Professional Documents
Culture Documents
o R.A. No. 10395 [March 14, 2013], strengthening tripartism, amending for the purpose Article 290
[275] of the Labor Code, otherwise known as the “Tripartism Law.”
➢Tripartism in labor relations is hereby declared a State policy. Towards this end, workers and
employers shall, as far as practicable, be represented in decision and policy-making bodies
of the government.
o R.A. No. 10396 [March 14, 2013], strengthening conciliation-mediation as a voluntary mode of
dispute settlement for all labor cases, amending for this purpose Article 234 [228] of the Labor
Code, otherwise known as the “Mandatory Conciliation-Mediation Law.”
o R.A. No. 10361 [January 18, 2013], instituting policies for the protection and welfare of domestic
workers, otherwise known as the “Domestic Workers Act” or “Batas Kasambahay.”
o R.A. No. 10151 [June 21, 2011], allowing the employment of night workers, thereby repealing
Articles 130 and 131 of Presidential Decree Number Four Hundred Forty-Two, as amended,
otherwise known as the Labor Code of the Philippines.
o R.A. No. 10022 [March 8, 2010], amending R.A. No. 8042, otherwise known as the Migrant
Workers and Overseas Filipinos Act of 1995, as amended, further improving the standard of
protection and promotion of the welfare of migrant workers, their families and overseas Filipinos
in distress and for other purposes.
1 Formerly, Omnibus Rules and Regulations Implementing R.A. No. 8042 jointly issued by the Secretary of Foreign Affairs and Secretary of
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A.
CONSTITUTIONAL PROVISIONS
a. FIRST OF TWO PROTECTION-TO-LABOR CLAUSES: “Section 18. The State affirms labor as a
primary social economic force. It shall protect the rights of workers and promote their welfare.
b. Freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble
and petition the government for redress of grievances.
NOTE: THIS FREEDOM IS RELEVANT ONLY IN PICKETING AND NOT IN STRIKE.
c. Right of public and private sector employees to form unions, associations, or societies for purposes
not contrary to law shall not be abridged.
NOTE: THIS IS KNOWN AS “FREEDOM OF ASSOCIATION.” THIS PROVISION IS THE BASIS
FOR THE EMPLOYEES’ RIGHT TO SELF-ORGANIZATION.
2 Formerly, POEA Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Workers issued on
February 4, 2002.
3 Formerly, POEA Rules and Regulations Governing the Recruitment and Employment of Seafarers issued on May 23, 2003.
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Prof. Joselito Guianan Chan
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They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall
also participate in policy and decision-making processes affecting their rights and benefits as may be
provided by law.
The State shall promote the principle of shared responsibility between workers and employers and
the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their
mutual compliance therewith to foster industrial peace.
The State shall regulate the relations between workers and employers, recognizing the right of labor
to its just share in the fruits of production and the right of enterprises to reasonable returns to
investments, and to expansion and growth.
• May cases be filed for violation of the foregoing constitutional provisions?
The labor-related provisions of the Constitution are merely statements of principles and are all NOT
selfexecuting provisions. They are used only as guides for judicial decisions or legislative enactments. Being
mere statement of principles and policies, no case can be filed for their violation. Only violation of the laws
passed to implement these principles and policies can be proper subject of court litigation.
• What are the kinds of procedural due process that may be asserted in labor cases?
The following are the kinds of procedural due process that may be invoked in labor cases, to wit:
(1) Procedural due process that may be invoked against the employer during the investigation of the
employee’s administrative case at the company-level that may lead to his dismissal:
a. Statutory due process per Agabon doctrine which refers to the due process provision in the Labor
Code (Article 277[b]); and
b. Contractual due process per Abbott Laboratories doctrine which refers to the due process
prescribed in the Company Rules and Regulations or Code of Conduct or Code of Discipline.
NOTE: CONSTITUTIONAL DUE PROCESS UNDER ARTICLE III, SECTION 1 OF THE
CONSTITUTION CANNOT BE INVOKED AGAINST A PRIVATE PARTY LIKE THE
EMPLOYER. IT CAN ONLY BE ASSERTED AGAINST THE STATE OR GOVERNMENT.
HENCE, THE EMPLOYEE BEING INVESTIGATED CANNOT INVOKE CONSTITUTIONAL
DUE PROCESS BUT ONLY STATUTORY AND CONTRACTUAL DUE PROCESS.
(2) Procedural due process that may be invoked once a case has already been filed in the labor court, such as
the Labor Arbiter or the NLRC, and/or brought to higher courts:
a. Constitutional due process under Section 1, Article III of the Constitution since this right cannot be
invoked against the private employer but only against the State or government as represented by Labor
Arbiters, NLRC, CA and SC.
The rule since Agabon is that compliance with the statutorily-prescribed procedural due process under
Article 292(b) [277(b)] of the Labor Code would suffice. It is not important in determining the validity of the
termination whether there is an existing company policy which also enunciates the procedural due process in
termination cases. However, under the latest doctrinal en banc ruling in the 2013 case of Abbott Laboratories,
Philippines v. Pearlie Ann F. Alcaraz, it is now required that in addition to compliance with the statutory due
process, the employer should still comply with the due process procedure prescribed in its own company rules now
called CONTRACTUAL DUE PROCESS. The employer’s failure to observe its own company-prescribed due
process, IN ADDITION TO STATUTORY DUE PROCESS, will make it liable to pay an indemnity in the form of
nominal damages, the amount of which is similar to the P30,000.00 awarded under the Agabon doctrine.
• When can an employee invoke constitutional due process and right to equal protection of the laws?
As distinguished from company-level investigation conducted by the employer where only STATUTORY
and CONTRACTUAL DUE PROCESS can be invoked, a dismissed employee can invoke constitutional due
process only when he files an illegal dismissal case in the labor court and he is deprived due process by a government
functionary like the Labor Arbiter or the Commission (NLRC), or Court of Appeals on Rule 65 certiorari petition.
The reason is that, at this stage, the government is now involved through said labor tribunals.
• Is right to counsel mandatory?
No. Per the prevailing Lopez doctrine (see 2011 case of Lopez v. Alturas Group of Companies), the right to
counsel is neither indispensable nor mandatory. It becomes mandatory only in two (2) situations:
(1) When the employee himself requests for counsel; or
(2) When he manifests that he wants a formal hearing on the charges against him, in which case, he
should be assisted by counsel.
B.
NEW CIVIL CODE
• Is Article 1700 of the Civil Code applicable to labor cases?
Yes, Article 1700 of the Civil Code provides:
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Prof. Joselito Guianan Chan
CHAN ROBLES ONLINE BAR REVIEW
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“Art. 1700. The relations between capital and labor are not merely contractual. They are so
impressed with public interest that labor contracts must yield to the common good. Therefore, such
contracts are subject to the special laws on labor unions, collective bargaining, strikes and lockouts,
closed shop, wages, working conditions, hours of labor and similar subjects.”
In Davao Integrated Port Stevedoring Services v. Abarquez, March 19, 1993. It was held that a CBA, as a
labor contract within the contemplation of Article 1700 of the Civil Code, is not merely contractual in nature but
impressed with public interest, thus, it must yield to the common good.
Similarly, an employment contract or any other labor contract is treated as not merely contractual in nature
similar to an ordinary contract like a lease contract because it is impressed with public interest. Consequently, all
labor laws are deemed incorporated therein even if not so expressly provided or stipulated in its provisions.
• How is Article 1702 of the Civil Code correlated with Article 4 of the Labor Code?
Both Article 1702 of the Civil Code and Article 4 of the Labor Code speak of the rule on interpretation and
construction provisions of law and labor contracts. Article 1702 of the Civil Code provides:
“Article 1702. In case of doubt, all labor legislation and all labor contracts shall be construed in favor
of the safety and decent living for the laborer.” Article 4 of the Labor Code states:
“Article 4. Construction in Favor of Labor. – All doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.”
Article 1700 applies to doubts and ambiguities in
(1) Labor legislations;
(2) Labor contracts such as an employment contract or a CBA;
(3) evidence presented in labor cases.
Article 1700 applies to doubts and ambiguities:
(1) In the Labor Code; and
(2) In the Implementing Rules of the Labor Code.
C.
THE LABOR CODE
• What are the distinctions between Labor Relations and Labor Standards?
“Labor standards law” is that part of labor law which prescribes the minimum terms and conditions of
employment which the employer is required to grant to its employees.
“Labor relations law” is that part of labor law (Book V of the Labor Code) which deals with unionism,
collective bargaining, grievance machinery, voluntary arbitration, strike, picketing and lockout.
Labor relations and labor standards laws are not mutually exclusive. They are complementary to, and closely
interlinked with, each other. For instance, the laws on collective bargaining, strikes and lockouts which are covered
by labor relations law necessarily relate to the laws on working conditions found in Book III.
• What is a SEBA?
An “exclusive bargaining representative” or “exclusive bargaining agent” or Sole and Exclusive Bargaining
Agent (SEBA), refers to a legitimate labor organization duly certified as the sole and exclusive bargaining
representative or agent of all the employees in a bargaining unit.
Note must be made of the latest innovative amendment of the Labor Code’s Implementing Rules introduced
by Department Order No. 40-I-15, Series of 2015, which has expressly repealed the entire provision on “Voluntary
Recognition” of the Implementing Rules on Book V and replaced it with the freshly-minted mode of securing the
status of a sole and exclusive bargaining agent through a “Request for SEBA Certification” or “Request.”
Voluntary recognition is therefore no longer allowed and is effectively replaced by the Request mode.
(NOTE: This is extensively discussed in Major Topic No. 7 (Labor Relations, infra)
• Can individual employee or group of employees bring grievable issues directly to their employer without the
participation of the SEBA?
Yes. The designation of a SEBA does not deprive an individual employee or group of employees to exercise
their right at any time to present grievances to their employer, with or without the intervention of the SEBA.
• Can individual employee or group of employees bring grievable issues to voluntary arbitration without the
participation of the SEBA?
No, as held in the 2009 case of Tabigue v. International Copra Export Corporation, where the Supreme
Court clarified that an individual employee or group of employees cannot be allowed to submit or refer unsettled
grievances for voluntary arbitration without the participation of the SEBA. The reason is that it is the SEBA which
is a party to the CBA which contains the provision on voluntary arbitration. Being a party thereto, the SEBA cannot
be disregarded when a grievable issue will be submitted for voluntary arbitration.
In order to have legal standing, the individual members should be shown to have been duly authorized
to represent the SEBA. (NOTE: Insular Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, Sept.
22, 2010, reiterated Tabigue).
• What is the principle of co-determination?
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Prof. Joselito Guianan Chan
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The principle of co-determination refers to the right given to the employees to co-determine or share the
responsibility of formulating certain policies that affect their rights, benefits and welfare.
In PAL v. NLRC, it was held that the formulation of a Code of Discipline among employees is a shared
responsibility of the employer and the employees. It affirmed the decision of the NLRC which ordered that the New
Code of Discipline should be reviewed and discussed with the union, particularly the disputed provisions and that
copies thereof be furnished each employee.
• Does the grant of the right of participation mean co-management of business or intrusion into management
prerogatives?
No. This principle does not mean that workers should approve management policies or decisions.
• What is Labor-Management Council (LMC)?
The establishment of Labor-Management Council (LMC) is mandated under the said constitutional principle
of co-determination.
------------oOo------------
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A.
ILLEGAL RECRUITMENT
• What are illegal recruitment acts that can be committed by No. 1 above (NON-LICENSEE or NON-HOLDER
OF AUTHORITY)?
When what is committed by such NON-LICENSEES or NON-HOLDERS OF AUTHORITY is any
of the acts of recruitment allowed only to be done by licensees or holders of authority such as the act of
canvassing, enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes
referring, contract services, promising or advertising for employment abroad, whether for profit or
not.
In other words, had they possessed of license or authority, their commission of any of the foregoing acts
could have been valid and not constitutive of illegal recruitment.
NOTE: The non-licensee or non-holder of authority is presumed to be engaged in such recruitment if
he in any manner, offers or promises for a fee employment abroad to two or more persons.
• What are acts of illegal recruitment when committed by ANY PERSON, whether a NON-LICENSEE, NON-
HOLDER OF AUTHORITY or even by a LICENSEE or HOLDER OF AUTHORITY?
(a) To charge or accept, directly or indirectly, any amount greater than that specified in the schedule
of allowable fees prescribed by the DOLE Secretary, or to make a worker pay or acknowledge any
amount greater than that actually received by him as a loan or advance;
(b) To furnish or publish any false notice or information or document in relation to recruitment or
employmen
(c) t;
(d) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor Code, or
for the purpose of documenting hired workers with the POEA, which include the act of reprocessing
workers through a job order that pertains to non-existent work, work different from the actual
overseas work, or work with a different employer whether registered or not with the POEA;
(e) To induce or attempt to induce a worker already employed to quit his employment in order to offer
him another unless the transfer is designed to liberate a worker from oppressive terms and conditions
of employment;
(f) To influence or attempt to influence any person or entity not to employ any worker who has not
applied for employment through his agency or who has formed, joined or supported, or has
contacted or is supported by any union or workers' organization;
(g) To engage in the recruitment or placement of workers in jobs harmful to public health or morality
or to the dignity of the Republic of the Philippines;
(h) To fail to submit reports on the status of employment, placement vacancies, remittance of foreign
exchange earnings, separation from jobs, departures and such other matters or information
as may be required by the Secretary of Labor and Employment;
(i) To substitute or alter to the prejudice of the worker, employment contracts approved and
verified by the DOLE from the time of actual signing thereof by the parties up to and including the
period of the expiration of the same without the approval of the DOLE;
(j) For an officer or agent of a recruitment or placement agency to become an officer or member of
the Board of any corporation engaged in travel agency or to be engaged directly or indirectly in
the management of travel agency;
(k) To withhold or deny travel documents from applicant workers before departure for monetary or
financial considerations, or for any other reasons, other than those authorized under the Labor Code
and its implementing rules and regulations;
(l) Failure to actually deploy a contracted worker without valid reason as determined by the Department
of Labor and Employment;
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(m) Failure to reimburse expenses incurred by the worker in connection with his documentation and
processing for purposes of deployment, in cases where the deployment does not actually take place
without the worker's fault. Illegal recruitment when committed by a syndicate or in large scale
shall be considered an offense involving economic sabotage; and
(n) To allow a non-Filipino citizen to head or manage a licensed recruitment/manning agency.”
PROHIBITED ACTIVITIES
IN RELATION TO ILLEGAL RECRUITMENT
• What are the PROHIBITED ACTIVITIES in connection with recruitment for overseas employment?
Besides illegal recruitment, the law additionally provides that it shall also be unlawful for any person or entity
to commit the following prohibited acts:
(1) Grant a LOAN to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which
will be used for payment of legal and allowable placement fees and make the migrant worker issue, either personally
or through a guarantor or accommodation party, post-dated checks in relation to the said loan;
(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a
LOAN only from specifically designated institutions, entities or persons;
(3) Refuse to condone or renegotiate a LOAN incurred by an overseas Filipino worker after the latter's employment
contract has been prematurely terminated through no fault of his or her own;
(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo
HEALTH EXAMINATIONS only from specifically designated medical clinics, institutions, entities or
persons, except in the case of a seafarer whose medical examination cost is shouldered by the principal/
shipowner;
(5) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo
TRAINING, SEMINAR, INSTRUCTION OR SCHOOLING of any kind only from specifically designated
institutions, entities or persons, except for recommendatory trainings mandated by principals/shipowners
where the latter shoulder the cost of such trainings;
(6) For a SUSPENDED RECRUITMENT/MANNING AGENCY to engage in any kind of recruitment activity
including the processing of pending workers' applications; and
(7) For a recruitment/manning agency or a foreign principal/employer to pass on the overseas Filipino worker or deduct
from his or her salary the payment of the cost of INSURANCE fees, premium or other insurance related
charges, as provided under the compulsory worker's INSURANCE coverage.
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Prof. Joselito Guianan Chan
CHAN ROBLES ONLINE BAR REVIEW
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• What are some relevant principles on illegal recruitment?
1. Mere impression that a person could deploy workers overseas is sufficient to constitute illegal recruitment. But
if no such impression is given, the accused should not be convicted for illegal recruitment.
2. Mere promise or offer of employment abroad amounts to recruitment.
3. There is no need to show that accused represented himself as a licensed recruiter.
4. Referrals may constitute illegal recruitment.
5. It is illegal recruitment to induce applicants to part with their money upon false misrepresentations and promises
in assuring them that after they paid the placement fee, jobs abroad were waiting for them and that they would
be deployed soon.
6. Recruitment whether done for profit or not is immaterial.
7. The act of receiving money far exceeding the amount as required by law is not considered as “recruitment and
placement” as this phrase is contemplated under the law.
8. Actual receipt of fee is not an element of the crime of illegal recruitment.
9. Conduct of interviews amounts to illegal recruitment.
10.Absence of receipt is not essential to hold a person guilty of illegal recruitment.
11. Conviction for illegal recruitment may be made on the strength of the testimonies of the complainants.
12.Absence of documents evidencing the recruitment activities strengthens, not weakens, the case for illegal
recruitment.
13.Only one person recruited is sufficient to convict one for illegal recruitment.
14.Non-prosecution of another suspect is immaterial.
15.Execution of affidavit of desistance affects only the civil liability but has no effect on the criminal liability for
illegal recruitment.
16.Defense of denial cannot prevail over positive identification. Positive identification where categorical and
consistent and not attended by any showing of ill motive on the part of the eyewitnesses on the matter prevails
over alibi and denial. Between the categorical statements of the prosecution witnesses, on the one hand, and bare
denials of the accused, on the other hand, the former must prevail.
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Prof. Joselito Guianan Chan
CHAN ROBLES ONLINE BAR REVIEW
www.chanroblesbar.com
4. The number of offenders is not material in illegal recruitment in large scale.
5. Recruitment in large scale or by a syndicate is malum prohibitum and not malum in se.
• What is the nature of the liability between local recruiter and its foreign principal?
The nature of their liability is “solidary” or “joint and several” for any and all claims arising out of the
employment contract of OFWs.
• Is the solidary liability of corporate officers with the recruitment agency “automatic” in character?
No. In order to hold the officers of the agency solidarily liable, it is required that there must be proof of their
culpability therefor. Thus, it was held in the 2013 case of Gagui v. Dejero,4 that while it is true that R.A. 8042 and
the Corporation Code provide for solidary liability, this liability must be so stated in the decision sought to be
implemented. Absent this express statement, a corporate officer may not be impleaded and made to personally answer
for the liability of the corporation.
• What are some relevant principles on the persons liable for illegal recruitment?
1. Employees of a licensed recruitment agency may be held liable for illegal recruitment as principal by direct
participation, together with his employer, if it is shown that he actively and consciously participated in illegal
recruitment.
2. Good faith and merely following orders of superiors are not valid defenses of an employee.
3. A manager of a recruitment/manning agency is not a mere employee. As such, he receives job applications,
interviews applicants and informs them of the agency’s requirement of payment of performance or cash bond
prior to the applicant’s deployment. As the crewing manager, he was at the forefront of the company’s
recruitment activities.
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Prof. Joselito Guianan Chan
CHAN ROBLES ONLINE BAR REVIEW
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TERMINATION OF CONTRACT OF MIGRANT WORKER
WITHOUT JUST OR VALID CAUSE
• Can an OFW acquire regularity of employment?
No. The prevailing rule is that OFWs are contractual (fixed-term only), not regular, employees. In fact, they
can never attain regularity of employment. Theirs is always fixed-term in nature.
• What are some relevant principles?
1. Indefinite period of employment of OFWs is not valid as it contravenes the explicit provision of the
POEA Rules and Regulations on fixed-period employment.
2. OFWs do not become regular employees by reason of nature of work, that is, that they are made to
perform work that is usually necessary and desirable in the usual business or trade of the employer. The
exigencies of their work necessitate that they be employed on a contractual basis. This notwithstanding
the fact that they have rendered more than twenty (20) years of service.
3. Regular employment does not result from the series of re-hiring of OFWs.
4. The fixed-period employment of OFWs is not discriminatory against them nor does it favor foreign
employers. It is for the mutual interest of both the seafarer and the employer why the employment status
must be contractual only or for a certain period of time. Seafarers spend most of their time at sea and
understandably, they cannot stay for a long and an indefinite period of time at sea. Limited access to
shore society during the employment will have an adverse impact on the seafarer. The national, cultural
and lingual diversity among the crew during the contract of employment is a reality that necessitates the
limitation of its period.
5. The expiration of the employment contracts of OFWs marks its ending.
• What is the effect of hiring a seafarer for overseas employment but assigning him to local vessel?
As held in OSM Shipping Philippines, Inc. v. NLRC,6 the non-deployment of the ship overseas did not
affect the validity of the perfected employment contract. After all, the decision to use the vessel for coastwise shipping
was made by petitioner only and did not bear the written conformity of private respondent. A contract cannot be
novated by the will of only one party. The claim of petitioner that it processed the contract of private respondent with
the POEA only after he had started working is also without merit. Petitioner cannot use its own misfeasance to defeat
his claim.
• What is the effect of non-deployment of OFW to overseas employment?
Petitioner-seafarer, in Santiago v. CF Sharp Crew Management, Inc.7 was not deployed overseas despite
the signing of a POEA-approved employment contract. One of his contentions is that such failure to deploy was an
act designed to prevent him from attaining the status of a regular employee. The Supreme Court, however, disagreed
and ruled that “seafarers are considered contractual employees and cannot be considered as regular employees under
the Labor Code. Their employment is governed by the contracts they sign every time they are rehired and their
employment is terminated when the contract expires. The exigencies of their work necessitate that they be employed
on a contractual basis.”
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Prof. Joselito Guianan Chan
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All the reliefs available to an illegally dismissed OFW are always monetary in nature.
It must be noted that under the 2009 Serrano doctrine, (Serrano v. Gallant Maritime Services, Inc.,),8 an
illegally dismissed OFW is now entitled to all the salaries for the entire unexpired portion of their employment
contracts, irrespective of the stipulated term or duration thereof. The underlined phrase in Section 10 below has
been declared unconstitutional in this case:
“In case of termination of overseas employment without just, valid or authorized cause as defined by
law or contract, or any unauthorized deductions from the migrant worker's salary, the worker shall be entitled
to the full reimbursement of his placement fee and the deductions made with interest at twelve percent (12%)
per annum, plus his salaries for the unexpired portion of his employment contract or for three (3) months
for every year of the unexpired term, whichever is less.”
However, R.A. No. 10022 (March 8, 2010), which amended R.A. No. 8042 (Migrant Workers and Overseas
Filipinos Act of 1995), has replicated and re-enacted the same unconstitutional provision exactly as above quoted.
The question is: was the unconstitutionality of the above-underlined part of the provision cured by such
replication or re-enactment in the amendatory law?
The 2014 en banc case of Sameer Overseas Placement Agency, Inc. v. Joy C. Cabiles, 9 answered this in the
negative. The said provision was thus declared still unconstitutional and null and void despite its replication in R.A.
No. 10022.
1. Monetary award to OFW is not in the nature of separation pay or backwages but a form of indemnity.
2. Only salaries are to be included in the computation of the amount due for the unexpired portion of the contract.
Overtime, holiday and leave pay and allowances are not included. However, this rule on exclusion of allowance
does not apply in case it is encapsulated in the basic salary clause.
3. Entitlement to overtime pay of OFWs. - As far as entitlement to overtime pay is concerned, the correct criterion
in determining whether or not sailors are entitled to overtime pay is not whether they were on board and cannot
leave ship beyond the regular eight (8) working hours a day, but whether they actually rendered service in excess
of said number of hours. An OFW is not entitled to overtime pay, even if guaranteed, if he failed to present any
evidence to prove that he rendered service in excess of the regular eight (8) working hours a day.
4. In case of unauthorized deductions from OFW’s salary, he shall be entitled to the full reimbursement of the
deductions made with interest at 12% per annum. This is in addition to the full reimbursement of his placement
fee with the same interest of 12% per annum plus his salaries for the unexpired portion of his employment
contract if he is terminated without just, valid or authorized cause as defined by law or contract.
• Which/Who has jurisdiction over an OFW’s claims for disability and death benefits?
a) The Labor Arbiters, NOT the SSS, have jurisdiction over claims for disability, death and other benefits
of OFWs.
b) Labor Arbiters have jurisdiction even if the case is filed by the heirs of the deceased OFW.
• Is the Labor Code’s concept of permanent total disability similar to that of OFWs?
Yes. The concept of this kind of disability under Article 192 of the Labor Code is applicable to them as
reiterated lately in the 2013 case of Kestrel Shipping Co., Inc. v. Munar. • What are the requisites for
compensability of injury or illness of seafarers?
1. It should be work-related; and
2. The injury or illness existed during the term of the seafarer’s employment contract.
DIRECT HIRING
9 G.R. No. 170139, Aug. 05, 2014. The foreign employer alleged in this case that respondent’s dismissal was due to inefficiency in
11
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Prof. Joselito Guianan Chan
CHAN ROBLES ONLINE BAR REVIEW
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3. Name hires or workers who are able to secure overseas employment opportunity with an employer
without the assistance or participation of any agency.
▪ Does the POEA Administrator or the DOLE Secretary or DOLE Regional Director have the power to issue closure
order?
Yes. If upon preliminary examination or surveillance, the DOLE Secretary, the POEA Administrator or DOLE
Regional Director is satisfied that such danger or exploitation exists, a written order may be issued for the closure of
the establishment being used for illegal recruitment activity.
• Does the DOLE Secretary have the power to issue warrant of arrest and search and seizure orders?
No. Salazar v. Achacoso,10 declared that the exercise by the DOLE Secretary of his twin powers to issue
arrest warrant and search and seizure orders provided under Article 38[c] of the Labor Code is unconstitutional. Only
regular courts can issue such orders.
REMITTANCE OF FOREIGN EXCHANGE EARNINGS
B.
EMPLOYMENT OF NON-RESIDENT ALIENS
• What are the categories of foreign nationals EXEMPTED from securing AEP?
a) All members of the diplomatic service and foreign government officials accredited by and with reciprocity
arrangement with the Philippine government;
b) Officers and staff of international organizations of which the Philippine government is a member, and their
legitimate spouses desiring to work in the Philippines;
c) All foreign nationals granted exemption by law;
d) Owners and representatives of foreign principals whose companies are accredited by the POEA, who come to
the Philippines for a limited period and solely for the purpose of interviewing Filipino applicants for
employment abroad;
e) Foreign nationals who come to the Philippines to teach, present and/or conduct research studies in universities
and colleges as visiting, exchange or adjunct professors under formal agreements between the universities or
colleges in the Philippines and foreign universities or colleges; or between the Philippine government and
foreign government: provided that the exemption is on a reciprocal basis; and
f) Permanent resident foreign nationals and probationary or temporary resident visa holders under Section 13 of
the Philippine Immigration Act of 1940.
• What are the categories of foreign nationals EXCLUDED from securing AEP?
a) Members of the governing board with voting rights only and do not intervene in the management of the
corporation or in the day-to-day operation of the enterprise.
b) Corporate officers as provided under the Corporation Code of the Philippines, Articles of Incorporation, and
By-laws of the Corporation such as President, Secretary and Treasurer.
c) Those providing consultancy services who do not have employers in the Philippines.
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d) Intra-corporate transferee who is a manager, executive or specialist as defined below in accordance with
Trade Agreements and an employee of the foreign service supplier for at least one (1) year prior to
deployment to a branch, subsidiary, affiliate or representative office in the Philippines:
(i) an EXECUTIVE: a natural person within the organization who primarily directs the management of the
organization and exercises wide latitude in decision making and receives only general supervision or
direction from higher level executives, the board of directors or stockholders of the business; an
executive would not directly perform tasks related to the actual provision of the service or services of
the organization;
(ii) a MANAGER: a natural person within the organization who primarily directs the organization/
department/ subdivision and exercises supervisory and control functions over other supervisory,
managerial or professional staff; does not include first-line supervisors unless employees supervised are
professionals; does not include employees who primarily perform tasks necessary for the provision of
the service; or
(iii) a SPECIALIST: a natural person within the organization who possesses knowledge at an advanced level
of expertise essential to the establishment/provision of the service and/or possesses proprietary
knowledge of the organization's service, research equipment, techniques or management; may include,
but is not limited to, members of a licensed profession.
e) Contractual service supplier who is a manager, executive or specialist and an employee of a foreign service
supplier which has no commercial presence in the Philippines:
(i) who enters the Philippines temporarily to supply a service pursuant to a contract between his/her employer
and a service consumer in the Philippines;
(ii) must possess the appropriate educational and professional qualifications; and
(iii) must be employed by the foreign service supplier for at least one (1) year prior to the supply of
service in the Philippines.
1.
APPRENTICES AND LEARNERS
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CONFLICT IN THE AGE REQUIREMENT FOR APPRENTICES:
Under the Labor Code as stated above – 14 years of age
Under the Labor Code’s Implementing Rules – “Be at least 15 years of age, provided those who are at
least 15 years of age but less than 18 may be eligible for apprenticeship only in non-hazardous
occupations.”
2.
DISABLED WORKERS
(PERSONS WITH DISABILITY)
(R.A. No. 7277, as Amended by R.A. No. 9442)
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A PWD hired as an apprentice or learner shall be paid not less than seventy-five percent (75%) of the applicable
minimum wage.
b.
DISCRIMINATION ON EMPLOYMENT
• What is the rule on discrimination against employment of PWDs?
No entity, whether public or private, shall discriminate against a qualified PWD by reason of disability in
regard to job application procedures, the hiring, promotion, or discharge of employees, employee compensation, job
training, and other terms, conditions and privileges of employment. The following constitute acts of discrimination:
(a) Limiting, segregating or classifying a job applicant with disability in such a manner that adversely affects
his work opportunities;
(b) Using qualification standards, employment tests or other selection criteria that screen out or tend to
screen out a PWD unless such standards, tests or other selection criteria are shown to be job-related for
the position in question and are consistent with business necessity; (c) Utilizing standards, criteria, or
methods of administration that:
(1) have the effect of discrimination on the basis of disability; or
(2) perpetuate the discrimination of others who are subject to common administrative control.
(d) Providing less compensation, such as salary, wage or other forms of remuneration and fringe benefits,
to a qualified employee with disability, by reason of his disability, than the amount to which a
nondisabled person performing the same work is entitled;
(e) Favoring a non-disabled employee over a qualified employee with disability with respect to promotion,
training opportunities, study and scholarship grants, solely on account of the latter’s disability;
(f) Re-assigning or transferring an employee with a disability to a job or position he cannot perform by
reason of his disability;
(g) Dismissing or terminating the services of an employee with disability by reason of his disability unless
the employer can prove that he impairs the satisfactory performance of the work involved to the prejudice
of the business entity; provided, however, that the employer first sought to provide reasonable
accommodations for persons with disability;
(h) Failing to select or administer in the most effective manner employment tests which accurately reflect
the skills, aptitude or other factor of the applicant or employee with disability that such tests purports to
measure, rather than the impaired sensory, manual or speaking skills of such applicant or employee, if
any; and
(i) Excluding PWD from membership in labor unions or similar organizations.
------------oOo------------
SYLLABUS
MAJOR TOPIC 3
LABOR STANDARDS
A.
CONDITIONS OF EMPLOYMENT
1.
SCOPE
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• Who are covered by the labor standards provisions of the Labor Code?
Employees in ALL establishments, whether operated for profit or not, are covered by the law on labor
standards.
• Who are excluded?
The following are excluded from the coverage of the law on labor standards:
a. Government employees;
b. Managerial employees;
c. Other officers or members of a managerial staff;
d. Domestic workers or kasambahay and persons in the personal service of another; e. Workers paid
by results;
f. Non-agricultural field personnel; and
g. Members of the family of the employer.
2.
HOURS OF WORK
a.
PRINCIPLES IN DETERMINING HOURS WORKED
“Fair day’s wage for a fair day’s labor,” remains the basic factor in determining the employees’
wages and backwages.
b.
NORMAL HOURS OF WORK
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(12) hours. In any case, any work performed beyond twelve (12) hours a day or forty-eight (48) hours a week shall
be subject to overtime pay.
ii.
POWER INTERRUPTIONS/BROWNOUTS
d.
WAITING TIME
(Article 84, Labor Code)
e.
OVERTIME
(Article 87, Labor Code)
• What are some basic principles on overtime work?
1. Work rendered after normal eight (8) hours of work is called “overtime work.”
2. In computing overtime work, "regular wage" or "basic salary" means "cash" wage only without
deduction for facilities provided by the employer.
3. "Premium pay" means the additional compensation required by law for work performed within eight (8)
hours on non-working days, such as regular holidays, special holidays and rest days.
4. "Overtime pay" means the additional compensation for work performed beyond eight (8) hours.
5. Illustrations on how overtime is computed:
a. For overtime work performed on an ORDINARY DAY, the overtime pay is plus 25% of the
basic hourly rate.
b. For overtime work performed on a REST DAY OR ON A SPECIAL DAY, the overtime pay is
plus 30% of the basic hourly rate which includes 30% additional compensation as provided in
Article 93 [a] of the Labor Code.
c. For overtime work performed on a REST DAY WHICH FALLS ON A SPECIAL DAY, the
overtime pay is plus 30% of the basic hourly rate which includes 50% additional compensation as
provided in Article 93 [c] of the Labor Code.
d. For overtime work performed on a REGULAR HOLIDAY, the overtime pay is plus 30% of the
basic hourly rate which includes 100% additional compensation as provided in Article 94 [b] of the
Labor Code.
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e. For overtime work performed on a REST DAY WHICH FALLS ON A REGULAR
HOLIDAY, the overtime pay is plus 30% of the basic hourly rate which includes 160% additional
compensation.
• May an employee validly refuse to render overtime work under any of the afore-said circumstances?
No. When an employee refuses to render emergency overtime work under any of the foregoing conditions,
he may be dismissed on the ground of insubordination or willful disobedience of the lawful order of the employer.
f.
NIGHT SHIFT DIFFERENTIAL
(ARTICLE 86, LABOR CODE)
• How is it reckoned and computed?
Night shift differential is equivalent to 10% of employee's regular wage for each hour of work performed
between 10:00 p.m. and 6:00 a.m. of the following day.
• What is the distinction between night shift differential pay and overtime pay?
When the work of an employee falls at night time, the receipt of overtime pay shall not preclude the right to
receive night differential pay. The reason is the payment of the night differential pay is for the work done during the
night; while the payment of the overtime pay is for work in excess of the regular eight (8) working hours.
• How is Night Shift Differential Pay computed?
1. Where night shift (10 p.m. to 6 a.m.) work is regular work.
a. On an ordinary day: Plus 10% of the basic hourly rate or a total of 110% of the basic hourly rate.
b. On a rest day, special day or regular holiday: Plus 10% of the regular hourly rate on a rest day,
special day or regular holiday or a total of 110% of the regular hourly rate.
2. Where night shift (10 p.m. to 6 a.m.) work is overtime work.
a. On an ordinary day: Plus 10% of the overtime hourly rate on an ordinary day or a total of 110%
of the overtime hourly rate on an ordinary day.
b. On a rest day or special day or regular holiday: Plus 10% of the overtime hourly rate on a rest
day or special day or regular holiday.
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3. For overtime work in the night shift. Since overtime work is not usually eight (8) hours, the
compensation for overtime night shift work is also computed on the basis of the hourly rate.
a. On an ordinary day. Plus 10% of 125% of basic hourly rate or a total of 110% of 125% of basic
hourly rate.
b. On a rest day or special day or regular holiday. Plus 10% of 130% of regular hourly rate on
said days or a total of 110% of 130% of the applicable regular hourly rate.
g.
REST PERIODS
1.
WEEKLY REST DAY
2.
EMERGENCY REST DAY WORK
• When can an employer require work on a rest day?
The employer may require any of its employees to work on their scheduled rest day for the duration of the
following emergency and exceptional conditions:
a. In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake,
epidemic or other disaster or calamity, to prevent loss of life and property, or in case of force majeure or
imminent danger to public safety;
b. In case of urgent work to be performed on machineries, equipment, or installations, to avoid serious loss
which the employer would otherwise suffer;
c. In the event of abnormal pressure of work due to special circumstances, where the employer cannot
ordinarily be expected to resort to other measures;
d. To prevent serious loss of perishable goods;
e. Where the nature of the work is such that the employees have to work continuously for seven (7) days in
a week or more, as in the case of the crew members of a vessel to complete a voyage and in other similar
cases; and
f. When the work is necessary to avail of favorable weather or environmental conditions where performance
or quality of work is dependent thereon.
h.
HOLIDAY PAY/PREMIUM PAY
1.
COVERAGE, EXCLUSIONS
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• What are REGULAR and SPECIAL HOLIDAYS?
A. Regular Holidays
New Year’s Day - 1 January (Wednesday)
Araw ng Kagitingan- 9 April (Wednesday)
Maundy Thursday - 17 April
Good Friday - 18 April
Labor Day - 1 May (Thursday)
Independence Day - 12 June (Thursday)
National Heroes Day- 25 August (Last Monday of August)
Bonifacio Day - 30 November (Sunday)
Christmas Day - 25 December (Thursday)
Rizal Day - 30 December (Tuesday)
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• If the employee worked during a special day that also falls on his/her rest day, he/she shall be paid an additional
50% of his/her daily rate on the first eight hours of work. Computation: [(Daily rate x 150%) + COLA].
• If the employee worked in excess of eight hours (overtime work) during a special day that also falls on his/her
rest day, he/she shall be paid an additional 30 % of his/her hourly rate on said day. Computation: (Hourly rate of
the basic daily wage x 150% x 130% x number of hours worked). c. Special Holiday for all schools
• For private establishments, 25 February 2014 is an ordinary workday and no premium is required to be paid for
work on said day.
• On the other hand, employees in private schools, whether academic or administrative personnel, shall be paid in
accordance with the rules for pay on special (non-working) days as stated above.
• What are the effects of absences on the computation of holiday pay?
1. Employees on leave of absence with pay - entitled to holiday pay when they are on leave of absence
with pay.
2. Employees on leave of absence without pay on the day immediately preceding the regular holiday -
may not be paid the required holiday pay if they have not worked on such regular holiday.
3. Employees on leave while on SSS or employee’s compensation benefits - Employers should grant the
same percentage of the holiday pay as the benefit granted by competent authority in the form of
employee’s compensation or social security payment, whichever is higher, if they are not reporting for
work while on such benefits.
4. When day preceding regular holiday is a non-working day or scheduled rest day - should not be
deemed to be on leave of absence on that day, in which case, employees are entitled to the regular holiday
pay if they worked on the day immediately preceding the non-working day or rest day.
2.
HOLIDAY PAY/PREMIUM PAY OF
TEACHERS, PIECE WORKERS, TAKAY,
SEASONAL WORKERS, SEAFARERS
• Are private school teachers entitled to holiday pay during semestral vacations? What about Christmas
vacation”
No, as far as regular holidays during semestral vacations are concerned. Yes,
as far as regular holidays during Christmas vacation are concerned.
• Are hourly-paid teachers entitled to holiday pay?
A school is exempted from paying hourly-paid faculty members their pay for regular holidays, whether the
same be during the regular semesters of the school year or during semestral, Christmas, or Holy Week vacations.
However, it is liable to pay the faculty members their regular hourly rate on days declared as special holidays or if,
for some reason, classes are called off or shortened for the hours they are supposed to have taught, whether extensions
of class days be ordered or not; and in case of extensions, said faculty members shall likewise be paid their hourly
rates should they teach during said extensions.
•Are piece-workers, takay and others paid by results entitled to holiday pay?
Yes. Where a covered employee is paid by results or output such as payment on piece-work, his holiday
pay should not be less than his average daily earnings for the last seven (7) actual working days preceding the
regular holiday. In no case, however, should the holiday pay be less than the applicable statutory minimum wage
rate.
• What are the distinctions between “supervised” and “unsupervised” workers paid by results to determine their
entitlement to holiday pay?
The principal test to determine entitlement to holiday pay is whether the employees’ time and performance
of the work are “supervised” or “unsupervised” by their employer. If supervised, the employee is entitled to holiday
pay. If unsupervised, he is not.
The distinctions between supervised and unsupervised workers paid by results are as follows:
1. Those whose time and performance are supervised by the employer. Here, there is an element of control
and supervision over the manner as to how the work is to be performed. A piece-rate worker belongs to
this category especially if he performs his work in the company premises; and
2. Those whose time and performance are unsupervised. Here, the employer’s control is over the result of
the work. Workers on pakyao and takay basis belong to this group. Both classes of workers are paid
per unit accomplished. Piece-rate payment is generally practiced in garment factories where work is
done in the company premises, while payment on pakyao and takay basis is commonly observed in the
agricultural industry, such as in sugar plantations where the work is performed in bulk or in volumes,
hence, difficult to quantify.
•Are seasonal workers entitled to holiday pay?
Yes. Seasonal workers are entitled to holiday pay while working during the season. They may not be paid
the required regular holiday pay during off-season where they are not at work.
• Are seafarers entitled to holiday pay?
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Yes. Any hours of work or duty including hours of watch-keeping performed by the seafarer on designated
rest days and holidays shall be paid rest day or holiday pay accordingly.
• What are important principles on holiday pay?
• In case of two (2) regular holidays falling on the same day, the worker should be compensated as follows: o If
unworked – 200% for the two regular holidays; o If worked – 200% for the two regular holidays plus premium
of 100% for work on that day.
• “Monthly-paid” employees are not excluded from the coverage of holiday pay.
i.
TH
13 MONTH PAY
• What are the kinds of establishment covered by the law on service charge?
The rules on service charge apply only to establishments collecting service charges, such as hotels,
restaurants, lodging houses, night clubs, cocktail lounges, massage clinics, bars, casinos and gambling houses, and
similar enterprises, including those entities operating primarily as private subsidiaries of the government.
• Who are the employees covered by this law?
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The same rules on service charges apply to all employees of covered employers, regardless of their positions,
designations or employment status, and irrespective of the method by which their wages are paid except those
receiving more than P2,000.00 a month.
• Who are not covered?
Specifically excluded from coverage are employees who are receiving wages of more than P2,000.00 a
month. However, it must be pointed out that the P2,000.00 ceiling is no longer realistic considering the applicable
minimum wages prevailing in the country. Hence, it must be disregarded.
•How is the service charge distributed?
a. Percentage of sharing.
All service charges collected by covered employers are required to be distributed at the following rates:
1. 85% to be distributed equally among the covered employees; and
2. 15% to management to answer for losses and breakages and distribution to employees receiving more
than P2,000.00 a month, at the discretion of the management.
b. Frequency of distribution.
The share of the employees referred to above should be distributed and paid to them not less often than once every
two (2) weeks or twice a month at intervals not exceeding sixteen (16) days.
• Can the service charge be integrated into the wages of covered employees?
Yes. In case the service charge is abolished, the share of covered employees should be considered integrated
in their wages, in accordance with Article 96 of the Labor Code. The basis of the amount to be integrated is the
average monthly share of each employee for the past twelve (12) months immediately preceding the abolition or
withdrawal of such charges.
• What are some principles on service charge?
• Tips and services charges are two different things. Tips are given by customers voluntarily to waiters and other
people who serve them out of recognition of satisfactory or excellent service. There is no compulsion to give tips
under the law. The same may not be said of service charges which are considered integral part of the cost of the
food, goods or services ordered by the customers.
• Service charges are not in the nature of profit share and, therefore, cannot be deducted from wage.
B.
WAGES
1.
WAGE VS. SALARY
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4. It includes the fair and reasonable value, as determined by the DOLE Secretary, of board, lodging, or
other facilities customarily furnished by the employer to the employee. “Fair and reasonable value”
shall not include any profit to the employer or to any person affiliated with the employer.
• What is basic wage?
“Basic wage” means all the remuneration or earnings paid by an employer to a worker for services rendered on
normal working days and hours but does not include cost-of-living allowances, profit-sharing payments, premium
payments, 13th month pay or other monetary benefits which are not considered as part of or integrated into the regular
salary of the workers.
Further, as held in Honda Phils., Inc. v. Samahan ng Malayang Manggagawa sa Honda, the following should be
excluded from the computation of “basic salary,” to wit: payments for sick, vacation and maternity leaves, night
differentials, regular holiday pay and premiums for work done on rest days and special holidays.
• What is minimum wage?
The minimum wage rates prescribed by law shall be the basic cash wages without deduction therefrom of
whatever benefits, supplements or allowances which the employees enjoy free of charge aside from the basic pay.
• What is statutory minimum wage?
The term “statutory minimum wage” refers simply to the lowest basic wage rate fixed by law that an employer can
pay his workers.
• What is regional minimum wage rate?
The term “regional minimum wage rates” refers to the lowest basic wage rates that an employer can pay
his workers, as fixed by the Regional Tripartite Wages and Productivity Boards (RTWPBs), and which shall not
be lower than the applicable statutory minimum wage rates.
• What are included/excluded in the term “wage rate”?
The term "wage rate" includes cost-of-living allowances as fixed by the RTWPB, but excludes other wage-
related benefits such as overtime pay, bonuses, night shift differential pay, holiday pay, premium pay, 13 th month pay,
premium pay, leave benefits, among others.
• Can COLA be integrated into the minimum wage?
Yes. The cost-of-living allowance (COLA) may be ordered integrated into the minimum wage by the Regional
Tripartite Wages and Productivity Board (“RTWPB” or “Regional Board”).
• What is COLA?
COLA is not in the nature of an allowance intended to reimburse expenses incurred by employees in the
performance of their official functions. It is not payment in consideration of the fulfillment of official duty. As defined,
“cost of living” refers to “the level of prices relating to a range of everyday items” or “the cost of purchasing the
goods and services which are included in an accepted standard level of consumption.” Based on this premise, COLA
is a benefit intended to cover increases in the cost of living.
• What is the “NO WORK, NO PAY” principle?
The “no work, no pay” or “fair day’s wage for fair day’s labor” means that if the worker does not work, he is
generally not entitled to any wage or pay. The exception is when it was the employer who unduly prevented him from
working despite his ableness, willingness and readiness to work; or in cases where he is illegally locked out or illegally
suspended or illegally dismissed, or otherwise illegally prevented from working, in which event, he should be entitled
to his wage.
3.
FACILITIES VERSUS SUPPLEMENTS
• What are facilities?
The term “facilities” includes articles or services for the benefit of the employee or his family but does not
include tools of the trade or articles or services primarily for the benefit of the employer or necessary to the conduct
of the employer’s business. They are items of expense necessary for the laborer’s and his family’s existence and
subsistence which form part of the wage and when furnished by the employer, are deductible therefrom, since if they
are not so furnished, the laborer would spend and pay for them just the same.
•What are supplements?
The term “supplements” means extra remuneration or special privileges or benefits given to or received by
the laborers over and above their ordinary earnings or wages.
• What are the distinctions between facilities and supplements?
The benefit or privilege given to the employee which constitutes an extra remuneration over and above his
basic or ordinary earning or wage is supplement; and when said benefit or privilege is made part of the laborer’s basic
wage, it is a facility. The criterion is not so much with the kind of the benefit or item (food, lodging, bonus or sick
leave) given but its purpose. Thus, free meals supplied by the ship operator to crew members, out of necessity, cannot
be considered as facilities but supplements which could not be reduced having been given not as part of wages but as
a necessary matter in the maintenance of the health and efficiency of the crew during the voyage.
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• What is the rule on deductibility of facilities and supplements?
Facilities are deductible from wage but not supplements.
4.
NON-DIMINUTION OF BENEFITS
• What is the applicability of the non-diminution rule in Article 100 of the Labor Code?
Albeit Article 100 is clear that the principle of non-elimination and non-diminution of benefits apply only to
the benefits being enjoyed “at the time of the promulgation” of the Labor Code, the Supreme Court has consistently
cited Article 100 as being applicable even to benefits granted after said promulgation. It has, in fact, been treated as
the legal anchor for the declaration of the invalidity of so many acts of employers deemed to have eliminated or
diminished the benefits of employees.
The 2014 case of Wesleyan University-Philippines v. Wesleyan University-Philippines Faculty and Staff
Association,11 succinctly pointed out that the Non-Diminution Rule found in Article 100 of the Labor Code explicitly
prohibits employers from eliminating or reducing the benefits received by their employees. This rule, however, applies
only if the benefit is based on any of the following:
1. An express policy; (2) A written contract; or
(3) A company practice.
There is not much controversy if the benefit involved is provided for under Nos. 1 and 2 above. Thus, if it is
expressly laid down in a written policy unilaterally promulgated by the employer, the employer is duty-bound to
adhere and comply by its own policy. It cannot be allowed to renege from its commitment as expressed in the policy.
If the benefit is granted under a written contract such as an employment contract or a collective bargaining
agreement (CBA), the employer is likewise under legal compulsion to so comply therewith. On No. 3 above, please
see discussion below.
4.1.
COMPANY PRACTICE
• What is company practice?
Company practice is a custom or habit shown by an employer’s repeated, habitual customary or succession
of acts of similar kind by reason of which, it gains the status of a company policy that can no longer be disturbed or
withdrawn.
To ripen into a company practice that is demandable as a matter of right, the giving of the benefit should not
be by reason of a strict legal or contractual obligation but by reason of an act of liberality on the part of the
employer.
