Labrel Midterms Reviewer PDF

LABOR RELATIONS
Atty. Peter Joey B. Usita

A.Y. 2018 - 2019
How do you determine the existence of an employer – employee relationship? The Supreme Court ruled in the Bombo Radyo case that the use of this test is not solely
The elements to determine the existence of an employer-employee relationship are: limited to the NLRC. The DOLE Secretary, or his or her representatives, can utilize the
1. The selection and engagement of an employee same test. The Supreme Court likewise provided the rules to be followed as follows:
2. The payment of wages 1. If a complaint if brought before the DOLE to give effect to labor standards
3. The power of dismissal provisions of the Labor Code or other labor legislation, and there is a finding in
4. The employers’ power to control the employee on the means and methods by DOLE that there exists an employee-employer relationship, DOLE exercises
which the work is accomplished jurisdiction to the exclusion of the NLRC
2. If DOLE finds no employer-employee relationship, the jurisdiction is with the
Why is it important to determine the existence of an employer – employee NLRC
relationship? 3. If a complaint is filed with the DOLE, and is accompanied by a claim of
It is important to determine the existence of an employer-employee relationship because: reinstatement, the jurisdiction is with the Labor Arbiter under Art 217(3) of the
1. It determines the rights of the employees and employers (such as hours of work, Labor Code
overtime pay, benefits under the Social Security Law, among others) 4. If a complaint is filed with the NLRC, and there is still an existing employer-
2. It determines the proper jurisdiction to try and decide the case employee relationship, the jurisdiction is properly with DOLE
X is the City of Manila, Y is the employee of X who was illegally dismissed. Where Sonza v. ABS – CBN (G.R. No. 1318051; June 10, 2004)
will Y file the complaint? FACTS:
In a case where the employer is a government agency or a government instrumentality, ABS-CBN signed an Agreement with the Mel and Jay Management and Development
such as the City of Manila in this case, the employee Y, who was illegally dismissed Corporation ("MJMDC"). MJMDC agreed to provide SONZA's services exclusively to
may file a complaint at the Civil Service Commission or CSC. ABS-CBN as talent for radio and television. ABS-CBN agreed to pay for SONZA's
services a monthly talent fee of P310,000 for the first year and P317,000 for the second
X employer of Y dismisses him. Y files a case for illegal dismissal, where will he and third year of the Agreement. ABS-CBN would pay the talent fees on the 10th and
file? 25th days of the month.
Y should file the case with the Labor Arbiter. Citing Rule IV, Sec 1(b) of the 2011
NLRC Rules of Procedure which provides “Labor Arbiters shall have original and Sonza resigned in view of recent events concerning his programs and career. He
exclusive jurisdiction to hear and decide cases involving all workers, whether considered the acts of the station violative of the Agreement.
agricultural or non-agricultural… involving termination disputes”
SONZA filed a complaint against ABS-CBN before the DOLE for unpaid talent fees,
Power of selection 13th month pay, separation pay, service incentive leave, signing bonus, travel allowance,
The power of selection is the determination of the qualifications and fitness of workers and amounts due under the Employee Stock Option Plan. ABS-CBN filed a Motion to
for hiring which is the prerogative of the employer Dismiss on the ground that no employer-employee relationship existed between the
parties. Labor Arbiter dismissed the complaint for lack of jurisdiction. NLRC affirmed
If an employer – employee relationship is established through the 4 – fold test, will LA’s decision.
the Labor Arbiter automatically have jurisdiction?
