding the status of their various benefits which were among the chief objections of our dissenting colleagues. It is understood that membership in good standing in the Union is a condition of their continued employment with the Bank. still be done in accordance with due process. such that they may be required to join respondent union and if they fail to do so. and (2) a xxxx subsequent notice informing the employee of the employer's decision to dismiss him.New employees falling within the bargaining unit as defined in Article I of this Agreement. (b) are part of the bargaining unit (defined in the CBA as comprised of BPIs rank and file employees). join the Union as a condition of their continued employment. BPI Union recommended to BPI their reiterating here that these differences are too insubstantial to warrant the exclusion of dismissal. BPI must still accord said employees the twin requirements of notice and hearing on the possibility that they may have other justifications for not joining the Union. if he desires. Union Shop . From the plain. who may hereafter be regularly employed by the Bank shall. BPI filed a motion for reconsideration. within thirty (30) days after they become regular employees. It bears 24 . are absorbed from another company as regular and permanent from the beginning of their employment with the surviving corporation. BPI refused. there are differences between (a) new employees who are hired as probationary or temporary but later regularized. Consequently. ISSUES/HELD: W/N the absorbed FEBTC employees fell within the definition of new employees under the Union Shop Clause.failure of the FEB employees to join the union. Indeed. The twin requirements of notice and hearing constitute the essential elements of procedural due process. However. Section 2. subject to existing contractual obligations. whether before or after the merger. the SC affirmed the CA.