• What are the criteria that may be used to determine existence of company practice?
Since there is no hard and fast rule which may be used and applied in determining whether a certain act of
the employer may be considered as having ripened into a practice, the following criteria may be used to determine
whether an act has ripened into a company practice:
1. The act of the employer has been done for a considerable period of time;
2. The act should be done consistently and intentionally; and
3. The act should not be a product of erroneous interpretation or construction of a doubtful or difficult
question of law or provision in the CBA.
(See the 2013 case of Vergara, Jr. v. Coca-Cola Bottlers Philippines, Inc.12)
1. THE ACT OF THE EMPLOYER HAS BEEN DONE FOR A CONSIDERABLE PERIOD OF
TIME.
If done only once as in the case of Philippine Appliance Corporation (Philacor) v. CA,13 where the CBA
signing bonus was granted only once during the 1997 CBA negotiation, the same cannot be considered as having
ripened into a company practice.
In the following cases, the act of the employer was declared company practice because of the considerable
period of time it has been practiced:
Union (NMS-IND-APL), G.R. No. 185556, March 28, 2011, 646 SCRA 501, 527; TSPIC Corporation v. TSPIC Employees Union
(FFW), G.R. No. 163419, Feb. 13, 2008, 545 SCRA 215, 226.
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(a) Davao Fruits Corporation v. Associated Labor Unions. 14 - The act of the company of freely and
continuously including in the computation of the 13th month pay, items that were expressly excluded by
law has lasted for six (6) years, hence, was considered indicative of company practice.
(b) Sevilla Trading Company v. A. V. A. Semana. 15 - The act of including non-basic benefits such as paid
leaves for unused sick leave and vacation leave in the computation of the employees’ 13th month pay
for at least two (2) years was considered a company practice.
(c) The 2010 case of Central Azucarera de Tarlac v. Central Azucarera de Tarlac Labor UnionNLU,16
also ruled as company practice the act of petitioner of granting for thirty (30) years, its workers the
mandatory 13th month pay computed in accordance with the following formula: Total Basic Annual
Salary divided by twelve (12) and Including in the computation of the Total Basic Annual Salary the
following: basic monthly salary; first eight (8) hours overtime pay on Sunday and legal/ special holiday;
night premium pay; and vacation and sick leaves for each year.
5.
17 G.R. No. L-57636, May 16, 1983, 122 SCRA 267; 207 Phil. 2235.
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PROHIBITIONS REGARDING WAGES
(See Articles 112 to 119 of the Labor Code)
(1) NON-INTERFERENCE BY EMPLOYER IN THE DISPOSAL BY EMPLOYEES OF THEIR WAGES.
Article 112 of the Labor Code - No employer is allowed to limit or otherwise interfere with the freedom of any
employee to dispose of his wages and no employer shall in any manner oblige any of his employees to patronize any
store or avail of the services offered by any person.
(2) WAGES NOT SUBJECT TO EXECUTION OR ATTACHMENT; EXCEPTION.
The general rule is that laborer’s wages are not subject to execution or attachment. The exception is when such
execution or attachment is made for debts incurred for food, shelter, clothing and medical attendance.
(3) PROHIBITION ON DEDUCTIONS FROM WAGES.
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(b) to reduce his wages and benefits; or
(c) to discharge him from employment; or
(d) to discriminate against him in any manner; on account and by reason of said employee’s:
(1) act of filing any complaint or institution of any proceeding under Title II [Wages], Book III of the Labor
Code; or
(2) act of testifying in said proceedings or when he is about to testify therein.
(9) FALSE STATEMENT, REPORT OR RECORD.
Article 119 of the Labor Code prohibits any person, whether employer or not, to make any false statement, report or
record required to be filed or kept in accordance with and pursuant to the provisions of the Labor Code, knowing such
statement, report or record to be false in any material respect.
Examples: Payrolls, time records, employment records and production records, among others.
6.
WAGE ORDER
• What is a Wage Order?
The term “Wage Order” refers to the order promulgated by the Regional Tripartite Wages and Productivity Board
(Regional Board) pursuant to its wage fixing authority.
• When is it proper to issue a Wage Order?
Whenever conditions in the region so warrant, the Regional Board shall investigate and study all pertinent
facts and based on the prescribed standards and criteria, shall proceed to determine whether a Wage Order should be
issued. Any such Wage Order shall take effect after fifteen (15) days from its complete publication in at least one (1)
newspaper of general circulation in the region.
• What are the standards/criteria for minimum wage fixing?
In the determination of regional minimum wages, the Regional Board shall, among other relevant factors,
consider the following:
(1) Needs of workers and their families
1) Demand for living wages;
2) Wage adjustment vis-à-vis the consumer price index;
3) Cost of living and changes therein; 4) Needs of workers and their families; 5) Improvements in
standards of living.
(2) Capacity to pay
1) Fair return on capital invested and capacity to pay of employers; 2) Productivity.
(3) Comparable wages and incomes 1) Prevailing wage levels.
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• Who are workers paid by results?
They are workers who are engaged on pakyao, piecework, task and other non-time work. They are so called
because they are paid not on the basis of the time spent on their work but according to the quantity, quality or kind of
job and the consequent results thereof.
• What are the categories of workers paid by results?
Workers paid by results may be classified into:
a) Supervised workers; and
b) Unsupervised workers.
As the term clearly connotes, supervised workers are those whose manner of work is under the control of the
employer; while unsupervised workers are those whose work is controlled more in the results than in the manner or
method of performing it.
The law does not make any categorical differentiation among the workers paid by results. Thus, the workers may be
on pakyao (sometimes spelled “pakyaw”), takay or piece-rate or output basis. All of them are similar in character in
that they are all paid on the basis of the results of their work. When the law does not distinguish, we should not
distinguish.
WAGE RATE OF APPRENTICES AND LEARNERS
• What is the wage rate of apprentices and learners?
The wage rate of a learner or an apprentice is set at seventy-five percent (75%) of the statutory minimum
wage.
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Following is the formula for the correction of wage distortion in the pay scale structures:
Minimum Wage = % x Prescribed Increase = Distortion Adjustment Actual
Salary
The above formula was held to be just and equitable.
C.
LEAVES
1.
SERVICE INCENTIVE LEAVE
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“Paternity leave” covers a married male employee allowing him not to report for work for seven (7)
calendar days but continues to earn the compensation therefor, on the condition that his spouse has delivered a child
or suffered miscarriage for purposes of enabling him to effectively lend support to his wife in her period of recovery
and/or in the nursing of the newly-born child.
“Delivery” includes childbirth or any miscarriage.
“Spouse” refers to the lawful wife. For this purpose, “lawful wife” refers to a woman who is legally married
to the male employee concerned.
“Cohabiting” refers to the obligation of the husband and wife to live together.
•What is the covered total number of deliveries?
Every married employee in the private and public sectors is entitled to a paternity leave of seven (7) calendar days
with full pay for the first four (4) deliveries of the legitimate spouse with whom he is cohabiting.
Paternity leave benefits are granted to the qualified employee after the delivery by his wife, without prejudice to an
employer allowing an employee to avail of the benefit before or during the delivery, provided that the total number
of days should not exceed seven (7) calendar days for each delivery.
• Is an unavailed paternity leave benefit convertible to cash?
No. In the event that the paternity leave benefit is not availed of, said leave shall not be convertible to cash.
4.
PARENTAL LEAVE FOR SOLO PARENTS
(R.A. No. 8972)
• What is parental leave?
“Parental leave” is the leave benefit granted to a male or female solo parent to enable him/her to perform
parental duties and responsibilities where physical presence is required.
• How many days may be availed of as parental leave?
The parental leave shall not be more than seven (7) working days every year to a solo parent who has
rendered service of at least one (1) year, to enable him/her to perform parental duties and responsibilities where his/
her physical presence is required. This leave shall be non-cumulative.
It bears noting that this leave privilege is an additional leave benefit which is separate and distinct from any
other leave benefits provided under existing laws or agreements.
• Who is a solo parent?
The term "solo parent" refers to any individual who falls under any of the following categories:
(1) A woman who gives birth as a result of rape and other crimes against chastity even without a final
conviction of the offender: Provided, That the mother keeps and raises the child;
(2) Parent left solo or alone with the responsibility of parenthood due to death of spouse;
(3) Parent left solo or alone with the responsibility of parenthood while the spouse is detained or is serving
sentence for a criminal conviction for at least one (1) year;
(4) Parent left solo or alone with the responsibility of parenthood due to physical and/or mental incapacity
of spouse as certified by a public medical practitioner;
(5) Parent left solo or alone with the responsibility of parenthood due to legal separation or de facto
separation from spouse for at least one (1) year, as long as he/she is entrusted with the custody of the
children;
(6) Parent left solo or alone with the responsibility of parenthood due to declaration of nullity or annulment
of marriage as decreed by a court or by a church as long as he/she is entrusted with the custody of the
children;
(7) Parent left solo or alone with the responsibility of parenthood due to abandonment of spouse for at least
one (1) year;
(8) Unmarried mother/father who has preferred to keep and rear her/his child/children instead of having
others care for them or give them up to a welfare institution;
(9) Any other person who solely provides parental care and support to a child or children;
(10) Any family member who assumes the responsibility of head of family as a result of the death,
abandonment, disappearance or prolonged absence of the parents or solo parent.
• What is the effect of change of status of the solo parent?
A change in the status or circumstance of the parent claiming benefits under this Act, such that he/she is no
longer left alone with the responsibility of parenthood, shall terminate his/her eligibility for these benefits.
• Who are considered children under this law?
"Children" refer to those living with and dependent upon the solo parent for support who are unmarried,
unemployed and not more than eighteen (18) years of age, or even over eighteen (18) years but are incapable of
selfsupport because of mental and/or physical defect/disability.
• Is an unavailed parental leave convertible to cash?
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No. In the event that the parental leave is not availed of, said leave shall not be convertible to cash unless
specifically agreed upon previously.
5.
SPECIAL LEAVES FOR WOMEN WORKERS
(MAGNA CARTA OF WOMEN)
6.
LEAVE FOR VICTIMS OF VIOLENCE
AGAINST WOMEN AND CHILDREN
(R.A. No. 9262)
• What is this kind of leave?
This special leave is granted to a woman employee who is a victim under this law. It is for a total of ten (10)
days of paid leave of absence, in addition to other paid leaves under the law. It is extendible when the necessity arises
as specified in the protection order. Its purpose is to enable the woman employee to attend to the medical and legal
concerns relative to said law. This leave is not convertible to cash.
• What is the requirement for its entitlement?
At any time during the application of any protection order, investigation, prosecution and/or trial of the
criminal case, a victim of Violence Against Women and their Children (VAWC) who is employed shall be entitled to
said paid leave of up to ten (10) days. The Punong Barangay/kagawad or prosecutor or the Clerk of Court, as the case
may be, shall issue a certification at no cost to the woman that such an action is pending, and this is all that is required
for the employer to comply with the 10-day paid leave.
D.
SPECIAL GROUPS OF EMPLOYEES
1.
WOMEN
a.
DISCRIMINATION
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R.A. No. 9710, otherwise known as “The Magna Carta of Women,” is a comprehensive women’s human
rights law that seeks to eliminate discrimination against women by recognizing, protecting, fulfilling and promoting
the rights of Filipino women, especially those in marginalized sector.
Based on the definition of the term “Discrimination Against Women” in R.A. No. 9710, the following are
considered discriminatory acts:
1. Any gender-based distinction, exclusion, or restriction which has the effect or purpose of impairing or
nullifying the recognition, enjoyment, or exercise by women, irrespective of their marital status, on a basis
of equality of men and women, of human rights and fundamental freedoms in the political, economic,
social, cultural, civil or any other field;
2. Any act or omission, including by law, policy, administrative measure, or practice, that directly or
indirectly excludes or restricts women in the recognition and promotion of their rights and their access to
and enjoyment of opportunities, benefits or privileges;
3. A measure or practice of general application that fails to provide for mechanisms to offset or address sex
or gender-based disadvantages or limitations of women, as a result of which women are denied or
restricted in the recognition and protection of their rights and in their access to and enjoyment of
opportunities, benefits, or privileges; or women, more than men, are shown to have suffered the greater
adverse effects of those measures or practices; and
4. Discrimination compounded by or intersecting with other grounds, status, or condition, such as ethnicity,
age, poverty or religion.
Additionally, women are guaranteed their right to decent work. The State shall progressively realize and
ensure decent work standards for women that involve the creation of jobs of acceptable quality in conditions of
freedom, equity, security and human dignity.
b.
STIPULATION AGAINST MARRIAGE
21 G.R. No. 118978, May 23, 1997, 272 SCRA 596, 605.
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c.
PROHIBITED ACTS
• What are the prohibited acts against women under the Labor Code?
Article 137 of the Labor Code and its implementing rule consider unlawful the followings acts of the
employer:
1. To discharge any woman employed by him for the purpose of preventing such woman from enjoying
maternity leave, facilities and other benefits provided under the Labor Code;
2. To discharge such woman on account of her pregnancy, or while on leave or in confinement due to her
pregnancy;
3. To discharge or refuse the admission of such woman upon returning to her work for fear that she may
again be pregnant;
4. To discharge any woman or any other employee for having filed a complaint or having testified or
being about to testify under the Labor Code; or
5. To require as a condition for or continuation of employment that a woman employee shall not get married
or to stipulate expressly or tacitly that upon getting married, a woman employee shall be deemed
resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a
woman employee merely by reason of marriage.
d.
SEXUAL HARASSMENT
(ANTI-SEXUAL HARASSMENT ACT)
(R.A. No. 7877)
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2. create a committee on decorum and investigation of cases on sexual harassment. The committee shall
conduct meetings, as the case may be, with officers and employees, teachers, instructors, professors,
coaches, trainors and students or trainees to increase understanding and prevent incidents of sexual
harassment. It shall also conduct the investigation of alleged cases constituting sexual harassment.
2.
MINORS (Labor Code and R.A. No. 7678,
R.A. No. 9231)
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(d) Any other person who performs work occasionally or sporadically and not on an occupational basis.
• Who is a domestic worker or kasambahay?
“Domestic worker” or “kasambahay” refers to any person engaged in domestic work within an
employment relationship, whether on a live-in or live-out arrangement, such as, but not limited to, general househelp,
"yaya", cook, gardener, or laundry person, but shall exclude service providers, family drivers, children who are under
foster family arrangement, or any person who performs domestic work only occasionally or sporadically and not on
an occupational basis.
This term shall not include children who are under foster family arrangement which refers to children
who are living with a family or household of relative/s and are provided access to education and given an allowance
incidental to education, I.e., "baon", transportation, school projects, and school activities.
Because of these new terminologies prescribed in the law, the use of the term “househelper” may no longer
be legally correct.
• Is the employment contract required to be in writing?
Yes. The employment contract must be in writing and should contain the conditions set by law.
• What are the rights and privileges of a kasambahay?
The rights and privileges of the Kasambahay are as follows:
(a) Minimum wage;
(b) Other mandatory benefits, such as the daily and weekly rest periods, service incentive leave, and 13th
month pay;
(c) Freedom from employers' interference in the disposal of wages;
(d) Coverage under the SSS, PhilHealth and Pag-IBIG laws;
(e) Standard of treatment;
(f) Board, lodging and medical attendance;
(g) Right to privacy;
(h) Access to outside communication;
(i) Access to education and training;
(j) Right to form, join, or assist labor organization;
(k) Right to be provided a copy of the employment contract;
(I) Right to certificate of employment;
(m) Right to terminate the employment; and
(n) Right to exercise their own religious beliefs and cultural practices.
The foregoing rights and privileges are discussed below.
• What is the minimum wage of kasambahay?
Under the Kasambahay Law, the following are the minimum wages of kasambahays:
(a) P2,500.00 a month for those employed in the National Capital Region (NCR);
(b) P2,000.00 a month for those employed in chartered cities and first class municipalities; and (c)
P1,500.00 a month for those employed in other municipalities.
• Are the minimum wages subject to review by the RTWPBs or Regional Boards?
Yes. After one (1) year from the effectivity of the Kasambahay Law, and periodically thereafter, the
Regional Tripartite and Productivity Wage Boards (RTPWBs) shall review, and if proper, determine and adjust
the minimum wage rates of domestic workers.”
• What are some important principles on wage of kasambahay?
• Frequency of payment of wages. - The wages of the Kasambahay shall be paid at least once a month. This is so
because the minimum wage rates are on a monthly basis.
• The equivalent minimum daily wage rate of the Kasambahay shall be determined by dividing the applicable
minimum monthly rate by thirty (30) days.
• The amount of the minimum wage depends on the geographical area where the Kasambahay works.
• Payment of wages:
1. To whom paid. - It should be made on time directly to the Kasambahay to whom they are due in cash at least
once a month.
2. Deductions, prohibition; when allowed. - The employer, unless allowed by the Kasambahay through a
written consent, shall make no deductions from the wages other than that which is mandated by law such as
for SSS, PhilHealth or Pag-IBIG contributions.
3. Mode of payment. - It should be paid in cash and not by means of promissory notes, vouchers, coupons,
tokens, tickets, chits, or any object other than the cash wage as provided for under this Act.
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4. Pay slip. – The employer shall at all times provide the Kasambahay with a copy of the pay slip containing
the amount paid in cash every pay day, and indicating all deductions made, if any. The copies of the pay slip
shall be kept by the employer for a period of three (3) years.
5. Prohibition on Interference in the disposal of wages. – It shall be unlawful for the employer to interfere
with the freedom of the Kasambahay in the disposition of his/her wages, such as:
(a) Forcing, compelling, or obliging the Kasambahay to purchase merchandise, commodities or
other properties from the employer or from any other person; or
(b) Making use of any store or services of such employer or any other person.
6. Prohibition against withholding of wages. – It shall be unlawful for an employer, directly or indirectly, to
withhold the wages of the Kasambahay. If the Kasambahay leaves without any justifiable reason, any unpaid
salary for a period not exceeding fifteen (15) days shall be forfeited. Likewise, the employer shall not induce
the Kasambahay to give up any part of the wages by force, stealth, intimidation, threat or by any other means
whatsoever.
• What are important terms and conditions of employment of kasambahay?
The following is a rundown of the basic terms and conditions that should be observed in the employment of a
Kasambahay:
a. Employable age. - Children whose age is below 15 years are absolutely prohibited to work as
Kasambahay.
b. Normal daily hours of work. – Because R.A. No. 10361 does not contain any provision on the number
of normal hours of work that a Kasambahay should render in a day but merely prescribes said daily rest
period of eight (8) hours per day, it may be concluded that the Kasambahay should work for at least a
total of sixteen (16) hours per day as normal hours of work. However, it must be noted that the Labor
Code does not contain any provision on the normal hours of work of househelpers. Article 1695 of the
Civil Code, however, specifically provides that househelpers shall not be required to work for more than
ten (10) hours a day. Since R.A. No. 10361, a special law, is the most recent piece of legislation, it
should prevail over the general provision of the Civil Code.
c. Normal daily hours of work for working child-kasambahay is eight (8) hours per day.
d. 13th month pay. - The Kasambahay who has rendered at least one (1) month of service is entitled to a
13th month pay which shall not be less than one-twelfth (1/12) of his/her total basic salary earned in a
calendar year. The 13th month pay shall be paid not later than December 24 of every year or upon
separation from employment.
e. Daily rest period. – The Kasambahay shall be entitled to an aggregate daily rest period of eight (8)
hours.
f. Weekly rest period. - The Kasambahay shall be entitled to at least twenty-four (24) consecutive hours
of rest in a week. The employer and the Kasambahay shall agree in writing on the schedule of the weekly
rest day but the preference of the Kasambahay, when based on religious grounds, shall be respected.
g. Service incentive leave. - A Kasambahay who has rendered at least one (1) year of service shall be
entitled to an annual service incentive leave of at least five (5) days with pay. Any unused portion of said
annual leave shall not be cumulative or carried over to the succeeding years. Unused leaves shall not be
convertible to cash.
h. Social security benefits. - A Kasambahay who has rendered at least one (1) month of service shall be
covered by the Social Security System (SSS), Employees Compensation Commission (ECC), Philippine
Health Insurance Corporation (PhilHealth), and Home Development Mutual Fund or Pag-IBIG, and shall
be entitled to all the benefits in accordance with their respective policies, laws, rules and regulations.
i. Obligation of employer to register and enroll with SSS, PhilHealth, and Pag-IBIG. - As employer of
the Kasambahay, he/she shall register himself/herself with, and enroll the latter as his/her employee to
the SSS, PhilHealth, and Pag-IBIG.
j. Deposits for loss or damage. - It shall be unlawful for the employer or any other person to require a
Kasambahay to make deposits from which deductions shall be made for the reimbursement of loss or
damage to tools, materials, furniture and equipment in the household.
k. Standard of treatment. - The Kasambahay shall be treated with respect by the employer or any member
of the household. He/she shall not be subjected to any kind of abuse, including repeated verbal or
psychological, nor be inflicted with any form of physical violence or harassment or any act tending to
degrade his/her dignity, as defined under the Revised Penal Code, Violence Against Women and their
Children Law (R.A. No. 9262), Special Protection of Children Against Child Abuse, Exploitation and
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Discrimination Act (R.A. No. 7610) as amended by R.A. No. 9231, Anti-Trafficking in Persons Act of
2003 (R.A. No. 9208), and other applicable laws.
l. Board, lodging and medical attendance. - The employer shall provide for the basic necessities of the
Kasambahay, to include the following:
(1) At least three (3) adequate meals a day, taking into consideration the Kasambahay's religious beliefs
and cultural practices;
(2) Humane sleeping condition that respects the person's privacy for live-in arrangement; and
(3) Appropriate rest and medical assistance in the form of first-aid medicines, in case of illnesses and
injuries sustained during service without loss of benefits.
m. Opportunities for education and training. - The Kasambahay shall be afforded the
opportunity to finish basic education, which shall consist of elementary and secondary education.
He/she may be allowed access to alternative learning systems and, as far as practicable, higher
education or technical vocational education and training.
n. Membership in labor organization. - The Kasambahay shall have the right to join a labor
organization of his/her own choosing for purposes of mutual aid and collective negotiation.
r. Health and safety. - The employer shall safeguard the safety and health of the Kasambahay
in accordance with the standards which the DOLE shall develop through the Bureau of Working
Conditions (BWC) and the Occupational Safety and Health Center (OSHC) within six (6) months from
the promulgation of this IRR. The said standards shall take into account the peculiar nature of domestic
work.
s. Prohibition on debt bondage. - It shall be unlawful for the employer or any person acting
on his/her behalf to place the Kasambahay under debt bondage. “Debt bondage” refers to the rendering
of service by the Kasambahay as security or payment for a debt where the length and nature of service
is not clearly defined or when the value of the service is not reasonably applied in the payment of the
debt.
t. Assignment to non-household work. - The employer shall not assign the Kasambahay to
work, whether in full or part-time, in a commercial, industrial or agricultural enterprise at a wage rate
lower than that provided for agricultural or non-agricultural workers.
If so assigned, the Kasambahay will no longer be treated as such but as a regular employee of the
establishment.
• What are the rules on termination of Kasambahay?
a. Pre-termination of employment. – The following rules shall be observed:
(1) In case the duration of employment is specified in the contract, the Kasambahay and the employer may
mutually agree upon notice to terminate the contract of employment before the expiration of its term.
(2) In case the duration is not determined by stipulation or by nature of service, the employer or the
Kasambahay may give notice to end the employment relationship five (5) days before the intended
termination of employment.
b. Termination of employment initiated by the Kasambahay. - The Kasambahay may terminate the
employment relationship at any time before the expiration of the contract for any of the following causes:
(1) Verbal or emotional abuse of the Kasambahay by the employer or any member of the household;
(2) Inhuman treatment including physical abuse of the Kasambahay by the employer or any member of the
household;
(3) Commission of a crime or offense against the Kasambahay by the employer or any member of the
household;
(4) Violation by the employer of the terms and conditions of the employment contract and other standards
set forth in the law;
(5) Any disease prejudicial to the health of the Kasambahay, the employer, or members of the household;
and
(6) Other causes analogous to the foregoing.
If the Kasambahay leaves without cause, any unpaid salary due, not exceeding the equivalent of 15 days’
work, shall be forfeited. In addition, the employer may recover from the Kasambahay deployment expenses, if any, if
the services have been terminated within six (6) months from employment.
c. Termination of employment initiated by the employer. - An employer may terminate the employment
of the Kasambahay at any time before the expiration of the contract for any of the following causes:
(1) Misconduct or willful disobedience by the Kasambahay of the lawful order of the employer in connection
with the former's work;
(2) Gross or habitual neglect or inefficiency by the Kasambahay in the performance of duties;
(3) Fraud or willful breach of the trust reposed by the employer on the Kasambahay;
(4) Commission of a crime or offense by the Kasambahay against the person of the employer or any
immediate member of the employer's family;
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(5) Violation by the Kasambahay of the terms and conditions of the employment contract and other standards
set forth under the law;
(6) Any disease prejudicial to the health of the Kasambahay, the employer, or members of the household;
and
(7) Other causes analogous to the foregoing.
If the employer dismissed the Kasambahay for reasons other than the above, he/she shall pay the Kasambahay
the earned compensation plus indemnity in the amount equivalent to fifteen (15) days’ work.
d. Invalid ground for termination. - Pregnancy and marriage of the Kasambahay are not
valid grounds for termination of employment.
e. Employment Certification. - Upon the termination of employment, the employer shall
issue the Kasambahay, within five (5) days from request, a certificate of employment indicating the
nature, duration of the service and work description.
4.
HOMEWORKERS
5
NIGHT WORKERS
(R.A. NO. 10151)
• What is the new law on night work?
R.A. No. 10151 [JUNE 21, 2011].
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a. Significance of the law.
R.A. No. 10151 has repealed Article 130 [Nightwork Prohibition] and Article 131 [Exceptions] of the Labor
Code and accordingly renumbered the same articles. Additionally, it has inserted a new Chapter V of Title III of Book
III of the Labor Code entitled “Employment of Night Workers” which addresses the issue on nightwork of all
employees, including women workers. Chapter V covers newly renumbered Articles 154 up to 161 of the Labor Code.
b. Coverage of the law.
The law on nightwork applies not only to women but to all persons, who shall be employed or permitted or
suffered to work at night, except those employed in agriculture, stock raising, fishing, maritime transport and inland
navigation, during a period of not less than seven (7) consecutive hours, including the interval from midnight to
five o'clock in the morning, to be determined by the DOLE Secretary, after consulting the workers’
representatives/labor organizations and employers.
c. Night worker, meaning.
"Night worker" means any employed person whose work covers the period from 10 o'clock in the evening to 6
o'clock the following morning provided that the worker performs no less than seven (7) consecutive hours of
work.
d. Mandatory facilities.
(1) Suitable first-aid and emergency facilities as provided for under Rule 1960 (Occupational Health
Services) of the Occupational Safety and Health Standards (OSHS);
(2) Lactation station in required companies pursuant to R.A. No. 10028 (The Expanded Breastfeeding
Promotion Act of 2009);
(3) Separate toilet facilities for men and women;
(4) Facility for eating with potable drinking water; and
(5) Facilities for transportation and/or properly ventilated temporary sleeping or resting quarters, separate
for male and female workers, shall be provided except where any of the following circumstances is
present:
i. Where there is an existing company guideline, practice or policy, CBA or any similar agreement
between management and workers providing for an equivalent or superior benefit; or
ii. Where the start or end of the night work does not fall within 12 midnight to 5 o'clock in the morning;
or
iii. Where the workplace is located in an area that is accessible 24 hours to public transportation; iv.
Where the number of employees does not exceed a specified number as may be provided for by the
DOLE Secretary in subsequent issuances.
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Employment relationship under the control test is determined under the same concept as discussed above, that is, by
asking whether “the person for whom the services are performed reserves the right to control not only the end to be
achieved but also the manner and means to be used in reaching such end.” 26
Under the economic reality test, the proper standard of economic dependence is whether the worker is
dependent on the alleged employer for his continued employment in that line of business. 27
These 2-tiered test applies to cases where there are several parties alleged to be employers of one individual. The
determinant factor is economic dependency of such individual. In other words, under the economic reality test, the
question to ask is - among the parties alleged to be the employer, to whom is the individual economically dependent?
Following the broader economic reality test, the Supreme Court found petitioner in Orozco v. The Fifth
Division of the Hon. CA,28 who is a columnist in the Philippine Daily Inquirer (PDI), not an employee of PDI but an
independent contractor. Thus:
“Petitioner’s main occupation is not as a columnist for respondent but as a women’s rights advocate
working in various women’s organizations. Likewise, she herself admits that she also contributes articles to
other publications. Thus, it cannot be said that petitioner was dependent on respondent PDI for her continued
employment in respondent’s line of business.
25 Id.
26 Id.
27 Id.
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“The inevitable conclusion is that petitioner was not respondent PDI’s employee but an independent
contractor, engaged to do independent work.”
• Is it necessary to have a written contract of employment in order to establish employer-employee relationship?
No. It may be an oral or written contract. A written contract is not necessary for the creation and validity of
the relationship.
The only exception is in the case of Kasambahay where, under the Kasambahay Law, it is required
that the contract of employment should be in writing.
2.
KINDS OF EMPLOYMENT
• What is the general classification of employment?
There are five (5) classifications of employment:
(a) Regular employees referring to those who have been “engaged to perform activities which are usually
necessary or desirable in the usual business or trade of the employer”;
(b) Project employees referring to those “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 engagement
of the employee”;
(c) Seasonal employees referring to those who work or perform services which are seasonal in nature, and
the employment is for the duration of the season;
(d) Casual employees referring to those who are not regular, project, or seasonal employees;
(e) Fixed-term employees whose term is freely and voluntarily determined by the employer and the
employee. NOTE: This is not provided in the Labor Code.
• Is the period of 6 months in the law on probationary employment (Article 296 [281], LC) the minimum or
maximum period?
The answer is it is neither the minimum nor the maximum period of probationary employment. The 6-month
period is mentioned in the law for purposes of setting the standard period. Proof that it is not the maximum is the
case of Buiser v. Leogardo where the probationary period of 18 months was considered reasonable. In other
words, probationary period may be for a day, a week, a month or several months, depending on the reasonable
discretion of management.
If there is no written contract, the employee is considered a regular employee from day one of his employment.
And even if there is one, he is deemed regular if there is no stipulation on probationary period.
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• Is procedural due process required in termination of probationary employment?
Yes, but only in the case of Numbers 1 and 2 above.
However, procedural due process is not required if the 3 rd ground above is invoked, except when the employer
prescribes in its company rules, a procedure for such termination, in which case, such should be followed in accordance
with the Abbott Laboratories doctrine (Contractual Due Process). Generally, in the case of No. 3 above, the
probationary employment is terminated by merely serving a notice of termination setting forth the results of the
performance evaluation conducted on the employee which forms as the basis for deciding to terminate the probationary
employment.
• When should termination of probationary employment be made?
Termination to be valid must be done prior to lapse of probationary period. Termination a few days after
lapse of probationary period cannot be done without due process as he has already become a regular employee by that
time.
b.
REGULAR EMPLOYMENT
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2. There must be a written contract of project employment stating the duration of the project employment as
well as the particular work or service to be performed. A written project employment contract is an
indispensable requirement.
3. Intervals in employment contracts indicate project employment.
4. Continuous, as opposed to intermittent, rehiring shows that employee is regular.
5. “Project-to-project” basis of employment is valid.
On termination of project employment.
1. Project employees enjoy security of tenure only during the term of their project employment.
2. Project employees have presumably become regular employees if they are allowed to work beyond the
completion of the project or any phase thereof to which they were assigned or after the “day certain”
which they and their employer have mutually agreed for its completion. Having become regular
employees, they can no longer be terminated on the basis of the completion of the project or any phase
thereof to which they were deployed.
d.
SEASONAL EMPLOYMENT
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operation period, did not in any way impair the validity of their contracts of employment which specifically stipulated
that their employment was only for one (1) month. ▪ When does a fixed-term employee become regular?
3.
JOB CONTRACTING
▪ What is the latest Implementing Rules on contractualization issued by the DOLE Secretary?
Department Order No. 174, Series of 2017 (issued on March 16, 2017) – Rules Implementing
Articles 106 to 109 of the Labor Code, as Amended.
Shortly after its issuance, Department Circular No. 01, Series of 2017 (Issued on June 09, 2017)
was issued by the DOLE Secretary to clarify the inapplicability of Department Order No. 174, Series
of 2017 to BPO, KPO, LPO, IT Infrastructure Outsourcing, Application Development, Hardware and/
or Software Support, Medical Transcription, Animation Services, Back Office Operations/Support, and
CONSTRUCTION INDUSTRY.
d.
TRILATERAL RELATIONSHIP IN JOB CONTRACTING
The following four (4) words are very important: CONTROL, MANNER & METHOD and
RESULT in determining the elements of legitimate job contracting arrangement.
Here are the elements based on law, Department Order No. 174 and jurisprudence:
(a) The contractor is engaged in a distinct and independent business and undertakes to perform the job or
work on its own responsibility, according to its own manner and method;
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(b) The contractor has substantial capital to carry out the job farmed out by the principal on his own
account, manner and method, investment in the form of tools, equipment, machinery and
supervision;
(c) In performing the work farmed out, the contractor is free from the control and/or direction of the
principal in all matters connected with the performance of the work EXCEPT as to the result
thereto; and
(d) The Service Agreement ensures compliance with all the rights and benefits for all the employees of
the contractor under labor laws.
Example:
Scenario 1: If it is ABC University that controls the manner and method of performing the job or work
of XYZ Security Agency’s security guards (such as when it is ABC University, that (1) sets the schedule
of the Security Guards; (2) makes the assignments to their respective posts; (3) monitors their
attendance/absences; (3) supervises their every action and performance of their duties, and the like), then,
ABC University is the direct employer of the guards and the XYZ Security Agency is but a laboronly
contractor.
Scenario 2: If it is ABC Security Agency which controls such manner and method of performing the
job or work of the Security Guards it assigned to ABC University, and ABC University is interested only
on the result of the arrangement (such as the safety of the students, teachers and employees, safeguard of
school property and premises, peace and tranquility inside its campus, etc.), then, there is here legitimate
job contracting arrangement where ABC University is the principal, XYZ Security Agency is the
contractor, and the Security Guards, the contractor’s employees.
• What is the amount of SUBSTANTIAL CAPITAL required under the new Rules?
According to Department Order No. 174, Series of 2017 (issued on March 16, 2017), the following
consists of substantial capital:
1. In the case of corporations, partnerships or cooperatives – paid-up capital stocks/shares of at least
P5 Million; or
2. In the case of single proprietorship - a net worth of at least P5 Million.
• “Substantial capital” and “investment in tools, etc.” are two separate requirements.
“Substantial capital” and “investment in tools, equipment, implements, machineries and work premises”
should be treated as two (2) distinct and separate requirements in determining whether there is legitimate
job contracting arrangement. It is enough that only one of these two requisites is complied with to make
the job contracting arrangement legitimate.
• May individuals engage in legitimate job contracting?
Yes. Legitimate job contracting may not only be engaged by corporation, partnership or single proprietorship.
Individuals may become legitimate job contractors themselves for as long as they have SPECIAL SKILLS or
TALENTS.
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• Are individuals engaged as legitimate job contractors required to fulfill the requisites of legitimate job
contracting as afore-described?
NO. They need not be registered as independent contractors with DOLE; they need not have substantial capital
(such as the P5 Million stated above). All that they are required is to have their tools consisting of SPECIAL
SKILL, TALENT or EXPERTISE.
1. Sonza v. ABS-CBN Broadcasting Corporation30 - TV and radio talents and others with special talents and
skills are not employees but legitimate independent contractors.
2. Orozco v. The Fifth Division of the Honorable Court of Appeals31 - A newspaper columnist is not an
employee but an independent contractor of the newspaper publishing the column.
3. Jose Mel Bernarte v. Philippine Basketball Association 32 - Basketball or soccer referee or umpire, an
independent contractor.
4. Semblante and Pilar v. CA, Gallera de Mandaue, et al. 33 - Cockpit masiador and sentenciador are
independent contractors.
5. Escasinas v. Shangri-la’s Mactan Island Resort34 - A doctor may be engaged as an independent contractor.
LABOR-ONLY CONTRACTING.
Based on law, Department Order No. 174 and jurisprudence, the following are the elements:
(a) The contractor does not have either (i) SUBSTANTIAL CAPITAL or (ii) INVESTMENTS
in the form of tools, equipment, machineries, supervision, work premises, among others, AND the
contractor's employees recruited and placed are performing activities which are directly related
to the main business operation of the principal;
or
(b) The contractor does not exercise the right to control over the performance of the work of the
employee.
NOTE: - There is labor-only contracting even if only one of the two (2) elements above is present.
- An unregistered contractor is presumed to be a labor-only contractor. Registration should be made with
the DOLE.
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• What are the distinctions between legitimate job contracting and labor-only contracting?
The chief distinctions between legitimate job contracting, on the one hand, and the prohibited labor-only
contracting, on the other, may be summed up as follows:
1. In the former, no employer-employee relationship exists between the contractual employees of the job
contractor and the principal; while in the latter, an employer-employee relationship is created by law
between the principal and the employees supplied by the labor-only contractor.
2. In the former, the principal is considered only an “indirect employer”; while in the latter, the principal is
considered the “direct employer” of the employees supplied by the labor-only contractor.
3. In the former, the solidary obligation of the principal and the legitimate job contractor is only for a
limited purpose, that is, to pay the wages of the contractor’s employees supplied to the principal.. Other
than this obligation of paying the wages, the principal is not responsible for any claim made by the
contractor’s employees; while in the latter, the principal becomes solidarily liable with the laboronly
contractor to the latter’s employees in the same manner and extent that the principal is liable to employees
directly hired by him/her.
• What are OTHER ILLICIT FORMS OF EMPLOYMENT IN D.O. 174, Series of 2017, (IN ADDITION TO
LABOR-ONLY CONTRACTING)?
The following are considered as such (formerly called “PROHIBITIONS” under previous Department Orders):
a) When the principal farms out work to a “Cabo” which term refers to a person or group of persons or to
a labor group which, under the guise of a labor organization, cooperative or any entity, supplies workers
to an employer, with or without any monetary or other consideration, whether in the capacity of an agent
of the employer or as an ostensible independent contractor.
b) Contracting out of job or work through an “In-house Agency” which term refers to a contractor which is
owned, managed, or controlled, directly or indirectly, by the principal or one where the principal
owns/represents any share of stock, and which operates solely or mainly for the principal.
c) Contracting out of job or work through an “In-house Cooperative” which merely supplies workers to
the principal. An “In-house Cooperative” refers to a cooperative which is managed, or controlled
directly or indirectly by the principal or one where the principal or any of its officers owns/represents any
equity or interest, and which operates solely or mainly for the principal.
d) Contracting out of a job or work by reason of a strike or lockout, whether actual or imminent.
e) Contracting out of a job or work being performed by union members and such will interfere with,
restrain or coerce employees in the exercise of their rights to self-organization as provided in Article
259 [248] of the Labor Code, as amended.
f) Requiring the contractor's/subcontractor's employees to perform functions which are currently being
performed by the regular employees of the principal.
g) Requiring the contractor's/subcontractor's employees to sign, as a precondition to employment or
continued employment, an antedated resignation letter; a blank payroll; a waiver of labor
standards including minimum wages and social or welfare benefits; or a quitclaim releasing the
principal or contractor from liability as to payment of future claims; or require the employee to
become member of a cooperative.
h) Repeated hiring by the contractor/subcontractor of employees under an employment contract of short
duration.
i) Requiring employees under a contracting/subcontracting arrangement to sign a contract fixing the
period of employment to a term shorter than the term of the Service Agreement, unless the contract
is divisible into phases for which substantially different skills are required and this is made known to the
employee at the time of engagement.
j) Such other practices, schemes or employment arrangements designed to circumvent the right of
workers to security of tenure.
B.
TERMINATION OF EMPLOYMENT
1.
TERMINATION BY EMPLOYEE
(RESIGNATION)
a.
RESIGNATION VERSUS CONSTRUCTIVE DISMISSAL
i.
RESIGNATION
• What are the two (2) kinds of resignation under the Labor Code (Article 300 [285])?
(a) Voluntary resignation - without just cause; or (b)
Involuntary resignation - with just cause.
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• What are the distinctions between the two?
(a) On service of written notice (resignation letter).
Voluntary Resignation requires the submission of a written resignation letter at least thirty (30) days before its
effectivity date; while in Involuntary Resignation, no such written resignation letter is required since it is being
made by the employee for just cause (see just causes below).
(b) On the consequence of failure to serve a written notice.
In Voluntary Resignation, the failure to serve the written resignation letter within the said 30-day period would make
the resigning employee liable for damages; while in Involuntary Resignation, since there is no similar requirement
of service of prior written notice, hence, there is no adverse consequence for such failure to the involuntarily
resigning employee.
(c) On whether there is illegal or constructive dismissal.
There can be no constructive dismissal in the case of Voluntary Resignation, the same having been voluntarily and
freely tendered by the employee; however, it is different in the of In Involuntary Resignation, since it always
amounts to constructive dismissal. (See discussion below).
ii.
CONSTRUCTIVE DISMISSAL
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In illegal dismissal, the employer openly shows his intention to dismiss the employee. In fact, the employer,
in compliance with due process, asks the employee to explain why he should not be dismissed for committing a
wrongful act and he is given due process prior to terminating him.
In contrast, in constructive dismissal, the employer will never indicate that he is terminating the employee. He
will even allow the employee to report to his work every day. But he will do any of the three (3) acts mentioned above
that indicates his intention to get rid of the services of the employee. This is the reason why it is called “dismissal in
disguise.”
2.
TERMINATION BY EMPLOYER
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2. Theft of property owned by a co-employee as distinguished from company-owned property which is
considered serious misconduct.
3. Incompetence, inefficiency or ineptitude.
4. Failure to attain work quota.
5. Failure to comply with weight standards of employer.
6. Attitude problem.
• Is dismissal based on Company Code of Discipline or Company Rules and Regulations illegal?
No.
In Sampaguita Auto Transport Corporation v. NLRC, the Supreme Court pronounced that the Court of
Appeals erred in ruling that the dismissal of private respondent, a bus driver of petitioner, was illegal because the
“grounds upon which petitioners based respondent’s termination from employment, viz.: ‘hindi lahat ng schedule
nailalabas,’ [‘]mababa ang revenue ng bus, laging kasama an[g] asawa sa byahe’ and ‘maraming naririnig na kwento
tungkol sa kanya, nag-uutos ng conductor para kumita sa hindi magandang paraan[,]’ xxx are not among those
enumerated under Article 297 [282] of the Labor Code as just causes for termination of employment.” The
irregularities or infractions committed by private respondent in connection with his work as a bus driver constitute
serious misconduct or, at the very least, conduct analogous to serious misconduct, under the above-cited Article 297
[282] of the Labor Code. The requirement in the company rules that: ‘3. to obey traffic rules and regulations as well
as the company policies. 4. to ensure the safety of the riding public as well as the other vehicles and motorist
(sic)’ is so fundamental and so universal that any bus driver is expected to satisfy the requirement whether or not he
has been so informed.
I.
SERIOUS MISCONDUCT
1. REQUISITES.
For misconduct or improper behavior to be a just cause for dismissal, the following requisites must concur:
II.
INSUBORDINATION
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OR WILLFUL DISOBEDIENCE OF LAWFUL ORDERS
1. REQUISITES.
One of the fundamental duties of an employee is to obey all reasonable rules, orders and instructions of the
employer. In order to validly invoke this ground, the following requisites must be complied with, to wit:
1. The employee’s assailed conduct must have been willful or intentional, the willfulness being characterized
by a wrongful and perverse attitude; and
2. The order violated must be based on a reasonable and lawful company rule, regulation or policy and made
known to the employee and must pertain to the duties for which he has been engaged to discharge.
III.
GROSS AND HABITUAL NEGLECT OF DUTIES
1. REQUISITES.
The following are the requisites:
(1) There must be negligence which is gross and/or habitual in character; and (2)
It must be work-related as would make him unfit to work for his employer.
2. SOME PRINCIPLES ON GROSS AND HABITUAL NEGLECT OF DUTIES.
• Simple negligence is not sufficient to terminate employment.
• The negligence must be gross in character which means absence of that diligence that an ordinarily prudent man
would use in his own affairs.
• As a general rule, negligence must be both gross and habitual to be a valid ground to dismiss.
• Habituality may be disregarded if negligence is gross or the damage or loss is substantial. “Habitual negligence”
implies repeated failure to perform one’s duties for a period of time, depending upon the circumstances.
• Actual damage, loss or injury is not an essential requisite.
• Gross negligence may result to loss of trust and confidence.
• Absences, if authorized, cannot be cited as a ground to terminate employment.
• Tardiness or absenteeism, if not habitual, cannot be cited as a ground to terminate employment.
• Tardiness or absenteeism, if habitual, may be cited as a ground to terminate employment.
• Tardiness or absenteeism, if habitual, may be tantamount to serious misconduct.
• Absences or tardiness due to emergency, ailment or fortuitous event are justified and may not be cited as just
cause to terminate employment.
• Unsatisfactory or poor performance, inefficiency and incompetence are considered just causes for dismissal
only if they amount to gross and habitual neglect of duties.
IV.
ABANDONMENT OF WORK
1. CONCEPT.
Abandonment is not provided for in the Labor Code but it is jurisprudentially considered a form of neglect
of duty; hence, a just cause for termination of employment under Article 297(b) [282(b)] of the Labor Code.
2. REQUISITES.
To constitute abandonment, two (2) elements must concur, namely:
1) The employee must have failed to report for work or must have been absent without valid or justifiable
reason; and
2) There must have been a clear intention on the part of the employee to sever the employer-employee
relationship manifested by some overt act.
3. SOME PRINCIPLES ON ABANDONMENT.
• Mere absence is not enough to constitute abandonment.
• Clear intention to sever employment relationship is necessary.
• Due process in abandonment cases consists only of the service of 2 notices to the employee, viz.:
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a. First notice directing the employee to explain why he should not be declared as having abandoned his job; and
b. Second notice to inform him of the employer’s decision to dismiss him on the ground of abandonment.
• No hearing is required to validly dismiss an employee for abandonment.
• Notices in abandonment cases must be sent to employee’s last known address per record of the company. The
employer need not look for the employee’s current whereabouts.
• Immediate filing of a complaint for illegal dismissal praying for reinstatement negates abandonment.
• Lapse of time between dismissal and filing of a case is not a material indication of abandonment. Hence, lapse of
2 years and 5 months or 20 months or 9 months or 8 months before filing the complaint for illegal dismissal is
not an indication of abandonment. Under the law, the employee has a 4-year prescriptive period within which to
institute his action for illegal dismissal.
• Filing of a case to pre-empt investigation of the administrative case is tantamount to abandonment.
• When what is prayed for in the complaint is separation pay and not reinstatement, the filing of complaint
does not negate abandonment.
• It is abandonment when what is prayed for in the complaint is separation pay and it was only in the position paper
that reinstatement was prayed for.
• Employment in another firm coinciding with the filing of complaint does not indicate abandonment.
• Offer of reinstatement by employer during proceedings before Labor Arbiter and refusal by employee does not
indicate abandonment but more of a symptom of strained relations between the parties.
• An employee may be absolved from the charge of abandonment of work but adjudged guilty of AWOL. These
two grounds are separate and distinct from each other.
• An employee who failed to report for work after the expiration of the duly approved leave of absence is considered
to have abandoned his job.
• An employee who failed to comply with the order for his reinstatement is deemed to have abandoned his work.
• An employee who, after being transferred to a new assignment, did not report for work anymore is deemed to
have abandoned his job.
• An employee who deliberately absented from work without leave or permission from his employer for the purpose
of looking for a job elsewhere is deemed to have abandoned his work.
• Imprisonment or detention by military does not constitute abandonment.
• Absence to evade arrest is not a valid justification. To do so would be to place an imprimatur on the employee’s
attempt to derail the normal course of the administration of justice.
V.
FRAUD
1. REQUISITES.
The following are the requisites of this ground:
1. There must be an act, omission, or concealment;
2. The act, omission or concealment involves a breach of legal duty, trust, or confidence justly reposed;
3. It must be committed against the employer or his/her representative; and
4. It must be in connection with the employees' work. 35
2. SOME PRINCIPLES ON FRAUD.
• Failure to deposit collection constitutes fraud.
• Lack of damage or losses is not necessary in fraud cases. The fact that the employer did not suffer losses from the
dishonesty of the dismissed employee because of its timely discovery does not excuse the latter from any
culpability.
• Lack of misappropriation or shortage is immaterial in case of unauthorized encashment of personal checks by
teller and cashier.
• Restitution does not have absolutory effect.
VI.
WILLFUL BREACH OF TRUST AND CONFIDENCE
1. REQUISITES.
For the doctrine of loss of trust and confidence to apply, the following requisites must be satisfied:
(1) The employee holds a position of trust and confidence;
(2) There exists an act justifying the loss of trust and confidence, which means that the act that betrays the
employer’s trust must be real, i.e., founded on clearly established facts;
35 Per latest DOLE Department Order No. 147-15, series of 2015, September 07, 2015.
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(3) The employee’s breach of the trust must be willful, i.e., it was done intentionally, knowingly and
purposely, without justifiable excuse; and
(4) The act must be in relation to his work which would render him unfit to perform it.