No. The Labor Arbiter will not automatically have jurisdiction over a case for the sole ISSUE: Whether or not an employer-employee relationship existed between Sonza and
reason of the four-fold test. ABS-CBN
SAN BEDA COLLEGE OF LAW – MENDIOLA

ABRILLO – ANGARA – ARCE – ARGONZA – AREÑO – BARNACHEA – BENEDICT – BERNAL – BONETE - CABRAL – CAJIGAL – CAPUCHINO – CHUA – DE LA PEÑA - DELA CRUZ – HILARIO – HIQUIANA – KASEY – LLEDO – LUZURIAGA - MARIANO – 1
MIGUEL – MIRABEL – PADERAYON - QUISMORIO – ROCES – ROMANO – SANTOS, E – SANTOS, L – TORRES – UNARCE - VENENCIANO – VISTA
LABOR RELATIONS
A.Y. 2018 - 2019
a. Was there an employer – employee relationship in this case? i. Where was the case first filed? – DOLE
No, there was no employer-employee relationship. Sonza is not an employee but an
independent contractor. j. SC observation regarding payment of wages of Sonza (talent fee)
Whatever benefits SONZA enjoyed arose from contract and not because of an employer-
b. If he was an independent contractor, what would be the effect of him filing employee relationship. SONZA's talent fees, amounting to P317,000 monthly in the
with the Labor Arbiter? second and third year, are so huge and out of the ordinary that they indicate more an
If he was an independent contractor, then the complaints filed by him with the Labor independent contractual relationship rather than an employer-employee relationship
Arbiter would be dismissed for lack of jurisdiction. Sonza’s claims are all based on the
May 1994 Agreement and stock option plan, and not on the Labor Code, since there is k. Ruling of the LA, NLRC, CA and SC
no employer-employee relationship. In effect, SONZA's cause of action is for breach of LA: NO. A “talent” cannot be considered as an employee by reason of the peculiar
contract which is intrinsically a civil dispute cognizable by the regular courts. circumstances surrounding the engagement of his services. Complainant was engaged
by respondent by reason of his peculiar skills and talent as a TV host and a radio
c. In resolving the case of Sonza, what test was applied applied? broadcaster. Unlike an ordinary employee, he was free to perform the services he
The 4-fold test: undertook to render in accordance with his own style.
1. the selection and engagement of the employee;
2. the payment of wages; NLRC: NO. We find it erroneous to assert that MJMDC is a mere labor-only’ contractor
3. the power of dismissal; and of ABS-CBN such that there exist[s] employer-employee relationship between the latter
4. the employer's power to control the employee on the means and methods by which and Mr. Sonza. On the contrary, We find it indubitable, that MJMDC is an agent, not of
the work is accomplished. ABS-CBN, but o the talent/contractor Mr. Sonza, as expressly admitted by the latter and
MJMDC in the May 11994 Agreement.
d. What law was applied?
Sonza’s contractual relations with ABS-CBN are founded on the New Civil Code, rather CA: NO. The CA affirmed the ruling of the NLRC. The existence of an employer-
than the Labor Code. Instead of merely resigning from ABS-CBN, Sonza served upon employee relationship between Sonza and ABS-CBN is a factual question that is within
the ABS-CBN a 'notice of rescission' of Agreement the jurisdiction of the NLRC to resolve.
e. Reason for the cancellation of his show SC: NO. Case law has consistently held that the elements of an employer-employee
Breach of contract. Sonza considered the acts of the station as violative of the relationship are: (a) the selection and engagement of the employee; (b) the payment of
Agreement. wages; (c) the power of dismissal; and (d) the employer’s power to control the employee
on the means and methods by which the work is accomplished. The last element, the so-
f. Nature of the complaint – Action for alleged breach of contract called control test, is the most important element
g. What prompted Sonza to file a case against ABS – CBN? A. Selection and Engagement of Employee
ABS-CBN ceased in airing his show, Mel & Jay, which sonza considers as violative or ABS-CBN engaged SONZAs services to co-host its television and radio programs
a breach of the Agreement because of SONZAs peculiar skills, talent and celebrity status.
h. What are the claims in the complaint? The specific selection and hiring of SONZA, because of his unique skills, talent and
Salaries, separation pay, service incentive leave pay, 13th month pay, signing bonus, celebrity status not possessed by ordinary employees, is a circumstance indicative, but
travel allowance, amount due under Employees Stock Option Plan (ESOP) not conclusive, of an independent contractual relationship. If SONZA did not possess
LABOR RELATIONS
A.Y. 2018 - 2019
such unique skills, talent and celebrity status, ABS-CBN would not have entered into to the hiring party. In the broadcast industry, exclusivity is not necessarily the same as
the Agreement with SONZA but would have hired him through its personnel department control.
just like any other employee.