2. GUIDELINES.
As a safeguard against employers who indiscriminately use “loss of trust and confidence” to justify arbitrary
dismissal of employees, the Supreme Court, in addition to the above elements, came up with the following guidelines
for the application of the doctrine:
(1) The loss of confidence must not be simulated;
(2) It should not be used as a subterfuge for causes which are illegal, improper or unjustified; (3) It may not
be arbitrarily asserted in the face of overwhelming evidence to the contrary; and
(4) It must be genuine, not a mere afterthought, to justify earlier action taken in bad faith.
The foregoing guidelines have been prescribed by the Supreme Court due to the subjective nature of this
ground which makes termination based on loss of trust and confidence prone to abuse.
3. SOME PRINCIPLES ON THE DOCTRINE OF LOSS OF TRUST AND CONFIDENCE.
• Employee’s position must be reposed with trust and confidence.
• “Position of trust and confidence” is one where a person is entrusted with confidence on delicate matters, or with
the custody, handling, or care and protection of the employer’s property.
• Two (2) classes of positions of trust. The first class consists of managerial employees or those who, by the
nature of their position, are entrusted with confidential and delicate matters and from whom greater fidelity to
duty is correspondingly expected. They refer to those vested with the powers or prerogatives to lay down and
execute management policies and/or to hire, transfer suspend, lay-off, recall, discharge, assign or discipline
employees or to effectively recommend such managerial actions. Their primary duty consists of the management
of the establishment in which they are employed or of a department or a subdivision thereof.
The second class consists of fiduciary rank-and-file employees who, though rank-and-file, are routinely charged
with the custody, handling or care and protection of the employer's money or property, or entrusted with
confidence on delicate matters, and are thus classified as occupying positions of trust and confidence. Included
under this class are “cashiers, auditors, property custodians, or those who, in the normal and routine exercise of
their functions, regularly handle significant amounts of [the employer’s] money or property.”
• Rules on termination of managerial and supervisory employees different from those applicable to rankand-
file employees. Thus, with respect to rank-and-file personnel, loss of trust and confidence as a ground for valid
dismissal requires proof of involvement in the alleged events in question and that mere uncorroborated
assertions and accusations by the employer will not be sufficient. But as regards a managerial employee, the
mere existence of a basis for believing that he has breached the trust of his employer would suffice for his
dismissal.
• There must be “some basis” for the loss of trust and confidence which means that there is reasonable ground to
believe, if not to entertain the moral conviction, that the concerned employee is responsible for the misconduct
and that the nature of his participation therein rendered him absolutely unworthy of trust and confidence
demanded by his position.
• Dismissal due to feng shui mismatch is not a valid ground to lose trust and confidence.
• Command responsibility of managerial employees is a ground to dismiss.
• Confidential employee may be dismissed for loss of trust and confidence.
• Grant of promotions and bonuses negates loss of trust and confidence.
• Long years of service, absence of derogatory record and small amount involved are deemed inconsequential
insofar as loss of trust and confidence is concerned.
• Dropping of criminal charges or acquittal in a criminal case arising from the same act does not affect the validity
of dismissal based on loss of trust and confidence.
• Full restitution does not absolve employee of offense which resulted in the loss of trust and confidence.
VII.
COMMISSION OF CRIME OR OFFENSE
1. REQUISITES.
The following are the requisites for the valid invocation of this ground:
1. A crime or offense was committed by the employee;
2. It was committed against any of the following persons:
(a) His employer;
(b) Any immediate member of his employer’s family; or
(c) His employer’s duly authorized representative.
2. SOME PRINCIPLES ON THE COMMISSION OF CRIME OR OFFENSE.
• Because of its gravity, work-relation is not necessary. Neither is it necessary to show that the commission of the
criminal act would render the employee unfit to perform his work for the employer.
VIII.
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OTHER ANALOGOUS CAUSES
1. ANALOGOUS CAUSES UNDER ESTABLISHED JURISPRUDENCE.
The following may be cited as analogous causes:
1) Violation of company rules and regulations.
2) Theft of property owned by a co-employee, as distinguished from theft of property owned by the
employer.
3) Incompetence, inefficiency or ineptitude.
4) Failure to attain work quota.
5) Failure to comply with weight standards of employer.
6) “Attitude problem” is analogous to loss of trust and confidence.
IX.
TERMINATION DUE TO ENFORCEMENT OF
UNION SECURITY CLAUSE
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in above-cited Alabang Country Club, Inc. v. NLRC, 3738 is required for a different purpose - to terminate his
employment.
OTHER PRINCIPLES `ON TERMINATION PER
DEPARTMENT ORDER NO. 147-15, SERIES OF 2015 (07
SEPTEMBER 2015):
2
➢ An employee found positive for use of dangerous drugs shall be dealt with administratively which shall be a
ground for suspension or termination. 39
➢ An employee shall not be terminated from work based on actual, perceived or suspected HIV status.40
➢ An employee shall not be terminated on basis of actual, perceived or suspected Hepatitis B status.41
➢ An employee who has or had tuberculosis shall not be discriminated against. He/she shall be entitled to work for
as long as they are certified by the company's accredited health provider as medically fit and shall be restored to
work as soon as his/her illness is controlled.42
➢ An employee may also be terminated based on the grounds provided for under the CBA.
b.
AUTHORIZED CAUSES
39 DOLE Department Order No. 53, Series of 2003 in relation to the IRR of R.A. 9165.
41 DOLE Department Advisory No.5, Series of 2010 Part III C1. par. c.
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NOTE: SENIORITY is not the principal criterion. The other criteria mentioned above which are lifted from
jurisprudence, is of equal importance.
I.
INSTALLATION OF LABOR-SAVING DEVICE
• What are the additional requisites unique to this ground? The additional requisites are as follows:
(1) There must be superfluous positions or services of employees;
(2) The positions or services are in excess of what is reasonably demanded by the actual requirements of the
enterprise to operate in an economical and efficient manner; and
(3) There must be an adequate proof of redundancy such as but not limited to the new staffing pattern,
feasibility studies/proposal, on the viability of the newly created positions, job description and the
approval by the management of the restructuring.44 III.
RETRENCHMENT
43 Per latest DOLE Department Order No. 147-15, series of 2015, September 07, 2015.
44
Id. 3
Id.
45 Balasabas v. NLRC, G.R. No. 85286, August 24,1992; Central Azucarerra dela Carlota v. NLRC, G.R. No. 100092, December
29, 1995.
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▪ Sharp drop in income is not a ground to justify retrenchment. A mere decline in gross income cannot in any
manner be considered as serious business losses. It should be substantial, sustained and real.
▪ Litany of woes, in the absence of any solid evidence that they translated into specific and substantial losses that
would necessitate retrenchment, will not suffice to justify retrenchment.
▪ Rehiring of retrenched employees does not necessarily indicate illegality of retrenchment.
▪ In an enterprise which has several branches nationwide, profitable operations in some of them will not
affect the validity of the retrenchment if overall, the financial condition thereof reflects losses.
IV.
CLOSURE OR CESSATION OF BUSINESS OPERATIONS
• Can an employer close its business even if it is not suffering from business losses? Yes. In fact, closure involves
two (2) situations:
(a) When NOT due to serious business losses or financial reverses; or
(b) When due to serious business losses or financial reverses
It is only in the first that payment of separation pay is required. No such requirement is imposed in the second.
• What are some relevant principles on closure? ▪ Principle of closure under Article 283 applies in cases of both
total and partial closure or cessation of business operations. Management may choose to close only a branch, a
department, a plant, or a shop.
▪ Closure of department or section and hiring of workers supplied by independent contractor as replacements is
valid.
▪ Relocation of business may amount to cessation of operations.
▪ Closure of business to merge or consolidate with another or to sell or dispose all of its assets, held valid.
▪ Audited financial statements necessary only in closure due to losses.
V.
DISEASE
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2. THE FUJI RULE – THE EMPLOYEE SHOULD BE GIVEN THE CHANCE TO PRESENT
COUNTERVAILING MEDICAL CERTIFICATES.
Subsequent to Deoferio, another 2014 case, Fuji Television Network, Inc. v. Arlene S. Espiritu, 48 has further
expounded on the due process requirement in termination due to disease, this time by categorically specifying the
right of the ailing employee to present countervailing evidence in the form of medical certificates to prove that his
dismissal due to disease is not proper and therefore illegal.
Respondent Arlene was petitioner’s news correspondent/producer “tasked to report Philippine news to Fuji through
its Manila Bureau field office.” She was successively given yearly fixed-term employment contracts until she was
diagnosed with lung cancer sometime in January 2009 when the Chief of News Agency of Fuji informed her “that the
company will have a problem renewing her contract” since it would be difficult for her to perform her job. She,
however, “insisted that she was still fit to work as certified by her attending physician.” Subsequently, Arlene and Fuji
signed a non-renewal contract where it was stipulated that her contract would no longer be renewed after its expiration
on May 31, 2009 and that the parties release each other from liabilities and responsibilities under the employment
contract. Arlene received her unpaid salaries and bonuses but she affixed her signature on the nonrenewal contract
with the initials “U.P.” for “under protest.” The day after Arlene signed the non-renewal contract, she filed a complaint
for illegal dismissal and attorney’s fees with the Labor Arbiter, alleging that she was forced to sign the non-renewal
contract when Fuji came to know of her illness and that Fuji withheld her salaries and other benefits for March and
April 2009 when she refused to sign. Arlene claimed that she was left with no other recourse but to sign the non-
renewal contract, and it was only upon signing that she was given her salaries and bonuses, in addition to separation
pay equivalent to 4 years.
The Supreme Court declared respondent Arlene as having been constructively dismissed. It was likewise held here
that respondent was not afforded due process, thus:
“There is no evidence showing that Arlene was accorded due process. After informing her
employer of her lung cancer, she was not given the chance to present medical certificates. Fuji
immediately concluded that Arlene could no longer perform her duties because of chemotherapy. It
did not ask her how her condition would affect her work. Neither did it suggest for her to take a leave,
even though she was entitled to sick leaves. Worse, it did not present any certificate from a competent
public health authority. What Fuji did was to inform her that her contract would no longer be
renewed, and when she did not agree, her salary was withheld. Thus, the Court of Appeals correctly
upheld the finding of the National Labor Relations Commission that for failure of Fuji to comply
with due process, Arlene was illegally dismissed.”
▪ What are some salient points to consider under this ground of disease?
▪ If the disease or ailment can be cured within the period of six (6) months with proper medical treatment, the
employer should not terminate the employee but merely ask him to take a leave of absence. The employer
should reinstate him to his former position immediately upon the restoration of his normal health.
▪ In case the employee unreasonably refuses to submit to medical examination or treatment upon being requested
to do so, the employer may terminate his services on the ground of insubordination or willful disobedience
of lawful order.
▪ A medical certificate issued by a company’s own physician is not an acceptable certificate for purposes of
terminating an employment based on Article 284, it having been issued not by a “competent public health
authority,” the person referred to in the law.
▪ A “competent public health authority” refers to a government doctor whose medical specialization
pertains to the disease being suffered by the employee. For instance, if the employee suffers from
tuberculosis, the medical certificate should be issued by a government-employed pulmonologist who is
competent to make an opinion thereon. If the employee has cardiac symptoms, the competent physician in this
case would be a cardiologist.
▪ The medical certificate should be procured by the employer and not by the employee.
3.
DUE PROCESS
(a) Twin-Notice Requirement
(b) Hearing; Ample Opportunity to be Heard
48 Fuji Television Network, Inc. v. Arlene S. Espiritu, G.R. Nos. 204944-45, Dec. 03, 2014.
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(2) Due process required to be observed by the labor authorities/tribunals/courts (Labor Arbiter/NLRC/CA) in
hearing and deciding labor cases brought before them for adjudication and decision (COURT-LEVEL DUE
PROCESS).
No. 1 above requires compliance with both the statutory and contractual due process as discussed below; while
No. 2 above requires observance of the constitutional due process.
It is No. 1 above that is prescribed in the Syllabus, hence, discussion herein will focus thereon.
▪ What is the King of Kings Transport doctrine on just cause procedural due process?
Based on this doctrine which was enunciated in the 2007 case of King of Kings Transport, Inc. v.
Mamac,50 the following requirements should be complied with in just cause termination:
(1) First written notice.
The first written notice to be served on the employee should:
a) Contain the specific causes or grounds for termination against him;
b) Contain a directive that the employee is given the opportunity to submit his written explanation within
the reasonable period of FIVE (5) CALENDAR DAYS from receipt of the notice:
1) to enable him to prepare adequately for his defense;
2) to study the accusation against him;
3) to consult a union official or lawyer;
4) to gather data and evidence; and
5) to decide on the defenses he will raise against the complaint.
c) Contain a detailed narration of the facts and circumstances that will serve as basis for the charge
against the employee. This is required in order to enable him to intelligently prepare his explanation
and defenses. A general description of the charge will not suffice.
d) Specifically mention which company rules, if any, are violated and/or which among the grounds under
Article 282 is being charged against the employee.
(2) Hearing required,
After serving the first notice, the employer should schedule and conduct a hearing or conference wherein
the employee will be given the opportunity to:
1) explain and clarify his defenses to the charge/s against him;
2) present evidence in support of his defenses; and
3) rebut the evidence presented against him by the management.
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During the hearing or conference, the employee is given the chance to defend himself personally, with the
assistance of a representative or counsel of his choice. Moreover, this conference or hearing could be used by the
parties as an opportunity to come to an amicable settlement.
NOTE: As earlier discussed, per the 2011 Lopez doctrine, which is the prevailing rule,
the right to counsel is neither indispensable nor mandatory. It becomes mandatory only in two
(2) situations:
(1) When the employee himself requests for counsel; or
(2) When he manifests that he wants a formal hearing on the charges against him, in which case,
he should be assisted by counsel. (See Lopez v. Alturas Group of Companies).
(3) Second written notice.
After determining that termination of employment is justified, the employer shall serve the employees a
written notice of termination indicating that:
1) all circumstances involving the charge/s against the employee have been considered; and 2)
grounds have been established to justify the severance of his employment.
▪ Meeting, dialogue, consultation or interview is not the hearing required by law. It may not be a substitute for the
actual holding of a hearing.
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▪ Prior consultation with union is not part of the due process requirement.
▪ Cross-examination or confrontation of witnesses is not necessary in company investigations.
▪ Co-conspirator’s confession is not sufficient to merit dismissal.
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5. Award of financial assistance in cases where the employee’s dismissal is declared legal but because of
long years of service, and other considerations, financial assistance is awarded.
6. Imposition of legal interest on separation pay, backwages and other monetary awards.
1.
REINSTATEMENT
a.
REINSTATEMENT PENDING APPEAL
(Article 229 [223], Labor Code)
• Is reinstatement pending appeal solely applicable to reinstatement ordered by the Labor Arbiter?
Yes. Reinstatement is self-executory or immediately executory only if it is ordered by the Labor Arbiter. This means
that the employee ordered reinstated need not file any motion for the issuance of writ of execution to enforce
reinstatement. The employer, in fact, is required to manifest within 10 days from his receipt of the order of
reinstatement which of the two (2) options he is taking:
1. To reinstate the employee to his former position or to a substantially equivalent position; or
2. To reinstate him in the payroll, which means the employee need not report for work but only for the
purpose of getting his wage.
There is no way the employer can disregard the reinstatement order. Posting of a bond does not stay the
execution of immediate reinstatement.
In contrast, if ordered by the NLRC, on appeal, or the Court of Appeals, under a Rule 65 certiorari petition,
or even by the Supreme Court, reinstatement is not immediately executory. This means that the employee
reinstated should still file a motion for issuance of writ of execution to enforce the reinstatement.
• Are there instances where writ of execution of Labor Arbiter’s reinstatement order is still required?
Yes, under the following two (2) instances, viz.:
1. When the employer disobeys the Rules-prescribed directive to submit a report of compliance within ten
(10) calendar days from receipt of the decision; or
2. When the employer refuses to reinstate the dismissed employee.
The Labor Arbiter shall motu proprio issue a corresponding writ to satisfy the reinstatement wages as they
accrue until actual reinstatement or reversal of the order of reinstatement.
The employee need not file a motion for the issuance of the writ of execution since the Labor Arbiter shall
thereafter motu proprio issue the writ. Employer may be cited for contempt for his refusal to comply with the order
of reinstatement.
Employer is liable to pay the salaries for the period that the employee was ordered reinstated pending appeal
even if his dismissal is later finally found to be legal on appeal.
▪ If the former position is already filled up, the employee ordered reinstated under Article 223 should be admitted
back to work in a substantially equivalent position.
▪ Reinstatement to a position lower in rank is not proper.
▪ Reinstatement cannot be refused on the basis of the employment elsewhere of the employee ordered reinstated.
▪ The failure of the illegally dismissed employee who was ordered reinstated to report back to work does not give
the employer the right to remove him, especially when there is a reasonable explanation for his failure.
▪ No reinstatement pending appeal should be made when antipathy and antagonism exist.
▪ If reinstatement is not stated in the Labor Arbiter’s decision (neither in the dispositive portion nor in the text
thereof), reinstatement is not warranted.
b.
SEPARATION PAY IN LIEU OF REINSTATEMENT
• Is separation pay applicable only to reinstatement as an alternative remedy?
Yes. Separation pay, as a substitute remedy, is only proper for reinstatement but not for backwages.
This remedy is not found in the Labor Code but is granted in case reinstatement is no longer possible or
feasible, such as when any of the following circumstances exists:
(1) Where the continued relationship between the employer and the employee is no longer viable due to the
strained relations and antagonism between them (Doctrine of Strained Relations).
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(2) When reinstatement proves impossible, impracticable, not feasible or unwarranted for varied reasons and
thus hardly in the best interest of the parties such as:
(a) Where the employee has already been replaced permanently as when his position has already been
taken over by a regular employee and there is no substantially equivalent position to which he may be
reinstated.
(b) Where the dismissed employee’s position is no longer available at the time of reinstatement for reasons
not attributable to the fault of the employer.
(c) When there has been long lapse or passage of time that the employee was out of employer’s employ
from the date of the dismissal to the final resolution of the case or because of the realities of the
situation.
(d) By reason of the injury suffered by the employee.
(e) The employee has already reached retirement age under a Retirement Plan.
(f) When the illegally dismissed employees are over-age or beyond the compulsory retirement age and
their reinstatement would unjustly prejudice their employer.
(3) Where the employee decides not to be reinstated as when he does not pray for reinstatement in his
complaint or position paper but asked for separation pay instead.
(4) When reinstatement is rendered moot and academic due to supervening events, such as:
(a) Death of the illegally dismissed employee.
(b) Declaration of insolvency of the employer by the court.
(c) Fire which gutted the employer’s establishment and resulted in its total destruction.
(d) In case the establishment where the employee is to be reinstated has closed or ceased operations.
(5) To prevent further delay in the execution of the decision to the prejudice of private respondent.
(6) Other circumstances such as (a) when reinstatement is inimical to the employer’s interest; (b)
reinstatement does not serve the best interests of the parties involved; (c) the employer is prejudiced by
the workers’ continued employment; or (d) that it will not serve any prudent purpose as when supervening
facts transpired which made execution unjust or inequitable.
• What is the amount of separation pay in lieu of reinstatement?
Per prevailing jurisprudence, the following are the components of separation pay in lieu of reinstatement>
(1) The amount equivalent to at least one (1) month salary or to one (1) month salary for every year of service,
whichever is higher, a fraction of at least six (6) months being considered as one (1) whole year.
(2) Allowances that the employee has been receiving on a regular basis.
• What is the period covered?
From start of employment up to the date of finality of decision except when the employer has ceased its
operation earlier, in which case, the same should be computed up to the date of closure.
• What is the salary rate to be used in computing it?
The salary rate prevailing at the end of the period of putative service should be the basis for computation
which refers to the period of imputed service for which the employee is entitled to backwages.
• What are some important principles on separation pay in lieu of reinstatement?
1. Award of separation pay and backwages are not inconsistent with each other. Hence, both may be
awarded to an illegally dismissed employee. The payment of separation pay is in addition to payment
of backwages.
2. Reinstatement cannot be granted when what is prayed for by employee is separation pay in lieu
thereof.
BACKWAGES
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▪ Salary increases during period of unemployment are not included as component in the computation of
backwages.
▪ Dismissed employee’s ability to earn is irrelevant in the award of backwages.
▪ In case reinstatement is ordered, full backwages should be reckoned from the time the compensation was
withheld (which, as a rule, is from the time of illegal dismissal) up to the time of reinstatement, whether actual
or in the payroll.
▪ If separation pay is ordered in lieu of reinstatement, full backwages should be computed from the time of
illegal dismissal until the finality of the decision. The justification is that along with the finality of the Supreme
Court’s decision, the issue on the illegality of the dismissal is finally laid to rest.
▪ If the illegally dismissed employee has reached the optional retirement age of 60 years, his backwages should
only cover the time when he was illegally dismissed up to the time when he reached 60 years. Under Article
287, 60 years is the optional retirement age.
▪ If the employee has reached 65 years of age or beyond, his full backwages should be computed only up to said
age. The contention of the employer that backwages should be reckoned only up to age 60 cannot be sustained.
▪ If employer has already ceased operations, full backwages should be computed only up to the date of the closure.
To allow the computation of the backwages to be based on a period beyond that would be an injustice to the
employer.
▪ Any amount received during payroll reinstatement is deductible from backwages.
LIMITED BACKWAGES
PREVENTIVE SUSPENSION
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period due to justifiable grounds. No extension thereof can be made based on whimsical, capricious or
unreasonable grounds.
➢ Preventive suspension lasting longer than 30 days, without the benefit of valid extension, amounts to
constructive dismissal.
➢ Indefinite preventive suspension amounts to constructive dismissal.
C.
RETIREMENT
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Hence, the termination of employment of the employees, arising as it did from an exercise of a management
prerogative granted by the mutually-negotiated CBA between the school and the union is valid.
• What is the minimum years of service required for entitlement under the law?
Five (5) years is the minimum years of service that must be rendered by the employee before he can avail of
the retirement benefits upon reaching optional or compulsory retirement age under Article 287.
• What is the retirement age of underground mine workers?
The rule is different. The optional retirement age of underground mine workers is 50 years of age; while the
compulsory retirement age is 60 years old.
• What is the minimum number of years of service required of underground mine workers? Minimum years of
service is also 5 years.
• Are the retirement benefits of underground mine workers similar to ordinary retirees?
Yes. In fact, other than the retirement age, all other requirements as well as benefits provided in the law are
applicable to underground mine workers.
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on SIL as well as on retirement, there is a difference between drivers paid under the “boundary system” and conductors
paid on commission basis. This is so because in practice, taxi drivers do not receive fixed wages. They retain only
those sums in excess of the “boundary” or fee they pay to the owners or operators of the vehicles. Conductors, on the
other hand, are paid a certain percentage of the bus’ earnings for the day. It bears emphasis that under P.D. No. 851
and the SIL Law, the exclusion from its coverage of workers who are paid on a purely commission basis is only with
respect to field personnel.
RETIREMENT BENEFITS OF
WORKERS PAID BY RESULTS
• What are the retirement benefits of workers paid by results?
For covered workers who are paid by results and do not have a fixed monthly rate, the basis for the
determination of the salary for fifteen (15) days shall be their average daily salary (ADS). The ADS is the average
salary for the last twelve (12) months reckoned from the date of their retirement, divided by the number of actual
working days in that particular period.
ENTITLEMENT OF EMPLOYEES
DISMISSED FOR JUST CAUSE TO RETIREMENT BENEFITS
General rule – Entitled because employee has acquired vested right over the retirement benefits.
Exception - Where just cause termination is cited in the retirement plan as reason to validly deny claim
for retirement benefits.
Here, the company’s retirement plan prohibits the award of retirement benefits to an employee
dismissed for just cause, a proscription that binds the parties to it.
In this case, the Supreme Court ordered the payment to the retrenched employees of both the
separation pay for retrenchment embodied in the CBA as well as the retirement pay provided
under a separate Retirement Plan. The reason is that these two are not mutually exclusive. There
is nothing in the CBA nor in the Retirement Plan that states that an employee who had received
separation pay would no longer be entitled to retirement benefits or that collection of retirement
benefits was prohibited if the employee had already received separation pay
It is provided in the retirement plan that the retirement, death and disability benefits paid in the plan
are considered integrated with and in lieu of termination benefits under the Labor Code, thus,
the retirement fund may be validly used to pay such termination or separation pay because of
closure of business.
c. When employees are entitled to only one form of benefit.
The retirement plan provides that the employee shall be entitled to either the retirement benefit
provided therein or the separation pay provided by law, whichever is higher, the employee cannot
be entitled to both benefits.
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✓RETIREMENT PAY UNDER THE LABOR CODE OR RETIREMENT PLAN IS SEPARATE
AND DISTINCT FROM THE RETIREMENT PAY UNDER THE SSS, GSIS AND PAG-IBIG.
------------oOo------------
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SYLLABUS
MAJOR TOPIC 5
MANAGEMENT PREROGATIVES
For example, an employer cannot prescribe more than 8 hours as normal working hours in a day because
there is a law which limits it to 8 hours. In the same vein, the employer cannot insist that an employee should observe
8 hours as the daily normal working hours if there is a stipulation in the CBA, employment contract, or there is an
employer policy or practice that the normal working hours is only 7 hours per day.
A.
DISCIPLINE
B.
TRANSFER OF EMPLOYEES
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▪ Commitment made by the employee like a salesman in the employment contract to be re-assigned
anywhere in the Philippines is binding on him.
▪ Even if the employee is performing well in his present assignment, management may reassign him to a
new post.
▪ The transfer of an employee may constitute constructive dismissal when:
1. When the transfer is unreasonable, inconvenient or prejudicial to the employee;
2. When the transfer involves a demotion in rank or diminution of salaries, benefits and other privileges;
and
3. When the employer performs a clear act of discrimination, insensibility, or disdain towards the employee,
which forecloses any choice by the latter except to forego his continued employment.
▪ The refusal of an employee to be transferred may be held justified if there is a showing that the transfer was
directed by the employer under questionable circumstances. For instance, the transfer of employees during
the height of their union’s concerted activities in the company where they were active participants is
illegal.
▪ An employee who refuses to be transferred, when such transfer is valid, is guilty of insubordination or
willful disobedience of a lawful order of an employer under Article 282 of the Labor Code.
▪ Refusal to transfer due to parental obligations, additional expenses, inconvenience, hardship and anguish
is not valid. An employee could not validly refuse lawful orders to transfer based on these grounds.
▪ Refusal to transfer to overseas assignment is valid.
▪ Refusal to transfer consequent to promotion is valid.
▪ Transfer to avoid conflict of interest is valid.
▪ A transfer from one position to another occasioned by the abolition of the position is valid.
C.
PRODUCTIVITY STANDARD
Illustrative cases:
In International School Manila v. International School Alliance of Educators (ISAE),54 the teacher was
held guilty of gross inefficiency meriting her dismissal on the basis of the Court’s finding that she failed to measure
up to the standards set by the school in teaching Filipino classes.
In Reyes-Rayel v. Philippine Luen Thai Holdings Corp., 55 the validity of the dismissal of petitioner who
was the Corporate Human Resources (CHR) Director for Manufacturing of respondent company, on the ground of
inefficiency and ineptitude, was affirmed on the basis of the Court’s finding that petitioner, on two occasions, gave
wrong information regarding issues on leave and holiday pay which generated confusion among employees in the
computation of salaries and wages.
In Realda v. New Age Graphics, Inc., 56 petitioner, a machine operator of respondent company, was
dismissed on the ground, among others, of inefficiency. In affirming the validity of his dismissal, the Supreme Court
reasoned:
“xxx (T)he petitioner’s failure to observe Graphics, Inc.’s work standards constitutes inefficiency
that is a valid cause for dismissal. Failure to observe prescribed standards of work, or to fulfill reasonable
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work assignments due to inefficiency may constitute just cause for dismissal. Such inefficiency is understood
to mean failure to attain work goals or work quotas, either by failing to complete the same within the allotted
reasonable period, or by producing unsatisfactory results.”
D.
BONUS
E.
CHANGE OF WORKING HOURS
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1. Philippine Telegraph and Telephone Company (PT&T) v. NLRC. 59 - It was declared here that the
company policy of not accepting or considering as disqualified from work any woman worker who
contracts marriage runs afoul of the test of, and the right against, discrimination afforded all women
workers by our labor laws and by no less than the Constitution.
2. Star Paper Corp. v. Simbol.60 - The following policies were struck down as invalid for violating the
standard of reasonableness which is being followed in our jurisdiction, otherwise called the “Reasonable
Business Necessity Rule”:
“1. New applicants will not be allowed to be hired if in case he/she has [a] relative, up to [the] 3 rd degree
of relationship, already employed by the company.
“2. In case of two of our employees (both singles [sic], one male and another female) developed a friendly
relationship during the course of their employment and then decided to get married, one of them should
resign to preserve the policy stated above.”
It was in this case of Star Paper that the Supreme Court pronounced that in Duncan, the policy against marriage
has passed and complied with the “Reasonable Business Necessity Rule” because of the conflict of interest sought to
be avoided. But in PT&T, there was no showing that there ever was a reasonable business necessity sought to be
protected by the policy against marriage. So also as in this case of Star Paper where there is no showing of such
reasonable business necessity.
NOTE: Besides the foregoing, Article 136 of the Labor Code considers as an unlawful act of the employer
to require as a condition for or continuation of employment that a woman employee shall not get married or to stipulate
expressly or tacitly that upon getting married, a woman employee shall be deemed resigned or separated. It is likewise
an unlawful act of the employer, to actually dismiss, discharge, discriminate or otherwise prejudice a woman employee
merely by reason of her marriage.
G.
POST-EMPLOYMENT BAN
“8. NON-INVOLVEMENT PROVISION – The EMPLOYEE further undertakes that during his/her engagement
with EMPLOYER and in case of separation from the Company, whether voluntary or for cause, he/ she shall not,
for the next TWO (2) years thereafter, engage in or be involved with any corporation, association or entity, whether
directly or indirectly, engaged in the same business or belonging to the same pre-need industry as the EMPLOYER.
Any breach of the foregoing provision shall render the EMPLOYEE liable to the EMPLOYER in the amount of One
Hundred Thousand Pesos (P100,000.00) for and as liquidated damages.”
Starting on January 1, 1993, petitioner worked for respondent as Senior Assistant Vice-President and
Territorial Operations Head in charge of its Hongkong and Asean operations under a 5-year contract of employment
containing the afore-quoted clause. On September 16, 1995, petitioner stopped reporting for work. In November 1995,
she became the Vice-President for Sales of Professional Pension Plans, Inc., a corporation engaged also in the pre-
need industry. Consequently, respondent sued petitioner for damages before the RTC of Pasig City. Respondent
alleged, among others, that petitioner’s employment with Professional Pension Plans, Inc. violated the above-quoted
non-involvement clause in her contract of employment. Respondent thus prayed for P100,000 as compensatory
damages; P200,000 as moral damages; P100,000 as exemplary damages; and 25% of the total amount due plus P1,000
per counsel’s court appearance, as attorney’s fees.
Petitioner countered that the non-involvement clause was unenforceable for being against public order or
public policy: First, the restraint imposed was much greater than what was necessary to afford respondent a fair and
reasonable protection. Petitioner contended that the transfer to a rival company was an accepted practice in the preneed
59 G.R. No. 118978, May 23, 1997, 272 SCRA 596, 605.
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industry. Since the products sold by the companies were more or less the same, there was nothing peculiar or unique
to protect. Second, respondent did not invest in petitioner’s training or improvement. At the time petitioner was
recruited, she already possessed the knowledge and expertise required in the pre-need industry and respondent
benefited tremendously from it. Third, a strict application of the non-involvement clause would amount to a
deprivation of petitioner’s right to engage in the only work she knew.
In affirming the validity of the Non-Involvement Clause, the Supreme Court ratiocinated as follows:
“xxx a non-involvement clause is not necessarily void for being in restraint of trade as long as there are
reasonable limitations as to time, trade, and place.
“In this case, the non-involvement clause has a time limit: two years from the time petitioner’s
employment with respondent ends. It is also limited as to trade, since it only prohibits petitioner from engaging
in any pre-need business akin to respondent’s. It is limited as to place since the prohibition covers only
Hongkong and Asean operations.
“More significantly, since petitioner was the Senior Assistant Vice-President and Territorial Operations Head in
charge of respondent’s Hongkong and Asean operations, she had been privy to confidential and highly sensitive
marketing strategies of respondent’s business. To allow her to engage in a rival business soon after she leaves would
make respondent’s trade secrets vulnerable especially in a highly competitive marketing environment. In sum, we
find the non-involvement clause not contrary to public welfare and not greater than is necessary to afford a fair
and reasonable protection to respondent.
“Thus, as held by the trial court and the Court of Appeals, petitioner is bound to pay respondent P100,000 as
liquidated damages. While we have equitably reduced liquidated damages in certain cases, we cannot do so in this
case, since it appears that even from the start, petitioner had not shown the least intention to fulfill the noninvolvement
clause in good faith.”
------------oOo------------
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Unless otherwise specified, all provisions of the law, R.A. No. 8282, applicable to covered employees shall
also be applicable to the covered self-employed persons.
A self-employed person shall be both employee and employer at the same time.
• Who may be covered voluntarily?
1. Separated Members
A member who is separated from employment or ceased to be self-employed/OFW/non-working spouse
and would like to continue contributing.
2. Overseas Filipino Workers (OFWs)
A Filipino recruited in the Philippines by a foreign-based employer for employment abroad or one who
legitimately entered a foreign country (i.e., tourist, student) and is eventually employed.
3. Non-working spouses of SSS members
A person legally married to a currently employed and actively paying SSS member who devotes full time
in the management of household and family affairs may be covered on a voluntary basis, provided there
is the approval of the working spouse. The person should never have been a member of the SSS. The
contributions will be based on 50 percent (50%) of the working spouse’s last posted monthly salary credit
but in no case shall it be lower than P1,000.
• What is the effective date of coverage?
For compulsory coverage:
1. For employer - Compulsory coverage of the employer shall take effect on the first day of his operation
or on the first day he hires employee/s. The employer is given only 30 days from the date of employment
of employee to report the person for coverage to the SSS.
2. For employee - Compulsory coverage of the employee shall take effect on the first day of his employment.
3. For self-employed - The compulsory coverage of the self-employed person shall take effect upon his
registration with the SSS or upon payment of the first valid contribution, in case of initial coverage.
For voluntary coverage:
1. For an OFW – upon first payment of contribution, in case of initial coverage.
2. For a non-working spouse – upon first payment of contribution.
3. For a separated member – on the month he/she resumed payment of contribution.
• Who are excluded employers?
Government and any of its political subdivisions, branches or instrumentalities, including corporations owned
or controlled by the Government with original charters.
• Who are excluded employees?
Workers whose employment or service falls under any of the following circumstances are not covered:
(1) Employment purely casual and not for the purpose of occupation or business of the employer;
(2) Service performed on or in connection with an alien vessel by an employee if he is employed when such
vessel is outside the Philippines;
(3) Service performed in the employ of the Philippine Government or instrumentality or agency thereof;
(4) Service performed in the employ of a foreign government or international organization, or their
whollyowned instrumentality: Provided, however, That this exemption notwithstanding, any foreign
government, international organization or their wholly-owned instrumentality employing workers in the
Philippines or employing Filipinos outside of the Philippines, may enter into an agreement with the
Philippine Government for the inclusion of such employees in the SSS except those already covered by
their respective civil service retirement systems: Provided, further, That the terms of such agreement shall
conform with the provisions of R.A. No. 8282 on coverage and amount of payment of contributions and
benefits: Provided, finally, That the provisions of this Act shall be supplementary to any such agreement;
and
(5) Such other services performed by temporary and other employees which may be excluded by regulation
of the Social Security Commission. Employees of bona-fide independent contractors shall not be deemed
employees of the employer engaging the service of said contractors.
• What are the classifications of benefits?
The SSS benefits may be classified into two (2) as follows:
(a) Social security benefits:
1) Sickness
2) Maternity
3) Retirement
4) Disability
5) Death and funeral.
(b) Employees’ compensation benefits.
• Who are primary beneficiaries?
The following are primary beneficiaries:
1. The dependent spouse until he or she remarries;
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2. The dependent legitimate, legitimated or legally adopted, and illegitimate children who are not yet
21 years of age.
The dependent illegitimate children shall be entitled to 50% of the share of the legitimate, legitimated
or legally adopted children. However, in the absence of the dependent legitimate, legitimated children of
the member, his/her dependent illegitimate children shall be entitled to 100% of the benefits
• Who are secondary beneficiaries?
The following are secondary beneficiaries:
1. The dependent parents, in the absence of the primary beneficiaries.
2. Any other person designated by the member as his/her secondary beneficiary, in the absence of all the
foregoing primary beneficiaries and dependent parents. B.
GSIS LAW
(R.A. No. 8291)
• Who are compulsorily required to become members of the GSIS?
1. All government personnel, whether elective or appointive, irrespective of status of
appointment, provided they are receiving fixed monthly compensation and have not reached the
mandatory retirement age of 65 years, are compulsorily covered as members of the GSIS and shall be
required to pay contributions.
2. However, employees who have reached the retirement age of 65 or more shall also be
covered, subject to the following rules:
An employee who is already beyond the mandatory retirement age of 65 shall be compulsorily covered and
be required to pay both the life and retirement premiums under the following situations:
a. An elective official who at the time of election to public office is below 65 years of age and will be 65
years or more at the end of his term of office, including the period/s of his re-election to public office
thereafter without interruption.
b. Appointive officials who, before reaching the mandatory age of 65, are appointed to government position
by the President of the Republic of the Philippines and shall remain in government service at age beyond
65.
c. Contractual employees including casuals and other employees with an employee-government agency
relationship are also compulsorily covered, provided they are receiving fixed monthly compensation and
rendering the required number of working hours for the month.
• What are the classes of membership in the GSIS?
Membership in the GSIS is classified either by type or status of membership.
• As to type of members, there are regular and special members:
(a) Regular Members – are those employed by the government of the Republic of the Philippines, national
or local, legislative bodies, government-owned and controlled corporations (GOCC) with original
charters, government financial institutions (GFIs), except uniformed personnel of the Armed Forces of
the Philippines, the Philippine National Police, Bureau of Jail Management and Penology (BJMP) and
Bureau of Fire Protection (BFP), who are required by law to remit regular monthly contributions to the
GSIS.
(b) Special Members – are constitutional commissioners, members of the judiciary, including those with
equivalent ranks, who are required by law to remit regular monthly contributions for life insurance
policies to the GSIS in order to answer for their life insurance benefits defined under RA 8291.
• As to status of membership, there are active and inactive members.
(a) Active member – refers to a member of the GSIS, whether regular or special, who is still in the
government service and together with the government agency to which he belongs, is required to pay
the monthly contribution.
(b) Inactive member – a member who is separated from the service either by resignation, retirement,
disability, dismissal from the service, retrenchment or, who is deemed retired from the service under
this Act.
• When does membership become effective?
The effective date of membership shall be the date of the member’s assumption to duty on his original
appointment or election to public office.
• What is the effect of separation from the service?
A member separated from the service shall continue to be a member, and shall be entitled to whatever benefits
he has qualified to in the event of any contingency compensable under the GSIS Law.
• Who are excluded from the compulsory coverage of the GSIS Law?
The following employees are excluded from compulsory coverage:
(a) Uniformed personnel of the Armed Forces of the Philippines (AFP), Philippine National Police
(PNP), Bureau of Fire Protection (BFP) and Bureau of Jail Management and Penology (BJMP);
(b) Barangay and Sanggunian Officials who are not receiving fixed monthly compensation;
(c) Contractual Employees who are not receiving fixed monthly compensation; and
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(d) Employees who do not have monthly regular hours of work and are not receiving fixed monthly
compensation.
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For purposes of computation of benefits, totalization applies in all cases so that the contributions made by the worker-
member in both Systems shall provide maximum benefits which otherwise will not be available. In no case shall the
contribution be lost or forfeited.
• What is the effect if worker is not qualified after totalization?
If after totalization, the worker-member still does not qualify for any benefit as listed in the law, the member
will then get whatever benefits correspond to his/her contributions in either or both Systems.
• What is the effect if worker qualifies for benefits in both Systems?
If a worker qualifies for benefits in both Systems, totalization shall not apply.
D.
EMPLOYEE’S COMPENSATION
COVERAGE AND WHEN COMPENSABLE
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1.
WHO MAY EXERCISE THE RIGHT
• Who are eligible to join, form or assist a labor organization for purposes of collective bargaining?
All rank-and-file employees of all branches, subdivisions, instrumentalities, and agencies of government,
including government-owned and/or controlled corporations with original charters, can form, join or assist
employees’ organizations of their own choosing.
• Are front-line managers or supervisors eligible to join, form or assist a labor organization?
Yes, but only among themselves. They cannot join a rank-and-file union.
• Do alien employees have the right to join a labor organization?
No, except if the following requisites are complied with:
1. He should have a valid working permit issued by the DOLE; and
2. He is a national of a country which grants the same or similar rights to Filipino workers OR which has
ratified either ILO Convention No. 87 or ILO Convention No. 98 (ON THE RIGHT TO SELF-
ORGANIZATION OF WORKERS) as certified by the Philippine Department of Foreign Affairs (DFA).
• Do members of cooperatives have the right to join, form or assist a labor organization?
No, because they are co-owners of the cooperative.
• What about employees of a cooperative?
Yes, because they have employer-employee relationship with the cooperative.
• What about members who are at the same time employees of the cooperative?
No, because the prohibition covers employees of the cooperative who are at the same time members thereof.
But employee-members of a cooperative may withdraw as members of the cooperative for purposes of joining a labor
union.
• Can employees of job contractors join, form or assist a labor organization?
Yes, but not for the purpose of collective bargaining with the principal but with their direct employer – the
job contractor.
• Are self-employed persons allowed to join, form or assist a labor organization?
Yes, for their mutual aid and protection but not for collective bargaining purposes since they have no
employers but themselves. BUT AS AND BY WAY OF DISTINCTION, THEIR LABOR ORGANIZATION IS
CALLED “WORKERS’ ASSOCIATION.”
This rule applies as well to ambulant, intermittent and other workers, rural workers and those without any
definite employers. The reason for this rule is that these persons have no employers with whom they can collectively
bargain.
2.
COMMINGLING or MIXED MEMBERSHIP
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• Is COMMINGLING or MIXED MEMBERSHIP of supervisors and rank-and-file union in one union allowed?
Is it a ground to cancel its registration?
No. It is not allowed. However, it bears noting that in case there is commingling or mixed membership of
supervisors and rank-and-file employees in one union, the new rule enunciated in Article 256 [245-A] of the Labor
Code, unlike in the old law, is that it cannot be invoked as a ground for the cancellation of the registration of the union.
The employees so improperly included are automatically deemed removed from the list of members of said union. In
other words, their removal from the said list is by operation of law.
3.
WHO CANNOT FORM, JOIN OR ASSIST
LABOR ORGANIZATIONS
1. PERSONS NOT ALLOWED TO FORM, JOIN OR ASSIST LABOR ORGANIZATIONS.
a. In the private sector.
1. Top and middle level managerial employees; and 2.
Confidential employees.
b. In the public sector.
The following are not eligible to form employees’ organizations:
1. High-level employees whose functions are normally considered as policy-making or managerial or
whose duties are of a highly confidential nature;
2. Members of the Armed Forces of the Philippines;
3. Police officers;
4. Policemen;
5. Firemen; and 6. Jail guards.
• Are managerial employees allowed unionize?
There are 3 types of managerial employees:
1. Top Management
2. Middle Management
3. First-Line Management (also called supervisory level)
The first two above are absolutely prohibited; but the third, being supervisors, are allowed but only among
themselves.
• Are confidential employees allowed to join, form or assist a labor organization? No, under the confidential
employee rule.
“Confidential employees” are those who meet the following criteria:
(1) They assist or act in a confidential capacity;
(2) To persons or officers who formulate, determine, and effectuate management policies specifically in the
field of labor relations. If not related to labor relations, an employee can never be considered as
confidential employee as would deprive him of his right to self-organization.
The two (2) criteria are cumulative and both must be met if an employee is to be considered a “confidential
employee” that would deprive him of his right to form, join or assist a labor organization.
4.
DOCTRINE OF NECESSARY IMPLICATION
5.
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RIGHTS AND CONDITIONS OF MEMBERSHIP
a.
NATURE OF RELATIONSHIP
a.1.
AFFILIATION AND DISAFFILIATION OF THE
LOCAL UNION FROM THE MOTHER UNION
1. AFFILIATION.
a. Mother union.
In relation to an affiliate, the federation or national union is commonly known as the “mother union.”
This term is not found in law but oftentimes, the Supreme Court uses this term to describe a federation or a national
union.
b. Affiliate.
An “affiliate” refers to:
(1) An independent union affiliated with a federation or a national union; or
(2) A local chapter which has been subsequently granted independent registration but did not disaffiliate
from the federation or national union which created it.
c. A chartered local/local chapter, not an affiliate.
Based on the above definition and description, technically, a local chapter created through the mode of
chartering by a mother union under Article 234-A of the Labor Code, cannot be properly called an “affiliate” if it has
not acquired any independent registration of its own.
The contract that binds a mother union and an affiliate is called “Contract of Affiliation”; while that of a
mother union and the chartered local/local chapter is called “Charter Certificate.”
d. Purpose of affiliation.
The purpose is to further strengthen the collective bargaining leverage of the affiliate. No doubt, the purpose
of affiliation by a local union with a mother union (federation or national union) is to increase by collective action its
bargaining power in respect of the terms and conditions of labor.
e. Principal-agent relationship.
To iterate, the mother union, acting for and in behalf of its affiliate, has the status of an agent while the local
union remains the principal – the basic unit of the association free to serve the common interest of all its members
subject only to the restraints imposed by the constitution and by-laws of the association. f. Some principles on
affiliation.
• Independent legal personality of an affiliate union is not affected by affiliation.
• Affiliate union becomes subject of the rules of the federation or national union.
• The appendage of the acronym of the federation or national union after the name of the affiliate union in
the registration with the DOLE does not change the principal-agent relationship between them. Such
inclusion of the acronym is merely to indicate that the local union is affiliated with the federation or national
union at the time of the registration. It does not mean that the affiliate union cannot independently stand
on its own.
• The fact that it was the federation which negotiated the CBA does not make it the principal and the
affiliate or local union which it represents, the agent.
• In case of illegal strike, the local union, not the mother union, is liable for damages.
2. DISAFFILIATION.
a. Right to disaffiliate.
The right of the affiliate union to disaffiliate from its mother federation or national union is a constitutionally-
guaranteed right which may be invoked by the former at any time. It is axiomatic that an affiliate union is a separate
and voluntary association free to serve the interest of all its members - consistent with the freedom of association
guaranteed in the Constitution.
b. Disaffiliation of independently-registered union and local chapter, distinguished.
The disaffiliation of an independently-registered union does not affect its legitimate status as a labor
organization. However, the same thing may not be said of a local chapter which has no independent registration since
its creation was effected pursuant to the charter certificate issued to it by the federation or national union. Once a local
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chapter disaffiliates from the federation or national union which created it, it ceases to be entitled to the rights and
privileges granted to a legitimate labor organization. Hence, it cannot, by itself, file a petition for certification election.
c. Some principles on disaffiliation.
▪ Disaffiliation does not divest an affiliate union of its legal personality.
▪ Disaffiliation of an affiliate union is not an act of disloyalty.
▪ Disaffiliation for purposes of forming a new union does not terminate the status of the members thereof
as employees of the company. By said act of disaffiliation, the employees who are members of the local
union did not form a new union but merely exercised their right to register their local union. The local
union is free to disaffiliate from its mother union.
▪ Disaffiliation should be approved by the majority of the union members.
▪ Disaffiliation terminates the right to check-off federation dues. The obligation to check-off federation
dues is terminated with the valid disaffiliation of the affiliate union from the federation with which it
was previously affiliated.
▪ Disaffiliation does not affect the CBA. It does not operate to amend it or change the administration of the
contract.
▪ Disaffiliating from the federation and entering into a CBA with the employer does not constitute an unfair
labor practice.
▪ Disaffiliation is not a violation of the union security clause.
a.2.
SUBSTITUTIONARY DOCTRINE
1. CHANGE OF BARGAINING REPRESENTATIVE DURING THE LIFE OF A CBA.
It simply refers to the substitution of the existing SOLE AND EXCLUSIVE BARGAINING AGENT
(“SEBA” or simply “bargaining agent”) by a newly certified SEBA which defeated it in the certification election.
As new SEBA, it is duty-bound to respect the existing CBA but it can renegotiate for new terms and conditions thereof.
2. EFFECT OF SUBSTITUTIONARY DOCTRINE ON THE DEPOSED UNION’S PERSONAL
UNDERTAKINGS.
In case of change of bargaining agent under the substitutionary doctrine, the new bargaining agent is not
bound by the personal undertakings of the deposed union like the “no strike, no lockout” clause in a CBA which is
the personal undertaking of the bargaining agent which negotiated it.
3. SOME PRINCIPLES ON SUBSTITUTIONARY DOCTRINE.
• The substitutionary doctrine cannot be invoked to subvert an existing CBA, in derogation of the principle of
freedom of contract. The substitution of a bargaining agent cannot be allowed if the purpose is to subvert an
existing CBA freely entered into by the parties. Such act cannot be sanctioned in law or in equity as it is in
derogation of the principle underlying the freedom of contract and good faith in contractual relations.
• The substitutionary doctrine is applicable also to a situation where the local union, which was created through
the process of chartering by the mother union, disaffiliates from the latter after it secured an independent
registration. The local union will thus be substituted to that of the federation which negotiated the CBA as in
Elisco-Elirol Labor Union [NAFLU] v. Noriel, where petitioner union was created through the mode of
chartering by the National Federation of Labor Unions (NAFLU) and later, it secured its independent
registration with the BLR and disaffiliated with NAFLU by virtue of a resolution by its general membership.
B.
BARGAINING UNIT
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(1) Community or mutuality of interest
doctrine;
(2) Globe doctrine or will of the members; (3)
Collective bargaining history doctrine; and
(4) Employment status doctrine.
1. COMMUNITY OR MUTUALITY OF INTEREST DOCTRINE.
Under this doctrine, the employees sought to be represented by the collective bargaining agent must have
community or mutuality of interest in terms of employment and working conditions as evinced by the type of work
they perform. It is characterized by similarity of employment status, same duties and responsibilities and substantially
similar compensation and working conditions.
St. James School of Quezon City v. Samahang Manggagawa sa St. James School of Quezon City. 61 -
Respondent union sought to represent the rank-and-file employees (consisting of the motor pool, construction and
transportation employees) of petitioner-school’s Tandang Sora campus. Petitioner-school opposed it by contending
that the bargaining unit should not only be composed of said employees but must include administrative, teaching and
office personnel in its five (5) campuses. The Supreme Court disagreed with said contention. The motor pool,
construction and transportation employees of the Tandang Sora campus had 149 qualified voters at the time of the
certification election, hence, it was ruled that the 149 qualified voters should be used to determine the existence of a
quorum during the election. Since a majority or 84 out of the 149 qualified voters cast their votes, a quorum existed
during the certification election. The computation of the quorum should be based on the rank-and-file motor pool,
construction and transportation employees of the Tandang Sora campus and not on all the employees in petitioner’s
five (5) campuses. Moreover, the administrative, teaching and office personnel are not members of the union. They
do not belong to the bargaining unit that the union seeks to represent.
Other cases:
(1) San Miguel Corporation v. Laguesma,62 involving a petition of the union which seeks to represent
the sales personnel in the various Magnolia sales offices in Northern Luzon. Petitioner company, however, opposed it
by taking the position that each sales office should constitute one bargaining unit. In disagreeing with this proposition
of petitioner, the High Court said: “What greatly militates against this position (of the company) is the meager number
of sales personnel in each of the Magnolia sales office in Northern Luzon. Even the bargaining unit sought to be
represented by respondent union in the entire Northern Luzon sales area consists only of approximately fiftyfive (55)
employees. Surely, it would not be for the best interest of these employees if they would further be fractionalized. The
adage ‘there is strength in number’ is the very rationale underlying the formation of a labor union.”
(2) San Miguel Corporation Supervisors and Exempt Employees Union v. Laguesma,63 involving the
issue of validity of constituting as one CBU of employees working in San Miguel’s three (3) plants located in three
(3) different places, namely: (1) in Cabuyao, Laguna, (2) in Otis, Pandacan, Metro Manila, and (3) in San Fernando,
Pampanga. It was declared that geographical location is immaterial and therefore can be completely disregarded if
the communal or mutual interest of the employees are not sacrificed. The distance among the 3 plants is not productive
of insurmountable difficulties in the administration of union affairs. Neither are there regional differences that are
likely to impede the operations of a single bargaining representative.
(3) Similar to this case is University of the Philippines v. Ferrer-Calleja,6465 where all non-academic
rankand-file employees of the University of the Philippines in its various campuses, to wit: (1) Diliman, Quezon City;
(2) Padre Faura, Manila; (3) Los Baños, Laguna; and (4) the Visayas, were allowed to participate in a certification
election as one bargaining unit.
2. GLOBE DOCTRINE.
This principle is based on the will of the employees. It is called Globe doctrine because this principle was
first enunciated in the United States case of Globe Machine and Stamping Co.,5 where it was ruled, in defining the
appropriate bargaining unit, that in a case where the company’s production workers can be considered either as a
single bargaining unit appropriate for purposes of collective bargaining or as three (3) separate and distinct bargaining
units, the determining factor is the desire of the workers themselves. Consequently, a certification election should be
held separately to choose which representative union will be chosen by the workers.
International School Alliance of Educators [ISAE] v. Quisumbing. 66 - The Supreme Court ruled here that
foreign-hired teachers do not belong to the bargaining unit of the local-hires because the former have not indicated
their intention to be grouped with the latter for purposes of collective bargaining. Moreover, the collective bargaining
history of the school also shows that these groups were always treated separately.
3. COLLECTIVE BARGAINING HISTORY DOCTRINE.
63 G.R. No. 110399, Aug. 15, 1997, 277 SCRA 370, 380-381.
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This principle puts premium to the prior collective bargaining history and affinity of the employees in
determining the appropriate bargaining unit. However, the existence of a prior collective bargaining history has been
held as neither decisive nor conclusive in the determination of what constitutes an appropriate bargaining unit.
National Association of Free Trade Unions v. Mainit Lumber Development Company Workers
Union.67 - It was ruled here that there is mutuality of interest among the workers in the sawmill division and logging
division as to justify their formation of a single bargaining unit. This holds true despite the history of said two divisions
being treated as separate units and notwithstanding their geographical distance from each other.
4. EMPLOYMENT STATUS DOCTRINE.
The determination of the appropriate bargaining unit based on the employment status of the employees is
considered an acceptable mode. For instance, casual employees and those employed on a day-to-day basis, according
to the Supreme Court in Philippine Land-Air-Sea Labor Union v. CIR, 68 do not have the mutuality or community
of interest with regular and permanent employees. Hence, their inclusion in the bargaining unit composed of the latter
is not justified. Confidential employees, by the very nature of their functions, assist and act in a confidential capacity
to, or have access to confidential matters of, persons who exercise managerial functions in the field of labor relations.
As such, the rationale behind the ineligibility of managerial employees to form, assist or join a labor union equally
applies to them. Hence, they cannot be allowed to be included in the rank-and-file employees’ bargaining unit. The
rationale for this inhibition is that if these managerial employees would belong to or be affiliated with a union, the
latter might not be assured of their loyalty to the union in view of evident conflict of interest. The union can also
become company-dominated with the presence of managerial employees in its membership.
C.
BARGAINING REPRESENTATIVE
A.K.A. SEBA OR BARGAINING AGENT
(a)
REQUEST FOR SEBA CERTIFICATION
(FORMERLY “VOLUNTARY RECOGNITION”)
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recognition of the employer. And under this new rule, the DOLE Regional Director is dutybound to extend such SEBA
Certification simply on the basis of the requesting union’s compliance with the requirements.
• What should the employer do if a request for recognition or a demand for CBA negotiation is made by a union
which has not been certified as the SEBA?
The employer so requested cannot now extend voluntary recognition but may still validly file a petition for
certification election (PCE) under Article 270 [258] of the Labor Code, in order to determine if the requesting union
has the majority support of the employees in the bargaining unit which it seeks to represent or where it intends to
operate.
• What are the situations involved in this new mode of “REQUEST FOR SEBA CERTIFICATION”?
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It is clear that under the three (3) scenarios cited above, the 2nd and 3rd clearly involve the conduct of
certification election. It is only in the 1st that the conduct of certification election is not the order of the day; there will
be certification election only when the requesting union or local fails to complete the requirements for SEBA
certification during the conference, in which event, the DOLE Regional Director shall refer the Request directly to the
Election Officer, not to the Mediator-Arbiter, for the conduct of certification election.
(b)
CERTIFICATION ELECTION
The general rule is that in the absence of a CBA duly registered in accordance with Article 231 of the Labor
Code, a petition for certification election may be filed at any time.
b. Bar rules.
No certification election may be held under the following rules:
1. Statutory bar rule;
2. Certification year bar rule;
3. Negotiations bar rule;
4. Bargaining deadlock bar rule; or
5. Contract bar rule.
1. STATUTORY BAR RULE.
The Labor Code does not contain any provision on this rule but the Rules to Implement the Labor Code
embody a rule that bars the filing of a PCE within a period of one (1) year from the date of a valid conduct of a
certification, consent, run-off or re-run election where no appeal on the results thereof was made. If there was such an
appeal from the order of the Med-Arbiter, the running of the one-year period is deemed suspended until the decision
on the appeal has become final and executory.
This is called the statutory bar rule which finds its roots from a similar rule in the United States. Thus, an
election cannot be held in any bargaining unit in which a final and valid election was concluded within the preceding
12-month period.
2. CERTIFICATION YEAR BAR RULE.
Under this rule, a petition for certification election (PCE) may not be filed within one (1) year:
1. From the date a union is certified as SEBA by virtue of a REQUEST FOR SEBA CERTIFICATION; or
2. From the date a valid certification, consent, run-off or re-run election has been conducted within the
bargaining unit.
If after this one year period, the SEBA did not commence collective bargaining with the employer, a PCE
may be filed by a rival union to challenge the majority status of the certified SEBA.
3. NEGOTIATIONS BAR RULE.
Under this rule, no PCE should be entertained while the sole and exclusive bargaining agent (SEBA) and the
employer have commenced and sustained negotiations in good faith within the period of one (1) year from the date of
a valid certification, consent, run-off or re-run election or from the date of voluntary recognition.
Once the CBA negotiations have commenced and while the parties are in the process of negotiating the terms
and conditions of the CBA, no challenging union is allowed to file a PCE that would disturb the process and unduly
forestall the early conclusion of the agreement.
4. BARGAINING DEADLOCK BAR RULE.
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Under this rule, a PCE may not be entertained when a bargaining deadlock to which an incumbent or certified
bargaining agent is a party has been submitted to conciliation or arbitration or has become the subject of a valid notice
of strike or lockout.
Kaisahan ng Manggagawang Pilipino [KAMPIL-KATIPUNAN] v. Trajano. - The bargaining deadlock-
bar rule was not applied here because for more than four (4) years after it was certified as the exclusive bargaining
agent of all the rank-and-file employees, it did not take any action to legally compel the employer to comply with its
duty to bargain collectively, hence, no CBA was executed. Neither did it file any unfair labor practice suit against the
employer nor did it initiate a strike against the latter. Under the circumstances, a certification election may be validly
ordered and held.
5. CONTRACT BAR RULE.
Under this rule, a PCE cannot be filed when a CBA between the employer and a duly recognized or certified
bargaining agent has been registered with the Bureau of Labor Relations (BLR) in accordance with the Labor Code.
Where the CBA is duly registered, a petition for certification election may be filed only within the 60day freedom
period prior to its expiry. The purpose of this rule is to ensure stability in the relationship of the workers and the
employer by preventing frequent modifications of any CBA earlier entered into by them in good faith and for the
stipulated original period.
When contract bar rule does not apply.
The contract-bar rule does not apply in the following cases:
1. Where there is an automatic renewal provision in the CBA but prior to the date when such automatic
renewal became effective, the employer seasonably filed a manifestation with the Bureau of Labor
Relations of its intention to terminate the said agreement if and when it is established that the bargaining
agent does not represent anymore the majority of the workers in the bargaining unit.
2. Where the CBA, despite its due registration, is found in appropriate proceedings that: (a) it contains
provisions lower than the standards fixed by law; or (b) the documents supporting its registration are
falsified, fraudulent or tainted with misrepresentation.
3. Where the CBA does not foster industrial stability, such as contracts where the identity of the
representative is in doubt since the employer extended direct recognition to the union and concluded a
CBA therewith less than one (1) year from the time a certification election was conducted where the “no
union” vote won. This situation obtains in a case where the company entered into a CBA with the union
when its status as exclusive bargaining agent of the employees has not been established yet.
4. Where the CBA was registered before or during the last sixty (60) days of a subsisting agreement or
during the pendency of a representation case. It is well-settled that the 60-day freedom period based on
the original CBA should not be affected by any amendment, extension or renewal of the CBA for purposes
of certification election.
• What are the requisites for the validity of the petition for certification election?
The following requisites should concur:
1. The union should be legitimate which means that it is duly registered and listed in the registry of
legitimate labor unions of the BLR or that its legal personality has not been revoked or cancelled with
finality.
2. In case of organized establishments, the petition for certification election is filed during (and not
before or after) the 60-day freedom period of a duly registered CBA.
3. In case of organized establishments, the petition complied with the 25% written support of the
members of the bargaining unit.
4. The petition is filed not in violation of any of the four (4) bar rules [See above discussion thereof].
• What are the two (2) kinds of majorities (DOUBLE MAJORITY RULE)?
The process of certification election requires two (2) kinds of majority votes, viz.:
1. Number of votes required for the validity of the process of certification election itself. In order to
have a valid certification election, at least a majority of all eligible voters in the appropriate bargaining
unit must have cast their votes.
2. Number of votes required to be certified as the collective bargaining agent. To be certified as the
sole and exclusive bargaining agent, the union should obtain a majority of the valid votes cast.
• What are some pertinent principles on certification election?
• The pendency of a petition to cancel the certificate of registration of a union participating in a certification election
does not stay the conduct thereof.
• The pendency of an unfair labor practice case filed against a labor organization participating in the certification
election does not stay the holding thereof.
• Direct certification as a method of selecting the exclusive bargaining agent of the employees is not allowed. This
is because the conduct of a certification election is still necessary in order to arrive in a manner definitive and
certain concerning the choice of the labor organization to represent the workers in a collective bargaining unit.
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• The “No Union” vote is always one of the choices in a certification election. Where majority of the valid votes
cast results in “No Union” obtaining the majority, the Med-Arbiter shall declare such fact in the order.
• Only persons who have direct employment relationship with the employer may vote in the certification election,
regardless of their period of employment.
b.1.
CERTIFICATION ELECTION IN AN
UNORGANIZED ESTABLISHMENT
• What are the requisites for the conduct of a certification election in an organized establishment?
The Med-Arbiter is required to automatically order the conduct of a certification election by secret ballot in
an organized establishment as soon as the following requisites are fully met:
1. That a petition questioning the majority status of the incumbent bargaining agent is filed before the
DOLE within the 60-day freedom period;
2. That such petition is verified; and
3. That the petition is supported by the written consent of at least twenty-five percent (25%) of all the
employees in the bargaining unit.
.
c.
RUN-OFF ELECTION
• What is a run-off election?
A “run-off election” refers to an election between the labor unions receiving the two (2) highest number
of votes in a certification election or consent election with three (3) or more unions in contention, where
such certification election or consent election results in none of the contending unions receiving the majority
of the valid votes cast; provided, that the total number of votes for all contending unions, if added, is at
least fifty percent (50%) of the number of valid votes cast.
• When is it conducted?
If the above conditions that justify the conduct of a run-off election are present and there are no objections
or challenges which, if sustained, can materially alter the election results, the Election Officer should motu
proprio conduct a run-off election within ten (10) days from the close of the election proceeding between
the labor unions receiving the two highest number of votes.
ILLUSTRATION.
To illustrate, in a certification election involving four (4) unions, namely: Union A, Union B, Union C,
and Union D, where there are 100 eligible voters who validly cast their votes, and the votes they each
garnered are as follows: Union A – 35; Union B – 25; Union C – 10; Union D - 15; and No Union - 15, a
run-off election may be conducted between Union A and Union B because:
1. Not one of the unions mustered the majority vote of 51 votes but Union A and Union B got
the first two highest number of votes;
2. If all the votes for the contending unions are added up, it will result in at least 50% of the valid
votes cast (Union A – 35; Union B – 25; Union C – 10; Union D - 15 for a total of 85 or
85%); and
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3. There are no objections or challenges which, if sustained, can materially alter the results of the
election.
THE “NO UNION” CHOICE SHOULD NO LONGER BE INCLUDED.
For obvious reason, the choice of “No Union” should no longer be included in the run-off election.
d.
RE-RUN ELECTION
1. RULE ON RE-RUN ELECTION, NOT FOUND IN LABOR CODE BUT LATELY PROVIDED
IN A DOLE DEPARTMENT ORDER.
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(2) National Federation of Labor v. The Secretary of Labor.73
CONSENT ELECTION
D.
RIGHTS OF LABOR ORGANIZATION
1.
CHECK-OFF, ASSESSMENT, AGENCY FEES
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In the following cases, individual written authorization is not required:
a. Assessment from non-members of the bargaining agent of “agency fees” which should be equivalent to
the dues and other fees paid by members of the recognized bargaining agent, if such non-members accept
the benefits under the CBA.
b. Deductions for fees for mandatory activities such as labor relations seminars and labor education
activities.
c. Deductions for withholding tax mandated under the National Internal Revenue Code.
e. Deductions for withholding of wages because of employee’s debt to the employer which is already due.
f. Deductions made pursuant to a judgment against the worker under circumstances where the wages may
be the subject of attachment or execution but only for debts incurred for food, clothing, shelter and
medical attendance.
g. Deductions from wages ordered by the court.
h. Deductions authorized by law such as for premiums for PhilHealth, SSS, Pag-IBIG, employees’
compensation and the like.
AGENCY FEES
REQUISITES FOR ASSESSMENT
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10. MINORITY UNION CANNOT DEMAND FROM THE EMPLOYER TO GRANT IT THE RIGHT TO
CHECK-OFF OF UNION DUES AND ASSESSMENTS FROM THEIR MEMBERS.
The obligation on the part of the employer to undertake the duty to check-off union dues and special
assessments holds and applies only to the bargaining agent and not to any other union/s (called “Minority Union/s”).
2.
COLLECTIVE BARGAINING
a.
DUTY TO BARGAIN COLLECTIVELY
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This doctrine is based on the ruling In Kiok Loy v. NLRC, 74 where the petitioner, Sweden Ice Cream Plant,
refused to submit any counter-proposal to the CBA proposed by its employees’ certified bargaining agent. The High
Court ruled that the employer had thereby lost its right to bargain the terms and conditions of the CBA. Thus, the CBA
proposed by the union was imposed lock, stock and barrel on the erring company.
The Kiok Loy case epitomizes the classic case of negotiating a CBA in bad faith consisting of the employer’s
refusal to bargain with the collective bargaining agent by ignoring all notices for negotiations and requests for counter-
proposals. Such refusal to send a counter-proposal to the union and to bargain on the economic terms of the CBA
constitutes an unfair labor practice under Article 248(g) of the Labor Code.
OTHER CASES AFTER KIOK LOY.
❖ Divine Word University of Tacloban v. Secretary of Labor and Employment, Sept. 11, 1992.
❖ General Milling Corporation v. CA, Feb. 11, 2004.
b.
COLLECTIVE BARGAINING AGREEMENT (CBA)
1. CBA.
A “Collective Bargaining Agreement” or “CBA” for short, refers to the negotiated contract between a duly
recognized or certified exclusive bargaining agent of workers and their employer, concerning wages, hours of work
and all other terms and conditions of employment in the appropriate bargaining unit, including mandatory provisions
for grievances and arbitration machineries. It is executed not only upon the request of the exclusive bargaining
representative but also by the employer.
2. ESSENTIAL REQUISITES OF COLLECTIVE BARGAINING.
Prior to any collective bargaining negotiations between the employer and the bargaining union, the following
requisites must first be satisfied:
1. Employer-employee relationship must exist between the employer and the members of the bargaining
unit being represented by the bargaining agent;
2. The bargaining agent must have the majority support of the members of the bargaining unit
established through the modes sanctioned by law; and 3. A lawful demand to bargain is made in
accordance with law.
3. SOME PRINCIPLES ON CBA.
• CBA is the law between the parties during its lifetime and thus must be complied with in good faith.
• Being the law between the parties, any violation thereof can be subject of redress in court.
• Non-impairment of obligations of contract. A contract is the law between the parties and courts have no choice
but to enforce such contract so long as it is not contrary to law, morals, good customs or public policy. Otherwise,
courts would be interfering with the freedom of contract of the parties.
• CBA is not an ordinary contract as it is impressed with public interest.
• Automatic Incorporation Clause – law is presumed part of the CBA.
• The benefits derived from the CBA and the law are separate and distinct from each other.
• Workers are allowed to negotiate wage increases separately and distinctly from legislated wage increases.
The parties may validly agree in the CBA to reduce wages and benefits of employees provided such
reduction does not go below the minimum standards.
• Ratification of the CBA by majority of all the workers in the bargaining unit makes the same binding on all
employees therein.
• Employees entitled to CBA benefits. The following are entitled to the benefits of the CBA:
(1) Members of the bargaining union;
(2) Non-members of the bargaining union but are members of the bargaining unit; (3)
Members of the minority union/s who paid agency fees to the bargaining union; and
(4) Employees hired after the expiration of the CBA.
• Pendency of a petition for cancellation of union registration is not a prejudicial question before CBA
negotiation may proceed.
• CBA should be construed liberally. If the terms of a CBA are clear and there is no doubt as to the intention of
the contracting parties, the literal meaning of its stipulation shall prevail.
1.
MANDATORY PROVISIONS OF CBA
1. MANDATORY STIPULATIONS OF THE CBA.
The Syllabus mentions 4 provisions that are mandatorily required to be stated in the CBA, to wit:
1. Grievance Procedure;
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2. Voluntary Arbitration;
3. No Strike-No Lockout Clause; and
4. Labor-Management Council (LMC).
If these provisions are not reflected in the CBA, its registration will be denied by the BLR.
(i)
GRIEVANCE PROCEDURE
1. “GRIEVANCE” OR “GRIEVABLE ISSUE”.
A “grievance” or “grievable issue” is any question raised by either the employer or the union regarding any
of the following issues or controversies:
1. The interpretation or implementation of the CBA;
2. The interpretation or enforcement of company personnel policies; or
3. Any claim by either party that the other party is violating any provisions of the CBA or company
personnel policies.
In order to be grievable, the violations of the CBA should be ordinary and not gross in character; otherwise,
they shall be considered as unfair labor practice (ULP).
Gross violation of the CBA is defined as flagrant and/or malicious refusal by a party thereto to comply
with the economic provisions thereof. If what is violated, therefore, is a non-economic or a political provision of
the CBA, the same shall not be considered as unfair labor practice and may thus be processed as a grievable issue in
accordance with and following the grievance machinery laid down in the CBA.
2. GRIEVANCE MACHINERY.
“Grievance machinery” refers to the mechanism for the adjustment and resolution of grievances arising
from the interpretation or implementation of a CBA and those arising from the interpretation or enforcement of
company personnel policies.
3. GRIEVANCE PROCEDURE.
“Grievance procedure” refers to the internal rules of procedure established by the parties in their CBA with
voluntary arbitration as the terminal step, which are intended to resolve all issues arising from the implementation and
interpretation of their collective agreement. It is that part of the CBA which provides for a peaceful way of settling
differences and misunderstanding between the parties.
The terms “grievance procedure” and “grievance machinery” may be used interchangeably.
(ii)
VOLUNTARY ARBITRATION
1. VOLUNTARY ARBITRATION.
“Voluntary arbitration” refers to the mode of settling labor-management disputes in which the parties select
a competent, trained and impartial third person who is tasked to decide on the merits of the case and whose decision
is final and executory.
2. VOLUNTARY ARBITRATOR.
A “Voluntary Arbitrator” refers to any person who has been mutually named or designated by the parties
to the CBA – the employer and the bargaining agent - to hear and decide the issues between them.
A Voluntary Arbitrator is not an employee, functionary or part of the government or of the Department of
Labor and Employment, but he is authorized to render arbitration services provided under labor laws.
(iii)
“NO STRIKE, NO LOCKOUT” CLAUSE
1. SIGNIFICANCE OF THE CLAUSE.
A “No Strike, No Lockout” clause in the CBA is an expression of the firm commitment of
the parties thereto that, on the part of the union, it will not mount a strike during the effectivity of the CBA,
and on the part of the employer, that it will not stage a lockout during the lifetime thereof.
This clause may be invoked by an employer only when the strike is economic in nature or one which is
conducted to force wage or other concessions from the employer that are not mandated to be granted by the law itself.
It does not bar strikes grounded on unfair labor practices. This is so because it is presumed that all economic issues
between the employer and the bargaining agent are deemed resolved with the signing of the CBA.
The same rule also applies in case of lockout. The said clause may only be invoked by the union in case the
ground for the lockout is economic in nature but it may not be so cited if the ground is unfair labor practice
committed by the union.
2. EFFECT OF VIOLATION OF THE CLAUSE.
A strike conducted in violation of this clause is illegal.
(iv)
LABOR-MANAGEMENT COUNCIL
1. CREATION OF LMC, CONSTITUTIONALLY AND LEGALLY JUSTIFIED.
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The Labor-Management Council (LMC) whose creation is mandated under the Labor Code, is meant to
implement the constitutionally mandated right of workers to participate in policy and decision-making processes
of the establishment where they are employed insofar as said processes will directly affect their rights, benefits and
welfare. This is the body that implements the policy of co-determination in the Constitution.
The LMC is mandated to be created in both organized and unorganized establishments.
2. SELECTION OF REPRESENTATIVES TO LMC.
In organized establishments, the workers’ representatives to the committee or council should be nominated
by the exclusive bargaining representative.
In establishments where no legitimate labor organization exists, the workers’ representative should be
elected directly by the employees at large.
3. LABOR-MANAGEMENT COUNCIL (LMC) VS. GRIEVANCE MACHINERY (GM).
To avoid confusion and possible major legal complication, a clear distinction line should be drawn between
LMC and GM. The following may be cited:
1. Constitutional origin. – The creation of the LMC is based on the constitutional grant to workers of
the right to participate in policy and decision-making processes under the 1st paragraph, Section 3, Article XIII of
the 1987 Constitution, thus:
“It shall guarantee the rights of all workers to self-organization, collective bargaining and
negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall
be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in
policy and decision-making processes affecting their rights and benefits as may be provided by law.”
The creation of a GM, on the other hand, is based on a different constitutional provision, the 2nd paragraph,
Section 3, Article XIII of the 1987 Constitution, which provides as follows:
“The State shall promote the principle of shared responsibility between workers and employers and
the preferential use of voluntary modes in settling disputes, including conciliation, and shall enforce their mutual
compliance therewith to foster industrial peace.”
2. Legal anchor. - The creation of LMC is provided under Article 255 of the Labor Code; while the
formation of a GM is mandated under Article 260 of the same Code.
3. Compulsory provision in the CBA. - Both LMC and GM are compulsorily required to be embodied
in the CBA in order for it to be considered a valid agreement.
4. Purpose for creation. - The LMC is created for the purpose of affording workers the right to
participate in policy and decision-making processes in matters affecting their rights, benefits and welfare; while that
of the GM is to resolve disputes and grievances arising from such policies or decisions or more specifically, to adjust
and resolve grievances arising from (1) the interpretation or implementation of the CBA or (2) the interpretation or
enforcement of company personnel policies.
5. Nature of functions. - The LMC is in the nature of a preventive mechanism meant to prevent and
avoid disputes or grievances by co-determining the proper policies that should be implemented by the employer in
respect of the workers’ rights, benefits and welfare; while a GM is an adjudicatory mechanism which is set into motion
only when a dispute or grievance occurs.
6. Nature of cognizable issues. – The LMC performs non-adversarial and non-adjudicatory tasks as
it concerns itself only with policy formulations and decisions affecting the workers’ rights, benefits and welfare and
not violations or transgressions of any policy, rule or regulation; while that of the GM is adversarial and adjudicatory
in character since its jurisdiction is confined to resolving and deciding disputes and grievances between management
and the workers arising from violations or transgressions of existing policies, rules or regulations. In other words, the
LMC does not resolve grievable or contentious issues; the GM does.
A case illustrative of this principle is the 2011 case of Cirtek Employees Labor Union-Federation of Free
Workers v. Cirtek Electronics, Inc. The CBA negotiation between petitioner union and respondent company was
deadlocked resulting in the staging of a strike by the former. The DOLE Secretary assumed jurisdiction over the labor
dispute but before he could rule on the controversy, respondent created a Labor-Management Council (LMC) through
which it concluded with the remaining officers of petitioner a Memorandum of Agreement (MOA) providing for daily
wage increases of P6.00 per day effective January 1, 2004 and P9.00 per day effective January 1, 2005. Petitioner
submitted the MOA to the DOLE Secretary, alleging that the remaining officers signed the MOA under respondent’s
assurance that should the Secretary order a higher award of wage increase, respondent would comply.
Respecting the MOA, petitioner posits that it was “surreptitiously entered into [in] bad faith,” it having been
forged without the assistance of the Federation of Free Workers or counsel, adding that respondent could have waited
for the Secretary’s resolution of the pending CBA deadlock or that the MOA could have been concluded before
representatives of the DOLE Secretary. As found by the DOLE Secretary, the MOA came about as a result of the
constitution, at respondent's behest, of the LMC which, he reminded the parties, should not be used as an avenue for
bargaining but for the purpose of affording workers to participate in policy and decision-making. Hence, the
agreements embodied in the MOA were not the proper subject of the LMC deliberation or procedure but of CBA
negotiations and, therefore, deserving little weight.
7. Composition. - The representatives of the workers to the LMC may or may not be nominated by
the recognized or certified bargaining agent, depending on whether the establishment is organized or unorganized.
Thus, in organized establishments, the workers’ representatives to the LMC should be nominated by the exclusive
bargaining agent. In establishments where no legitimate labor organization exists, the workers’ representatives
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should be elected directly by the employees of the establishment at large; while those in the GM are nominated solely
by the bargaining agent.
E.
UNFAIR LABOR PRACTICE
(ULP)
1.
NATURE, ASPECTS
1. WHEN AN ACT CONSTITUTES ULP.
At the outset, it must be clarified that not all unfair acts constitute ULPs. While an act or decision of an
employer or a union may be unfair, certainly not every unfair act or decision thereof may constitute ULP as defined
and enumerated under the law.
The act complained of as ULP must have a proximate and causal connection with any of the following 3
rights:
1. Exercise of the right to self-organization; 2. Exercise of the right to collective bargaining; or
3. Compliance with CBA.
Sans this connection, the unfair acts do not fall within the technical signification of the term “unfair labor
practice.”
2. THE ONLY ULP WHICH MAY OR MAY NOT BE RELATED TO THE EXERCISE OF THE RIGHT TO
SELF-ORGANIZATION AND COLLECTIVE BARGAINING.
The only ULP which is the exception as it may or may not relate to the exercise of the right to selforganization
and collective bargaining is the act described under Article 248 [f], i.e., to dismiss, discharge or otherwise prejudice
or discriminate against an employee for having given or being about to give testimony under the Labor Code.
3. LABOR CODE PROVISIONS ON ULP.
Under the Labor Code, there are only five (5) provisions related to ULP, to wit:
1. Article 258 [247] which describes the concept of ULPs and prescribes the procedure for their prosecution;
2. Article 259 [248] which enumerates the ULPs that may be committed by employers;
3. Article 260 [249] which enumerates the ULPs that may be committed by labor organizations;
4. Article 274 [261] which considers violations of the CBA as no longer ULPs unless the same are gross in
character which means flagrant and/or malicious refusal to comply with the economic provisions thereof.
5. Article 278(c) [263(c)] which refers to union-busting, a form of ULP, involving the dismissal from
employment of union officers duly elected in accordance with the union constitution and by-laws, where
the existence of the union is threatened thereby.
4. PARTIES WHO/WHICH MAY COMMIT ULP.
A ULP may be committed by an employer or by a labor organization. Article 259 [248] describes the ULPs
that may be committed by an employer; while Article 260 [249] enumerates those which may be committed by a labor
organization.
On the part of the employer, only the officers and agents of corporations, associations or partnerships who
have actually participated in or authorized or ratified ULPs are criminally liable.
On the part of the union, only the officers, members of governing boards, representatives or agents or
members of labor associations or organizations who have actually participated in or authorized or ratified the ULPs
are criminally liable.
5. ELEMENTS OF ULP.
1. There should exist an employer-employee relationship between the offended party and the offender;
and
2. The act complained of must be expressly mentioned and defined in the Labor Code as an unfair labor
practice.
Absent one of the elements aforementioned will not make the act an unfair labor practice.
6. ASPECTS OF ULP.
Under Article 258 [247], a ULP has two (2) aspects, namely:
1. Civil aspect; and
2. Criminal aspect.
The civil aspect of an unfair labor practice includes claims for actual, moral and exemplary damages,
attorney’s fees and other affirmative reliefs. Generally, these civil claims should be asserted in the labor case before
the Labor Arbiters who have original and exclusive jurisdiction over unfair labor practices. The criminal aspect, on
the other hand, can only be asserted before the regular court.
2.
ULP BY EMPLOYERS
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I.
INTERFERENCE WITH, RESTRAINT OR COERCION OF EMPLOYEES
IN THE EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION
1. TEST OF INTERFERENCE, RESTRAINT OR COERCION.
The terms “interfere,” “restrain” and “coerce” are very broad that any act of management that may
reasonably tend to have an influence or effect on the exercise by the employees of their right to self-organize may fall
within their meaning and coverage. According to the Supreme Court in Insular Life Assurance Co., Ltd., Employees
Association-NATU v. Insular Life Assurance Co., Ltd., 75 the test of whether an employer has interfered with or
restrained or coerced employees within the meaning of the law is whether the employer has engaged in conduct which
may reasonably tend to interfere with the free exercise of the employees’ rights. It is not necessary that there be
direct evidence that any employee was in fact intimidated or coerced by the statements or threats of the employer if
there is a reasonable inference that the anti-union conduct of the employer does have an adverse effect on the exercise
of the right to self-organization and collective bargaining.
2. TOTALITY OF CONDUCT DOCTRINE.
In ascertaining whether the act of the employer constitutes interference with, restraint or coercion of the
employees’ exercise of their right to self-organization and collective bargaining, the “totality of conduct doctrine”
may be applied.
The totality of conduct doctrine means that expressions of opinion by an employer, though innocent in
themselves, may be held to constitute an unfair labor practice because of the circumstances under which they were
uttered, the history of the particular employer’s labor relations or anti-union bias or because of their connection with
an established collateral plan of coercion or interference. An expression which may be permissibly uttered by one
employer, might, in the mouth of a more hostile employer, be deemed improper and consequently actionable as an
unfair labor practice. The past conduct of the employer and like considerations, coupled with an intimate connection
between the employer’s action and the union affiliation or activities of the particular employee or employees taken as
a whole, may raise a suspicion as to the motivation for the employer’s conduct. The failure of the employer to ascribe
a valid reason therefor may justify an inference that his unexplained conduct in respect of the particular employee or
employees was inspired by the latter’s union membership and activities.
In General Milling,76 the Supreme Court considered the act of the employer in presenting the letters from
February to June 1993, by 13 union members signifying their resignation from the union clearly indicative of the
employer’s pressure on its employees. The records show that the employer presented these letters to prove that the
union no longer enjoyed the support of the workers. The fact that the resignations of the union members occurred
during the pendency of the case before the Labor Arbiter shows the employer’s desperate attempt to cast doubt on the
legitimate status of the union. The ill-timed letters of resignation from the union members indicate that the employer
had interfered with the right of its employees to self-organization. Because of such act, the employer was declared
guilty of ULP.
3. INTERFERENCE IN THE EMPLOYEE’S RIGHT TO SELF-ORGANIZATION.
a. Interference is always ULP.
The judicial dictum is that any act of interference by the employer in the exercise by employees of their right
to self-organization constitutes an unfair labor practice. This is the very core of ULP.
In Hacienda Fatima v. National Federation of Sugarcane Workers – Food and General Trade,77 the
Supreme Court upheld the factual findings of the NLRC and the Court of Appeals that from the employer’s refusal to
bargain to its acts of economic inducements resulting in the promotion of those who withdrew from the union, the use
of armed guards to prevent the organizers to come in, and the dismissal of union officials and members, one cannot
but conclude that the employer did not want a union in its hacienda - a clear interference in the right of the workers to
self-organization. Hence, the employer was held guilty of unfair labor practice.
It was likewise held in Insular Life78 that it is an act of interference for the employer to send individual
letters to all employees notifying them to return to work at a time specified therein, otherwise new employees would
be engaged to perform their jobs. Individual solicitation of the employees or visiting their homes, with the employer
or his representative urging the employees to cease their union activities or cease striking, constitutes ULP. All the
above-detailed activities are ULPs because they tend to undermine the concerted activity of the employees, an activity
to which they are entitled free from the employer's molestation.
b. Formation of a union is never a valid ground to dismiss.
c. It is ULP to dismiss a union officer or an employee for his union activities.
II.
76 General Milling Corporation v. CA, G.R. No. 146728, Feb. 11, 2004.
78 Insular Life Assurance Co., Ltd., Employees Association-NATU v. Insular Life Assurance Co., Ltd., G.R. No. L-25291, Jan. 30, 1971, 37
SCRA 244.
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YELLOW DOG CONTRACT
1. WHAT IS A YELLOW DOG CONTRACT?
It is one which exacts from workers as a condition of employment that they shall not join or belong to a
labor organization, or attempt to organize one during their period of employment or that they shall withdraw
therefrom in case they are already members of a labor organization.
2. COMMON STIPULATIONS IN A YELLOW DOG CONTRACT.
A typical yellow dog contract embodies the following stipulations:
(1) A representation by the employee that he is not a member of a labor organization;
(2) A promise by the employee that he will not join a union; and
(3) A promise by the employee that upon joining a labor organization, he will quit his employment.
The act of the employer in imposing such a condition constitutes unfair labor practice under Article 248(b)
of the Labor Code. Such stipulation in the contract is null and void.
III.
CONTRACTING OUT OF SERVICES AND FUNCTIONS
1. GENERAL RULE.
As a general rule, the act of an employer in having work or certain services or functions being performed by
union members contracted out is not per se an unfair labor practice. This is so because contracting-out of a job, work
or service is clearly an exercise by the employer of its business judgment and its inherent management rights and
prerogatives. Hiring of workers is within the employer’s inherent freedom to regulate its business and is a valid
exercise of its management prerogative subject only to special laws and agreements on the matter and the fair standards
of justice. The employer cannot be denied the faculty of promoting efficiency and attaining economy by a study of
what units are essential for its operation. It has the ultimate right to determine whether services should be performed
by its personnel or contracted to outside agencies.
2. WHEN CONTRACTING-OUT BECOMES ULP.
It is only when the contracting out of a job, work or service being performed by union members will interfere
with, restrain or coerce employees in the exercise of their right to self-organization that it shall constitute an unfair
labor practice. Thus, it is not unfair labor practice to contract out work for reasons of business decline, inadequacy
of facilities and equipment, reduction of cost and similar reasonable grounds.
IV.
COMPANY UNION
1. COMPANY INITIATED, DOMINATED OR ASSISTED UNION.
Paragraph [d] of Article 259 [248] considers it an unfair labor practice to initiate, dominate, assist or otherwise
interfere with the formation or administration of any labor organization, including the giving of financial or other
support to it or its organizers or supporters. Such union is called “company union” as its formation, function or
administration has been assisted by any act defined as unfair labor practice under the Labor Code.
V.
DISCRIMINATION
1. COVERAGE OF PROHIBITION.
What is prohibited as unfair labor practice under the law is to discriminate in regard to wages, hours of work,
and other terms and conditions of employment in order to encourage or discourage membership in any labor
organization.
4. MATERIALITY OF PURPOSE OF ALLEGED DISCRIMINATORY ACT.
In Manila Pencil Co., Inc. v. CIR,81 it was ruled that even assuming that business conditions justify the
dismissal of employees, it is a ULP of employer to dismiss permanently only union members and not
nonunionists.
79 Joel I. Seidman, The Yellow Dog Contract, The Johns Hopkins Press, 1932, Ch. 1, pp.11-38.
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In Manila Railroad Co. v. Kapisanan ng mga Manggagawa sa Manila Railroad Co., 82 the
nonregularization of long-time employees because of their affiliation with the union while new employees were
immediately regularized was declared an act of discrimination.
VI.
FILING OF CHARGES OR GIVING OF TESTIMONY
1. CONCEPT.
Under paragraph [f] of Article 259 [248] of the Labor Code, it is an unfair labor practice for an employer to
dismiss, discharge or otherwise prejudice or discriminate against an employee for having given or being about to give
testimony under the Labor Code.
2. THE ONLY ULP NOT REQUIRED TO BE RELATED TO EMPLOYEE’S EXERCISE OF THE RIGHT
TO SELF-ORGANIZATION AND COLLECTIVE BARGAINING.
It must be underscored that Article 259(f) [248 (f)] is the only unfair labor practice that need not be related
to the exercise by the employees of their right to self-organization and collective bargaining.
In Itogon-Suyoc Mines, Inc. v. Baldo,83 it was declared that an unfair labor practice was committed by the
employer when it dismissed the worker who had testified in the hearing of a certification election case despite its prior
request for the employee not to testify in the said proceeding accompanied with a promise of being reinstated if he
followed said request.
VII.
CBA-RELATED ULPs
1. THREE (3) CBA-RELATED ULPs.
Article 259 [248] enunciates three (3) CBA-related unfair labor practices, to wit:
1. To violate the duty to bargain collectively as prescribed in the Labor Code.
2. To pay negotiation or attorney’s fees to the union or its officers or agents as part of the settlement
of any issue in collective bargaining or any other dispute.
3. To violate a collective bargaining agreement.
VII-A.
PAYMENT OF NEGOTIATION AND ATTORNEY’S FEES
1. WHEN PAYMENT CONSIDERED ULP.
Article 259 (h) [248(h)] of the Labor Code considers as an unfair labor practice the act of the employer in
paying negotiation fees or attorney’s fees to the union or its officers or agents as part of the settlement of any issue in
collective bargaining or any other dispute.
VII-B.
VIOLATION OF THE CBA
1. CORRELATION.
Article 259 (i) [248(i)] of the Labor Code should be read in relation to Article 261 thereof. Under Article
261, as amended, violations of a CBA, except those which are gross in character, shall no longer be treated as an
unfair labor practice and shall be resolved as grievances under the CBA. Gross violations of CBA shall mean flagrant
and/or malicious refusal to comply with the economic provisions of such agreement.
2. CASE LAW.
The act of the employer in refusing to implement the negotiated wage increase stipulated in the CBA, which
increase is intended to be distinct and separate from any other benefits or privileges that may be forthcoming to the
employees, is an unfair labor practice.
Refusal for a considerable number of years to give salary adjustments according to the improved salary scales
in the CBA is an unfair labor practice.
3.
ULP OF LABOR ORGANIZATIONS
I.
RESTRAINT AND COERCION OF EMPLOYEES
IN THE EXERCISE OF THEIR RIGHT TO SELF-ORGANIZATION
1. UNION MAY INTERFERE WITH BUT NOT RESTRAIN OR COERCE EMPLOYEES IN THE
EXERCISE OF THEIR RIGHT TO SELF-ORGANIZE.
Under Article 260(a) [249 (a)], it is ULP for a labor organization, its officers, agents or representatives to
restrain or coerce employees in the exercise of their right to self-organization. Compared to similar provision of Article
248(a) of the Labor Code, notably lacking is the use of the word “interfere” in the exercise of the employees’ right to
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self-organize. The significance in the omission of this term lies in the grant of unrestricted license to the labor
organization, its officers, agents or representatives to interfere with the exercise by the employees of their right to self-
organization. Such interference is not unlawful since without it, no labor organization can be formed as the act of
recruiting and convincing the employees is definitely an act of interference.
II.
DISCRIMINATION
Under Article 260(b) [249 (b)], it is ULP for a labor organization, its officers, agents or representatives:
(1) To cause or attempt to cause an employer to discriminate against an employee, including
discrimination against an employee with respect to whom membership in such organization has been denied.
(2) To terminate an employee’s union membership on any ground other than the usual terms and
conditions under which membership or continuation of membership is made available to other members.
III.
DUTY OF UNION TO BARGAIN COLLECTIVELY
1. CONCEPT.
Under Article 260(c) [249 (c)], it is ULP for a duly certified sole and exclusive bargaining union, its officers,
agents or representatives to refuse or violate the duty to bargain collectively with the employer. This is the counterpart
provision of Article 259(g) [248 (g)] respecting the violation by the employer of its duty to bargain collectively.
2. PURPOSE.
The obvious purpose of the law is to ensure that the union will negotiate with management in good faith and
for the purpose of concluding a mutually beneficial agreement regarding the terms and conditions of their employment
relationship.
IV.
FEATHERBEDDING DOCTRINE
1. CONCEPT.
Article 260(d) [249 (d)] is the “featherbedding”84 provision in the Labor Code. Patterned after a similar provision in
the Taft-Hartley Act,85 “featherbedding” or “make-work” refers to the practice, caused and induced by a union, of
hiring more workers than are needed to perform a given work, job or task or to adopt work procedures which is
evidently senseless, wasteful, inefficient and without legitimate justifications since it is meant purely for the purpose
of employing additional workers than are necessary. This is resorted to by the union as a response to the laying-off of
workers occasioned by their obsolescence because of the introduction of machines, robots 86 or new and innovative
technological changes and improvements in the workplace or as required by minimum health and safety standards,
among other reasons. Its purpose is to unduly secure the jobs of the workers. Because of these lay-offs, the unions are
constrained to resort to some featherbedding practices. Accordingly, they usually request that the technological
changes be introduced gradually, or not at all, or that a minimum number of personnel be retained despite such
changes. They resort to some ways and methods of retaining workers even though there may be little work left for
them to do and perform. It therefore unnecessarily maintains or increases the number of employees used or the amount
of time consumed to work on a specific job, work or undertaking. By so increasing the demand for workers,
featherbedding obviously keeps wages higher. 87
2. REQUISITES.
The requisites for featherbedding are as follows:
84 Etymologically, the term "featherbedding" originally referred to any person who is pampered, coddled, or excessively rewarded. The term
originated in the use of feathers to fill mattresses in beds, providing for more comfort. The modern use of the term in the labor relations
setting began in the United States railroad industry, which used feathered mattresses in sleeping cars. Railway labor unions, confronted
with changing technology which led to widespread unemployment, sought to preserve jobs by negotiating contracts which required
employers to compensate workers to do little or no work or which required complex and time-consuming work rules so as to generate a full
day's work for an employee who otherwise would not remain employed. (Merriam-Webster's Dictionary of Law, 1st ed., Merriam-Webster,
Inc., 1996. ISBN 0-87779-604-1; Visit also the Knowledge Encyclopedia at http://www.referenceforbusiness.com/knowledge/
Featherbedding.html; Last visited: Jan. 30, 2017).
85 It is the Labor Management Relations Act of 1947, better known as the “Taft–Hartley Act,” which was enacted on June 23, 1947. It
amended the National Labor Relations Act, 29 U.S. Code § 158 - Unfair labor practices, Sec. 8[b] [6] thereof, which states: “to cause or
attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other thing of value, in the nature of an exaction,
for services which are not performed or not to be performed[.]”
86 “Featherbedding” is the insistence by unions on employment of unnecessary workers, i.e., demanding payment for work no longer performed
by workers because of machines or robots. Featherbedding dramatically increases labor costs and decreases productivity. (See Labor Law
Glossary, Matt Austin Labor Law, https://mattaustinlaborlaw.com/labor-lawdictionary/; Last accessed: October 09, 2016).
87 It must be noted that Section 8(b)(6) of the Taft-Hartley Act has outlawed featherbedding arrangements which is a ULP of the union making
the demand for payment of wages for services which are not performed or not to be performed. However, the prohibitions against
featherbedding under this section are made applicable only to payments for workers not to work. Consequently, the agreement prescribing
minimum number of workers to be hired and maintained and other “make-work” arrangements are considered valid and legal,
notwithstanding the provision of this section.
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(1) The labor organization, its officers, agents or representatives have caused or attempted to cause an
employer either:
(a) to pay or agree to pay any money, including the demand for fee for union negotiations; or (b)
to deliver or agree to deliver any things of value;
(2) Such demand for payment of money or delivery of things of value is in the nature of an exaction; and
(3) The services contemplated in exchange for the exaction are not actually performed or will not be
performed.
On No. 1 above, it is important that the effort at securing payment of sums of money or delivery of goods or things
of value, emanates from and initiated by the union.
On No. 2 above, the act of the employer in paying the money or delivering the things of value demanded by the union,
is against its will and is therefore, as the law states, “in the nature of exaction” by the union. “Exaction”, as a legal
term, means an excessive or harsh demand of a reward or fee for an official service performed in the normal course
of duty. It is taking more fee or pay for the services than what the law allows, under color of one’s official authority. 88
While it is a form of extortion, 89 it should, however, be differentiated from “extortion” in that, in “extortion,” the
union extorts more than its due, when something is due; in “exaction,” the union exacts what is not due, when there
is nothing due to it.90
On No. 3 above, although the employer agrees to pay money or deliver things of value, the employees to whom such
payment and delivery are made will not actually do or perform the contemplated services. Being an exaction, no
services would be rendered in exchange for the money paid or things of value delivered.