Jurisdiction of the Labor Arbiter
B. Payment of Wages Under Article 224 of the Labor code, paragraph (a):
All the talent fees and benefits paid to SONZA were the result of negotiations that led Except as otherwise provided under this Code, the Labor Arbiters shall have
to the Agreement. Whatever benefits SONZA enjoyed arose from contract and not original and exclusive jurisdiction to hear and decide, within thirty (30) calendar
days after the submission of the case by the parties for decision without extension,
because of an employer-employee relationship.
even in the absence of stenographic notes, the following cases involving all
workers, whether agricultural or non-agricultural:
SONZA’s talent fees, amounting to P317,000 monthly in the second and third year, are 1. Unfair labor practice cases;
so huge and out of the ordinary that they indicate more an independent contractual 2. Termination disputes;
relationship rather than an employer-employee relationship. ABS-CBN agreed to pay 3. If accompanied with a claim for reinstatement, those cases that workers may
SONZA such huge talent fees precisely because of SONZA’s unique skills, talent and file involving wages, rates of pay, hours of work and other terms and
celebrity status not possessed by ordinary employees. conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising
C. Power of Dismissal from the employer-employee relations;
The manner by which SONZA terminated his relationship with ABS-CBN is immaterial. 5. Cases arising from any violation of Article 264 of this Code, including
Whether SONZA rescinded the Agreement or resigned from work does not determine questions involving the legality of strikes and lockouts; and
his status as employee or independent contractor. 6. Except claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims arising from employer-employee
D. Power of Control relations, including those of persons in domestic or household service,
Applying the control test to the present case, we find that SONZA is not an employee involving an amount exceeding five thousand pesos (P5,000.00) regardless
but an independent contractor. of whether accompanied with a claim for reinstatement.
First, ABS-CBN was not involved in the actual performance that produced the finished a. What if the claim exceeds 5,000 pesos?
product of SONZAs work. ABS-CBN did not instruct SONZA how to perform his job. Regardless of the amount, if there is still an Er-Ee relationship existing at the time of the
ABS-CBN merely reserved the right to modify the program format and airtime schedule filing of the complaint, the jurisdiction is with the Regional Director. The Labor Arbiter
for more effective programming. ABS-CBNs sole concern was the quality of the shows acquires jurisdiction if the Er-Ee relationship no longer exists either because the
and their standing in the ratings. Clearly, ABS-CBN did not exercise control over the employee has resigned, retired, or has been dismissed by the employer.
means and methods of performance of SONZAs work.
b. Effect of reinstatement
Second, SONZA failed to show that these rules controlled his performance. We find that In case of reinstatement, the employee shall be entitled to backwages for the period
these general rules are merely guidelines towards the achievement of the mutually which he was “illegally dismissed”. However, if the reinstatement of the employee is no
desired result, which are top-rating television and radio programs that comply with longer practicable, the employees shall be entitled to backwages of the unexpired portion
standards of the industry. of his employment contract.
Last, being an exclusive talent does not by itself mean that SONZA is an employee of
ABS-CBN. Even an independent contractor can validly provide his services exclusively
LABOR RELATIONS
A.Y. 2018 - 2019
Article 129 of the Labor Code for holiday and rest day and illegal diminution of benefits, delayed payment of wages
Recovery of wages, simple money claims and other benefits. Upon complaint of any and noncoverage of SSS, PAG-IBIG and Philhealth. After the conduct of summary
interested party, the Regional Director of the Department of Labor and Employment or investigations, and after the parties submitted their position papers, the DOLE Regional
any of the duly authorized hearing officers of the Department is empowered, through Director found that private respondent was an employee of petitioner, and was entitled
summary proceeding and after due notice, to hear and decide any matter involving the to his money claims. Petitioner sought reconsideration of the Director's Order, but failed.