3. DEMAND FOR PAYMENT OF STANDBY SERVICES.
A union commits ULP under this provision by causing or attempting to cause an employer to pay or agree to pay for
standby services. Payments for “standing-by,” or for the substantial equivalent of “standing-by,” are not payments
for “services performed” within the meaning of the law. When an employer receives a bona-fide offer of competent
performance of relevant services, it remains for the employer, through free and fair negotiation, to determine whether
such offer should be accepted and what compensation should be paid for the work done.91
It is an exaction constitutive of ULP within the meaning of this law for a union to demand of the employer for a
contract calling for payment of compensation for the presence of one of its members at a jobsite when no unionist’s
work is being done therein, and when the employer indicated that it had no need for such labor, the union staged a
strike to make the employer respond to such demand. The demand herein is considered not a bona-fide offer of
competent performance of relevant services. 92
A union’s demand that a theater corporation employ maintenance men at its theater is also an arguable violation of
the anti-featherbedding provision of the law where maintenance men employed at other theaters under union
compulsion did little or no actual work but were merely present on the premises during working hours. 93
4. DEMAND FOR PAYMENT OF MADE WORK.
Where work is actually done by an employee with the employer’s consent, the union’s demand that the employee be
compensated for time spent in doing the work does not violate the law. 94 The law leaves to collective bargaining the
determination of what work, if any, including bona-fide “made work,” shall be included as compensable services and
what rate of compensation shall be paid for it.95
A musicians’ union has been held not to have violated the anti-featherbedding provision by refusing to permit a union
band to perform at the opening game of the baseball season, refusing to permit a union organist to play at the home
games, and picketing the baseball stadium, in order to force the owner of the baseball team to hire a union band to
play at all weekend home games; or by refusing to give its consent to appearances of travelling bands in a theater
88 Meaning of “exaction” per USLegal.com found at http://definitions.uslegal.com/e/exaction/. Last visited: June 30, 2016. Note that “[t]he act
of exacting money or the sum exacted is also called exaction.” See also TheLawDictionary.Com at http://thelawdictionary.org/exaction/, Last
accessed: June 30, 2016.
90
See USLegal.com at http://definitions.uslegal.com/e/exaction/. Last visited: June 30, 2016. The FreeDictionary.com at http://legal-
dictionary.thefreedictionary.com/exaction, distinguished these two terms, thus: “EXACTION, torts. A willful wrong done by an officer, or by
one who, under color of his office, takes more fee or pay for his services than what the law allows. Between extortion and exaction there is
this difference; that in the former case the officer extorts more than his due, when something is due to him; in the latter, he exacts what is
not his due, when there is nothing due to him. Wishard; Co. Litt. 368.” Last accessed: June 30, 2016.
92 International Brotherhood of Teamsters, etc., 212 NLRB 968, 1974 CCH NLRB 26867, 87 BNA LRRM 1101.
93 Consolidated Theaters, Inc. v. Theatrical Stage Employees Union, 69 Cal 2d 713, 73 Cal Rptr 213, 447 P2d 325.
94 NLRB v. Gamble Enterprises, Inc., 345 US 117, 97 l Ed 864, 73 S Ct 560; American Newspaper Publishers Association v. NLRB, 345 US
95 American Newspaper Publishers Association v. NLRB, 345 US 100, 97 L Ed 852, 73 S Ct 552, 31 ALR2d 497.
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unless the theater manager also employs a local orchestra in connection with certain programs where the local
orchestra is to perform actual and not token services, even though the theater manager does not need or want to employ
the local orchestra. 96 Similarly, a printers’ union does not violate the anti-featherbedding provision by securing
payment of wages to printers from newspapers for setting “bogus” - duplicate forms for local advertisements although
the newspaper already has cardboard matrices to be used as molds for metal casting from which to print the same
advertisements – even though the “bogus” is ordinarily not used but is melted down immediately. 97
5. DEMAND FOR PAYMENT OF WORK ALREADY COMPENSATED.
The anti-featherbedding provision has been held not to bar a union from demanding payment for work for which the
employer has already paid another person. Hence, a union has been held not guilty of ULP in demanding payment to
it of an amount equal to the wages paid by the employer to a non-union employee for work to which the union’s
members were entitled. If the work is actually done by employees, there can be no conflict with the antifeatherbedding
provision, regardless of whether or not the persons receiving payment are the ones who performed the work. 98
V.
DEMAND OR ACCEPTANCE OF
NEGOTIATION FEES OR ATTORNEY’S FEES
1. CONCEPT.
Under Article 260(e) [249 (e)], it is ULP for a labor organization, its officers, agents or representatives to ask
for or accept negotiation fees or attorney’s fees from employers as part of the settlement of any issue in collective
bargaining or any other dispute.
VI.
VIOLATION OF THE CBA
1. CONCEPT.
Under Article 260(f) [249 (f)], it is ULP for a labor organization, its officers, agents or representatives to
violate a CBA.
2. COUNTERPART PROVISION.
This is the counterpart provision of Article 259(i) [248 (i)] regarding the employer’s act of violating a CBA.
But it must be noted that under Article 261 of the Labor Code, violation of the CBA is generally considered merely a
grievable issue. It becomes an unfair labor practice only if the violation is gross in character which means that there
is flagrant and/or malicious refusal to comply with the economic (as distinguished from non-economic) stipulations in
the CBA. This principle applies not only to the employer but to the labor organization as well. VII.
CRIMINAL LIABILITY FOR ULPs OF LABOR ORGANIZATION
1. PERSONS LIABLE.
Article 260 [249] is explicit in its provision on who should be held liable for ULPs committed by labor
organizations. It states that only the officers, members of governing boards, representatives or agents or members of
labor associations or organizations who have actually participated in, authorized or ratified unfair labor practices shall
be held criminally liable.
F.
PEACEFUL CONCERTED ACTIVITIES
A.
FORMS OF CONCERTED ACTIVITIES
1. FORMS OF CONCERTED ACTIVITIES.
There are three (3) forms of concerted activities, namely:
1. Strike; 2.
Picketing; and 3.
Lockout.
1.
BY LABOR ORGANIZATION
1. Strike; and
2. Picketing.
1. STRIKE.
96 Musicians Union v. Superior Court of Alameda County, 69 Cal 2d 695, 73 Cal Rptr 201, 447 P2d 313; NLRB v. Gamble Enterprises, Inc.,
345 US 117, 97 L Ed 864, 73 S Ct 560.
97 American Newspaper Publishers Association v. NLRB, 345 US 100, 97 L Ed 852, 73 S Ct 552, 31 ALR2d 497; International Hod Carriers
Bldg. & Common Laborers Union, 135 NLRB 1153 1962 CCH NLRB 10938, 49 BNA LRRM 1638.
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“Strike” means any temporary stoppage of work by the concerted action of the employees as a result of
an industrial or labor dispute.
2. PICKETING.
“Picketing” is the act of workers in peacefully marching to and fro before an establishment involved in a
labor dispute generally accompanied by the carrying and display of signs, placards and banners intended to inform
the public about the dispute.
2.
BY EMPLOYER
1. LOCKOUT.
“Lockout” means the temporary refusal by an employer to furnish work as a result of an industrial or
labor dispute.
It consists of the following:
1. Shutdowns;
2. Mass retrenchment and dismissals initiated by the employer. 3. The
employer’s act of excluding employees who are union members.
a.
REQUISITES FOR A VALID STRIKE
1. PROCEDURAL BUT MANDATORY REQUISITES FOR A VALID STRIKE.
A strike, in order to be valid and legal, must conform to the following procedural requisites:
1st requisite - It must be based on a valid and factual ground;
2nd requisite - A notice of strike must be filed with the NCMB-DOLE;
3rd requisite - A notice must be served to the NCMB-DOLE at least twenty-four (24) hours prior to the
taking of the strike vote by secret balloting, informing said office of the decision to conduct
a strike vote, and the date, place, and time thereof;
th
4 requisite - A strike vote must be taken where a majority of the members of the union obtained by secret
ballot in a meeting called for the purpose, must approve it;
th
5 requisite - A strike vote report should be submitted to the NCMB-DOLE at least seven (7) days before
the intended date of the strike;
th
6 requisite - Except in cases of union-busting, the cooling-off period of 15 days, in case of unfair labor
practices of the employer, or 30 days, in case of collective bargaining deadlock, should be
fully observed; and
th
7 requisite - The 7-day waiting period/strike ban reckoned after the submission of the strike vote report to
the NCMB-DOLE should also be fully observed in all cases.
All the foregoing requisites, although procedural in nature, are mandatory and failure of the union to comply
with any of them would render the strike illegal.
I.
FIRST REQUISITE:
EXISTENCE OF VALID AND FACTUAL GROUND/S
1. VALID GROUNDS.
The law recognizes only 2 grounds in support of a valid strike, viz.: 1.
Collective bargaining deadlock (Economic Strike); and/or
2. Unfair labor practice (Political Strike).
A strike not based on any of these two grounds is illegal.
2. SOME PRINCIPLES ON THE FIRST REQUISITE.
▪ Violation of CBA, except when gross, is not an unfair labor practice, hence, may not be cited as ground
for a valid strike. Ordinary violation of a CBA is no longer treated as an unfair labor practice but as a
mere grievance which should be processed through the grievance machinery and voluntary arbitration.
▪ Inter-union or intra-union dispute is not a valid ground.
▪ Violation of labor standards is not a valid ground.
▪ Wage distortion is not a valid ground.
II.
SECOND REQUISITE:
FILING OF A NOTICE OF STRIKE
1. NOTICE OF STRIKE.
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No labor organization shall declare a strike without first having filed a notice of strike.
III.
THIRD REQUISITE:
SERVICE OF A 24-HOUR PRIOR NOTICE
In Capitol Medical Center, Inc. v. NLRC, it was imposed as additional requisite that a 24-hour notice must
be served to the NCMB-DOLE prior to the taking of the strike vote by secret balloting, informing it of the union’s
decision to conduct a strike vote as well as the date, place, and time thereof.
IV.
FOURTH REQUISITE:
CONDUCT OF A STRIKE VOTE
1. MAJORITY APPROVAL OF THE STRIKE.
No labor organization shall declare a strike without the necessary strike vote first having been obtained and
reported to the NCMB-DOLE. A decision to declare a strike must be approved by a majority of the total union
membership in the bargaining unit concerned, obtained by secret ballot in meetings or referenda called for that
purpose. This process is called “strike vote balloting.”
A STRIKE WITHOUT THE MAJORITY SUPPORT OF THE UNION MEMBERS IS CALLED A
“WILDCAT STRIKE.”
2. PURPOSE.
The purpose of a strike vote is to ensure that the decision to strike broadly rests with the majority of the
union members in general and not with a mere minority.
3. DURATION OF THE VALIDITY OF THE MAJORITY APPROVAL OF A STRIKE.
The majority decision to stage a strike is valid for the duration of the dispute based on substantially the same
grounds considered when the strike vote was taken.
V.
FIFTH REQUISITE:
SUBMISSION OF THE STRIKE VOTE TO NCMB-DOLE
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The purpose of the cooling-off periods is to provide an opportunity for mediation and conciliation of the
dispute by the NCMB-DOLE with the end in view of amicably settling it.
VII.
SEVENTH REQUISITE:
7-DAY WAITING PERIOD OR STRIKE BAN
1. PURPOSE OF THE 7-DAY WAITING PERIOD OR STRIKE BAN.
The seven (7) day waiting period is intended to give the NCMB-DOLE an opportunity to verify whether
the projected strike really carries the approval of the majority of the union members.
2. WAITING PERIOD/STRIKE BAN VS. COOLING-OFF PERIOD.
The 7-day waiting period or strike ban is a distinct and separate requirement from the cooling-off period
prescribed by law. The latter cannot be substituted for the former and vice-versa.
The cooling-off period is counted from the time of the filing of the notice of strike. The 7-day waiting
period/strike ban, on the other hand, is reckoned from the time the strike vote report is submitted to the NCMBDOLE.
Consequently, a strike is illegal for failure to comply with the prescribed mandatory cooling-off period and
the 7-day waiting period/strike ban after the submission of the report on the strike vote.
3. BOTH MUST BE COMPLIED WITH SEPARATELY AND DISTINCTLY FROM EACH OTHER.
The requirements of cooling-off period and 7-day waiting period/strike ban must both be complied with. The
labor union may take the strike vote and report the same to the NCMB-DOLE within the statutory cooling-off period.
In this case, the 7-day waiting period/strike ban should be counted from the day following the expiration of the cooling-
off period. A contrary view would certainly defeat and render nugatory the salutary purposes behind the distinct
requirements of cooling-off period and the waiting period/strike ban.
The NCMB Primer on Strike, Picketing and Lockout, 99 issued by the NCMB, the agency of government
directly tasked with the implementation and enforcement of this particular legal provision and requirement, is very
clear on this point, thus:
“In the event the result of the strike/lockout vote ballot is filed within the cooling-off
period, the 7-day requirement shall be counted from the day following the expiration of the
cooling-off period.”100
In other words, the seven (7) days should be added to the cooling-off period of fifteen (15) days, in case of
unfair labor practice, or thirty (30) days, in case of collective bargaining deadlock and it is only after the lapse of the
total number of days after adding the two (2) periods that the strike/lockout may be lawfully and validly staged.
While there was no categorical declaration on this point, the Supreme Court, in holding in the 2010 case of
Phimco Industries, Inc. v. Phimco Industries Labor Association (PILA),101 that respondents fully satisfied the
legal procedural requirements, noted that the strike notice grounded on collective bargaining deadlock was filed on
March 9, 1995. Consequently, the 30-day cooling-off period would have lapsed on April 9, 1995. The strike vote was
reached on March 16, 1995 and the notification thereof was filed with the DOLE on March 17, 1995 or well within
the cooling-off period. Based on the said rule in the NCMB Primer, the strike could only be validly staged starting
from April 17, 1995 and onwards, i.e., after the lapse of 7 days from April 9, 1995. Hence, since the actual strike
was launched only on April 25, 1995, there was clearly full compliance with the requisites.
Example: In a case where the notice of strike grounded on ULP is filed on October 1, 2015, and the strike
vote is taken within the cooling-off period, say, on October 5, 2015 and the strike vote report showing majority support
for the intended strike is submitted to the NCMB-DOLE the following day, October 6, 2015, the question is when can
the union legally stage the strike?
Following the above principle, the answer obviously is on October 24, 2015 or any day thereafter. This is so
because the 15-day cooling-off period for ULP expires on October 16 and adding the 7-day strike ban which “should
be counted from the day following the expiration of the cooling-off period,” the 7th day would be on October 23, 2015.
Obviously, the strike cannot be conducted on the 7th day but rather after the lapse thereof; hence, it is only on October
24, 2015 and onwards that the union may lawfully conduct the strike.
4. SOME PRINCIPLES ON COOLING-OFF PERIOD AND 7-DAY WAITING PERIOD.
▪ Deficiency of even one (1) day of the cooling-off period and 7-day strike ban is fatal.
▪ One-day strike without complying with the 7-day strike ban is illegal.
b.
REQUISITES FOR A VALID LOCKOUT
1. SUBSTANTIALLY SIMILAR REQUISITES AS IN STRIKE.
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With a slight, insignificant variation, the procedural but mandatory requisites for a valid strike discussed
above are substantially similar to those applicable for valid lockout. For purposes of ease and clarity, the same are
presented as follows:
• 1st requisite - It must be based on a valid and factual ground;
• 2nd requisite - A notice of lockout must be filed with the NCMB-DOLE;
• 3rd requisite - A notice must be served to the NCMB-DOLE at least twenty-four (24) hours prior to the
taking of the lockout vote by secret balloting, informing said office of the decision to conduct a lockout
vote, and the date, place, and time thereof;
• 4th requisite - A lockout vote must be taken where a majority of the members of the Board of Directors of
the corporation or association or of the partners in a partnership obtained by secret ballot in a meeting
called for the purpose, must approve it;
• 5th requisite - A lockout vote report should be submitted to the NCMB-DOLE at least seven (7) days
before the intended date of the lockout;
• 6th requisite - The cooling-off period of 15 days, in case of unfair labor practices of the labor organization,
or 30 days, in case of collective bargaining deadlock, should be fully observed; and
• 7th requisite - The 7-day waiting period/lockout ban reckoned after the submission of the lockout vote
report to the NCMB-DOLE should also be fully observed in all cases.
c.
REQUISITES FOR LAWFUL PICKETING
1. THE REQUISITES FOR A VALID STRIKE ARE NOT APPLICABLE TO PICKETING.
The seven (7) requisites for a valid strike discussed above do not apply to picketing.
2. REQUISITES FOR LAWFUL PICKETING.
The most singular requirement to make picketing valid and legal is that it should be peacefully conducted.
Based on the foregoing provision, the requisites may be summed up as follows:
1. The picket should be peacefully carried out;
2. There should be no act of violence, coercion or intimidation attendant thereto;
3. The ingress to (entrance) or egress from (exit) the company premises should not be obstructed; and
4. Public thoroughfares should not be impeded.
3. RIGHT TO PICKET IS PROTECTED BY THE CONSTITUTION AND THE LAW.
Unlike a strike which is guaranteed under the Constitutional provision on the right of workers to conduct
peaceful concerted activities under Section 3, Article XIII thereof, the right to picket is guaranteed under the
freedom of speech and of expression and to peaceably assemble to air grievances under Section 4, Article III (Bill
of Rights) thereof.
4. EFFECT OF THE USE OF FOUL LANGUAGE DURING THE CONDUCT OF THE PICKET.
In the event the picketers employ discourteous and impolite language in their picket, such may not result in,
or give rise to, libel or action for damages.
5. PICKETING VS. STRIKE.
(a) To strike is to withhold or to stop work by the concerted action of employees as a result of an
industrial or labor dispute. The work stoppage may be accompanied by picketing by the striking employees outside of
the company compound.
(b) While a strike focuses on stoppage of work, picketing focuses on publicizing the labor dispute and
its incidents to inform the public of what is happening in the company being picketed.
(c) A picket simply means to march to and fro in front of the employer’s premises, usually accompanied
by the display of placards and other signs making known the facts involved in a labor dispute. It is but one strike
activity separate and different from the actual stoppage of work.
Phimco Industries, Inc. v. Phimco Industries Labor Association (PILA). 102 - While the right of employees
to publicize their dispute falls within the protection of freedom of expression and the right to peaceably assemble to
air grievances, these rights are by no means absolute. Protected picketing does not extend to blocking ingress to
and egress from the company premises. That the picket was moving, was peaceful and was not attended by
actual violence may not free it from taints of illegality if the picket effectively blocked entry to and exit from the
company premises.
6. WHEN PICKET CONSIDERED A STRIKE.
In distinguishing between a picket and a strike, the totality of the circumstances obtaining in a case should
be taken into account.
Santa Rosa Coca-Cola Plant Employees Union v. Coca-Cola Bottlers Phils., Inc.103 - Petitioners contend
that what they conducted was a mere picketing and not a strike. In disagreeing to this contention, the High Court
emphasized that it is not an issue in this case that there was a labor dispute between the parties as petitioners had
notified the respondent of their intention to stage a strike, and not merely to picket. Petitioners’ insistence to stage a
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strike is evident in the fact that an amended notice of strike was filed even as respondent moved to dismiss the first
notice. The basic elements of a strike are present in this case: 106 members of petitioner Union, whose respective
applications for leave of absence on September 21, 1999 were disapproved, opted not to report for work on said date,
and gathered in front of the company premises to hold a mass protest action. Petitioners deliberately absented
themselves and instead wore red ribbons and carried placards with slogans such as: “YES KAMI SA STRIKE,”
“PROTESTA KAMI,” “SAHOD, KARAPATAN NG MANGGAGAWA IPAGLABAN,” “CBA-’WAG BABOYIN,”
“STOP UNION BUSTING.” They marched to and fro in front of the company’s premises during working hours. Thus,
petitioners engaged in a concerted activity which already affected the company’s operations. The mass concerted
activity obviously constitutes a strike. Moreover, the bare fact that petitioners were given a Mayor’s permit is not
conclusive evidence that their action/activity did not amount to a strike. The Mayor’s description of what activities
petitioners were allowed to conduct is inconsequential. To repeat, what is definitive of whether the action staged by
petitioners is a strike and not merely a picket is the totality of the circumstances surrounding the situation.
Petitioner union in the 2011 case of Leyte Geothermal Power Progressive Employees Union-ALUTUCP
v. Philippine National Oil Company – Energy Development Corporation,104 contends that there was no stoppage
of work; hence, they did not strike. Euphemistically, petitioner union avers that it “only engaged in picketing,” and
maintains that “without any work stoppage, [its officers and members] only engaged in xxx protest activity.” The
Supreme Court, however, ruled that it was a strike and not picketing or protest activity that petitioner union staged. It
found the following circumstances in support of such finding:
(1) Petitioner union filed a Notice of Strike on December 28, 1998 with the DOLE grounded on
respondent’s purported unfair labor practices, i.e., “refusal to bargain collectively, union busting and mass
termination.” On even date, petitioner Union declared and staged a strike.
(2) The DOLE Secretary intervened and issued a Return-to-Work Order dated January 4, 1999,
certifying the labor dispute to the NLRC for compulsory arbitration. The Order indicated the following facts: (1) filing
of the notice of strike; (2) staging of the strike and taking control over respondent’s facilities of its Leyte Geothermal
Project on the same day petitioner union filed the notice of strike; (3) attempts by the NCMB to forge a mutually
acceptable solution proved futile; (4) in the meantime, the strike continued with no settlement in sight placing in
jeopardy the supply of much needed power supply in the Luzon and Visayas grids.
(3) Petitioner union itself, in its pleadings, used the word “strike.”
(4) Petitioner union’s asseverations are belied by the factual findings of the NLRC, as affirmed by the
CA thus: “The failure to comply with the mandatory requisites for the conduct of strike is both admitted and clearly
shown on record. Hence, it is undisputed that no strike vote was conducted; likewise, the cooling-off period was not
observed and that the 7-day strike ban after the submission of the strike vote was not complied with since there was
no strike vote taken.”
In fine, petitioner union’s bare contention that it did not hold a strike cannot trump the factual findings of the
NLRC that petitioner union indeed struck against respondent. In fact, and more importantly, petitioner union failed to
comply with the requirements set by law prior to holding a strike.
d.
WHEN IS A STRIKE CONSIDERED ILLEGAL?
A strike is illegal if it is declared and staged:
1) Without complying with the procedural but mandatory requisites (See 7 requisites above).
2) For unlawful purpose such as to compel the dismissal of an employee or to force recognition of the union
or for trivial and puerile purpose or to circumvent contracts and judicial orders .
3) Based on non-strikeable or invalid grounds such as:
a) Inter-union or intra-union disputes.
b) Simple violation of CBA in contrast to gross violation thereof which is deemed ULP. c)
Violation of labor standards.
d) Legislated wage orders (wage distortion).
4) Without first having bargained collectively.
5) In violation of the “no strike, no lockout” clause in the CBA.
6) Without submitting the issues to the grievance machinery or voluntary arbitration or failing to exhaust
the steps provided therein.
7) While conciliation and mediation proceeding is on-going at the NCMB. 8) Based on issues already
brought to voluntary or compulsory arbitration.
9) During the pendency of a case involving the same ground/s cited in the notice of strike.
10) In defiance of an assumption or certification or return-to-work order.
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11) In violation of a temporary restraining order or an injunction order.
12) After the conversion of the notice of strike into a preventive mediation case.
13) Against the prohibition by law.
14) By a minority union.
15) By an illegitimate union.
16) By dismissed employees.
17) In violation of the company code of conduct which prohibits “inciting or participating in riots, disorders,
alleged strikes or concerted actions detrimental to [Toyota’s] interest,” The penalty for which is
dismissal.
18) As protest rallies in front of government offices such as in the following cases:
Toyota Motor Phils. Corp. Workers Association [TMPCWA] v. NLRC, 105 where the Supreme
Court ruled that the protest rallies staged by the employees from February 21 to 23, 2001 in front of the
offices of the Bureau of Labor Relations (BLR) and the DOLE Secretary constitute illegal strike and
not legitimate exercise of their right to peaceably assemble and petition the government for redress of
grievances. It was illegal for having been undertaken without satisfying the mandatory pre-requisites
for a valid strike under Article 263 of the Labor Code.
The ruling in Toyota was cited in Solidbank Corporation v. Gamier, 106 as basis in declaring the
protest action of the employees of petitioner Solidbank which was staged in front of the Office of the
DOLE Secretary in Intramuros, Manila, as constitutive of illegal strike since it paralyzed the operations
of the bank. The protest action in this case was conducted because of the CBA deadlock.
19) As welga ng bayan which is in the nature of a general strike as well as an extended sympathy strike.
3.
ASSUMPTION OF JURISDICTION
(BY THE DOLE SECRETARY OR ALTERNATIVELY, AT HIS DISCRETION,
CERTIFICATION OF THE LABOR DISPUTE TO THE NLRC FOR COMPULSORY
ARBITRATION)
1. WHEN DOLE SECRETARY MAY ASSUME OR CERTIFY A LABOR DISPUTE.
Article 278(g) [263(g)] of the Labor Code provides that when in the opinion of the DOLE Secretary, the
labor dispute causes or will likely to cause a strike or lockout in an industry indispensable to the national
interest, he is empowered to do either of 2 things:
1. He may assume jurisdiction over the labor dispute and decide it himself; or
2. He may certify it to the NLRC for compulsory arbitration, in which case, it will be the NLRC which shall
hear and decide it.
This power may be exercised by the DOLE Secretary even before the actual staging of a strike or lockout
since Article 278(g) [263(g)] does not require the existence of a strike or lockout but only of a labor dispute involving
national interest.
2. WHAT CONSTITUTES A NATIONAL INTEREST CASE?
The Labor Code vests in the DOLE Secretary the discretion to determine what industries are indispensable
to the national interest. Accordingly, upon the determination by the DOLE Secretary that such industry is indispensable
to the national interest, he has authority to assume jurisdiction over the labor dispute in the said industry or certify it
to the NLRC for compulsory arbitration.
Past issuances of the DOLE Secretary have not made nor attempted to mention specifically what the
industries indispensable to the national interest are. It was only in Department Order No. 40-H-13, Series of 2013, that
certain industries were specifically named, thus:
“Section 16. Industries Indispensable to the National Interest. – For the guidance of the workers
and employers in the filing of petition for assumption of jurisdiction, the following industries/ services are
hereby recognized as deemed indispensable to the national interest:
a. Hospital sector;
b. Electric power industry;
c. Water supply services, to exclude small water supply services such as bottling and refilling
stations;
d. Air traffic control; and
e. Such other industries as may be recommended by the National Tripartite Industrial Peace
Council (TIPC).”
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Obviously, the above enumerated industries are not exclusive as other industries may be considered
indispensable to the national interest based on the appreciation and discretion of the DOLE Secretary or as may be
recommended by TIPC.
3. DIFFERENT RULE ON STRIKES AND LOCKOUTS IN HOSPITALS, CLINICS AND MEDICAL
INSTITUTIONS.
As a general rule, strikes and lockouts in hospitals, clinics and similar medical institutions should be avoided.
In case a strike or lockout is staged, it shall be the duty of the striking union or locking-out employer to
provide and maintain an effective skeletal workforce of medical and other health personnel whose movement and
services shall be unhampered and unrestricted as are necessary to insure the proper and adequate protection of the life
and health of its patients, most especially emergency cases, for the duration of the strike or lockout.
The DOLE Secretary may immediately assume, within twenty four (24) hours from knowledge of the
occurrence of such a strike or lockout, jurisdiction over the same or certify it to the NLRC for compulsory arbitration.
4. SOME PRINCIPLES ON ASSUMPTION/CERTIFICATION POWER OF THE DOLE SECRETARY.
▪ Prior notice and hearing are not required in the issuance of the assumption or certification order.
▪ The DOLE Secretary may seek the assistance of law enforcement agencies like the Philippine National Police to
ensure compliance with the provision thereof as well as with such orders as he may issue to enforce the same.
5. RETURN-TO-WORK ORDER.
a. It is a STATUTORY PART AND PARCEL of assumption/certification order even if not expressly
stated therein.
The moment the DOLE Secretary assumes jurisdiction over a labor dispute involving national interest or
certifies it to the NLRC for compulsory arbitration, such assumption or certification has the effect of automatically
enjoining the intended or impending strike or, if one has already been commenced, of automatically prohibiting its
continuation. The mere issuance of an assumption or certification order automatically carries with it a return-to-work
order, even if the directive to return to work is not expressly stated therein. It is thus not necessary for the DOLE
Secretary to issue another order directing the strikers to return to work.
It is error therefore for striking workers to continue with their strike alleging absence of a return-to-work
order since Article 263(g) is clear that once an assumption/certification order is issued, strikes are enjoined or, if one
has already taken place, all strikers should immediately return to work.
b. Nature of return-to-work order.
Return-to-work order is compulsory and immediately executory in character. It should be strictly
complied with by the parties even during the pendency of any petition questioning its validity in order to maintain the
status quo while the determination is being made. Filing of a motion for reconsideration does not affect the
enforcement of a return-to-work order which is immediately executory.
c. Some principles on return-to-work order.
▪ The issue of legality of strike is immaterial in enforcing the return-to-work order.
▪ Upon assumption or certification, the parties should revert to the status quo ante litem which refers to the
state of things as it was before the labor dispute or the state of affairs existing at the time of the filing of
the case. It is the last actual, peaceful and uncontested status that preceded the actual controversy.
▪ To implement the return-to-work order, the norm is actual reinstatement. However, payroll
reinstatement in lieu of actual reinstatement may properly be resorted to when special circumstances
exist that render actual reinstatement impracticable or otherwise not conducive to attaining the purposes of
the law.
Example:
University of Sto. Tomas v. NLRC, where the teachers ordered to return to work could not be given back
their academic assignments since the return-to-work order of the DOLE Secretary was issued in the middle
of the first semester of the academic year. The Supreme Court affirmed the validity of the payroll
reinstatement order of the NLRC and ruled that the NLRC did not commit grave abuse of discretion in
providing for the alternative remedy of payroll reinstatement. It observed that the NLRC was only trying
its best to work out a satisfactory ad hoc solution to a festering and serious problem.
3.1.
NATURE OF ASSUMPTION ORDER
OR CERTIFICATION ORDER
1. A POLICE POWER MEASURE.
The power to issue assumption or certification orders is an extraordinary authority granted to the President
and to his alter ego, the DOLE Secretary, the exercise of which should be strictly limited to national interest cases. It
is in the nature of a police power measure. This is done for the promotion of the common good considering that a
prolonged strike or lockout can be inimical to the national economy.
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3.2.
EFFECT OF DEFIANCE OF
ASSUMPTION OR CERTIFICATION ORDERS
ON EMPLOYMENT OF DEFIANT WORKERS
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However, absent any showing that the employees are union officers, they cannot be dismissed based solely
on the illegality of the strike.
To illustrate how the “knowing participation” of union officers may be ascertained and established, the
following factors were taken into account in another 2011 case, Abaria v. NLRC,109 which led to the declaration that
they knowingly participated in the illegal strike:
(1) Their persistence in holding picketing activities despite the declaration by the NCMB that their
union was not duly registered as a legitimate labor organization and notwithstanding the letter from the federation’s
legal counsel informing them that their acts constituted disloyalty to the national federation; and
(2) Their filing of the notice of strike and conducting a strike vote despite the fact that their union has
no legal personality to negotiate with their employer for collective bargaining purposes.
2. Ordinary union members.
The mere finding or declaration of illegality of a strike will not result in termination of ordinary union
members. For an ordinary union member to suffer termination, it must be shown by clear evidence that he has
committed illegal acts during the strike.
b. Reason for the distinction.
The reason for this distinction is that the union officers have the duty to guide their members to respect the
law. If instead of doing so, the officers urged the members to violate the law and defy the duly constituted authorities,
their dismissal from the service is a just penalty or sanction for their unlawful act. Their responsibility as main players
in an illegal strike is greater than that of the ordinary union members and, therefore, limiting the penalty of dismissal
only to the former for their participation in an illegal strike is in order.
c. Some principles on illegality of a strike. ▪ The fact that the employees are signatories to the CBA does
not in itself sufficiently establish their status as union officers during the illegal strike. Neither were their
active roles during the bargaining negotiations be considered as evidence of their being union officers.
▪ Only the union officers during the period of illegal strike are liable. If the employees acted as union
officers after the strike, they may not be held liable and, therefore, could not be terminated in their
capacity as such.
▪ Shop stewards are union officers. Hence, they should be terminated upon the declaration of the illegality
of the strike.
▪ Union officers may be dismissed despite the fact that the illegal strike was staged only for 1 day or
even for less than 10 hours. This holds true in cases of defiance of the assumption/ certification order
issued in national interest cases.
▪ If the dispositive portion of the decision failed to mention the names of union officers, resort should
be made to the text of the decision.
▪ No wholesale dismissal of strikers allowed. The employer cannot just unceremoniously dismiss a
hundred of its employees in the absence of clear and convincing proof that these people were indeed
guilty of the acts charged and then, afterwards, go to court to seek validation of the dismissal it
whimsically executed. That certainly cannot be allowed.
109 G.R. Nos. 154113, 187778, 187861 & 196156, Dec. 7, 2011, 661 SCRA 686.
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photographs. Simply referring to them as “strikers,” or “complainants in this case” is not enough to justify their
dismissal.
d. Some principles on commission of illegal acts in the course of the strike.
▪ Only members who are identified as having participated in the commission of illegal acts are liable.
Those who did not participate should not be blamed therefor.
• To effectively hold ordinary union members liable, those who participated in the commission of illegal
acts must not only be identified but the specific illegal acts they each committed should be described
with particularity.
▪ If violence was committed by both employer and employees, the same cannot be cited as a ground to
declare the strike illegal.
------------oOo------------
SYLLABUS
MAJOR TOPIC 8 JURISDICTION
AND REMEDIES
PRELIMINARY CONSIDERATIONS
ON PROCEDURE AND JURISDICTION
1. EXISTENCE OF EMPLOYER-EMPLOYEE RELATIONSHIP.
The existence of employer-employee relationship between the parties-litigants, or a reasonable causal
connection to such relationship is a jurisdictional pre-requisite for the exercise of jurisdiction over a labor dispute by
the Labor Arbiters or any other labor tribunals.
2. THE CAUSE OF ACTION MUST ARISE FROM THE EMPLOYER-EMPLOYEE RELATIONSHIP.
Even if there is employer-employee relationship, if the cause of action did not arise out of or was not incurred
in connection with the employer-employee relationship, Labor Arbiters and other labor tribunals have no jurisdiction
thereover.
Actions between employers and employees where the employer-employee relationship is merely incidental
are within the exclusive original jurisdiction of the regular courts.
3. REASONABLE CAUSAL CONNECTION RULE – THE RULE IN CASE OF CONFLICT OF
JURISDICTION BETWEEN LABOR COURT AND REGULAR COURT.
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Under this rule, if there is a reasonable causal connection between the claim asserted and the
employeremployee relations, then the case is within the jurisdiction of labor courts.
In the absence of such nexus, it is the regular courts that have jurisdiction.
4. THE POWER TO DETERMINE EXISTENCE OF EMPLOYMENT RELATIONSHIP.
Under labor laws, it is not only the Labor Arbiters and the NLRC who/which are vested with the power to
determine the existence of employer-employee relationship.
The following have also the power to make similar determination:
(1) The DOLE Secretary and the DOLE Regional Directors, to the exclusion of the Labor Arbiter and
the NLRC;
(2) The Med-Arbiter;
(3) The Social Security Commission (SSC).
5. IN CASES FILED BY OFWs, LABOR ARBITERS MAY EXERCISE JURISDICTION EVEN ABSENT
THE EMPLOYMENT RELATIONSHIP.
In Santiago v. CF Sharp Crew Management, Inc., 110 it was held that a seafarer who has already signed a
POEA-approved employment contract but was not deployed overseas and, therefore, there is no employer-employee
relationship, may file his monetary claims case with the Labor Arbiter. This is because the jurisdiction of Labor
Arbiters is not limited to claims arising from employer-employee relationships. Under Section 10 of R. A. No. 8042
(Migrant Workers and Overseas Filipinos Act of 1995), as amended, the Labor Arbiter may exercise jurisdiction over
the claims of OFWs arising out of an employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment, including claims for actual, moral, exemplary and other forms of damage.
(See also the 2012 case of Bright Maritime Corporation v. Fantonial111).
6. LABOR ARBITERS HAVE JURISDICTION EVEN IF THE CASE IS FILED BY THE HEIRS OF THE
OFW.
This was the ruling in Medline Management, Inc. v. Roslinda. 112 As heirs, the wife and son of Juliano
Roslinda, the deceased OFW, have the personality to file the claim for death compensation, reimbursement of medical
expenses, damages and attorney's fees before the Labor Arbiter of the NLRC.
7. LABOR DISPUTES, NOT SUBJECT TO BARANGAY CONCILIATION.
Labor cases are not subject to the conciliation proceedings prescribed under P.D. No. 1508 requiring the
submission of disputes before the Barangay Lupong Tagapayapa prior to their filing with the court or other
government offices. Instead of simplifying labor proceedings designed at expeditious settlement or referral to the
proper courts or offices to decide them finally, the conciliation of the issues before the Barangay Lupong Tagapayapa
would only duplicate the conciliation proceedings and unduly delay the disposition of labor cases.
A.
LABOR ARBITER
1. THE LABOR ARBITER.
The Labor Arbiter is an official in the Arbitration Branch of the National Labor Relations Commission
(NLRC) who hears and decides cases falling under his original and exclusive jurisdiction as provided by law.
2. LABOR ARBITERS HAVE NO INJUNCTIVE POWER; ONLY THE COMMISSION (NLRC) HAS THIS
POWER.
Previously, Labor Arbiters are possessed of injunctive power. This grant of injunctive power, however, was
deleted in recent NLRC Rules. The Labor Arbiter thus has no more injunctive power. Only the Commission (NLRC)
has that power.
1.
JURISDICTION
1. NATURE OF JURISDICTION OF LABOR ARBITERS - ORIGINAL AND EXCLUSIVE.
The jurisdiction conferred by Article 217 upon the Labor Arbiters is both original and exclusive, meaning,
no other officers or tribunals can take cognizance of, or hear and decide, any of the cases therein enumerated.
2. EXCEPTIONS TO THE ORIGINAL AND EXCLUSIVE JURISDICTION OF LABOR
ARBITERS.
The following cases are the exceptions when the Labor Arbiters may not exercise their original and exclusive
jurisdiction:
1. In assumed cases. When the DOLE Secretary or the President exercises his power under Article 278(g)
[263(g)] of the Labor Code to assume jurisdiction over national interest cases and decide them himself.
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2. In certified cases. When the NLRC exercises its power of compulsory arbitration over similar national
interest cases that are certified to it by the DOLE Secretary pursuant to the exercise by the latter of his
certification power under the same Article 278(g) [263(g)].
3. In cases arising from CBA. - When cases arise from the interpretation or implementation of collective
bargaining agreements and from the interpretation or enforcement of company personnel policies which
shall be disposed of by the Labor Arbiter by referring the same to the grievance machinery and voluntary
arbitration, as may be provided in said agreements.
4. In cases submitted for voluntary arbitration. - When the parties agree to submit the case to voluntary
arbitration before a Voluntary Arbitrator or panel of Voluntary Arbitrators who, under Articles 274 [261]
and 275 [262] of the Labor Code, are also possessed of original and exclusive jurisdiction to hear and
decide cases mutually submitted to them by the parties for arbitration and adjudication.
3. RUNDOWN OF ALL CASES FALLING UNDER THE JURISDICTION OF THE LABOR
ARBITERS.
More particularly, Labor Arbiters shall have original and exclusive jurisdiction to hear and decide the
following cases involving all workers, whether agricultural or non-agricultural:
1. Under Article 224 [217] of the Labor Code:
(a) Unfair labor practice cases;
(b) Termination disputes (Illegal dismissal cases); (c)
Money claims exceeding P5,000.00.
(d) Claims for actual, moral, exemplary and other forms of damages arising from employer-employee
relations; and
(e) Cases involving the legality of strikes and lockouts.
NOTE: Claims for employees’ compensation, SSS, PhilHealth (Medicare) and maternity benefits do not fall
under the jurisdiction of the Labor Arbiter because these fall under the jurisdiction of other government agencies.
2. Under Article 124 of the Labor Code, as amended by R.A. No. 6727:
Disputes involving legislated wage increases and wage distortion in unorganized establishments not
voluntarily settled by the parties pursuant to R.A. No. 6727.
3. Under Article 128(b) of the Labor Code, as amended by R.A. No. 7730:
• Contested cases under the exception clause in Article 128(b) of the Labor Code.
4. Under Article 233 [227] of the Labor Code:
• Enforcement of compromise agreements when there is non-compliance by any of the parties thereto,
pursuant to Article 227 of the Labor Code.
5. Under Article 276 [262-A] of the Labor Code:
• Issuance of writ of execution to enforce decisions of Voluntary Arbitrators or panel of Voluntary
Arbitrators, in case of their absence or incapacity, for any reason.
6. Under Section 10 of R.A. No. 8042, as amended by R.A. No. 10022:
• Money claims of OFWs arising out of employer-employee relationship or by virtue of any law or
contract, including claims death and disability benefits and for actual, moral, exemplary and other
forms of damages.
7. Other cases as may be provided by law.
I.
JURISDICTION OVER UNFAIR LABOR PRACTICE CASES
1. SOME PRINCIPLES ON JURISDICTION OVER ULPs.
• The Labor Arbiter has jurisdiction over all ULPs whether committed by the employers or the labor organizations.
• The Labor Arbiter has jurisdiction only over the civil aspect of ULP, the criminal aspect being lodged with the
regular courts.
II.
JURISDICTION OVER ILLEGAL DISMISSAL CASES
1. SOME PRINCIPLES ON JURISDICTION OVER TERMINATION CASES.
• The validity of the exercise of jurisdiction by Labor Arbiters over illegal dismissal cases is not dependent
on the kind or nature of the ground cited in support of the dismissal; hence, whether the dismissal is
for just cause or authorized cause, it is of no consequence.
• In case of conflict of jurisdiction between Labor Arbiter and the Voluntary Arbitrator over
termination cases, the former’s jurisdiction shall prevail for the following reasons:
(1) Termination of employment is not a grievable issue that must be submitted to the grievance machinery
or voluntary arbitration for adjudication. The jurisdiction thereover remains within the original and
exclusive ambit of the Labor Arbiter and not of the Voluntary Arbitrator.
(2) Even if the CBA provides that termination disputes are grievable, the same is merely discretionary on
the part of the parties thereto.
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(3) Once there is actual termination, jurisdiction is conferred upon Labor Arbiters by operation of law.
(4) Interpretation of CBA and enforcement of company personnel policies are merely corollary to an
illegal dismissal case.
(5) Article 217 is deemed written into the CBA being an intrinsic part thereof.
• In other words, the Voluntary Arbitrator will only have jurisdiction over illegal dismissal cases when there
is express agreement of the parties to the CBA, i.e., the employer and the bargaining agent, to submit
the termination case to voluntary arbitration. Absent the mutual express agreement of the parties, Voluntary
Arbitrator cannot acquire jurisdiction over termination cases.
• The express agreement must be stated in the CBA or there must be enough evidence on record
unmistakably showing that the parties have agreed to resort to voluntary arbitration.
III.
JURISDICTION OVER MONEY CLAIMS CASES
1. CLASSIFICATION OF MONEY CLAIMS.
Money claims falling within the original and exclusive jurisdiction of the Labor Arbiters may be classified
as follows:
1. Any money claim, regardless of amount, when asserted in an illegal dismissal case (where the remedy
of reinstatement is proper). Here, the money claim is but an accompanying remedy
subordinated to the principal cause of action, i.e., illegal dismissal; or
If the amount does not exceed P5,000.00, it is, under Article 129, the DOLE Regional Director who has
jurisdiction to take cognizance thereof. Therefore, the amount of P5,000.00 becomes important only when the
principal cause of action is MONETARY CLAIM.
3. SOME PRINCIPLES ON JURISDICTION OVER MONEY CLAIMS.
• Award of statutory benefits even if not prayed for is valid.
• Claim for notarial fees by a lawyer employed by a company is within the jurisdiction of the Labor Arbiter.
(a)
VERSUS REGIONAL DIRECTOR
1. LABOR ARBITERS HAVE NO JURISDICTION OVER SMALL MONEY CLAIMS LODGED UNDER
ARTICLE 129.
As earlier emphasized, under Article 129 of the Labor Code, DOLE Regional Directors have jurisdiction
over claims amounting to P5,000 or below, provided the following requisites concur:
1. The claim must arise from employer-employee relationship;
2. The claimant does not seek reinstatement; and
3. The aggregate money claim of each employee does not exceed P5,000.00.
2. IN INSPECTION OF ESTABLISHMENT CASES UNDER ARTICLE 128 (VISITORIAL AND
ENFORCEMENT POWER), THE DOLE REGIONAL DIRECTORS HAVE JURISDICTION
REGARDLESS OF WHETHER OR NOT THE TOTAL AMOUNT OF CLAIMS PER EMPLOYEE
EXCEEDS P5,000.00.
a. Requisites.
For the valid exercise by the DOLE Secretary or any of his duly authorized representatives (DOLE Regional
Directors) of the visitorial and enforcement powers provided under Article 128(b), the following requisites should
concur:
1. The employer-employee relationship should still exist;
2. The findings in question were made in the course of inspection by labor inspectors; and
3. The employees have not yet initiated any claim or complaint with the DOLE Regional Director under
Article 129, or the Labor Arbiter under Article 217.
3. HOWEVER, JURISDICTION OVER CONTESTED CASES UNDER THE EXCEPTION CLAUSE IN
ARTICLE 128(b) OF THE LABOR CODE INVOLVING INSPECTION OF ESTABLISHMENTS
BELONGS TO THE LABOR ARBITERS AND NOT TO DOLE REGIONAL DIRECTORS.
a. Relation of paragraph (b) of Article 128 to the jurisdiction of Labor Arbiters.
The Labor Arbiters have jurisdiction over contested cases under the exception clause in Article 128(b), which
states: “xxx. The Secretary or his duly authorized representatives shall issue writs of execution to the appropriate
authority for the enforcement of their orders, except in cases where the employer contests the findings of the labor
employment and enforcement officer and raises issues supported by documentary proofs which were not considered
in the course of inspection.”
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In interpreting the afore-quoted provision of the exception clause, three (3) elements must concur to divest
the Regional Directors or their representatives of jurisdiction thereunder, to wit:
(a) That the employer contests the findings of the labor regulations officer and raises issues thereon;
(b) That in order to resolve such issues, there is a need to examine evidentiary matters; and (c)
That such matters are not verifiable in the normal course of inspection.
The 2009 case of Meteoro v. Creative Creatures, Inc.,113 best illustrates the application of the exception
clause. Here, it was held that the Court of Appeals aptly applied the “exception clause” because at the earliest
opportunity, respondent company registered its objection to the findings of the labor inspector on the ground that there
was no employer-employee relationship between petitioners and respondent company. The labor inspector, in fact,
noted in his report that “respondent alleged that petitioners were contractual workers and/or independent and talent
workers without control or supervision and also supplied with tools and apparatus pertaining to their job.” In its
position paper, respondent again insisted that petitioners were not its employees. It then questioned the Regional
Director’s jurisdiction to entertain the matter before it, primarily because of the absence of an employer-employee
relationship. Finally, it raised the same arguments before the Secretary of Labor and the appellate court. It is,
therefore, clear that respondent contested and continues to contest the findings and conclusions of the labor inspector.
To resolve the issue raised by respondent, that is, the existence of an employer-employee relationship, there is a need
to examine evidentiary matters.
IV.
JURISDICTION OVER CLAIMS FOR DAMAGES
1. LABOR ARBITERS HAVE JURISDICTION OVER CLAIMS FOR DAMAGES.
It is now a well-settled rule that claims for damages as well as attorney’s fees in labor cases are cognizable
by the Labor Arbiters, to the exclusion of all other courts. Rulings to the contrary are deemed abandoned or modified
accordingly.
2. CLAIMS FOR DAMAGES OF OVERSEAS FILIPINO WORKERS (OFWs).
Claims for actual, moral, exemplary and other forms of damages that may be lodged by overseas Filipino
workers are cognizable by the Labor Arbiters.
V.
JURISDICTION OVER LEGALITY OF STRIKES AND LOCKOUTS
114 G.R. No. 183335, Dec. 23, 2009; See also Hotel Employees Union-NFL v. Waterfront Insular Hotel Davao, G.R. Nos. 174040-
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5. Certification of the labor dispute to the NLRC. - Under the same provision of Article 278(g)
[263(g)] of the Labor Code, the DOLE Secretary has the option of not assuming jurisdiction over the labor dispute in
national interest cases. Instead, he may certify it to the NLRC for compulsory arbitration, in which case, it will be the
NLRC which shall hear and decide all the issues subject of the certification order.
In case at the time of the said assumption or certification, there is a pending case before the Labor Arbiter or
Voluntary Arbitrator on the issue of illegality of the strike or lockout, the same shall be deemed subsumed in the
assumed or certified case. Resultantly, it is no longer the Labor Arbiter or the Voluntary Arbitrator who should decide
the said case but the DOLE Secretary, in the case of assumed cases, or the NLRC, in the case of certified cases.
6. Assumption of jurisdiction over a national interest case by the President. - The President of the
Philippines is not precluded from intervening in a national interest case by exercising himself the powers of his alter
ego, the DOLE Secretary, granted under Article 278(g) [263(g)] by assuming jurisdiction over the same for purposes
of settling or terminating it.
7. Submission of a national interest case to voluntary arbitration. - Despite the pendency of the
assumed or certified national interest case, the parties are allowed to submit any issues raised therein to voluntary
arbitration at any stage of the proceeding, by virtue of Article 278(h) [263(h)] which provides that “(b)efore or at any
stage of the compulsory arbitration process, the parties may opt to submit their dispute to voluntary arbitration.”
The foregoing interplay explains why Article 278(i) [263(i)] makes specific reference to the President of the
Philippines, the Secretary of Labor and Employment, the Commission (NLRC) or the Voluntary Arbitrator in
connection with the law on strike, lockout and picketing embodied in Article 278 [263]. The only labor official not so
mentioned therein but who has a significant role to play in the interaction of labor officials and tribunals in strike or
lockout cases, is the Labor Arbiter. This is understandable in the light of the separate express grant of jurisdiction to
the Labor Arbiters under Article 224(a)(5) [217(a)(5)] as above discussed.
VI.
JURISDICTION OVER CASES INVOLVING LEGISLATED
WAGE INCREASES AND WAGE DISTORTION
VII.
JURISDICTION OVER ENFORCEMENT OR ANNULMENT
OF COMPROMISE AGREEMENTS
1. LEGAL BASIS.
Article 233 [227] clearly embodies the following provisions on compromise agreements:
“Article 233 [227]. Compromise Agreements. - Any compromise settlement, including those
involving labor standard laws, voluntarily agreed upon by the parties with the assistance of the Bureau or the
regional office of the Department of Labor, shall be final and binding upon the parties. The National Labor
Relations Commission or any court shall not assume jurisdiction over issues involved therein except in
case of non-compliance thereof or if there is prima facie evidence that the settlement was obtained
through fraud, misrepresentation, or coercion.”
Clear from the foregoing provision that, although the compromise agreement may have been entered into by
the parties before the Bureau of Labor Relations (BLR) or the DOLE Regional Office, it is the Labor Arbiter who has
jurisdiction to take cognizance of the following issues related thereto, to the exclusion of the BLR and the DOLE
Regional Directors:
(1) To enforce the compromise agreement in case of non-compliance therewith by any of the parties thereto; or
(2) To nullify it if there is prima facie evidence that the settlement was obtained through fraud,
misrepresentation, or coercion.
VIII.
JURISDICTION OVER EXECUTION AND ENFORCEMENT
OF DECISIONS OF VOLUNTARY ARBITRATORS
1. DECISIONS OF VOLUNTARY ARBITRATORS.
Article 276 [262-A] of the Labor Code prescribes the procedures that Voluntary Arbitrators or panel of
Voluntary Arbitrators should follow in adjudicating cases filed before them. Once a decision has been rendered in a
case and subsequently becomes final and executory, it may be enforced through the writ of execution issued by the
same Voluntary Arbitrator or panel of Voluntary Arbitrators who rendered it, addressed to and requiring certain public
officers to execute the final decision, order or award.
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2. LABOR ARBITERS MAY ISSUE THE WRIT OF EXECUTION.
In situations, however, where the Voluntary Arbitrator or the panel of Voluntary Arbitrators who rendered
the decision is absent or incapacitated for any reason, Article 276 [262-A] grants jurisdiction to any Labor Arbiter in
the region where the winning party resides, to take cognizance of a motion for the issuance of the writ of execution
filed by such party and accordingly issue such writ addressed to and requiring the public officers mentioned above to
execute the final decision, order or award of the Voluntary Arbitrator or panel of Voluntary Arbitrators.
IX.
JURISDICTION OVER CASES OF OFWs
X.
OTHER ISSUES OVER WHICH LABOR ARBITERS HAVE JURISDICTION
1. JURISDICTION OVER CERTAIN ISSUES AS PROVIDED IN JURISPRUDENCE.
In accordance with well-entrenched jurisprudence, the issues, claims or cases of the following fall under the
jurisdiction of the Labor Arbiters:
(a) Employees in government-owned and/or controlled corporations without original charters;
(b) Domestic workers or kasambahay;
(c) Employees of cooperatives;
(d) Counter-claims of employers against employees.
X-1.
JURISDICTION OVER CASES OF
DOMESTIC WORKERS OR KASAMBAHAY
1. WHEN LABOR ARBITERS HAVE JURISDICTION.
The Labor Arbiter has jurisdiction if the amount of the claim exceeds P5,000.00; otherwise, the jurisdiction
is vested with the DOLE Regional Director under Article 129 of the Labor Code.
Incidentally, it is no longer legally correct to use the term “domestic servant” or “househelper” in reference
to a person who performs domestic work. Under R.A. No. 10361, “domestic servant” or “househelper” should now
be referred to as “domestic worker” or “kasambahay.”
X-2.
JURISDICTION OVER CASES OF
EMPLOYEES OF COOPERATIVES
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Simply stated, insofar as member-employees are concerned, there is a need to determine their cause of action.
If what they are asserting arose from their employment relationship with the cooperative, such as monetary claims or
illegal dismissal cases, then, the Labor Arbiter has jurisdiction thereover. But if the action involves their membership
with the cooperative, then, it is considered an intra-cooperative dispute which falls under the jurisdiction of the
Cooperative Development Authority (CDA).
Members of cooperatives or member-employees thereof are not allowed to organize a labor organization to
collectively bargain with the cooperative because they are the owners of the cooperative. They cannot negotiate with
themselves. Only employees of cooperative can organize such labor organization, for obvious reason.
X-3.
JURISDICTION OVER COUNTER-CLAIMS OF EMPLOYERS
XI-A.
CLAIMS FOR DAMAGES ARISING FROM BREACH OF NON-COMPETE CLAUSE AND
OTHER POST-EMPLOYMENT PROHIBITIONS
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adjudication of a labor dispute but recovery of a sum of money based on our civil laws on obligation and
contract.
b. Car loans such as those granted to sales or medical representatives by reason of the nature of their work.
The employer’s demand for payment of the employees’ amortizations on their car loans, or, in the
alternative, the return of the cars to the company, is not a labor, but a civil, dispute. It involves
debtorcreditor relations, rather than employee-employer relations.
c. Appliance loans concern the enforcement of a loan agreement involving debtor-creditor relations
founded on contract and do not in any way concern employee relations. As such it should be enforced
through a separate civil action in the regular courts and not before the Labor Arbiter.
d. Loans from retirement fund also involve the same principle as above; hence, collection therefor may
only be made through the regular courts and not through the Labor Arbiter or any labor tribunal.
XI-C.
DISMISSAL OF DIRECTORS AND CORPORATE OFFICERS
1. LABOR ARBITERS HAVE NO JURISDICTION.
The dismissal of a director or corporate officer is an intra-corporate dispute cognizable by the Regional Trial
Court and not by the Labor Arbiter.
2. MATLING DOCTRINE.
Under this doctrine,116 the following rules should be observed:
(1) The dismissal of regular employees falls under the jurisdiction of Labor Arbiters; while that of
corporate officers falls within the jurisdiction of the regular courts.
(2) The term “corporate officers” refers only to those expressly mentioned in the Corporation Code and
By-Laws; all other officers not so mentioned therein are deemed employees.
(3) Corporate officers are elected or appointed by the directors or stockholders, and those who are given
that character either by the Corporation Code or by the corporation’s by-laws.
(4) The Corporation Code specifically mentions only the following corporate officers, to wit: president,
secretary and treasurer and such other officers as may be provided for in the by-laws.
(5) The Board of Directors can no longer create corporate offices because the power of the Board of
Directors to create a corporate office cannot be delegated. Therefore, the term “corporate officers”
should only refer to the above and to no other. A different interpretation can easily leave the way open
for the Board of Directors to circumvent the constitutionally guaranteed security of tenure of the
employee by the expedient inclusion in the By-Laws of an enabling clause on the creation of just any
corporate officer position.
(6) Distinction between a corporate officer and an employee. - An “office” is created by the charter of
the corporation and the “corporate officer” is elected by the directors or stockholders. On the other
hand, an “employee” occupies no office and generally is employed not by the action of the directors or
stockholders but by the managing officer of the corporation who also determines the compensation to be
paid to such employee.
(7) Because of the Matling doctrine, the rulings in Tabang and Nacpil, are no longer controlling because
they are “too sweeping and do not accord with reason, justice, and fair play.”
(8) The status of an employee as director and stockholder does not automatically convert his dismissal
into an intra-corporate dispute.
(9) TWO (2) ELEMENTS TO DETERMINE WHETHER A DISPUTE IS INTRA-CORPORATE OR
NOT.
(a) The status or relationship of the parties (Relationship test); and
(b) The nature of the question that is the subject of their controversy. (Nature of controversy test). In
the absence of any one of these factors, the RTC will not have jurisdiction.
(10)The criteria do not depend on the services performed but on the manner of creation of the office.
In Matling, respondent Corros was supposedly at once an employee, a stockholder, and a Director of
Matling. The circumstances surrounding his appointment to office must be fully considered to determine
whether the dismissal constituted an intra-corporate controversy or a labor termination dispute. It must
also be considered whether his status as Director and stockholder had any relation at all to his
appointment and subsequent dismissal as Vice President for Finance and Administration.
Obviously enough, the respondent was not appointed as Vice President for Finance and Administration
because of his being a stockholder or Director of Matling. He had started working for Matling on
September 8, 1966, and had been employed continuously for 33 years until his termination on April 17,
116 Enunciated in the 2010 case of Matling Industrial and Commercial Corp. v. Ricardo R. Coros, G.R. No. 157802, Oct. 13, 2010.
This case is an appeal via petition for review on certiorari. The petitioners challenge the decision of the CA which sustained the
ruling of the NLRC to the effect that the Labor Arbiter had jurisdiction because the respondent, its Vice President for Finance and
Administration, was not a corporate officer of petitioner Matling.
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2000. His first work as a bookkeeper and his climb in 1987 to his last position as Vice President for
Finance and Administration had been gradual but steady. Even though he might have become a
stockholder of Matling in 1992, his promotion to the position of Vice President for Finance and
Administration in 1987 was by virtue of the length of quality service he had rendered as an employee of
Matling. His subsequent acquisition of the status of Director/stockholder had no relation to his
promotion. Besides, his status of Director/stockholder was unaffected by his dismissal from employment
as Vice President for Finance and Administration.
3. SIGNIFICANT CASES DECIDED BASED ON THE MATLING DOCTRINE.
a. Cosare v. Broadcom Asia, Inc., (2014)
In this 2014 case, the Supreme Court ruled that the Labor Arbiter, not the regular courts, has original
jurisdiction over the illegal dismissal case filed by petitioner Cosare who was an incorporator of respondent Broadcom
and was holding the position of Assistant Vice President for Sales (AVP for Sales) and Head of the Technical
Coordination at the time of his termination. The following justifications were cited in support of this ruling:
(1) The mere fact that a person was a stockholder and an officer of the company at the time the subject
controversy developed does not necessarily make the case an intra-corporate dispute.
(2) A person, although an officer of the company, is not necessarily a corporate officer thereof.
(3) General Information Sheet (GIS) submitted to SEC neither governs nor establishes the nature of office.
(4) The Nature of the Controversy Test: The mere fact that a person was a stockholder at the time of the
filing of the illegal dismissal case does not make the action an intra-corporate dispute. b. Other cases:
(1) Barba v. Liceo de Cagayan University (2012);
(2) Marc II Marketing, Inc. and Lucila V. Joson v. Alfredo M. Joson (2011); (3)
Real v. Sangu Philippines, Inc. (2011).
XI-D.
LABOR CASES INVOLVING ENTITIES IMMUNE FROM SUIT
1. IMMUNE ENTITIES CANNOT BE SUED FOR LABOR LAW VIOLATIONS.
In this jurisdiction, the generally accepted principles of international law are recognized and adopted as part
of the law of the land. Immunity of a State and international organizations from suit is one of these universally
recognized principles. It is on this basis that Labor Arbiters or other labor tribunals have no jurisdiction over immune
entities.
2. ILLUSTRATIVE CASE.
In Department of Foreign Affairs v. NLRC, 117 involving an illegal dismissal case filed against the Asian
Development Bank (ADB), it was ruled that said entity enjoys immunity from legal process of every form and
therefore the suit against it cannot prosper. And this immunity extends to its officers who also enjoy immunity in
respect of all acts performed by them in their official capacity. The Charter and the Headquarters Agreement granting
these immunities and privileges to the ADB are treaty covenants and commitments voluntarily assumed by the
Philippine government which must be respected.
3. EXCEPTION TO THE RULE.
There is an exception to the immunity rule as exemplified by the case of United States v. Hon. Rodrigo,118
where it was held that when the function of the foreign entity otherwise immune from suit partakes of the nature of a
proprietary activity, such as the restaurant services offered at John Hay Air Station undertaken by the United States
Government as a commercial activity for profit and not in its governmental capacity, the case for illegal dismissal
filed by a Filipino cook working therein is well within the jurisdiction of Philippine courts. The reason is that by
entering into the employment contract with the cook in the discharge of its proprietary functions, it impliedly divested
itself of its sovereign immunity from suit.
4. ESTOPPEL DOES NOT CONFER JURISDICTION OVER AN IMMUNE ENTITY.
An entity immune from suit cannot be estopped from claiming such diplomatic immunity since estoppel does
not operate to confer jurisdiction to a tribunal that has none over a cause of action.
XI-E.
DOCTRINE OF FORUM NON CONVENIENS
1. REQUISITES.
This doctrine is an international law principle which has been applied to labor cases. The following are the
requisites for its applicability:
(1) That the Philippine court is one to which the parties may conveniently resort;
117 G.R. No. 113191, Sept. 18, 1996, 262 SCRA 39, 43-44.
118 G.R. No. 79470, Feb. 26, 1990, 182 SCRA 644, 660.
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(2) That the Philippine court is in a position to make an intelligent decision as to the law and the facts; and
(3) That the Philippine court has or is likely to have power to enforce its decision.
2. APPLICATION TO LABOR CASES.
a. Case where doctrine was rejected.
Petitioners’ invocation of this principle was rejected in Pacific Consultants International Asia, Inc. v.
Schonfeld.119 Petitioners’ insistence was based on the fact that respondent is a Canadian citizen and was a repatriate.
In so rejecting petitioners’ contention, the Supreme Court cited the following reasons that do not warrant the
application of the said principle: (1) the Labor Code does not include forum non conveniens as a ground for the
dismissal of the complaint; and (2) the propriety of dismissing a case based on this principle requires a factual
determination; hence, it is properly considered as a defense.
b. Case where doctrine was applied.
This doctrine was applied in the case of The Manila Hotel Corp. and Manila Hotel International Limited
v. NLRC,120 where private respondent Marcelo Santos was an overseas worker employed as a printer in a printing
press in the Sultanate of Oman when he was directly hired by the Palace Hotel, Beijing, People’s Republic of China
to work in its print shop. This hotel was being managed by the Manila Hotel International Ltd., a foreign entity
registered under the laws of Hong Kong. Later, he was terminated due to retrenchment occasioned by business reverses
brought about by the political upheaval in China (referring to the Tiananmen Square incident) which severely affected
the hotel’s operations.
In holding that the NLRC was a seriously inconvenient forum, the Supreme Court noted that the main aspects
of the case transpired in two foreign jurisdictions and the case involves purely foreign elements. The only link that the
Philippines has with the case is that the private respondent employee (Marcelo Santos) is a Filipino citizen. The Palace
Hotel and MHICL are foreign corporations. Consequently, not all cases involving Filipino citizens can be tried here.
Respondent employee was hired directly by the Beijing Palace Hotel, a foreign employer, through correspondence
sent to him while he was working at the Sultanate of Oman. He was hired without the intervention of the POEA or
any authorized recruitment agency of the government. Hence, the NLRC is an inconvenient forum given that all the
incidents of the case - from the time of recruitment, to employment to dismissal - occurred outside the Philippines.
The inconvenience is compounded by the fact that the proper defendants, the Palace Hotel and MHICL, are not
nationals of the Philippines. Neither are they “doing business in the Philippines.” Likewise, the main witnesses, Mr.
Shmidt (General Manager of the Palace Hotel) and Mr. Henk (Palace Hotel’s Manager) are non-residents of the
Philippines.
Neither can an intelligent decision be made as to the law governing the employment contract as such was
perfected in foreign soil. This calls to fore the application of the principle of lex loci contractus (the law of the place
where the contract was made). It must be noted that the employment contract was not perfected in the Philippines.
Private respondent employee signified his acceptance thereof by writing a letter while he was in the Sultanate of Oman.
This letter was sent to the Palace Hotel in the People’s Republic of China. Neither can the NLRC determine the facts
surrounding the alleged illegal dismissal as all acts complained of took place in Beijing, People’s Republic of China.
The NLRC was not in a position to determine whether the Tiananmen Square incident truly adversely affected the
operations of the Palace Hotel as to justify respondent employee’s retrenchment.
Even assuming that a proper decision could be reached by the NLRC, such would not have any binding effect
against the employer, the Palace Hotel, which is a corporation incorporated under the laws of China and was not even
served with summons. Jurisdiction over its person was not acquired. This is not to say that Philippine courts and
agencies have no power to solve controversies involving foreign employers. Neither could it be said that the Supreme
Court does not have power over an employment contract executed in a foreign country. If the respondent employee
were an “overseas contract worker”, a Philippine forum, specifically the POEA, not the NLRC, would protect him.
He is not an “overseas contract worker”, a fact which he admits with conviction.
XI-F.
CONSTITUTIONALITY OF LABOR CONTRACT STIPULATIONS
1. THE HALAGUEÑA DOCTRINE.
In Halagueńa v. Philippine Airlines, Inc., 121 it was pronounced that it is not the Labor Arbiter but the regular
court which has jurisdiction to rule on the constitutionality of labor contracts such as a CBA. Petitioners were female
flight attendants of respondent Philippine Airlines (PAL) and are members of the Flight Attendants and Stewards
Association of the Philippines (FASAP), the sole and exclusive bargaining representative of the flight attendants,
flight stewards and pursers of respondent. The July 11, 2001 CBA between PAL and FASAP provides that the
compulsory retirement for female flight attendants is fifty-five (55) and sixty (60) for their male counterpart.
Claiming that said CBA provision is discriminatory against them, petitioners filed against respondent a
Special Civil Action for Declaratory Relief with Prayer for the Issuance of Temporary Restraining Order and Writ of
Preliminary Injunction with the Regional Trial Court (RTC) of Makati City.
In ruling that the RTC has jurisdiction, the Supreme Court cited the following reasons:
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(1) The case is an ordinary civil action, hence, beyond the jurisdiction of labor tribunals.
(2) The said issue cannot be resolved solely by applying the Labor Code. Rather, it requires the application
of the Constitution, labor statutes, law on contracts and the Convention on the Elimination of All Forms
of Discrimination Against Women (CEDAW). The power to apply and interpret the constitution and
CEDAW is within the jurisdiction of trial courts, a court of general jurisdiction.
(3) Not every controversy or money claim by an employee against the employer or vice-versa is within the
exclusive jurisdiction of the Labor Arbiter. Actions between employees and employer where the
employer-employee relationship is merely incidental and the cause of action proceeds from a different
source of obligation are within the exclusive jurisdiction of the regular courts. Here, the
employeremployee relationship between the parties is merely incidental and the cause of action
ultimately arose from different sources of obligation, i.e., the Constitution and CEDAW.
2.
REQUIREMENTS TO PERFECT APPEAL TO NLRC
I.
APPEAL IN GENERAL
1. APPEAL, MEANING AND NATURE.
The term “appeal” refers to the elevation by an aggrieved party to an agency vested with appellate authority
of any decision, resolution or order disposing the principal issues of a case rendered by an agency vested with original
jurisdiction, undertaken by filing a memorandum of appeal.
2. SOME PRINCIPLES ON APPEAL.
• Appeals under Article 223 apply only to appeals from the Labor Arbiter’s decisions, awards or orders to the
Commission (NLRC).
• There is no appeal from the decisions, orders or awards of the NLRC. Clearly, therefore, Article 223 of the Labor
Code is not the proper basis for elevating the case to the Court of Appeals or to the Supreme Court. The proper
remedy from the decisions, awards or orders of the NLRC to the Court of Appeals is a Rule 65 petition for
certiorari and from the Court of Appeals to the Supreme Court, a Rule 45 petition for review on certiorari.
• Appeal from the NLRC to the DOLE Secretary and to the President had long been abolished.
• Appeal is not a constitutional right but a mere statutory privilege. Hence, parties who seek to avail of it must
comply with the statutes or rules allowing it.
• A motion for reconsideration is unavailing as a remedy against a decision of the Labor Arbiter. The Labor Arbiter
should treat the said motion as an appeal to the NLRC.
• A “Petition for Relief” should be treated as appeal.
• Affirmative relief is not available to a party who failed to appeal. A party who does not appeal from a decision
of a court cannot obtain affirmative relief other than the ones granted in the appealed decision.
3. GROUNDS FOR APPEAL TO THE COMMISSION (NLRC).
The appeal to the NLRC may be entertained only on any of the following grounds:
a. If there is a prima facie evidence of abuse of discretion on the part of the Labor Arbiter;
b. If the decision, order or award was secured through fraud or coercion, including graft and corruption; c.
If made purely on questions of law; and/or
d. If serious errors in the findings of fact are raised which, if not corrected, would cause grave or irreparable
damage or injury to the appellant.
• NLRC has certiorari power.
The first ground above regarding prima facie evidence of abuse of discretion on the part of the Labor Arbiter
is actually an exercise of certiorari power by the NLRC. The case of Triad Security & Allied Services, Inc.
v. Ortega,122 expressly recognized this certiorari power of the NLRC. Clearly, according to the 2012 case of Auza,
Jr.
v. MOL Philippines, Inc.,123 the NLRC is possessed of the power to rectify any abuse of discretion committed by the
Labor Arbiter.
II.
PERFECTION OF APPEAL
1. EFFECT OF PERFECTION OF APPEAL ON EXECUTION.
To reiterate, the perfection of an appeal shall stay the execution of the decision of the Labor Arbiter except
execution for reinstatement pending appeal.
2. PERFECTION OF APPEAL, MANDATORY AND JURISDICTIONAL.
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The perfection of appeal within the period and in the manner prescribed by law is jurisdictional and
noncompliance with the legal requirements is fatal and has the effect of rendering the judgment final and executory,
hence, unappealable.
3. REQUISITES.
The requisites for perfection of appeal to the NLRC are as follows:
(1) Observance of the reglementary period;
(2) Payment of appeal and legal research fee;
(3) Filing of a Memorandum of Appeal;
(4) Proof of service to the other party; and
(5) Posting of cash, property or surety bond, in case of monetary awards.
The foregoing are discussed below.
III.
REGLEMENTARY PERIOD
1. THREE (3) KINDS OF REGLEMENTARY PERIOD.
The reglementary period depends on where the appeal comes from, viz.:
1. Ten (10) calendar days – in the case of appeals from decisions of the Labor Arbiters under Article 223
of the Labor Code;
2. Five (5) calendar days – in the case of appeals from decisions of the Labor Arbiters in contempt cases;
and
3. Five (5) calendar days – in the case of appeals from decisions of the DOLE Regional Director under
Article 129 of the Labor Code.
Calendar days and not working days.
The shortened period of ten (10) days fixed by Article 223 contemplates calendar days and not working
days. The same holds true in the case of the 5-day reglementary period under Article 129 of the Labor Code.
Consequently, Saturdays, Sundays and legal holidays are included in reckoning and computing the reglementary
period.
2. EXCEPTIONS TO THE 10-CALENDAR DAY OR 5-CALENDAR DAY REGLEMENTARY PERIOD
RULE.
The following are the specific instances where the rules on the reckoning of the reglementary period have
not been strictly observed:
1. 10th day (or 5th day) falling on a Saturday, Sunday or holiday, in which case, the appeal may be filed in
the next working day.
2. When NLRC exercises its power to “correct, amend, or waive any error, defect or irregularity whether
in substance or form” in the exercise of its appellate jurisdiction, as provided under Article 218(c) of the
Labor Code, in which case, the late filing of the appeal is excused.
3. When technical rules are disregarded under Article 221.
4. When there are some compelling reasons that justify the allowance of the appeal despite its late filing
such as when it is granted in the interest of substantial justice.
3. SOME PRINCIPLES ON REGLEMENTARY PERIOD.
• The reglementary period is mandatory and not a “mere technicality.”
• The failure to appeal within the reglementary period renders the judgment appealed from final and executory
by operation of law. Consequently, the prevailing party is entitled, as a matter of right, to a writ of execution and
the issuance thereof becomes a ministerial duty which may be compelled through the remedy of mandamus.
• The date of receipt of decisions, resolutions or orders by the parties is of no moment. For purposes of appeal, the
reglementary period shall be counted from receipt of such decisions, resolutions, or orders by the counsel or
representative of record.
• Miscomputation of the reglementary period will not forestall the finality of the judgment. It is in the interest of
everyone that the date when judgments become final and executory should remain fixed and ascertainable.
• Date of mailing by registered mail of the appeal memorandum is the date of its filing.
• Motion for extension of time to perfect an appeal is not allowed. This kind of motion is a prohibited pleading.
• Motion for extension of time to file the memorandum of appeal is not allowed.
• Motion for extension of time to file appeal bond is not allowed.
IV.
APPEAL FEE AND LEGAL RESEARCH FEE
1. PAYMENT OF APPEAL FEE AND LEGAL RESEARCH FEE, MANDATORY AND JURISDICTIONAL.
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The payment by the appellant of the prevailing appeal fee and legal research fee is both mandatory and
jurisdictional. An appeal is perfected only when there is proof of payment of the appeal fee. It is by no means a mere
technicality. If not paid, the running of the reglementary period for perfecting an appeal will not be tolled.
V.
MEMORANDUM OF APPEAL
1. REQUISITES.
The requisites for a valid Memorandum of Appeal are as follows:
1. The Memorandum of Appeal should be verified by the appellant himself in accordance with the Rules of
Court, as amended;
2. It should be presented in three (3) legibly typewritten or printed copies;
3. It shall state the grounds relied upon and the arguments in support thereof, including the relief prayed for;
4. It shall contain a statement of the date the appellant received the appealed decision, award or order; and
5. It shall be accompanied by:
(i) proof of payment of the required appeal fee and legal research fee; (ii)
posting of a cash or surety bond (in case of monetary awards); and (iii)
proof of service upon the other party.
2. REQUIREMENTS NOT JURISDICTIONAL.
The aforesaid requirements that should be complied with in a Memorandum of Appeal are merely a rundown
of the contents of the required appeal memorandum to be submitted by the appellant. They are not jurisdictional
requirements.
3. SOME PRINCIPLES ON MEMORANDUM OF APPEAL.
• Mere notice of appeal without complying with the other requisites aforestated shall not stop the running
of the period for perfecting an appeal.
• Memorandum of appeal is not similar to motion for reconsideration.
• Lack of verification in a memorandum of appeal is not a fatal defect. It may easily be corrected by requiring
an oath.
• An appeal will be dismissed if signed only by an unauthorized representative.
• Only complainants who signed the memorandum of appeal are deemed to have appealed the Labor
Arbiter’s decision. The prevailing doctrine in labor cases is that a party who has not appealed cannot obtain from
the appellate court any affirmative relief other than those granted, if any, in the decision of the lower tribunal.
VI.
PROOF OF SERVICE TO ADVERSE PARTY
1. FAILURE TO SERVE COPY TO ADVERSE PARTY, NOT FATAL.
While it is required that in all cases, the appellant shall furnish a copy of the Memorandum of Appeal to the
other party (appellee), non-compliance therewith, however, will not be an obstacle to the perfection of the appeal; nor
will it amount to a jurisdictional defect on the NLRC’s taking cognizance thereof.
VII.
POSTING OF BOND
1. WHEN POSTING OF BOND REQUIRED.
Only in case the decision of the Labor Arbiter or the DOLE Regional Director (under Article 129 of the Labor
Code) involves a monetary award, that an appeal by the employer may be perfected only upon the posting of a bond,
which shall either be in the form of (1) cash deposit, (2) surety bond or (3) property bond, equivalent in amount to
the monetary award, but excluding the amount of damages (moral and exemplary) and attorney’s fees. In other
words, only monetary awards (such as unpaid wages, backwages, separation pay, 13th month pay, etc.) are
required to be covered by the bond. Moral and exemplary damages and attorney’s fees are excluded.
2. SOME PRINCIPLES ON POSTING OF BOND.
• Posting of bond is mandatory and jurisdictional.
• The cash or surety bond required for the perfection of appeal should be posted within the reglementary
period. If a party failed to perfect his appeal by the non-payment of the appeal bond within the 10-calendar day
period provided by law, the decision of the Labor Arbiter becomes final and executory upon the expiration of the
said period.
• In case the employer failed to post a bond to perfect its appeal, the remedy of the employee is to file a motion
to dismiss the appeal and not a petition for mandamus for the issuance of a writ of execution.
• Surety bond must be issued by a reputable bonding company duly accredited by the Commission (NLRC) or the
Supreme Court.
• The bond shall be valid and effective from the date of deposit or posting, until the case is finally decided, resolved
or terminated, or the award satisfied.
• Posting of a bank guarantee or bank certification is not sufficient compliance with the bond requirement.
It is not equivalent to nor can be considered compliance with the cash, surety or property bond.
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• Cooperatives are not exempted from posting bond.
• Government is exempt from posting of bond; government-owned and/or controlled corporations, however,
are not exempt therefrom.
• Bond is not required for the NLRC to entertain a motion for reconsideration. An appeal bond is required
only for the perfection of an appeal of a Labor Arbiter’s decision involving a monetary award.
• Bond is not required to file a Rule 65 petition for certiorari.
VII-A.
RULE ON REDUCTION OF APPEAL BOND
1. REQUISITES WHEN THE AMOUNT OF APPEAL BOND MAY BE REDUCED.
(1) The motion should be filed within the reglementary period;
(2) The motion to reduce bond should be based on meritorious grounds; and
(3) The motion should be accompanied by a partial bond, the amount of which should be reasonable in
relation to the monetary awards.
2. THE MCBURNIE DOCTRINE: NEW GUIDELINES FOR FILING AND ACCEPTANCE OF MOTIONS
TO REDUCE BOND.
The 2013 en banc decision rendered in the case of Andrew James Mcburnie v. Eulalio Ganzon, 124 has enunciated
the following guidelines that must be observed in the matter of the filing and acceptance of motions to reduce appeal
bond, as provided in Section 6, Rule VI of the 2011 NLRC Rules of Procedure:
(a) The filing of a motion to reduce appeal bond shall be entertained by the NLRC subject to the following
conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is posted;
(b) For purposes of compliance with condition no. (2) above, a motion shall be accompanied by the posting
of a provisional cash or surety bond equivalent to ten percent (10%) of the monetary award subject of
the appeal, exclusive of damages and attorney's fees;
(c) Compliance with the foregoing conditions shall suffice to suspend the running of the 10-day
reglementary period to perfect an appeal from the Labor Arbiter’s decision to the NLRC;
(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine the final
amount of bond that shall be posted by the appellant, still in accordance with the standards of meritorious
grounds and reasonable amount; and
(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that exceeds the amount
of the provisional bond, the appellant shall be given a fresh period of ten (10) days from notice of the
NLRC order within which to perfect the appeal by posting the required appeal bond.
This Mcburnie ruling has completely overhauled the rules on motion to reduce bond. Before its advent, the issue of
what amount to post by way of partial or provisional bond has continued to hound the party litigants and the courts.
Now, the fixing of “ten percent (10%) of the monetary award subject of the appeal, exclusive of damages and
attorney's fees” as the “reasonable amount” that should be posted has completely eradicated any and all controversies
thereon. In other words, no more motion for reduction of bond accompanied by said 10% requirement would be denied
outright on the ground of insufficiency or inadequacy of the partial or provisional bond.
What is left for the determination by the NLRC, using its sound judgment and discretion, are only the
issues of (1) the reasonable final amount of the bond; and (2) what constitute “meritorious grounds.” This
determination is important since “in all cases, the reduction of the appeal bond shall be justified by meritorious
grounds and accompanied by the posting of the required appeal bond in a reasonable amount.” 125
The rule set in McBurnie was clarified126 by the Court in the consolidated cases of Sara Lee Philippines v. Ermilinda
Macatlang.127 Thus, while McBurnie has effectively addressed the preliminary amount of the bond to be posted in
order to toll the running of the period to appeal, there is no hard and fast rule in determining whether the additional
124 G.R. Nos. 178034, 178117, 186984 and 186985, Oct. 17, 2013.
125 Andrew James Mcburnie v. Eulalio Ganzon, G.R. Nos. 178034, 178117, 186984 and 186985, Oct. 17, 2013.
126 The fact of clarification was pronounced in Balite v. SS Ventures International, Inc., G.R. No. 195109, Feb. 4, 2015.
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bond to be posted is reasonable in relation to the judgment award. In this case of Sara Lee, petitioner companies128
were held liable by the Labor Arbiter for the illegal dismissal of 5,984 employees with accompanying award of
separation pay and other monetary benefits amounting to P3,453,664,710.86. Petitioner companies filed their Notice
of Appeal with Motion to Reduce Appeal Bond and To Admit Reduced Amount with the NLRC. They asked the
NLRC to reduce the appeal bond to P1 Million each on the grounds that it is impossible for any insurance company
to cover such huge amount and that, in requiring them to post in full the appeal bond, it would be tantamount to
denying them their right to appeal.
In light of the impossibility for any surety company to cover the appeal bond and the huge economic losses
which the companies and their employees might suffer if the P3.45 Billion bond is sustained, the NLRC granted the
reduction of the appeal bond. The NLRC issued an Order dated 31 March 2006 directing petitioner corporations to
post an additional P4.5 Million bond, bringing the total posted bond to P9 Million. The Court of Appeals, however,
reversed and set aside the said 31 March 2006 NLRC Resolution and deemed it reasonable under the circumstances
of the case to order the posting of an additional appeal bond of P1 Billion.
Considering the peculiar circumstances in Sara Lee, the Court has to determine what is the reasonable amount of
appeal bond. The fact was underscored that the amount of 10% of the award is not a permissible bond but is only
such amount that shall be deemed reasonable in the meantime that the appellant’s motion is pending resolution by the
NLRC. The actual reasonable amount yet to be determined is necessarily a bigger amount. In an effort to strike a
balance between the constitutional obligation of the state to afford protection to labor, on the one hand, and the
opportunity afforded to the employer to appeal, on the other, it considered the appeal bond in the amount of P725M
which is equivalent to 25% of the monetary award sufficient to perfect the appeal, viz.:
“We sustain the Court of Appeals in so far as it increases the amount of the required appeal bond.
But we deem it reasonable to reduce the amount of the appeal bond to P725 Million. This directive
already considers that the award if not illegal, is extraordinarily huge and that no insurance company
would be willing to issue a bond for such big money. The amount of P725 Million is approximately
25% of the basis above calculated. It is a balancing of the constitutional obligation of the state to
afford protection to labor which, specific to this case, is assurance that in case of affirmance of the
award, recovery is not negated; and on the other end of the spectrum, the opportunity of the
employer to appeal.
“By reducing the amount of the appeal bond in this case, the employees would still be assured of at
least substantial compensation, in case a judgment award is affirmed. On the other hand,
management will not be effectively denied of its statutory privilege of appeal.”
In line with Sara Lee and the objective that the appeal on the merits to be threshed out soonest by the NLRC, the
Court, in the 2015 case of Balite v. SS Ventures International, Inc.,129 held that the appeal bond of P100,000.00
posted by the respondent company for the total monetary award of P490,308.00, which is equivalent to around 20%
thereof, is sufficient to perfect the appeal. With the employer's demonstrated good faith in filing the motion to reduce
the bond on demonstrable grounds coupled with the posting of the appeal bond in the requested amount, as well as the
filing of the memorandum of appeal, the right of the employer to appeal must be upheld. This is in recognition of the
importance of the remedy of appeal, which is an essential part of our judicial system and the need to ensure that every
party litigant is given the amplest opportunity for the proper and just disposition of his cause freed from the constraints
of technicalities.
3.
REINSTATEMENT PENDING APPEAL
1. PIONEER TEXTURIZING DOCTRINE: REINSTATEMENT ASPECT OF LABOR ARBITER’S
DECISION, IMMEDIATELY EXECUTORY EVEN PENDING APPEAL; NO WRIT OF EXECUTION
REQUIRED.
According to the Pioneer Texturizing doctrine, an order of reinstatement issued by the Labor Arbiter under
Article 229 [223] of the Labor Code is self-executory or immediately executory even pending appeal. This means that
the perfection of an appeal shall stay the execution of the decision of the Labor Arbiter except execution of the
reinstatement pending appeal.
2. REINSTATEMENT PENDING APPEAL, APPLICABLE ONLY TO THE REINSTATEMENT ORDER
ISSUED BY THE LABOR ARBITER; WRIT OF EXECUTION REQUIRED WHEN REINSTATEMENT
IS ORDERED BY NLRC ON APPEAL, OR SUBSEQUENTLY BY THE COURT OF APPEALS OR
SUPREME COURT, AS THE CASE MAY BE.
By way of distinction, the rule on reinstatement pending appeal applies only to the order of reinstatement
issued by the Labor Arbiter and to no other. This means that if the reinstatement order is issued by the NLRC on
appeal, or by the Court of Appeals or by the Supreme Court, there is a need to secure a writ of execution from the
Labor Arbiter of origin to enforce the reinstatement of the employee whose dismissal is declared illegal.
3. TWO (2) OPTIONS OF EMPLOYER.
To implement the reinstatement aspect of a Labor Arbiter’s decision, there are only two (2) options available
to the employer, to wit:
128 This case is a consolidation of 6 cases involving several corporations, namely: Sara Lee Philippines, Inc. (SLPI), Aris Philippines,
Inc. (Aris), Sara Lee Corporation (SLC) and Fashion Accessories Philippines, Inc. (FAPI).
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1. Actual reinstatement. - The employee should be reinstated to his position which he occupies prior to his
illegal dismissal under the same terms and conditions prevailing prior to his dismissal or separation or, if
no longer available, to a substantially-equivalent position; or
2. Payroll reinstatement. – The employee should be reinstated in the payroll of the company without
requiring him to report back to his work.
4. DUTY OF EMPLOYER TO NOTIFY EMPLOYEE ORDERED REINSTATED.
It is required that in case the decision of the Labor Arbiter includes an order of reinstatement, it should
contain:
(a) A statement that the reinstatement aspect is immediately executory; and
(b) A directive for the employer to submit a report of compliance within ten (10) calendar days from receipt
of the said decision.
Disobedience of this directive clearly denotes a refusal to reinstate. The employee need not file a motion for
the issuance of the writ of execution since the Labor Arbiter is mandated thereafter to motu proprio issue the writ.
With the new rules in place, there is hardly any difficulty in determining the employer’s intransigence in immediately
complying with the order.
5. INSTANCES WHEN WRIT OF EXECUTION OF LABOR ARBITER’S REINSTATEMENT ORDER
STILL REQUIRED.
Under the 2011 NLRC Rules of Procedure, there are two (2) instances when a writ of execution should still
be issued immediately by the Labor Arbiter to implement his order of reinstatement, even pending appeal, viz.:
(1) When the employer disobeys the prescribed directive to submit a report of compliance within ten (10)
calendar days from receipt of the decision; or
(2) When the employer refuses to reinstate the dismissed employee.
The Labor Arbiter shall motu proprio issue a corresponding writ to satisfy the reinstatement wages as they
accrue until actual reinstatement or reversal of the order of reinstatement.
6. SOME PRINCIPLES ON REINSTATEMENT PENDING APPEAL.
• Employer has no way of staying execution of immediate reinstatement. He cannot post bond to prevent its
execution.
• Reinstatement pending appeal applies to all kinds of illegal dismissal cases, regardless of the grounds
thereof.
• Reinstatement pending appeal does not apply when the dismissal is legal but reinstatement is ordered for
some reasons like equity and compassionate justice.
• The failure of employee ordered reinstated pending appeal to report back to work as directed by the employer
does not give the employer the right to remove him, especially when there is a reasonable explanation for his
failure.
• When former position is already filled up, the employee ordered reinstated pending appeal should be reinstated
to a substantially equivalent position.
• Reinstatement to a position lower in rank is not proper.
• In case of two successive dismissals, the order of reinstatement pending appeal under Article 223 issued in the
first case shall apply only to the first case and should not affect the second dismissal. According to Sevilla v.
NLRC, the Labor Arbiter was correct in denying the third motion for reinstatement filed by the petitioner
because what she should have filed was a new complaint based on the second dismissal. The second dismissal
gave rise to a new cause of action. Inasmuch as no new complaint was filed, the Labor Arbiter could not have
ruled on the legality of the second dismissal.
• Reinstatement pending appeal is not affected by the reinstated employee’s employment elsewhere.
• Effect of grant of achievement award during reinstatement pending appeal.
In the 2014 case of Garza v. Coca-Cola Bottlers Philippines, Inc., 130 it was pronounced that the act of
respondent CCBPI in giving an award of a Certificate of Achievement to petitioner for his exemplary sales
performance during his reinstatement ordered by the Labor Arbiter, while respondent’s appeal with the NLRC
was still pending, constitutes recognition of petitioner’s abilities and accomplishments. It indicates that he is a
responsible, trustworthy and hardworking employee of CCBPI. It constitutes adequate proof weighing in his
favor.
B.
NATIONAL LABOR RELATIONS COMMISSION (NLRC)
1. NATURE.
The NLRC is an administrative quasi-judicial body. It is an agency attached to the DOLE solely for
program and policy coordination only. It is in charge of deciding labor cases through compulsory arbitration.
2. COMPOSITION OF THE NLRC.
The NLRC is composed of a Chairman and twenty-three (23) members called “Commissioners.”
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The NLRC has tripartite composition. Eight (8) members thereof should be chosen only from among the
nominees of the workers sector and another eight (8) from the employers sector. The Chairman and the seven (7)
remaining members shall come from the public sector, with the latter to be chosen preferably from among the
incumbent Labor Arbiters.
3. COMMISSION EN BANC.
The Commission sits en banc only for the following purposes:
(1) To promulgate rules and regulations governing the hearing and disposition of cases before any of its
divisions and regional branches; and
(2) To formulate policies affecting its administration and operations.
The NLRC does not sit en banc to hear and decide cases. The banc has no adjudicatory power. The
Commission exercises its adjudicatory and all other powers, functions, and duties through its eight (8) Divisions.
4. NLRC’S EIGHT (8) DIVISIONS.
The NLRC is divided into eight (8) divisions, each one is comprised of three (3) members. Each Division
shall consist of one (1) member from the public sector who shall act as its Presiding Commissioner and one (1) member
each from the workers and employers sectors, respectively.
The various Divisions of the Commission have exclusive appellate jurisdiction over cases within their
respective territorial jurisdictions.
1.
JURISDICTION
1. TWO (2) KINDS OF JURISDICTION.
The NLRC exercises two (2) kinds of jurisdiction:
1. Exclusive original jurisdiction; and 2.
Exclusive appellate jurisdiction.
2. EXCLUSIVE ORIGINAL JURISDICTION.
The NLRC exercises exclusive and original jurisdiction over the following cases:
a. Petition for injunction in ordinary labor disputes to enjoin or restrain any actual or threatened
commission of any or all prohibited or unlawful acts or to require the performance of a particular act in
any labor dispute which, if not restrained or performed forthwith, may cause grave or irreparable damage
to any party.
b. Petition for injunction in strikes or lockouts under Article 264 of the Labor Code.
c. Certified cases which refer to labor disputes causing or likely to cause a strike or lockout in an industry
indispensable to the national interest, certified to it by the Secretary of Labor and Employment for
compulsory arbitration by virtue of Article 263(g) of the Labor Code.
d. Petition to annul or modify the order or resolution (including those issued during execution proceedings)
of the Labor Arbiter.
3. EXCLUSIVE APPELLATE JURISDICTION.
The NLRC exercises exclusive appellate jurisdiction over the following: a.
All cases decided by the Labor Arbiters.
b. Cases decided by the DOLE Regional Directors or hearing officers involving small money claims under
Article 129 of the Labor Code.
c. Contempt cases decided by the Labor Arbiters.
2.
EFFECT OF NLRC REVERSAL OF
LABOR ARBITER’S ORDER OF REINSTATEMENT
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Marilou S. Genuino v. NLRC, Citibank, N.A., Dec. 4, 2007.
• The Refund Doctrine in Genuino no longer applies, per Garcia Doctrine (See below).
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employer. For in the event of a reversal of the Labor Arbiter’s decision ordering reinstatement, the
employer gets back the same amount without having to spend ordinarily for bond premiums. This
circumvents, if not directly contradicts, the proscription that the “posting of a bond [even a cash bond]
by the employer shall not stay the execution for reinstatement.”
(2) Re: modification of the Roquero doctrine. – The Roquero doctrine was reaffirmed but
with the modification that “[a]fter the Labor Arbiter’s decision is reversed by a higher tribunal, the
employee may be barred from collecting the accrued wages, if it is shown that the delay in enforcing
the reinstatement pending appeal was without fault on the part of the employer.”
b. Two-fold test under the Garcia doctrine.
Under Garcia, the test to determine the liability of the employer (who did not reinstate the employee pending
appeal) to pay the wages of the dismissed employee covering the period from the time he was ordered reinstated by
the Labor Arbiter to the reversal of the Labor Arbiter’s decision either by the NLRC, the Court of Appeals or the High
Court, is two-fold, to wit:
(1) There must be actual delay or the fact that the order of reinstatement pending
appeal was not executed prior to its reversal; and
(2) The delay must not be due to the employer’s unjustified act or omission. If
the delay is due to the employer’s unjustified refusal, the employer may still
be required to pay the salaries notwithstanding the reversal of the Labor
Arbiter’s decision.
In Garcia, there was actual delay in reinstating petitioners but respondent PAL was justified in not complying
with the reinstatement order of the Labor Arbiter because during the pendency of the illegal dismissal case, the SEC
placed respondent PAL under an Interim Rehabilitation Receiver who, after the Labor Arbiter rendered his decision,
was replaced with a Permanent Rehabilitation Receiver. It is settled that upon appointment by the SEC of a
rehabilitation receiver, all actions for claims before any court, tribunal or board against the corporation shall ipso jure
be suspended. Resultantly, respondent PAL’s “failure to exercise the alternative options of actual reinstatement and
payroll reinstatement was thus justified. Such being the case, respondent’s obligation to pay the salaries pending
appeal, as the normal effect of the non-exercise of the options, did not attach.”
c. Cases decided after the promulgation of the Garcia doctrine.
Subsequent to Garcia, some of the cases decided in accordance with this doctrine are as follows:
(1) College of the Immaculate Conception v. NLRC (2010);
(2) Islriz Trading v. Capada (2011);
(3) Pfizer, Inc. v. Velasco (2011); and
(4) C. Alcantara & Sons, Inc. v. CA (2012).
2. RECKONING OF THE PERIOD COVERED BY ACCRUED REINSTATEMENT WAGES.
To clarify, employees ordered reinstated by the Labor Arbiter are entitled to accrued reinstatement wages
only from the time the employer received a copy of the Labor Arbiter’s decision declaring the employees’
termination illegal and ordering their reinstatement up to the date of the decision of the appellate tribunal
overturning that of the Labor Arbiter. It is not accurate therefore to state that such entitlement commences “from
the moment the reinstatement order was issued up to the date when the same was reversed by a higher court without
fear of refunding what he had received.”
4. SOME PRINCIPLES ON REINSTATEMENT WAGES.
• Employer is not liable to pay any reinstatement backwages if reinstatement is ordered not by the Labor Arbiter
but by the NLRC on appeal and it was not executed by writ and its finding of illegal dismissal is later reversed by
the Court of Appeals and/or Supreme Court.
• Payroll-reinstated employee is entitled not only to reinstatement wages but also to other benefits during the
period of payroll reinstatement until the illegal dismissal case is reversed by a higher tribunal.
• Award of additional backwages and other benefits from the time the Labor Arbiter ordered reinstatement until
actual or payroll reinstatement is proper and valid.
C.
COURT OF APPEALS
1.
RULE 65, RULES OF COURT
1. RULE 65 PETITION FOR CERTIORARI, THE ONLY MODE OF ELEVATING A LABOR CASE TO
THE COURT OF APPEALS.
The only mode by which a labor case decided by any of the following labor authorities/tribunals may reach
the Court of Appeals is through a Rule 65 petition for certiorari.
(a) the DOLE Secretary;
(b) the Commission (NLRC); and
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(c) the Director of the Bureau of Labor Relations (BLR) in cases decided by him in his appellate jurisdiction
(as distinguished from those he decides in his original jurisdiction which are appealable to the DOLE
Secretary).
The remedy of ordinary appeal to the Court of Appeals is not available from their decisions, orders or
awards. The reason for this rule is that their decisions, orders or awards are final and executory and therefore
inappealable.
2. THE ONLY EXCEPTION.
The only exception to the foregoing rule is in the case of decisions, orders or awards issued by the Voluntary
Arbitrator or panel of Voluntary Arbitrators which may be elevated to the Court of Appeals by way of an ordinary
appeal under a Rule 43 petition for review.
3. FILING OF MOTION FOR RECONSIDERATION OF THE DECISION OF THE DOLE SECRETARY,
THE COMMISSION (NLRC) OR THE BLR DIRECTOR, A PRE-REQUISITE TO FILING OF RULE
65 PETITION FOR CERTIORARI.
The rule on the filing of a Motion for Reconsideration of the decision of the DOLE Secretary, the NLRC and
the BLR Director is mandatory and jurisdictional. Failure to comply therewith would result in the dismissal of the
Rule 65 certiorari petition. Jurisprudence abounds enunciating the rule that a motion for reconsideration is a
prerequisite for the filing of a special civil action for certiorari.
The reason for this rule is that in labor cases, a motion for reconsideration is the plain and adequate
remedy from an adverse decision of the DOLE Secretary, the NLRC and the BLR Director.
• THE PHILTRANCO DOCTRINE: a motion for reconsideration should be filed even though it is not
required or even prohibited by the concerned government office. This was the rule enunciated in the 2014
case of Philtranco Service Enterprises, Inc. v. Philtranco Workers Union-Association of Genuine Labor
Organizations (PWU-AGLO).131 Thus, while a government office may prohibit altogether the filing of a
motion for reconsideration with respect to its decisions or orders, the fact remains that certiorari inherently
requires the filing of a motion for reconsideration which is the tangible representation of the opportunity
given to the office to correct itself. Unless it is filed, there could be no occasion to rectify. Worse, the remedy
of certiorari would be unavailing. Simply put, regardless of the proscription against the filing of a motion
for reconsideration, the same may be filed on the assumption that rectification of the decision or order must
be obtained and before a petition for certiorari may be instituted.
4. CERTIORARI PETITION MAY BE FILED EVEN IF THE DECISION OF THE DOLE SECRETARY,
THE COMMISSION (NLRC), OR THE BLR DIRECTOR HAS ALREADY BECOME FINAL AND
EXECUTORY.
This rule applies to the decisions rendered by the DOLE Secretary, the NLRC or the BLR Director (in cases
which he decided in his appellate jurisdiction).
If the CA grants the petition and nullifies their decisions on the ground of grave abuse of discretion amounting
to excess or lack of jurisdiction, such decisions are, in contemplation of law, null and void ab initio; hence, they never
became final and executory.
2.
JUDICIAL REVIEW OF DECISIONS
OF VOLUNTARY ARBITRATORS
131 G.R. No. 180962, Feb. 26, 2014. Although this case involves a decision of the DOLE Secretary, the principle enunciated herein equally
applies to the NLRC.
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3. PERIOD OF APPEAL – 15 DAYS.
Rule 43 of the Rules of Court requires that the petition for review to be taken to the Court of Appeals should
be filed within fifteen (15) days from notice of the award, judgment or final order or resolution of the Voluntary
Arbitrator.
D.
SUPREME COURT
1.
RULE 45, RULES OF COURT
1. RULE 45 PETITION FOR REVIEW ON CERTIORARI, THE ONLY MODE BY WHICH A LABOR CASE
MAY REACH THE SUPREME COURT.
Since the Court of Appeals has jurisdiction over the petition for certiorari under Rule 65 that may be filed
before it from the decisions of the NLRC or the DOLE Secretary or the BLR Director (in cases decided by him in his
appellate jurisdiction), any alleged errors committed by it in the exercise of its jurisdiction would be errors of judgment
which are reviewable by means of a timely appeal to the Supreme Court and not by a special civil action of certiorari.
If the aggrieved party fails to do so within the reglementary period and the decision accordingly becomes
final and executory, he cannot avail himself of the writ of certiorari, his predicament being the effect of his deliberate
inaction. A petition for certiorari under Rule 65 cannot be a substitute for a lost appeal under Rule 45; hence, it
should be dismissed.
2. THE NEYPES DOCTRINE (FRESH PERIOD RULE) - FRESH PERIOD FROM DENIAL OF MOTION
FOR RECONSIDERATION.
In the 2013 case of Elizabeth Gagui v. Dejero, 134 petitioner successively filed two Motions for
Reconsideration of the CA’s decision but both were denied. Petitioner elevated the case to the Supreme Court under
Rule 45. In their comment, respondents alleged that the instant petition had been filed 15 days after the prescriptive
period of appeal under Section 2, Rule 45 of the Rules of Court. In her reply, petitioner countered that she has a fresh
period of 15 days from the date she received the Resolution of the CA to file the instant Rule 45 petition. In affirming
the contention of petitioner, the Supreme Court cited the en banc ruling in the case of Neypes v. CA 135 which
standardized the appeal periods, thus:
“To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appeal their
cases, the Court deems it practical to allow a fresh period of 15 days within which to file the notice of appeal in the
Regional Trial Court, counted from receipt of the order dismissing a motion for a new trial or motion for
reconsideration.
“Henceforth, this ‘fresh period rule’ shall also apply to Rule 40 governing appeals from the Municipal Trial
Courts to the Regional Trial Courts; Rule 42 on petitions for review from the Regional Trial Courts to the Court of
Appeals; Rule 43 on appeals from quasi-judicial agencies to the Court of Appeals and Rule 45 governing
appeals by certiorari to the Supreme Court. The new rule aims to regiment or make the appeal period uniform,
to be counted from receipt of the order denying the motion for new trial, motion for reconsideration (whether full or
partial) or any final order or resolution.”
Consequently, since petitioner in Gagui received the CA Resolution denying her two Motions for
Reconsideration only on 16 March 2011, she had another 15 days within which to file her Petition, or until 31 March
2011. This Petition, filed on 30 March 2011, fell within the prescribed 15-day period.
E.
BUREAU OF LABOR RELATIONS (BLR)
1.
JURISDICTION
2. MED-ARBITER.
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The term “Med-Arbiter” refers to an officer in the DOLE Regional Office or in the BLR authorized to hear
and decide representation cases, inter-union or intra-union disputes and other related labor relations disputes.136
While the Labor Code refers to this official as “Med-Arbiter,”137 it should, however, be construed to mean
“Mediator-Arbiter.”138 Most recent DOLE issuances 139 have specifically changed such reference to “Mediator-
Arbiter” in their provisions. This is but proper since the word “Med”140 obviously is an abbreviation of the word
“Mediator.”
3. DOLE REGIONAL DIRECTOR.
The Regional Directors are the duly authorized representatives of the DOLE Secretary in the DOLE regional
offices. They are in charge of the administration and enforcement of labor standards within their respective territorial
jurisdictions.141 Although, like the Med-Arbiters, they are not also specifically mentioned in said article, it is a known
procedural rule, however, that in addition to their jurisdiction over cases falling under Articles 128 142 and 129143 of
the Labor Code, they also have jurisdiction over certain specified cases contemplated under Article 232 [226] of the
same Code such as disputes concerning union registration and cancellation of union registration as well as CBA
registration or deregistration cases.
4. BLR DIRECTOR.
The BLR is headed by a Director who hears and decides certain specified cases over which he has either
original or appellate jurisdiction. In many cases, his name, instead of the BLR, is usually the one impleaded as public
respondent in certiorari petitions to the CA or subsequent appeals to the Supreme Court. Thus, one would encounter
countless cases filed against such luminaries like Pura-Ferrer Calleja, Cresenciano B. Trajano, Benedicto Ernesto R.
Bitonio Jr., and Hans Leo J. Cacdac, among others, who are sued in their capacity as BLR Directors.
III.
CASES COGNIZABLE
The following are the general classifications of the cases falling under the jurisdiction of the said officials, to wit:
(a) Inter-union disputes;
(b) Intra-union disputes;144 and
(c) Other related labor relations disputes. 145
III-A.
INTER-UNION AND INTRA-UNION DISPUTES
1. INTER-UNION OR REPRESENTATION DISPUTE.
136 Section 1 [ii], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17,
2003]. Excepted from the Med-Arbiter’s jurisdiction are cases over which the Regional Director exercises original and exclusive jurisdiction
such as application for union registration, petitions for cancellation of union registration and complaints for examination of unions books of
accounts.” This is per Section 3, Rule II [Med-Arbitration], Rules of Procedure on Mediation-Arbitration, which provides: “SEC. 3. Jurisdiction
of the Regional Director.- The Regional Director shall exercise original and exclusive jurisdiction over application for union registration,
petitions for cancellation of union registration and complaints for examination of unions books of accounts.” See also Barles v. Bitonio, G.R.
No. 120220, June 16, 1999.
137 The term “Med-Arbiter” is used and cited in the following articles of the Labor Code: Articles 230 [224] (Execution of decisions, orders or
awards), 268 [256] (Representation issue in organized establishments), 269 [257] (Petitions in unorganized establishments), 272 [259]
(Appeal from certification election orders), and 292 [277] (Miscellaneous provisions), paragraph (i) thereof. Surprisingly, Med-Arbiter is not
referred to at all in Article 232 [226].
138 Nowhere, however, in the Labor Code is the term “Mediator-Arbiter” used or cited.
139 Such as Department Order No. 40-F-03, Series of 2008, issued on October 30, 2008. This Department Order was issued by the DOLE
Secretary to implement the changes in the Labor Code brought about by the amendments introduced thereto by R.A. No. 9481 [Effective
June 14, 2007]. Another issuance is Department Order No. 40-I-15, Series of 2015 [September 07, 2015], entitled “Further Amending
Department Order No. 40, Series of 2003, Amending the Implementing Rules and Regulations of Book V of the Labor Code of the
Philippines, as Amended.”
140 Although without a period that would signify that it is an abridgement of a word.
142 Visitorial and enforcement powers of the DOLE Secretary and his duly authorized representatives, the DOLE Regional Directors.
143 See Article 129, Labor Code, involving monetary claims of ₱5,000 or less.
144 Diokno v. Hon. Cacdac, G.R. No. 168475, July 4, 2007; Bautista v. CA, G.R. 123375, Feb. 28, 2005, 452 SCRA 406, 420.
145 Section 1[B] (formerly Section 2), Rule XI, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-F-03,
Series of 2008 [Oct. 30, 2008]; Article 232 [226], Labor Code; Policy Instructions No. 6; Villaor v. Trajano, G.R. No. 69188, Sept. 23, 1986;
M. Y. San Biscuits, Inc. v. Laguesma, G.R. No. 95011, April 22, 1991.
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An “inter-union dispute” or “representation dispute” is one occurring or carried on between or among unions. 146 It
refers to a case involving a petition for certification election filed by a duly registered labor organization which is
seeking to be recognized as the sole and exclusive bargaining agent (SEBA) of the rank-and-file employees or
supervisory employees, as the case may be, in the appropriate bargaining unit of a company, firm or establishment.147
If there are two or more legitimate unions involved, it also refers to any conflict between and among them concerning
the issue of which of them should be certified as the SEBA for purposes of collective bargaining with the employer.
Broadly, it covers any other conflict or dispute between legitimate labor unions. 148
Note must be made of the latest innovative amendment of the Labor Code’s Implementing Rules introduced
by Department Order No. 40-I-15, Series of 2015, 149 which has expressly repealed the entire provision 150 on
“Voluntary Recognition” of the Implementing Rules on Book V and replaced it with the freshly-minted mode of
securing the status of a sole and exclusive bargaining agent through a “Request for SEBA Certification” or “Request.”
Voluntary recognition is therefore no longer allowed and is effectively replaced by the Request mode.
The Request basically is in the nature of an inter-union or representation dispute. While it may not involve
the actual conduct of a certification election when it is made in an unorganized establishment with only one (1)
legitimate union, since it would merely require a simple validation process by the DOLE Regional Director of
confirming the majority support of the members of the bargaining unit for the requesting union and once validated,
the requesting union is immediately certified as the SEBA without conducting a certification election, however,
certification election will have to be conducted under any of the following situations:
(1) When the Request is made in an unorganized establishment with only one (1) legitimate union,
and the requesting union or local fails to complete the requirements for SEBA certification during the validation
conference before the DOLE Regional Director, such Request should be referred to the Election Officer for the conduct
of certification election, 151 in which case, such certification election should now be under the jurisdiction of the
Mediator-Arbiter.
(2) When the Request is made in an unorganized establishment with more than one (1) legitimate
labor organization, in which case, the DOLE Regional Director, before whom Requests are required to be filed,
should refer the Request directly to the Election Officer for the conduct of a certification election 152 in accordance
with the Rules;153 and
(3) When the Request is made in an organized establishment, in which case, the Regional Director
should refer the same to the Mediator-Arbiter for the determination of the propriety of conducting a certification
election.154
It is clear from the foregoing discussion that there is a jurisdictional interplay between the DOLE Regional
Director and the Med-Arbiter, a subject which will be discussed further in the sections below dwelling on the
jurisdiction of these labor authorities.
2. INTRA-UNION OR INTERNAL UNION DISPUTE.
An “intra-union dispute” or “internal union dispute” refers to a conflict within or inside a labor union. 155 It
may refer to any conflict between and among officers and/or members of one particular union, including grievances
arising from any violation of the rights and conditions of membership, violation of or disagreement over any provision
NCMB Primer on Strike, Picketing and Lockout, 2nd Edition, December 1995; Diokno v. Hon. Cacdac, Ibid.; Bautista v. CA, Ibid.
148 Section 1 [x], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb.
17, 2003].
150 Particularly its Rule VII [Voluntary Recognition], Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-
03, Series of 2003, [Feb. 17, 2003]. This provision has been repealed and replaced by a new provision entitled, "REQUEST FOR SOLE
AND EXCLUSIVE BARGAINING AGENT (SEBA) CERTIFICATION", pursuant to the amendment introduced by Section 3, Department
Order No. 40-I-15, Series of 2015 [September 07, 2015], entitled “Further Amending Department Order No. 40, Series of 2003, Amending
the Implementing Rules and Regulations of Book V of the Labor Code of the Philippines, as Amended.”
151 Section 4, Rule VII of the Rules to Implement the Labor Code, as amended by Department Order No. 40-I-15, Series of 2015 [September
07, 2015]. The election should be conducted in accordance with Rule IX thereof.
153 Referring to Rule IX of the Labor Code’s Implementing Rules, as amended by Department Order No. 40-I-15, Series of 2015 [September
07, 2015].
154 Section 6, Rule VII, Ibid. in accordance with Rules VIII and IX, Ibid.
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of the union’s constitution and by-laws,156 issues over control, supervision and management of its internal affairs, 157
or disputes arising from chartering or affiliation of a union.158
3. RUNDOWN OF INTER-UNION AND INTRA-UNION CASES.
In accordance with the Labor Code’s Implementing Rules, as amended in 2015,159 the following is a rundown
of all
possible inter-union/intra-union disputes:
a) Cancellation of registration of a labor organization filed by its members or by another labor organization;
b) Conduct of election of union and workers’ association officers or nullification of election of union and
workers' association officers;
c) Audit/accounts examination of union or workers' association funds;
d) Deregistration of collective bargaining agreements;
e) Validity/invalidity of union affiliation or disaffiliation;
f) Validity/invalidity of acceptance/non-acceptance for union membership;
g) Validity/invalidity of impeachment/expulsion of union and workers' association officers and members;
h) Validity/invalidity of Request for SEBA Certification160 (Replacing “Voluntary Recognition” as a mode of
securing sole and exclusive bargaining agent status);
i) Opposition to application for union and CBA registration;
j) Violations of or disagreements over any provision in a union or workers' association constitution and by-
laws;
k) Disagreements over chartering or registration of labor organizations and collective bargaining
agreements;
I) Violations of the rights and conditions of union or workers' association membership;
m) Violations of the rights of legitimate labor organizations, except interpretation of collective bargaining
agreements;161 and
n) Such other disputes or conflicts involving the rights to self-organization, union membership and collective
bargaining -
1) Between and among legitimate labor organizations; or
2) Between and among members of a union or workers’ association.
III-B.
OTHER RELATED LABOR RELATIONS DISPUTES
1. MEANING OF “OTHER RELATED LABOR RELATIONS DISPUTES.”
“Other related labor relations dispute” refers to any conflict between a labor union and the employer or any
individual, entity or group that is not a labor union or workers’ association.162
More specifically, it may refer to any of the following:
(a) Any conflict between:
(1) a labor union and an employer, or
(2) a labor union and a group that is not a labor organization; or
(3) a labor union and an individual who is not a member of such union;
(b) Cancellation of registration of unions and workers’ associations filed by individuals other than its
members, or group that is not a labor organization; and
156 Section 1 [bb], Rule I, Book V, Ibid.; Diokno v. Hon. Cacdac, supra; Bautista v. CA, supra.
157 Section 1 [8], Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases; Appendix 2 [Definition of Terms],
NCMB Primer on Strike, Picketing and Lockout, 2nd Edition, December 1995.
158
Section 1 [bb], Rule I, Book V, Ibid.; Diokno v. Hon. Cacdac, supra; Bautista v. CA, supra.
159 See Section 1, Rule XI, Book V of the Rules to Implement the Labor Code, as previously amended by Department Order No. 40-F-03,
Series of 2008 [October 30, 2008] which designated this section as “Section 1(A)”, and as further amended by Section 18, Department Order
No. 40-I-15, Series of 2015 [September 07, 2015], entitled “Further Amending Department Order No. 40, Series of 2003, Amending the
Implementing Rules and Regulations of Book V of the Labor Code of the Philippines, as Amended.”
160 This is in the nature of an inter-union dispute which may be occasioned by the introduction of a new mode of securing the status of sole
and exclusive bargaining agent (SEBA). The
Labor Code’s Implementing Rules, particularly its RULE VII on “Voluntary Recognition” was actually repealed and replaced by a completely
new provision entitled “REQUEST FOR SOLE AND EXCLUSIVE BARGAINING AGENT (SEBA) CERTIFICATION” This was introduced by
the amendatory provision of Section 3, Department Order No. 40-I-15, Series of 2015 [September 07, 2015], Ibid.
161 Disputes over the interpretation or implementation of the CBA are considered as grievable issues cognizable by and should be processed
through the grievance machinery and voluntary arbitration provided in the CBA itself. (See Articles 273 [260] and 274 [261], Labor Code).
162 Section 1 [rr], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb.
17, 2003].
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(c) A petition for interpleader involving labor relations.163
IV.
ORIGINAL AND EXCLUSIVE JURISDICTION
OF MED-ARBITERS, DOLE DIRECTORS AND BLR DIRECTOR
Having known the various cases afore-described, a discussion of the respective jurisdictions of the Med-
Arbiters, DOLE Directors and BLR Director over these cases may now be made with greater clarity.
1. ORIGINAL AND EXCLUSIVE JURISDICTION OF THE MED-ARBITERS.
The cases falling under the original and exclusive jurisdiction of the Med-Arbiters are as follows:
(1) Inter-union disputes (representation or certification election conflicts), such as:
(a) Request for SEBA certification when made in an unorganized establishment with only one1 or
more than one (1) legitimate union2 or in an organized establishment;164 or
(b) Petition for certification election, consent election, run-off election or re-run election;
(2) Intra-union disputes;
(3) Other related labor relations disputes; 165
(4) Injunction cases;166 and
(5) Contempt cases.167
On No. 1[a] above, the Mediator-Arbiter will have jurisdiction over a Request for SEBA Certification if it is made
in an organized establishment as well as in instances where it is made in an unorganized establishment with
more than one (1) legitimate organization. Under this situation, the DOLE Regional Director, before whom the
said Request is filed, is required to refer it to the Mediator-Arbiter for the determination of the propriety of
conducting a certification election; consequently, the Mediator-Arbiter would now have the jurisdiction to take
cognizance of the certification election.168
2. ORIGINAL AND EXCLUSIVE JURISDICTION OF THE DOLE REGIONAL DIRECTORS.
The DOLE Regional Directors have original and exclusive jurisdiction over numerous cases. 169 But not all
of them are relevant to or connected with the three (3) classes of cases 170 expressly mentioned in Article 232 [226].
Only the following cases cognizable by them are related thereto or connected therewith by virtue of laws and rules:
(1) Visitorial cases under Article 289 [274], 171 involving examination of books of accounts of
independent unions, local chapters/chartered locals and workers’ associations;
163 Section 1[B] (formerly Section 2), Rule XI, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-F-03,
Series of 2008 [Oct. 30, 2008].
164 Section 6, Rule VII, in relation to Rules VIII and IX, Ibid.
165 Section 1 [ii], Rule I, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17,
2003]; Section 4, Rule XI, Book V of the
Rules to Implement the Labor Code, as amended by Department Order No. 40-F-03, Series of 2008 [October 30, 2008]. See also Article
226, Labor Code; Policy Instructions No. 6; Villaor v. Trajano, G.R. No. 69188, Sept. 23, 1986.
166 Med-Arbiters have the authority to issue temporary restraining orders (TROs) and writs of injunction in appropriate cases. Section 5, Rule
XVI, Book V of the Omnibus Rules Implementing the Labor Code states: “Sec 5. Injunctions. -- No temporary injunctions or restraining order
in any case involving or growing out of a labor dispute shall be issued by any court or other entity. On the other hand, the Office of the
President, the Secretary of Labor, the Commission, the Labor Arbiter or Med-Arbiter may enjoin any or all acts involving or arising from any
case pending before any of said offices or officials which if not restrained forthwith may cause grave or irreparable damage to any of the
parties to the case or seriously affect social or economic stability.”
167 Section 4, Rule XVI, Book V, Rules to Implement the Labor Code.
168 Section 6, Rule VII, in relation to Rules VIII and IX, Department Order No. 40-I-15, Series of 2015 [September 07, 2015].
169 All the cases cognizable by the DOLE Regional Directors are as follows: (a) Visitorial (inspection) cases under Article 37; (b) Visitorial
(inspection) and enforcement cases under Article 128; (c) Visitorial cases under Article 289 [274], involving examination of books of accounts
of independent unions, local chapters/chartered locals and workers’ associations; (d) Occupational safety and health violations; (e) Small
money claims cases arising from labor standards violations in an amount not exceeding ₱5,000.00 and not accompanied with a claim for
reinstatement under Article 129; (f) Cases related to private recruitment and placement agencies (PRPAs) for local employment, such as:
(1) Applications for license or denial thereof; (2) Complaints for suspension or cancellation of license by reason of administrative offenses;
(3) Complaints for illegal recruitment; and (4) Petition for closure of agency; (g) Cases submitted for voluntary arbitration in their capacity
as Ex-Officio Voluntary Arbitrators (EVAs) under Department Order No. 83-07, Series of 2007; (h) Union registration-related cases, such
as: 1) Applications for union registration of independent unions, local chapters and workers’ associations; 2) Petition for denial of application
for registration of said unions; 3) Petitions for revocation or cancellation of registration of said unions; (i) Notice of merger, consolidation,
affiliation and change of name of said unions and or petition for denial thereof; (j) CBA-related cases, such as: 1) Application for registration
of single-enterprise CBAs or petition for deregistration thereof; 2) Petition for denial of registration of single-enterprise CBAs or denial of
deregistration thereof; and (k) Request for SEBA certification when made in an unorganized establishment with only one (1) legitimate union.
170 These are (1) inter-union disputes; (2) intra-union disputes; and (3) Other related labor relations disputes.
171 “Article 289 [274]. Visitorial power. The Secretary of Labor and Employment or his duly authorized representative is hereby empowered to
inquire into the financial activities of legitimate labor organizations upon the filing of a complaint under oath and duly supported by the written
consent of at least twenty percent (20%) of the total membership of the labor organization concerned and to examine their books of accounts
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(2) Union registration-related cases, such as:
(a) Applications for union registration of independent unions, local chapters and workers’
associations;172
1 In case the Request is made in an unorganized establishment with only one (1) legitimate union, and the requesting union or local fails to
complete the requirements for SEBA certification during the validation conference before the DOLE Regional Director, in which event, such
Request should be referred to the Election Officer for the conduct of certification election (Section 4, Rule VII of the Rules to Implement the
Labor Code, as amended by Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. The election should be conducted in
accordance with Rule IX thereof.), which necessarily would mean that such certification election should now be conducted under the
jurisdiction of the Mediator-Arbiter to whom the Election Officer is duty-bound to report the outcome of the election proceeding. Certainly,
the ensuing certification election cannot be conducted under the directive of the DOLE Regional Director without the participation of the
Mediator-Arbiter who, under the law, is the one possessed of the original and exclusive jurisdiction over certification election cases, including
the proclamation of the winning SEBA. (See Section 21, Rule IX, Book V, Rules to Implement the Labor Code, as ordered renumbered by
Section 17, Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. This section was originally numbered Section 20, per
Department Order No. 40-03, Series of 2003, [Feb. 17, 2003], but it was subsequently re-numbered to Section 19, per Department Order
No. 40-F-03, Series of 2008 [Oct. 30, 2008]).
2 Section 5, Rule VII, in relation to Rules VIII and IX, Department Order No. 40-I-15, Series of 2015 [September 07, 2015].
On No. 1 above, it is imperative to point out that although by nature, this is an intra-union dispute, the rules,
however, treat this separately from those generally applicable to intra-union disputes 180 and accordingly vest
jurisdiction thereover in the DOLE Regional Directors and not in the Med-Arbiters.
and other records to determine compliance or non-compliance with the law and to prosecute any violations of the law and the union
constitution and by-laws: Provided, That such inquiry or examination shall not be conducted during the sixty (60)-day freedom period nor
within the thirty (30) days immediately preceding the date of election of union officials.” (As amended by Section 31, Republic Act No. 6715,
March 21, 1989).
172 Section 3, Rule II of the Med-Arbitration Rules states: “SEC. 3. Jurisdiction of the Regional Director.- The Regional Director shall exercise
original and exclusive jurisdiction over application for union registration, petitions for cancellation of union registration and
complaints for examination of unions books of accounts.” See also Section 1, Rule II, Rules of Procedure on Mediation-Arbitration.
173 See Article 243 [236] of the Labor Code which provides: “Art. 243 [236]. Denial of registration; appeal. The decision of the Labor Relations
Division in the regional office denying registration may be appealed by the applicant union to the Bureau within ten (10) days from receipt of
notice thereof.”
174 Referring to independent unions, local chapters and workers’ associations, as distinguished from federations, national unions, industry
unions, trade union centers and their local chapters/chartered locals, affiliates and member organizations whose application for registration
as well as denial or cancellation or revocation of registration is cognizable by the BLR Director in his original and exclusive jurisdiction [infra].
175 Specifically cited as exception to Med-Arbiter’s jurisdiction is cancellation of union registration, per Section 1 [ii], Rule I, Book V, Rules to
Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003].
176 Section 3, Rule II of the Med-Arbitration Rules, supra; See also Section 4, Rule XI, Book V of the Rules to Implement the Labor Code, as
amended by Department Order No. 40-F-03, Series of 2008 [October 30, 2008].
177 As distinguished from cases involving multi-empoyer CBAs which fall under the original jurisdiction of the BLR Director.
178 Section 4 [formerly Section 5], Rule XI, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series
of 2003, [Feb. 17, 2003], and as renumbered by Department Order No. 40-F-03, Series of 2008 [Oct. 30, 2008].
179 Section 4, Rue VII, Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. Under this situation, the DOLE Regional Director,
before whom the Request for SEBA Certification is filed, should refer the Request for SEBA Certification to the Mediator-Arbiter for the
determination of the propriety of conducting a certification election, in which case, the Mediator-Arbiter now has the jurisdiction to decide the
certification election issue. (Section 6, Rule VII, in relation to Rules VIII and IX, Department Order No. 40-I-15, Series of 2015 [September
07, 2015]). Note must be made that when the Request for SEBA Certification is made in an unorganized establishment with more than one
(1) legitimate labor organization, the Med-Arbiter takes over from the DOLE Regional Director in the matter of hearing and resolving the
issue of certification election.
180 See Section 3, Rule XIII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb.
17, 2003], thus, a request for examination of books of accounts pursuant to Article 289 [274], in the absence of allegations pertaining to a
violation of Article 250 [241], should not be treated as an intra-union dispute.
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Barles v. Bitonio 181 is clear on this point. It was held here 182 that while intra-union conflicts, such as
examinations of accounts are under the jurisdiction of the BLR, however, the Rules of Procedure on Mediation-
Arbitration purposely and expressly separated or distinguished examinations of union accounts from the genus of
intra-union conflicts and provided a different procedure for their resolution. Consequently, original jurisdiction over
complaints for examinations of union accounts is vested not in the Med-Arbiter but in the DOLE Regional Director.
This is apparent from Section 3183 thereof.
But there is a need to point out though that the foregoing rule applies only when the request for examination
of books of accounts concerns only those of independent unions, local chapters/chartered locals and workers’
associations. If what is involved are those of federations, national unions, industry unions or trade union centers,
and their local chapters/chartered locals, affiliates and member organizations, the jurisdiction thereover is vested
with the BLR Director and not with the DOLE Regional Director.
On No. 2[a] above, as far as workers’ associations are concerned, if they operate in more than one region,
the application for registration should be filed with the BLR or the Regional Offices, but either way, it should be
processed by the BLR.184 This is so in order to have a unified resolution of the merits of the application by one, single
agency.
On No. 4 above, when the Request for SEBA Certification is made in an unorganized establishment with
only one (1) legitimate union, it should be filed with the DOLE Regional Director who will make an immediate
determination on whether there is majority support by the members of the bargaining unit to the requesting union.
Once the majority support is confirmed and the requesting union does not fail to complete the requirements for SEBA
certification during the validation conference, the requesting union is immediately certified by the DOLE Regional
Director as the SEBA without conducting a certification election.
As a consequence of this latest change in the Rules, it may be said that the DOLE Regional Director, in a
way, is now empowered to rule on a “representation” issue which, technically speaking, falls under and is covered
by the general class of “inter-union disputes” that falls within the jurisdiction of the Mediator-Arbiter. In fact, the
very Request itself speaks of “SEBA Certification,” a relief that is not the consequence of “Voluntary Recognition”
- the original remedy intended to be replaced by this Request mode.
For it is clear that under the previous repealed rule on voluntary recognition, the DOLE Regional Director
never issues a “SEBA Certification”; what is done is the mere recording1 of the “Notice of Voluntary Recognition”
jointly submitted by the employer and the union to the DOLE Regional Office which issued the recognized labor
union’s certificate of registration or, in the case of local chapter, where the charter certificate and the other documents
required under Article 241 [234-A] were submitted and filed.2 Since it is crystal clear under existing laws, rules and
jurisprudence that it is the Mediator-Arbiter who has the original and exclusive jurisdiction to issue a “SEBA
Certification” under any of the modes3 of selecting a SEBA, it is not surprising if the issue of the validity of the
exercise of similar power to issue the SEBA Certification by the DOLE Regional Director would be raised in an
appropriate proceeding.
But the rule is quite clear that the Mediator-Arbiter would acquire original jurisdiction over the Request
for SEBA Certification under the following situations:
(1) In case the Request is made in an unorganized establishment with only one (1) legitimate union,
and the requesting union or local fails to complete the requirements for SEBA certification during the validation
conference before the DOLE Regional Director, in which event, such Request should be referred to the Election
Officer4 for the conduct of certification election5 which necessarily would mean that such certification election should
now be conducted under the jurisdiction of the Mediator-Arbiter to whom the Election Officer is duty-bound to report
the outcome of the election proceeding.6 Certainly, the ensuing certification election cannot be conducted under the
directive of the DOLE Regional Director without the participation of the Mediator-Arbiter who, under the law,7 is the
one possessed of the original and exclusive jurisdiction over certification election cases, including the proclamation
of the winning SEBA.8
(2) In case the Request is made in an unorganized establishment with more than one (1) legitimate
union, in which event, the DOLE Regional Director is required to refer the Request directly to the Election Officer
for the conduct of a certification election9 which should be in accordance with the Rules10 that state, in its Section 2,
Rule VIII, that the “(Request) shall be heard and resolved by the Mediator-Arbiter.” Resultantly, it is still the
Mediator-Arbiter who should take cognizance of the Request which, in this case, is the equivalent of the Petition for
Certification Election over which he exercises original jurisdiction.
(3) In case the Request is made in an organized establishment, in which case, the Regional Director
should refer
182 Citing La Tondena Workers Union v. Secretary of Labor, G.R. No. 96821, Dec. 9, 1994, 239 SCRA 117.
183 Section 3, Rule II of the Med-Arbitration Rules states: “SEC. 3. Jurisdiction of the Regional Director.- The Regional Director shall exercise
original and exclusive jurisdiction over application for union registration, petitions for cancellation of union registration and complaints for
examination of unions books of accounts.”
184 See 2nd paragraph, Section 1, Rule III, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of
2003, [Feb. 17, 2003]; See also Section 1, Rule II, Rules of Procedure on Mediation-Arbitration.
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the same to the Mediator-Arbiter for the determination of the propriety of conducting a certification election.11
3. ORIGINAL AND EXCLUSIVE JURISDICTION OF THE BLR DIRECTOR.
At the outset, it must be stressed that reference in the law and pertinent rules to “BLR”, as far as the issue of
jurisdiction is concerned, should appropriately mean “BLR Director.” This is as it should be because “BLR” is a
generic
1
Under the previous repealed provision, it is stated that where the notice of voluntary recognition is sufficient in form, number and substance
and where there is no other registered labor union operating within the bargaining unit concerned, the DOLE Regional Office, through the
Labor Relations Division shall, within ten (10) days from receipt of the notice, record the fact of voluntary recognition in its roster of legitimate
labor unions and notify the labor union concerned. (See the repealed provision of Section 3, Rule VII, Book V, Rules to Implement the Labor
Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17, 2003]).
Where the notice of voluntary recognition is insufficient in form, number and substance, the DOLE Regional Office shall, within the same period,
notify the labor union of its findings and advise it to comply with the necessary requirements. Where neither the employer nor the labor union
failed to complete the requirements for voluntary recognition within thirty (30) days from receipt of the advisory, the DOLE Regional Office
shall return the notice of voluntary recognition together with all its accompanying documents without prejudice to its resubmission. (Section
3, Rule VII, Book V, Ibid.).
2
Section 1, Rule VII, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17,
2003].
3 Besides this mode, the other modes of selecting or designating a SEBA are certification election, consent election, run-off election, and
lately, re-run election.
4 “Election Officer” refers to an officer of the Bureau of Labor Relations or the Labor Relations Division in the Regional Office authorized to
conduct certification elections, election of union officers and other forms of elections and referenda. (Section 1 [o], Rule I, and Sections 2-5,
Rule XII, Book V, Rules to Implement the Labor Code, as amended by Department
Order No. 40-03, Series of 2003, [Feb. 17, 2003]). It is the Election Officer who shall have control of the pre-election conference and election
proceedings. (Section 1, Rule IX, Book V, Ibid.).
5 Section 4, Rule VII of the Rules to Implement the Labor Code, as amended by Department Order No. 40-I-15, Series of 2015 [September
07, 2015]. The election should be conducted in accordance with Rule IX thereof.
6 Under the Rules, within 24 hours from the final canvass of votes, there being a valid election, the Election Officer shall transmit the records
of the case to the Med-Arbiter who shall, within the same period from receipt of the minutes and results of election, issue an order proclaiming
the results of the election and certifying the union which obtained the majority of the valid votes cast as the sole and exclusive bargaining
agent in the subject bargaining unit, xxx. (The provision entitled “Proclamation and certification of the result of the election” should now be
denominated as Section 21, Rule IX, Book V, Rules to Implement the Labor Code, by virtue of the re-numbering ordered by Section 17,
Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. This section was originally numbered Section 20, per Department
Order No. 40-03, Series of 2003, [Feb. 17, 2003], but it was subsequently renumbered to Section 19, per Department Order No. 40-F-03,
Series of 2008 [Oct. 30, 2008]. This latest 2015 re-numbering was effected through said Section 17 which states: “Sections subsequent to
inserted new provisions and/or renumbered sections are renumbered accordingly.”).
8 See Section 21, Rule IX, Book V, Rules to Implement the Labor Code, as ordered renumbered by Section 17, Department Order No. 40-I-
15, Series of 2015 [September 07, 2015].This section was originally numbered Section 20, per Department Order No. 40-03, Series of 2003,
[Feb. 17, 2003], but it was subsequently re-numbered to Section 19, per Department Order No. 40-F-03, Series of 2008 [Oct. 30, 2008].
9 Section 5, Rule VII, Rules to Implement the Labor Code, as amended by Department Order No. 40-I-15, Series of 2015 [September 07,
2015].
10 Referring to Rule IX of the Rules to Implement the Labor Code, as amended by Department Order No. 40-I-15, Series of 2015 [September
07, 2015]. Note must be made that when the Request for SEBA Certification is made in organized establishment, in which case, the Regional
Director should refer the same to the Mediator-Arbiter for the determination of the propriety of conducting a certification election. (Section 6,
Rule VII, Ibid. in accordance with Rules VIII and IX, Ibid.).
11 Section 6, Rule VII, in relation to Rules VIII and IX, Department Order No. 40-I-15, Series of 2015 [September 07, 2015].
term that includes not only the Med-Arbiters and DOLE Regional Directors but the BLR Director himself. More
significantly, there is jurisprudential variance in the cases cognizable by the BLR Director, in relation to Med-Arbiters
and DOLE Regional Directors, hence, referring to the cases properly falling under the jurisdiction of the “BLR
Director” as such would be more appropriate and less confusing than simply referring to them as falling under the
jurisdiction of the “BLR.”
The BLR Director exercises two (2) kinds of jurisdiction, namely: original and appellate.185 The following
cases
fall under the first:
185 The appellate jurisdiction of the BLR Director is discussed in another section below.
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(1) Complaints and petitions involving the application for registration, revocation or cancellation of
registration of federations, national unions, industry unions, trade union centers and their local
chapters/chartered locals, affiliates and member organizations;186
(2) Request for examination of books of accounts of said labor organizations187 under Article 289 [274] of
the Labor Code;
(3) Intra-union disputes involving said labor organizations;188
(4) Notice of merger, consolidation, affiliation and change of name of said unions and or petition for
denial thereof;189
(5) Registration of multi-employer190 CBAs or petitions for deregistration thereof; 191
(6) Contempt cases.
As far as No. 3 above is concerned, the 2010 case of Atty. Montaño v. Atty. Verceles, 192 is relevant.
Petitioner193 here claimed that under the Implementing Rules,194 it is the DOLE Regional Director and not the BLR
(Director) who has jurisdiction over intra-union disputes involving federations which, in this case, pertains to the
election protests in connection with the election of officers of the federation (Federation of Free Workers [FFW]). In
finding no merit in petitioner’s contention, the High Court pointed out that Article 226 of the Labor Code clearly
provides that the BLR (Director) and the Regional Directors of DOLE have concurrent jurisdiction over inter-union
and intra-union disputes. Such disputes include the conduct or nullification of election of union and workers’
association officers. There is, thus, no doubt as to the BLR (Director)’s jurisdiction over the instant dispute involving
member-unions of a federation arising from disagreement over the provisions of the federation’s constitution and by-
laws. It agreed with the following observation of the BLR (Director):
“Rule XVI lays down the decentralized intra-union dispute settlement mechanism. Section 1 states that any
complaint in this regard ‘shall be filed in the Regional Office where the union is domiciled.’ The concept of domicile
in labor relations regulation is equivalent to the place where the union seeks to operate or has established a
geographical presence for purposes of collective bargaining or for dealing with employers concerning terms and
conditions of employment.
“The matter of venue becomes problematic when the intra-union dispute involves a federation, because
the geographical presence of a federation may encompass more than one administrative region. Pursuant to
its authority under Article 232 [226], this Bureau exercises original jurisdiction over intra-union disputes
involving federations. It is well-settled that FFW, having local unions all over the country, operates in more
than one administrative region. Therefore, this Bureau maintains original and exclusive jurisdiction over
disputes arising from any violation of or disagreement over any provision of its constitution and by-laws.”195
V.
APPELLATE JURISDICTION OF THE BLR DIRECTOR AS
DISTINGUISHED FROM THAT OF THE DOLE SECRETARY
1. NECESSITY FOR JURISDICTIONAL DISTINCTIONS.
The distinctions pointed out above between the respective jurisdictions of the Med-Arbiters, DOLE Regional
Directors and the BLR Director acquire significance in determining which of the cases over which they exercise
jurisdiction may be appealed to the BLR Director and those that may be appealed to the DOLE Secretary, both of
186 As distinguished from petitions for cancellation of registration of independent unions, local chapters and workers’ associations, as provided
in Section 3, Rule II of the Med-Arbitration Rules which states: “SEC. 3. Jurisdiction of the Regional Director.- The Regional Director shall
exercise original and exclusive jurisdiction over application for union registration, petitions for cancellation of union registration and
complaints for examination of unions books of accounts.” See also Section 4, Rule XI, Book V of the Rules to Implement the Labor
Code, as amended by Department Order No. 40-F-03, Series of 2008 [October 30, 2008] and Section 1, Rule II, Rules of Procedure on
Mediation-Arbitration.
187 Referring to federations, national unions, industry unions and trade union centers, as distinguished from independent unions, local
chapters and workers’ associations.
188 Id.
189
Section 5, Rule IV, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17,
2003] and as further amended by Department Order No. 40-D-05, Series of 2005, Sept. 13, 2005.
190 As distinguished from cases involving single-enterprise CBAs which fall under the jurisdiction of the DOLE Regional Director.
191 Section 4, Rule XI, Book V of the Rules to Implement the Labor Code, as amended by Department Order No. 40-F-03, Series of 2008
[October 30, 2008].
193 Petitioner was elected the National Vice President of FFW in the National Convention held at Subic International Hotel, Olongapo City over
the strong opposition and protest of respondent Atty. Ernesto C. Verceles, a delegate to the convention and president of University of the
East Employees Association (UEEA-FFW) which is an affiliate union of FFW.
194 See Section 6 of Rule XV, in relation to Section 1 of Rule XIV of Book V of the Rules to Implement the Labor Code.
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whom, based on law and jurisprudence, are possessed of exclusive appellate jurisdiction over certain cases decided
by the MedArbiters, DOLE Regional Directors and BLR Director.
The Supreme Court had occasion to distinguish the appellate jurisdiction of the BLR Director from that of
the DOLE Secretary in the case of Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees Union. 196
Accordingly, the appellate jurisdiction of the DOLE Secretary is limited only to the review of decisions rendered by
the BLR Director in the exercise of his exclusive and original jurisdiction. The DOLE Secretary has no jurisdiction
over decisions of the BLR Director rendered in the exercise of his appellate jurisdiction over decisions made by Med-
Arbiters and DOLE Regional Directors in the exercise of their respective original and exclusive jurisdictions, the
reason being that such decisions are final and inappealable.
2. APPEALS FROM DECISIONS OF MED-ARBITERS.
Decisions in the cases falling under the original and exclusive jurisdiction of the Med-Arbiters are appealable
as follows:
(1) Inter-union disputes (representation or certification election conflicts) – to DOLE Secretary197
(a) Request for SEBA certification when made in an unorganized establishment with only one198 or more
than one (1) legitimate union199 or in an organized establishment – to DOLE Secretary
(b) Petition for certification election, consent election, run-off election or re-run election - to DOLE
Secretary
(2) Intra-union disputes200 – to BLR Director
(3) Other related labor relations disputes - to BLR Director
(4) Injunction cases - to BLR Director
(5) Contempt cases - to BLR Director
2.1. DIFFERENT RULE RE APPELLATE JURISDICTION OVER MED-ARBITER’S DECISIONS IN
INTERUNION DISPUTES.
a. Legal basis.
While generally, the decisions of the Med-Arbiters are appealable to the BLR Director, excepted therefrom
are their decisions in inter-union disputes201 which are appealable directly to the DOLE Secretary by virtue of Article
272 [259]202 of the Labor Code.
b. Variance in the rule on appeal in unorganized and organized establishments.
The rule on appeal in certification election cases in unorganized establishments is different from that of
organized establishments, to wit:
(1) Appeal in unorganized establishments. - The order granting the conduct of a certification election
in an unorganized establishment is not subject to appeal. Any issue arising from its conduct or from its results is proper
197 This is by virtue of Article 272 [259] of the Labor Code. This article is entitled “Appeal from Certification Election Orders” and it provides as
follows: “Article 259. Appeal from
Certification Election Orders. – Any party to an election may appeal the order or results of the election as determined by the Med-Arbiter
directly to the Secretary of Labor and Employment on the ground that the rules and regulations or parts thereof established by the Secretary
of Labor and Employment for the conduct of the election have been violated. Such appeal shall be decided within fifteen (15) calendar days.”
Prior to the amendment of Article 272 [259] by R.A. No. 6715, the decisions of the Med-Arbiter in certification election cases are appealable
to the BLR. Now, they are appealable to the DOLE Secretary. (A’ Prime Security Services, Inc. v. Hon. Secretary of Labor, G.R. No. 91987,
July 17, 1995). It must be emphasized that as far as intra-union disputes are concerned, the decisions of the Med-Arbiters thereon remain
appealable to the BLR. (See Section 1 [1], Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases).
198 In case the Request is made in an unorganized establishment with only one (1) legitimate union, and the requesting union or local fails to
complete the requirements for SEBA certification during the validation conference before the DOLE Regional Director, in which event, such
Request should be referred to the Election Officer for the conduct of certification election (Section 4, Rule VII of the Rules to Implement the
Labor Code, as amended by Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. The election should be conducted in
accordance with Rule IX thereof.), which necessarily would mean that such certification election should now be conducted under the
jurisdiction of the Mediator-Arbiter to whom the Election Officer is duty-bound to report the outcome of the election proceeding. Certainly,
the ensuing certification election cannot be conducted under the directive of the DOLE Regional Director without the participation of the
Mediator-Arbiter who, under the law, is the one possessed of the original and exclusive jurisdiction over certification election cases, including
the proclamation of the winning SEBA. (See Section 21, Rule IX, Book V, Rules to Implement the Labor Code, as ordered renumbered by
Section 17, Department Order No. 40-I-15, Series of 2015 [September 07, 2015]. This section was originally numbered Section 20, per
Department Order No. 40-03, Series of 2003, [Feb. 17, 2003], but it was subsequently re-numbered to Section 19, per Department Order
No. 40-F-03, Series of 2008 [Oct. 30, 2008]).
199 Section 5, Rule VII, in relation to Rules VIII and IX, Department Order No. 40-I-15, Series of 2015 [September 07, 2015].
200 Section 1 [1], Rule III, NCMB Manual of Procedures for Conciliation and Preventive Mediation Cases.
202 Supra.
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subject of a protest. Appeal may only be made to the DOLE Secretary in case of denial of the petition within ten (10)
calendar days from receipt of the decision of denial.203
(2) Appeal in organized establishments. - The order granting the conduct of a certification election
in an organized establishment and the decision dismissing or denying the petition for certification election may be
appealed to the DOLE Secretary within ten (10) calendar days from receipt thereof. 204
3. APPEALS FROM DECISIONS OF DOLE REGIONAL DIRECTORS.
a. Decisions appealable to the BLR Director.
Not all decisions, awards or orders rendered by the DOLE Regional Directors are appealable to the BLR
Director. Only decisions in the following cases relevant and related to labor relations, are appealable to the BLR
Director:
(1) Visitorial cases under Article 289 [274], involving examination of books of accounts of independent
unions, local chapters/chartered locals and workers’ associations; 205
(2) Union registration-related cases, such as:
a) Denial of applications206 for union registration of independent unions, local chapters and workers’
associations;
b) Revocation or cancellation207 of registration of said unions;
(3) Notice of merger, consolidation, affiliation and change of name of said unions and or petition for denial
thereof;208
(4) CBA-related cases, such as:
a) Application for registration of single-enterprise209 CBAs or petition for deregistration thereof;210
b) Petition for denial of registration of single-enterprise CBAs or denial of petition deregistration thereof.
As far as No. 1 above is concerned, appellate authority over decisions of the DOLE Regional Directors
involving examinations of union accounts is expressly conferred on the BLR Director under the Rules of Procedure
on MediationArbitration,211 to wit:
“RULE II
MED-ARBITRATION
“SEC. 3. Jurisdiction of the Regional Director. - The Regional Director shall exercise original and
exclusive jurisdiction over application for union registration, petitions for cancellation of union registration and
complaints for examination of union books of accounts. SEC. 4. Jurisdiction of the Bureau.- xxx
“(b) The Bureau shall exercise appellate jurisdiction over all cases originating from the Regional Director
involving union registration or cancellation of certificates of union registration and complaints for examination
of union books of accounts.”212
203 Section 18 [formerly Section 17], Rule VIII, Book V, of the Rules to Implement the Labor Code, as amended by Department Order No.
40-F-03, Series of 2008 [October 30, 2008].
204 Id.
205 The BLR Director, not the DOLE Secretary, has the appellate authority over decisions of the DOLE Regional Directors involving
examinations of union accounts as provided under Rule II of the Rules of Procedure on Mediation-Arbitration, issued on April 10, 1992, to
wit: “SEC. 3. Jurisdiction of the Regional Director. - The Regional Director shall exercise original and exclusive jurisdiction over application
for union registration, petitions for cancellation of union registration and complaints for examination of unions books of accounts. SEC. 4.
Jurisdiction of the Bureau.- xxx “(b) The Bureau shall exercise appellate jurisdiction over all cases originating from the Regional Director
involving union registration or cancellation of certificates of union registration and complaints for examination of union books of accounts.”
206 See Article 243 [236] of the Labor Code which provides: “Art. 243 [236]. Denial of registration; appeal. The decision of the Labor Relations
Division in the regional office denying registration may be appealed by the applicant union to the Bureau within ten (10) days from receipt of
notice thereof.”
207 See Article 245 [238] of the Labor Code which provides: “Art. 245 [238]. Cancellation of registration; appeal. The certificate of registration
of any legitimate labor organization, whether national or local, shall be cancelled by the Bureau if it has reason to believe, after due hearing,
that the said labor organization no longer meets one or more of the requirements herein prescribed.”
208 Section 5, Rule IV, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17,
2003] and as further amended by Department Order No. 40-D-05, Series of 2005, Sept. 13, 2005.
209 As distinguished from cases involving multi-employer CBAs which fall under the original jurisdiction of the BLR Director.
210 Section 4 [formerly Section 5], Rule XI, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series
of 2003, [Feb. 17, 2003], and as renumbered by Department Order No. 40-F-03, Series of 2008 [Oct. 30, 2008].
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The language of the law is categorical. Any additional explanation on the matter is superfluous. It is thus
clear then that the DOLE Secretary has no appellate jurisdiction over decisions of DOLE Regional Directors involving
petitions for examinations of union accounts.213
b. Cases not appealable to the BLR Director but to some other labor officials.
For greater clarity in presentation and to avoid any confusion, it is worthy to mention that the decisions of the DOLE
Regional Directors in the following cases which are not related to labor relations are appealable to the DOLE Secretary
and not to the BLR Director:
(a) Visitorial (inspection) cases under Article 37;214
(b) Visitorial (inspection) and enforcement cases 215 under Article 128, (either routine or initiated through a
complaint);216
(c) Occupational safety and health violations;217
(d) Cases related to private recruitment and placement agencies (PRPAs) for local employment, such as:
1) Applications for license or denial thereof;
2) Complaints for suspension or cancellation of license by reason of administrative offenses;
3) Complaints for illegal recruitment; and 4) Petition for closure of agency. 218
Additionally, their decisions on small money claims cases arising from labor standards violations in an
amount not exceeding ₱5,000.00 and not accompanied with a claim for reinstatement under Article 129 are appealable
to the NLRC.
VI.
REMEDIES FROM DECISIONS OF
BLR DIRECTOR AND DOLE SECRETARY
RENDERED IN THEIR APPELLATE JURISDICTION
1. APPEALS END WITH BLR DIRECTOR AND DOLE SECRETARY.
Notably, the remedy of appeal involved in the cases contemplated under Article 232 [226] is available only
up to the level of either the BLR Director or the DOLE Secretary, as the case may be. Appeal to the CA from their
decisions rendered in their respective appellate jurisdictions is not available; the only remedy being the filing of an
original special civil action for certiorari under Rule 65 of the Rules of Court. 219
In the case of decisions rendered by the BLR Director in his appellate jurisdiction, they can no longer be
appealed to the DOLE Secretary because another appeal to the DOLE Secretary is not tenable anymore, the BLR
Director’s decisions thereon having already become final and executory. 220
2. REMEDY FROM CA DECISIONS TO THE SUPREME COURT.
of accounts and records of any person or entity covered by this Title, require it to submit reports regularly on prescribed forms, and act on
violation of any provisions of this Title.” (Referring to Tile I [Recruitment and Placement of Workers], Book I, Labor Code).
215 Visitorial cases involve inspection of establishments to determine compliance with labor standards; while enforcement cases involve
216 Based on the 2nd paragraph of Article 128(b), Labor Code, which states: “An order issued by the duly authorized representative of the
Secretary of Labor and Employment under this
Article may be appealed to the latter. xxx” (As amended by Republic Act No. 7730, June 2, 1994). Additionally, it is provided in Section 1,
Rule IV, of the Rules on the Disposition of Labor Standards Cases in the Regional Offices, thus: “Section 1. Appeal. – The order of the
Regional Director shall be final and executory unless appealed to the Secretary of Labor and Employment within ten (10) calendar
daysfrom receipt thereof.” The grounds for the appeal are provided in Section 2 thereof, thus: “Grounds for appeal. – The aggrieved party
may appeal to the Secretary the Order of the Regional Director on any of the following grounds: (a) there is a prima facie evidence of
abuse of discretion on the part of the Regional Director; (b) the Order was secured through fraud, coercion or graft and corruption; (c) the
appeal is made purely on questions of law; and (d) serious errors in the findings of facts were committed which, if not corrected, would
cause grave irreparable damageor injury to the appellant.” (See also Section 2, in relation to Section 3(a), Rule X, Book III of the Rules to
Implement the Labor Code}.
217 Section 6(a) of Rule VI [Health and Safety Cases] of the Rules on the Disposition of Labor Standards Cases in the Regional Offices which
provides: Section 6. Review by the Secretary. - (a) The Secretary at his own initiative or upon the request of the employer and/or employee,
may review the order of the Regional Director which shall be immediately final and executory unless stayed by the Secretary upon posting
by the employer of a reasonable cash or performance bond as fixed by the Regional Director.” See also the 2nd paragraph of Article 128(b),
Labor Code.
218 Section 62, Department Order No. 141-14, Series of 2014, Nov. 20, 2014.
219 Section 23, Rule XI, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17,
2003]; National Federation of Labor [NFL] v. Laguesma, G.R. No. 123426, March 10, 1999.
220 Abbott Laboratories Philippines, Inc. v. Abbott Laboratories Employees Union, G.R. No. 131374, Jan, 26, 2000.
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There is only one mode to elevate labor cases from the CA to the Supreme Court and that is, through Rule 45 petition
for review on certiorari.
VII.
ADMINISTRATIVE FUNCTIONS OF THE BLR AND LRDs
The BLR and the Labor Relations Divisions (LRDs) in the DOLE Regional Offices have concurrent
jurisdiction over the following administrative functions:
1. Registration of labor unions;
2. Keeping of registry of labor unions;
3. Maintenance and custody of the files of CBAs and other related agreements.
4. Records of settlement of labor disputes; and
5. Copies of orders and decisions of Voluntary Arbitrators. 221
It must be noted that it is the registration of the labor organization with the BLR and not with the Securities and
Exchange Commission (SEC) which makes it a legitimate labor organization with rights and privileges granted under
the Labor Code.222
F.
NATIONAL CONCILIATION AND MEDIATION BOARD
(NCMB)
1.
NATURE OF PROCEEDINGS
1. NCMB IS NOT A QUASI-JUDICIAL AGENCY.
NCMB is not a quasi-judicial agency, according to the 2009 case of Tabigue v. International Copra Export
Corporation. 223
“Quasi-judicial function” is a term which applies to the action, discretion, etc. of public administrative
officers or bodies, who are required to investigate facts or ascertain the existence of facts, hold hearings, and draw
conclusions from them as a basis for their official action and to exercise discretion of a judicial nature.
2. NOT BEING A QUASI-JUDICIAL AGENCY, NCMB’S RULINGS CANNOT BE ELEVATED TO, AND
COGNIZABLE BY, THE COURT OF APPEALS.
Rule 43 of the Rules of Court applies only to awards, judgments, final orders or resolutions of or authorized
by any quasi-judicial agency in the exercise of its quasi-judicial functions. Hence, NCMB’s decision, not having
been rendered by a quasi-judicial body, cannot be elevated to the Court of Appeals under said rule.
2.
CONCILIATION VS. MEDIATION
1. CONCILIATION AND MEDIATION, MEANING.
Both the terms “conciliation” and “mediation” refer to a process whereby a third person usually called
Conciliator (in case of conciliation) or Mediator (in case of mediation), intervenes in a dispute involving two or more
conflicting parties for the purpose of reconciling their differences or persuading them into adjusting or settling their
dispute. The Conciliator or Mediator normally does not make or render any decision, his role being confined to the
functions afore-described.
3. DISTINCTION BETWEEN CONCILIATION AND MEDIATION.
Generally, there are no marked distinctions between conciliation and mediation. The reason is that in both
cases, a neutral third party (called Conciliator or Mediator) is tasked to assist two or more opposing parties in finding
appropriate resolution to a dispute.
In the NCMB, the hearing officer is called Conciliator-Mediator. There is no separate classification between
conciliators and mediators. When the Conciliator-Mediator performs his task, he does not make any distinction when
he is acting as Conciliator or as Mediator.
In other jurisdictions, the principal distinction between conciliation and mediation lies on the extent of
the power and authority granted to the neutral third party.
In mediation, the Mediator normally facilitates a deliberation or discussion of the issues between the parties.
He may or may not offer any opinions on the strength and weaknesses of each party's positions and arguments. Thus,
mediation may be classified into two, namely:
[PLASLU] v. CIR, G.R. Nos. L-5664 & L-5698, Sept. 17, 1953, 93 Phil. 747.
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1. Facilitative Mediation where the Mediator does not make or offer any opinion; or
2. Evaluative Mediation where the Mediator offers an opinion which is not binding on the parties.
It bears stressing, however, that regardless of which of the 2 methods above is chosen, the Mediator is not
empowered to impose his will on the parties.
In conciliation, the Conciliator is given more power and authority in that he may not only offer an opinion on the
issues at hand but may actually make a binding opinion thereon provided the parties stipulate in advance to this effect.
His opinion is based on the facts and the law involved in the controversy before him.
It may thus be observed that conciliation is more formal than mediation in the sense that the Conciliator’s
opinion, unlike the Mediator’s, may be binding on the parties, although it may be merely temporary in character.
3.
PREVENTIVE MEDIATION
1. PREVENTIVE MEDIATION AS A REMEDY.
“Preventive mediation,” as a remedy, is not found in the Labor Code. But under the law which created the
NCMB, it is expressly stated that one of its functions is to provide preventive mediation to disputing parties.
The term “preventive mediation case” refers to the potential or brewing labor dispute which is the subject of
a formal or informal request for conciliation and mediation assistance sought by either or both parties in order to
remedy, contain or prevent its degeneration into a full blown dispute through amicable settlement.
2. HOW TO INITIATE PREVENTIVE MEDIATION.
Preventive mediation proceeding may be initiated in two (2) ways:
(1) By filing a notice or request of preventive mediation, as distinguished from a notice of strike/ lockout;
or
(2) By conversion of the notice of strike/lockout into a preventive mediation case.
G.
DOLE REGIONAL DIRECTORS
1.
JURISDICTION
1. ROLE OF THE DOLE REGIONAL DIRECTORS.
224 G.R. No. 88210, Jan. 23, 1991, 193 SCRA 223.
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The DOLE has a total of 16 Regional Offices nationwide each one of them is headed by a Regional Director. The
DOLE Regional Directors are the duly “authorized representatives” of the DOLE Secretary referred to in Article 128
of the Labor Code which grants to them both visitorial and enforcement powers. They are in charge of the
administration and enforcement of labor standards within their respective territorial jurisdictions.226
2. JURISDICTION OF THE DOLE REGIONAL DIRECTORS.
The DOLE Regional Directors have original and exclusive jurisdiction over the following cases:
(a) Visitorial (inspection) cases under Article 37;227
(b) Visitorial (inspection) and enforcement cases1 under Article 128,2 (either routine or initiated through a
complaint);
(c) Visitorial cases under Article 289 [274],3 involving examination of books of accounts of independent
unions, local chapters/chartered locals and workers’ associations;
(d) Occupational safety and health violations;4
(e) Small money claims cases arising from labor standards violations in an amount not exceeding ₱5,000.00
and not accompanied with a claim for reinstatement under Article 129;
(f) Cases related to private recruitment and placement agencies (PRPAs) for local5 employment, such as:
1) Applications for license or denial thereof; 228
2) Complaints for suspension or cancellation of license by reason of administrative offenses; 229
3) Complaints for illegal recruitment;230 and
4) Petition for closure of agency;231
(g) Cases submitted for voluntary arbitration in their capacity as Ex-Officio Voluntary Arbitrators (EVAs)
under Department Order No. 83-07, Series of 2007.232 (h) Union registration-related cases, such as:
1) Applications for union registration of independent unions, local chapters and workers’
associations;233
2) Petitions for denial of application for registration 234 of said unions;235
3) Petitions for revocation or cancellation of registration 236 of said unions;237
226 See Section 3, Rule I, Rules on the Disposition of Labor Standards Cases in the Regional Offices [Sept. 16, 1987]; Atilano v. De la Cruz,
G.R. No. 82488, Feb. 28, 1990, 182 SCRA 886; San Miguel Corporation v. The Hon. CA, G.R. No. 146775, Jan. 30, 2002.
227 “Article 37. Visitorial Power. - The Secretary of Labor or his duly authorized representatives may, at any time, inspect the premises, books
of accounts and records of any person or entity covered by this Title, require it to submit reports regularly on prescribed forms, and act on
violation of any provisions of this Title.” (Referring to Tile I [Recruitment and Placement of Workers], Book I, Labor Code).
228 Section 8, Department Order No. 141-14, Series of 2014 (Revised Rules and Regulations Governing Recruitment and Placement for Local
Employment), Nov. 20, 2014; See previous provision on this matter in Section 36, Rule VII, Rules And Regulations Governing Private
Recruitment and Placement Agency for Local Employment, June 5, 1997. See also National Federation of Labor v. Laguesma, G.R. No.
123426, March 10, 1999.
229 Section 54, in relation to Section 51, Department Order No. 141-14, Series of 2014, Ibid.
230 Section 45, Department Order No. 141-14, Series of 2014, Ibid.
231 Section 47, Department Order No. 141-14, Series of 2014, Ibid.
232 Issued by former DOLE Secretary, now Associate Justice of the Supreme Court, Arturo D. Brion on June 8, 2007.
233 Section 3, Rule II of the Med-Arbitration Rules states: “SEC. 3. Jurisdiction of the Regional Director.- The Regional Director shall exercise
original and exclusive jurisdiction over application for union registration, petitions for cancellation of union registration and
complaints for examination of unions books of accounts.” See also Section 1, Rule II, Rules of Procedure on Mediation-Arbitration.
234 See Article 243 [236] of the Labor Code which provides: “Art. 243 [236]. Denial of registration; appeal. The decision of the Labor Relations
Division in the regional office denying registration may be appealed by the applicant union to the Bureau within ten (10) days from receipt of
notice thereof.”
235 Referring to independent unions, local chapters and workers’ associations, as distinguished from federations, national unions, industry
unions, trade union centers and their local chapters/chartered locals, affiliates and member organizations whose application for registration
as well as denial or cancellation or revocation of registration is cognizable by the BLR Director in his original and exclusive jurisdiction [infra].
236 See Article 245 [238] of the Labor Code which provides: “Art. 245 [238]. Cancellation of registration; appeal. The certificate of registration
of any legitimate labor organization, whether national or local, shall be cancelled by the Bureau if it has reason to believe, after due hearing,
that the said labor organization no longer meets one or more of the requirements herein prescribed.”
237 Section 3, Rule II of the Med-Arbitration Rules, supra; See also Section 4, Rule XI, Book V of the Rules to Implement the Labor Code, as
amended by Department Order No. 40F-03, Series of 2008 [October 30, 2008].
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(i) Notice of merger, consolidation, affiliation and change of name of said unions and or petition for denial
thereof;238
(j) CBA-related cases, such as:
1) Application for registration of single-enterprise239 CBAs or petition for deregistration thereof;240
2) Petition for denial of registration of single-enterprise CBAs or denial of petition for deregistration
thereof; and
1
Visitorial cases involve inspection of
establishments to determine compliance with
labor standards; while enforcement cases
involve issuance of compliance orders and
writs of execution.
4 Section 6 of Rule VI [Health and Safety Cases] of the Rules on the Disposition of Labor Standards Cases in the Regional Offices.
5 As distinguished from recruitment and placement of workers for overseas employment which falls under the jurisdiction of the Philippine
(k) Request for SEBA certification when made in an unorganized establishment with only one (1)
legitimate union.241
I.
LABOR STANDARDS ENFORCEMENT CASES
1. SUBJECT OF THE VISITORIAL AND ENFORCEMENT POWERS - THE ESTABLISHMENT AND
NOT THE EMPLOYEES THEREIN.
The subject of the visitorial and enforcement powers granted to the DOLE Secretary or his duly authorized
representatives under Article 128 is the establishment which is under inspection and not the employees thereof.
Consequently, any awards granted are not confined to employees who signed the complaint inspection but
are equally applicable to all those who were employed by the establishment concerned at the time the complaint
was filed, even if they were not signatories thereto. The reason is that the visitorial and enforcement powers are
relevant to, and may be exercised over, establishments, not over individual employees thereof, to determine
compliance by such establishments with labor standards laws. Necessarily, in case of an award from such
violation by the establishment, all its existing employees should be benefited thereby. It must be stressed, however,
that such award should not apply to those who resigned, retired or ceased to be employees at the time the complaint
was filed.
2. ORIGINAL JURISDICTION.
The DOLE Regional Directors exercise original jurisdiction over the following:
(a) Cases involving inspection of establishments to determine compliance with labor standards (Visitorial
Power); and
(b) Cases involving issuance of compliance orders and writs of execution (Enforcement Power).
238 Section 5, Rule IV, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series of 2003, [Feb. 17,
2003] and as further amended by Department Order No. 40-D-05, Series of 2005, Sept. 13, 2005.
239 As distinguished from cases involving multi-empoyer CBAs which fall under the original jurisdiction of the BLR Director.
240 Section 4 [formerly Section 5], Rule XI, Book V, Rules to Implement the Labor Code, as amended by Department Order No. 40-03, Series
of 2003, [Feb. 17, 2003], and as renumbered by Department Order No. 40-F-03, Series of 2008 [Oct. 30, 2008].
241 Under this situation, the DOLE Regional Director, before whom the Request for SEBA Certification is filed, should refer the Request for
SEBA Certification to the Mediator-Arbiter for the determination of the propriety of conducting a certification election, in which case, the
Mediator-Arbiter now has the jurisdiction to decide the certification election issue. (Section 6, Rule VII, in relation to Rules VIII and IX,
Department Order No. 40-I-15, Series of 2015 [September 07, 2015]). Note must be made that when the Request for SEBA Certification is
made in an unorganized establishment with more than one (1) legitimate labor organization, the Med-Arbiter takes over from the DOLE
Regional Director in the matter of hearing and resolving the issue of certification election.
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(a) access to employer’s records and premises at any time of the day or night, whenever work is being
undertaken therein; and (b) the right:
(1) to copy from said records;
(2) to question any employee and investigate any fact, condition or matter which may be necessary to
determine violations or which may aid in the enforcement of the Labor Code and of any labor law,
wage order, or rules and regulations issued pursuant thereto.
4. ENFORCEMENT POWER OF REGIONAL DIRECTORS UNDER ARTICLE 128(b).
The statutory basis of the authority of the DOLE Regional Directors to administer and enforce labor standards
is found in Article 128(b) of the Labor Code, as amended.
Pursuant thereto, the DOLE Regional Director, in cases where the employer-employee relationship still
exists, shall have the power:
a. to issue compliance orders to give effect to the labor standards provisions of the Labor Code and other
labor legislations based on the findings of labor employment and enforcement officers or industrial safety
engineers made in the course of inspection.
b. to issue writs of execution to the appropriate authority for the enforcement of their orders, except in
cases where the employer contests the findings of the labor employment and enforcement officer and
raises issues supported by documentary proofs which were not considered in the course of inspection, in
which case, the contested case shall fall under the jurisdiction of the Labor Arbiter to whom it should be
endorsed by the Regional Director.
c. to order stoppage of work or suspension of operations of any unit or department of an establishment
when non-compliance with the law or implementing rules and regulations poses grave and imminent
danger to the health and safety of workers in the workplace. Within 24 hours, a hearing shall be
conducted to determine whether an order for the stoppage of work or suspension of operations shall be
lifted or not. In case the violation is attributable to the fault of the employer, he shall pay the employees
concerned their salaries or wages during the period of such stoppage of work or suspension of operation.
d. to require employers, by appropriate regulations, to keep and maintain such employment records as
may be necessary in aid of his visitorial and enforcement powers under the Labor Code.
II.
SMALL MONEY CLAIMS CASES
1. JURISDICTION OVER CLAIMS NOT EXCEEDING P5,000.
The DOLE Regional Director has original jurisdiction over small money claims cases arising from labor
standards violations in the amount not exceeding P5,000.00 and not accompanied with a claim for reinstatement under
Article 129 of the Labor Code.
Article 129 contemplates the recovery of wages and other monetary claims and benefits, including legal
interest, owing to an employee or domestic worker or kasambahay, arising from employer-employee relations
provided the claim does not exceed P5,000.00.
2. REQUISITES FOR THE VALID EXERCISE OF JURISDICTION BY DOLE REGIONAL DIRECTORS
UNDER ARTICLE 129.
The following requisites must all concur, to wit:
(1) The claim is presented by an employee or domestic worker or kasambahay;
(2) The claimant, no longer being employed, does not seek reinstatement; and
(3) The aggregate money claim of the employee or domestic worker or kasambahay does not exceed
P5,000.00.
In the absence of any of the aforesaid three (3) requisites, the Labor Arbiters have original and exclusive
jurisdiction over all claims arising from employer-employee relations, other than claims for employees’
compensation, social security, PhilHealth and maternity benefits.
III.
CASES SUBMITTED TO REGIONAL DIRECTORS AND ASSISTANT REGIONAL
DIRECTORS FOR VOLUNTARY ARBITRATION IN THEIR CAPACITY AS EX-OFFICIO
VOLUNTARY ARBITRATORS (EVAs)
1. JURISDICTION.
As EVAs, the DOLE Regional Directors and their Assistants have jurisdiction over the following cases:
(a) All grievances arising from the interpretation or implementation of the CBA;
(b) All grievances arising from the interpretation or enforcement of company personnel policies which
remain unresolved after exhaustion of the grievance procedure;
(c) Cases referred to them by the DOLE Secretary under the DOLE’s Administrative Intervention for
Dispute Avoidance (AIDA) initiative (provided under DOLE Circular No. 1, Series of 2006); and
(d) Upon agreement of the parties, any other labor dispute may be submitted to the EVAs for voluntary
arbitration.
H.
DOLE SECRETARY
1. POWERS OF THE DOLE SECRETARY.
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The DOLE Secretary, being the head of the Department of Labor and Employment, is possessed of a number of
powers, some of which are mentioned in the syllabus, to wit:
1. Visitorial and enforcement powers;
2. Power to suspend the effects of termination;
3. Assumption of jurisdiction;
4. Appellate jurisdiction; and
5. Voluntary arbitration powers.
2. CASES FALLING UNDER THE DOLE SECRETARY’S ORIGINAL JURISDICTION.
The DOLE Secretary has original jurisdiction over the following cases:
1. Petition to assume jurisdiction over labor disputes affecting industries indispensable to the national
interest (national interest cases);242
2. Petition to certify national interest cases to the NLRC for compulsory arbitration; 243
3. Petition to suspend effects of termination; 244
4. Administrative Intervention for Dispute Avoidance (AIDA) cases; 245
5. Voluntary arbitration cases;246 and
6. Contempt cases.247
1.
VISITORIAL AND ENFORCEMENT POWERS
1. THREE (3) KINDS OF POWER UNDER ARTICLE 128.
Article 128 of the Labor Code, as amended, basically enunciates the three (3) kinds of power which the
DOLE Secretary and/or the Regional Directors, his duly authorized representatives, may exercise in connection with
the administration and enforcement of the labor standards provisions of the Labor Code and of any labor law, wage
order or rules and regulations issued pursuant thereto.
The three (3) kinds of power are as follows:
1) Visitorial power:
2) Enforcement power: and
3) Appellate power or power of review.
2. WHO EXERCISE THE POWERS.
Nos. 1 and 2 above are exercised under the original jurisdiction of the DOLE Regional Directors.
This has been earlier discussed under the separate topic of “VII. PROCEDURE AND JURISDICTION, E.
DOLE Regional Directors, 1. Jurisdiction”, supra. Hence, the same will no longer be touched under the instant topical
discussion.
The appellate power in No. 3 above may only be exercised by the DOLE Secretary in respect to any
decision, order or award issued by the DOLE Regional Directors.
3. NATURE OF THE VISITORIAL AND ENFORCEMENT POWERS.
The visitorial and enforcement powers granted to the DOLE Secretary and the DOLE Regional Directors
who are his duly authorized representatives, are quasi-judicial in nature.
4. IT IS THE REGIONAL DIRECTORS WHO HAVE ORIGINAL JURISDICTION TO EXERCISE THE
VISITORIAL AND ENFORCEMENT POWERS UNDER ARTICLES 37, 128 AND 274.
In the instances contemplated under Articles 37, 128 and 274, it is the DOLE Regional Directors, the DOLE
Secretary’s duly authorized representatives commonly referred to in these three (3) articles, who have the original
jurisdiction to exercise the visitorial power granted therein.
243 Id.
245 This is a new form of dispute settlement introduced by the DOLE Secretary under DOLE Circular No. 1, Series of 2006, issued on August
11, 2006 by former DOLE Secretary Arturo D. Brion, later a distinguished member of the Highest Court. This was issuedin line with the
objectives of R.A. No. 9285, otherwise known as the “Alternative Dispute Resolution Act of 2004” [approved on April 2, 2004], Executive
Order No. 523 dated April 07, 2006 and the mandate of the DOLE to promote industrial peace.
247 As provided under Article 231 [225] which states: Article 231 [225]. Contempt powers of the Secretary of Labor. In the exercise of his
powers under this Code, the Secretary of Labor may hold any person in direct or indirect contempt and impose the appropriate penalties
therefor.
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5. THE ROLE OF THE DOLE SECRETARY IN THE EXERCISE OF VISITORIAL AND ENFORCEMENT
POWERS IS APPELLATE IN NATURE.
It is clear from the above disquisition that the original jurisdiction over the exercise of the visitorial and enforcement
powers belongs to the DOLE Regional Directors, as the duly authorized representatives of the DOLE Secretary.
The role of the DOLE Secretary is confined to the exercise of his appellate jurisdiction over the decisions, orders and
awards of the DOLE Regional Directors in cases brought before them for adjudication under Articles 128 and 274.
2.
POWER TO SUSPEND EFFECTS OF TERMINATION
1. GROUNDS.
The DOLE Secretary may suspend the effects of termination pending resolution of the dispute in the event
of a prima facie finding by the appropriate official of the DOLE before whom the dispute is pending that:
1. the termination may cause a serious labor dispute; and/or
2. the termination is in implementation of a mass lay-off.
2. RATIONALE FOR SUSPENDING THE EFFECTS OF TERMINATION.
The obvious purpose behind this rule is to bring the parties back to the status quo ante litem, that is, their
state of relationship prior to the termination. In this way, the workers will be litigating the issue of the validity or
legality of their termination on more or less equal footing with the employer since they will be immediately reinstated
and accordingly not be deprived of their wages while the litigation is on-going.
3. REINSTATEMENT PENDING RESOLUTION OF THE TERMINATION DISPUTE.
Suspension of the effects of termination will necessarily result in the immediate reinstatement of the
terminated employees. An order of reinstatement pending resolution of the case may thus be issued by the DOLE
Secretary pursuant to this power.
4. DISTINGUISHED FROM DOLE SECRETARY’S POWER OF ASSUMPTION OR CERTIFICATION IN
NATIONAL INTEREST CASES.
a. Different power of the DOLE Secretary.
This power of the DOLE Secretary granted under Article 277(b) should be distinguished from his power to
assume or certify labor disputes involving industries indispensable to the national interest under Article 263(g). The
following distinctions may be cited:
First, the exercise of the power to suspend the effects of termination involves only the issue of termination
of employment which may cause a serious labor dispute or is in implementation of a mass lay-off; while the power to
assume or certify labor disputes is applicable to all labor disputes, irrespective of the grounds therefor, provided such
labor disputes will cause or likely to cause strikes or lockouts in industries indispensable to the national interest.
Second, the former requires the conduct of preliminary determination of the existence of prima facie evidence
that the termination may cause a serious labor dispute or is in implementation of a mass lay-off to be conducted by
the appropriate official of the DOLE before whom the termination dispute is pending; while the latter does not require
such preliminary prima facie determination. In fact, prior notice and hearing are not required before the DOLE
Secretary may issue an assumption or certification order.
Third, the “serious labor dispute” contemplated under the former may or may not involve a strike or lockout;
while the labor dispute referred to in the latter will cause or likely to cause a strike or lockout.
Fourth, the former may be exercised in cases of termination of employment for as long as any of the two (2)
grounds mentioned in Article 277(b) exists, irrespective of the nature of the business of the employer; while the latter
may only be exercised in industries indispensable to the national interest.
Fifth, the remedy under the former is immediate reinstatement pending resolution of the termination case;
while in the latter, the remedy is the automatic return to work of the strikers or locked-out employees, if the strike or
lock-out is on-going at the time of the issuance of the assumption/certification order or the enjoining of the strike or
lockout, if one has not taken place, pending the resolution of the issues raised in the notice of strike or lockout.
3.
ASSUMPTION OF JURISDICTION
The DOLE Secretary is granted under Article 263(g) of the Labor Code, the extraordinary police power of
assuming jurisdiction over a labor dispute which, in his opinion, will cause or likely to cause a strike or lockout in an
industry indispensable to the national interest, or the so-called “national interest” cases. Alternatively, he may certify
the labor dispute to the NLRC for compulsory arbitration.
4.
APPELLATE JURISDICTION
I.
VARIOUS APPEALS TO THE DOLE SECRETARY
UNDER THE LABOR CODE AND APPLICABLE RULES
1. OFFICES FROM WHICH APPEALS MAY ORIGINATE.
Appeals to the DOLE Secretary may originate from any of the following offices:
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(1) DOLE Regional Directors;
(2) Med-Arbiters;
(3) Director of the Bureau of Labor Relations (BLR); and (4) Philippine Overseas Employment
Administration (POEA).
2. CASES NOT APPEALABLE TO THE DOLE SECRETARY.
The following decisions, awards or orders are not appealable to the Office of the DOLE Secretary:
(1) Those rendered by Labor Arbiters that are appealable to the Commission (NLRC) which has exclusive
appellate jurisdiction thereover;
(2) Those rendered by the Commission (NLRC) since they can be elevated directly to the CA by way of a
Rule 65 certiorari petition;
(3) Those rendered by the BLR Director in the exercise of his appellate jurisdiction since they can be brought
directly to the CA under Rule 65 certiorari petition;
(4) Those rendered by DOLE Regional Directors under Article 129 of the Labor Code since they are
appealable to the NLRC;
(5) Those issued by DOLE Regional Directors in their capacity as Ex-Officio Voluntary Arbitrators (EVAs)
since they can be brought directly to the CA under Rule 43 of the Rules of Court; and
(6) Those rendered by Voluntary Arbitrators which are appealable directly to the CA under Rule 43 of the
Rules of Court.
II.
APPEALS FROM DOLE REGIONAL DIRECTORS
1. CASES APPEALABLE TO DOLE SECRETARY.
Not all decisions, awards or orders rendered by the DOLE Regional Directors are appealable to the DOLE Secretary.
Only those issued in the following cases are so appealable:
(a) Labor standards enforcement cases under Article 128;
(b) Occupational safety and health violations; and
(c) Complaints against private recruitment and placement agencies (PRPAs) for local employment.
2. CASES NOT APPEALABLE TO THE DOLE SECRETARY.
As earlier pointed out, the following cases decided by the DOLE Regional Directors are not appealable to
the DOLE Secretary but to some other agencies/tribunals indicated below:
(a) Decisions in small money claims cases arising from labor standards violations in the amount not
exceeding P5,000.00 and not accompanied with a claim for reinstatement under Article 129 are
appealable to the NLRC;
(b) Decisions in cases submitted to DOLE Regional Directors for voluntary arbitration in their capacity as
Ex-Officio Voluntary Arbitrators (EVAs) under Department Order No. 83-07, Series of 2007 may be
elevated directly to the Court of Appeals by way of a Rule 43 petition. This is so because the DOLE
Regional Directors, in so deciding, are acting as Voluntary Arbitrators; hence, what should apply are the
rules on appeal applicable to voluntary arbitration.
III.
APPEALS FROM DECISIONS OF
MEDIATORS-ARBITERS (MED-ARBITERS) AND BLR DIRECTOR
(NOTE: See discussion above in connection with the
jurisdiction of the Bureau of Labor Relations [BLR])
V.
APPEALS FROM DECISIONS OF POEA
1. CASES APPEALABLE TO THE DOLE SECRETARY.
The decisions in the following cases rendered by the Philippine Overseas Employment Administration (POEA) in its
original jurisdiction are appealable to the DOLE Secretary:
(a) Recruitment violations and other related cases. - All cases which are administrative in character,
involving or arising out of violation of rules and regulations relating to licensing and registration of
recruitment and employment agencies or entities, including refund of fees collected from workers and
violation of the conditions for the issuance of license to recruit workers.
(b) Disciplinary action cases and other special cases which are administrative in character, involving
employers, principals, contracting partners and Filipino migrant workers.
It must be noted that the POEA ceased to have any jurisdiction over money claims of OFWs, or those arising
out of an employer-employee relationship or by virtue of any law or contract involving Filipino workers for overseas
deployment including claims for actual, moral, exemplary and other forms of damages. The jurisdiction over these
claims was transferred to the Labor Arbiters of the NLRC by virtue of Section 10 of R.A. No. 8042, as amended.
Hence, appeals therefrom may be instituted to the Commission (NLRC).
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5.
DOLE SECRETARY’S VOLUNTARY ARBITRATION POWERS
1. AIDA.
a. New rule on voluntary settlement of cases by the DOLE Secretary.
A new form of dispute settlement by the DOLE Secretary was introduced by DOLE Circular No. 1, Series
of 2006. Called Administrative Intervention for Dispute Avoidance (AIDA), this is a new administrative procedure
for the voluntary settlement of labor disputes in line with the objectives of R.A. No. 9285, Executive Order No. 523
and the mandate of the DOLE to promote industrial peace.
b. Nature of administrative intervention by DOLE Secretary.
This recourse is separate from the established dispute resolution modes of mediation, conciliation and
arbitration under the Labor Code, and is an alternative to other voluntary modes of dispute resolution such as the
voluntary submission of a dispute to the Regional Director for mediation, to the NCMB for preventive mediation, or
to the intervention of a regional or local tripartite peace council for the same purpose.
c. Parties who may request for DOLE Secretary’s intervention.
Either or both the employer and the certified collective bargaining agent (or the representative of the
employees where there is no certified bargaining agent) may voluntarily bring to the Office of the DOLE Secretary,
through a Request for Intervention, any potential or ongoing dispute defined below.
d. Potential or on-going dispute. A potential or on-going dispute refers to:
(a) a live and active dispute;
(b) that may lead to a strike or lockout or to massive labor unrest; and
(c) is not the subject of any complaint or notice of strike or lockout at the time a Request for Intervention is
made.
2. VOLUNTARY ARBITRATION BY DOLE SECRETARY.
If the intervention through AIDA fails, either or both parties may avail themselves of the remedies provided
under the Labor Code. Alternatively, the parties may submit their dispute to the Office of the DOLE Secretary for
voluntary arbitration. Such voluntary arbitration should be limited to the issues defined in the parties' submission to
voluntary arbitration agreement and should be decided on the basis of the parties' position papers and submitted
evidence. The Office of the DOLE Secretary is mandated to resolve the dispute within sixty (60) days from the parties'
submission of the dispute for resolution.
3. DOES THE DOLE SECRETARY ASSUME THE ROLE OF VOLUNTARY ARBITRATOR ONCE HE
ASSUMES JURISDICTION OVER A LABOR DISPUTE?
In the 2014 case of Philtranco Service Enterprises, Inc. v. Philtranco Workers Union-Association of
Genuine Labor Organizations (PWU-AGLO),248 this poser was answered in the negative. A notice of strike was
filed by respondent union which, after failure of conciliation and mediation by the NCMB, was referred by the
Conciliator-Mediator to the Office of the DOLE Secretary who thereby assumed jurisdiction over the labor dispute.
The case was resolved by the Acting DOLE Secretary in favor of respondent union. A motion for reconsideration was
filed by petitioner company. The DOLE Secretary, however, declined to rule on the motion citing a DOLE regulation,
applicable to voluntary arbitration, which provided that the Voluntary Arbitrators’ decisions, orders, resolutions or
awards shall not be the subject of motions for reconsideration. The DOLE Secretary took the position that when he
assumed jurisdiction over the labor dispute, he was acting as a Voluntary Arbitrator. Petitioner subsequently filed a
Rule 65 certiorari petition with the CA. The CA, however, dismissed petitioner company’s Rule 65 certiorari petition
on the ground, among others, that the decision of the DOLE Secretary, having been rendered by him in his capacity
as Voluntary Arbitrator, is not subject to a Rule 65 certiorari petition but to a Rule 43 petition for review which
properly covers decisions of Voluntary Arbitrators.
Before the Supreme Court, petitioner asserted that, contrary to the CA’s ruling, the case is not a simple
voluntary arbitration case. The character of the case, which involves an impending strike by petitioner’s employees;
the nature of petitioner’s business as a public transportation company, which is imbued with public interest; the merits
of its case; and the assumption of jurisdiction by the DOLE Secretary – all these circumstances removed the case from
the coverage of Article 262, and instead placed it under Article 263, of the Labor Code. For its part, respondent union
argued that the DOLE Secretary decided the assumed case in his capacity as Voluntary Arbitrator; thus, his decision,
being that of a Voluntary Arbitrator, is only assailable via a petition for review under Rule 43. The Supreme Court,
however, pronounced that:
“It cannot be said that in taking cognizance of NCMB-NCR CASE No. NS-02-028-07, the Secretary of Labor
did so in a limited capacity, i.e., as a voluntary arbitrator. The fact is undeniable that by referring the case to the
Secretary of Labor, Conciliator-Mediator Aglibut conceded that the case fell within the coverage of Article 263 of
the Labor Code; the impending strike in Philtranco, a public transportation company whose business is imbued with
public interest, required that the Secretary of Labor assume jurisdiction over the case, which he in fact did. By
assuming jurisdiction over the case, the provisions of Article 263 became applicable, any representation to the
contrary or that he is deciding the case in his capacity as a voluntary arbitrator notwithstanding.”
248 G.R. No. 180962, Feb. 26, 2014. Although this case involves a decision of the DOLE Secretary, the principle enunciated herein equally
applies to the NLRC.
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Consequently, the Supreme Court reversed and set aside the CA ruling and reinstated the case and directed the CA
“to resolve the same with deliberate dispatch.”
I.
GRIEVANCE MACHINERY
AND VOLUNTARY ARBITRATION
(NOTE must be made that the 2017 Syllabus merely requires a discussion of the jurisdiction of the
Voluntary Arbitrator and the remedies available before him. However, in the view of the
author, there can be no meaningful discussion of these subject matters without touching the
subject of
“Grievance Machinery” since the main bulk of cases cognizable by Voluntary Arbitrators emanate
from and consist of unresolved grievances that were initially processed and adjudicated through the
Grievance Machinery. Hence, a discussion of Grievance Machinery is of extreme necessity).
1.
SUBJECT MATTER OF GRIEVANCE
1. GRIEVANCE OR GRIEVABLE ISSUE.
A “grievance” or “grievable issue” is any question raised by either the employer or the union
regarding any of the following issues or controversies:
1. The interpretation or application of the CBA;
2. The interpretation or enforcement of company personnel policies; or
3. Violation of any provisions of the CBA or company personnel policies.
2. VALIDITY AND BINDING EFFECT OF DECISIONS OF GRIEVANCE COMMITTEE.
A member of the bargaining union who brought his grievable issue for resolution by the Grievance
Committee is bound by whatever disposition the latter may render thereon.
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(3)one chosen by the parties with or without the assistance of the NCMB, pursuant to a selection procedure
agreed upon in the CBA; or
(4)one appointed by the NCMB in case either of the parties to the CBA refuses to submit to voluntary
arbitration.
This term includes a panel of Voluntary Arbitrators.
3. VOLUNTARY ARBITRATOR ACTS IN QUASI-JUDICIAL CAPACITY.
Although not a part of a government unit or a personnel of the Department of Labor and Employment, a
Voluntary Arbitrator, by the nature of his functions, acts in a quasi-judicial capacity. He is a means by which
government acts, or by which a certain government act or function is performed. He performs a state function pursuant
to a governmental power delegated to him under the Labor Code. The landmark case of Luzon Development Bank
v. Association of Luzon Development Bank Employees, 249 clearly declared that a Voluntary Arbitrator,
whether acting solely or in a panel, enjoys in law the status of a quasi-judicial agency.
2.1.
JURISDICTION
1. ORIGINAL AND EXCLUSIVE JURISDICTION.
a. In general.
The Voluntary Arbitrator or panel of Voluntary Arbitrators shall have exclusive and original jurisdiction
over the following cases:
(1) Unresolved grievances arising from the interpretation or implementation of the collective bargaining
agreement (CBA).
(2) Unresolved grievances arising from the interpretation or enforcement of company personnel policies.
(3) Violations of the CBA which are not gross in character.
(4) Other labor disputes, including unfair labor practices and bargaining deadlocks, upon agreement of the
parties.
(5) National interest cases.
(6) Wage distortion issues arising from the application of any wage orders in organized establishments.
(7) Unresolved grievances arising from the interpretation and implementation of the Productivity Incentive
Programs under R.A. No. 6971.
2.1.1.
JURISDICTION OVER OTHER LABOR DISPUTES
Under Article 262 of the Labor Code, upon agreement of the parties, the Voluntary Arbitrator or panel of
Voluntary Arbitrators may also hear and decide all other labor disputes, including unfair labor practices and
bargaining deadlocks. For this purpose, before or at any stage of the compulsory arbitration process, parties to a labor
dispute may agree to submit their case to voluntary arbitration.
2.1.2.
JURISDICTION OVER NATIONAL INTEREST CASES
Article 263(g) of the Labor Code which involves the DOLE Secretary’s power of assumption of jurisdiction
or certification to the NLRC of labor disputes affecting industries indispensable to the national interest, also provides
that “[b]efore or at any stage of the compulsory arbitration process, the parties may opt to submit their dispute
to voluntary arbitration.”
This means that even if the case has already been assumed by the DOLE Secretary or certified to the NLRC
for compulsory arbitration, or even during its pendency therewith, the parties thereto may still withdraw the case from
the DOLE Secretary or NLRC, as the case may be, and submit it to a Voluntary Arbitrator for voluntary arbitration
purposes.
2.1.3.
JURISDICTION OVER WAGE DISTORTION CASES
▪ Jurisdiction over wage distortion cases depends on whether the establishment is organized or unorganized.
In organized establishments, the employer and the union are required to negotiate to correct the wage
distortion. Any dispute arising from such wage distortion should be resolved through the grievance procedure under
the CBA and if it remains unresolved, through voluntary arbitration.
In unorganized establishments, where there are no CBAs or recognized or certified collective bargaining
unions, the jurisdiction is with the Labor Arbiter.
SOME PRINCIPLES.
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1) Cases cognizable by Voluntary Arbitrators in their original jurisdiction but ERRONEOUSLY filed
with Labor Arbiters, DOLE Regional Offices or NCMB should be disposed of by referring them to the
Voluntary Arbitrators or panel of Voluntary Arbitrators mutually chosen by the parties.
2) Cases cognizable by Voluntary Arbitrators but filed with regular courts should be dismissed.
3) THE WELL-ENTRENCHED RULE IS THAT WHEN A CASE DOES NOT INVOLVE THE
PARTIES TO A CBA – THE EMPLOYER AND THE BARGAINING UNION - IT IS NOT
SUBJECT TO VOLUNTARY ARBITRATION. While individual or group of employees, without the
participation of the union, are granted the right to bring grievance directly to the employer, they
cannot submit the same grievance, if unresolved by the employer, for voluntary arbitration without
the union’s approval and participation. The reason is that it is the union which is the party to the CBA,
and not the individual or group of employees. - This rule was lately affirmed in the 2009 case of Tabigue
v. International Copra Export Corporation. Pursuant to Article 260 of the Labor Code, the parties to a
CBA shall name or designate their respective representatives to the grievance machinery and if the grievance
is unsettled in that level, it shall automatically be referred to the voluntary arbitrators designated in advance
by parties to a CBA. Consequently only disputes involving the union and the company shall be referred
to the grievance machinery or voluntary arbitrators.”
3.
REMEDIES
1. RELIEFS AND REMEDIES THAT MAY BE GRANTED BY VOLUNTARY ARBITRATORS.
Besides the procedural remedies discussed above, the Voluntary Arbitrator or panel of Voluntary Arbitrators
may grant the same reliefs and remedies granted by Labor Arbiters under Article 279 of the Labor Code, such as:
(1) In illegal dismissal cases:
(a) Actual reinstatement;
(b) Separation pay in lieu of reinstatement, in case reinstatement becomes impossible, non-feasible or
impractical;
(c) Full backwages;
(d) Moral and exemplary damages; and (e) Attorney’s fees.
(2) Monetary awards in monetary claims cases in which case, the decision should specify the amount
granted and the formula used in the computation thereof.
J.
PRESCRIPTION OF ACTIONS
1. MONEY CLAIMS CASES.
a. Prescriptive period is three (3) years under Article 291 of the Labor Code. - The prescriptive period
of all money claims and benefits arising from employer-employee relations is 3 years from the time the
cause of action accrued; otherwise, they shall be forever barred.
b. All other money claims of workers prescribe in 3 years. - Article 291 contemplates all money claims
arising from employer-employee relationship, including:
1. Money claims arising from the CBA.
2. Incremental proceeds from tuition increases.
3. Money claims of Overseas Filipino Workers (OFWs).
Note must be made that in the 2010 case of Southeastern Shipping v. Navarra, Jr.,250 the 1-year prescriptive
period in Section 28 of POEA-SEC was declared null and void. The reason is that Article 291 of the Labor Code
is the law governing the prescription of money claims of seafarers, a class of overseas contract workers. This law
prevails over said Section 28.
2. ILLEGAL DISMISSAL CASES.
a. Legal basis is not Article 291 of the Labor Code but Article 1146 of the Civil Code. - The 3-year
prescriptive period in Article 291 solely applies to money claims but not to illegal dismissal cases which
are not in the nature of money claims. The prescriptive period of illegal dismissal cases is 4 years under
Article 1146 of the Civil Code.
3. UNFAIR LABOR PRACTICE (ULP) CASES.
a. Prescriptive period of ULP cases is 1 year (Article 290, Labor Code). - The prescriptive period for all
complaints involving unfair labor practices is one (1) year from the time the acts complained of were
committed; otherwise, they shall be forever barred.
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b. Pre-requisite for prosecution of criminal cases. - Before a criminal action for ULP may be filed, it is a
condition sine qua non that a final judgment finding that an unfair labor practice act was committed by
the respondent should first be secured or obtained in the labor case initiated before the Labor Arbiter or
the Voluntary Arbitrator, as the case may be. Final judgment is one that finally disposes of the action or
proceeding. For instance, if the remedy of appeal is available but no appeal is made, then, the judgment
is deemed final and executory. If an appeal is made, then the final judgment rendered by the last tribunal,
say the Supreme Court, to which the case was elevated should be the reckoning factor.
c. Interruption of prescriptive period of offenses. - As far as ULP cases are concerned, the running of the
one (1) year prescriptive period is interrupted during the pendency of the labor proceeding.
d. Evidentiary value of the final judgment in the labor case. - In ULP cases, the final judgment in the
labor case cannot be presented as evidence of the facts proven therein or as evidence of the guilt of the
respondent therein. Its evidentiary or probative value is confined merely in proving the fact of compliance
with the condition sine qua non prescribed by law, i.e., that a final judgment has been secured in the labor
proceeding finding that an unfair labor practice act was in fact committed by the respondent.
4. OFFENSES PENALIZED UNDER THE LABOR CODE AND ITS IMPLEMENTING RULES AND
REGULATIONS (IRR).
a. Prescriptive period is 3 years (Article 290, Labor Code). - The prescriptive period of all criminal
offenses penalized under the Labor Code and the Rules to Implement the Labor Code is three (3) years
from the time of commission thereof.
b. Consequence of non-compliance with prescriptive period under Article 290. - Failure to initiate or
file the criminal action or complaint within the prescriptive period shall forever bar such action.
c. Illegal dismissal is not an “offense” under Article 290. - The act of the employer in dismissing an
employee without cause, although a violation of the Labor Code and its implementing rules, does not
amount to an “offense” as this term is understood and contemplated under Article 290.
5. ILLEGAL RECRUITMENT CASES.
a. Simple illegal recruitment cases. – The prescriptive period is five (5) years.
b. Illegal recruitment cases involving economic sabotage. – The prescriptive period is twenty (20) years.
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