recovery of wages and other monetary claims and benefits, including legal interest, On appeal to the DOLE Secretary, petitioner denied once more the existence of
owing to an employee or person employed in domestic or household service or employer-employee relationship|||dismissed petitioner's appeal on the ground that
househelper under this Code, arising from employer-employee relations: Provided, That petitioner submitted a Deed of Assignment of Bank Deposit instead of posting a cash or
such complaint does not include a claim for reinstatement: Provided further, That the surety bond. When the matter was brought before the CA, where petitioner claimed that
aggregate money claims of each employee or househelper does not exceed Five it had been denied due process, it was held that petitioner was accorded due process as
thousand pesos (P5,000.00). The Regional Director or hearing officer shall decide or it had been given the opportunity to be heard, and that the DOLE Secretary had
resolve the complaint within thirty (30) calendar days from the date of the filing of the jurisdiction over the matter, as the jurisdictional limitation imposed by Article 129 of
same. Any sum thus recovered on behalf of any employee or househelper pursuant to the Labor Code on the power of the DOLE Secretary under Art. 128 (b) of the Code had
this Article shall be held in a special deposit account by, and shall be paid on order of, been repealed by Republic Act No. (RA) 7730.
the Secretary of Labor and Employment or the Regional Director directly to the
employee or househelper concerned. Any such sum not paid to the employee or a. Who are the parties?
househelper because he cannot be located after diligent and reasonable effort to locate Petitioner: People’s Broadcasting Service (Bombo Radyo Phils., Inc.)
him within a period of three (3) years, shall be held as a special fund of the Department Respondents: Secretary of Labor and Employment; Regional Director, DOLE Region
of Labor and Employment to be used exclusively for the amelioration and benefit of VII and Jandeleon Juezan
workers.
b. Did he file the case before the Court?
Any decision or resolution of the Regional Director or hearing officer pursuant to this Juezan filed a complaint against People’s Broadcasting Service with the DOLE Regional
provision may be appealed on the same grounds provided in Article 223 of this Code, Office No. VII, Cebu City.
within five (5) calendar days from receipt of a copy of said decision or resolution, to the
National Labor Relations Commission which shall resolve the appeal within ten (10) c. What division of the NLRC?
calendar days from the submission of the last pleading required or allowed under its The complaint was filed with the DOLE Regional Office No. VII, Cebu City.
rules.
d. How did the ruling affect the jurisdiction of the Labor Arbiter?
The Secretary of Labor and Employment or his duly authorized representative may If a complaint is filed with the DOLE, and it is accompanied by a claim for
supervise the payment of unpaid wages and other monetary claims and benefits, reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art 217(3),
including legal interest, found owing to any employee or househelper under this Code. which provides that the LA has original and exclusive jurisdiction over those cases
(As amended by Section 2, Republic Act No. 6715, March 21, 1989) involving wages, rates of pay, hours of work, and other terms and conditions of
employment, if accompanied by a claim for reinstatement.
PBC v. Secretary of Labor
FACTS: e. 3 legal principles to remember in this case
Private respondent Jandeleon Juezan filed a complaint against petitioner with the 1. Under Art. 128(b) of the Labor Code, the DOLE is fully empowered to make a
Department of Labor and Employment (DOLE) Regional Office No. VII, Cebu City, for determination as to the existence of an employer-employee relationship in the
illegal deduction, nonpayment of service incentive leave, 13th month pay, premium pay exercise of its visitorial power, subject to judicial review, not review by the NLRC.
LABOR RELATIONS
A.Y. 2018 - 2019
2. Art 128(b) has been amended to expand the powers of the DOLE Secretary and The determination of the existence of an employer-employee relationship by the DOLE
his duly authorized representatives by RA 7730. In these cases, the Court resolved must be respected. The expanded visitorial and enforcement power of the DOLE granted
that DOLE had the jurisdiction, despite the amount of the money claims involved. by RA 7730 would be rendered nugatory if the alleged employer could, by the simple
3. expedient of disputing the employer- employee relationship, force the referral of the
a. If a complaint is brought before the DOLE to give effect to the labor standard matter to the NLRC. The Court issued the declaration that at least a prima facie showing
provisions and there is a finding by the DOLE that there is an existing er-ee of the absence of an employer-employee relationship be made to oust the DOLE of
relationship, DOLE exercises jurisdiction to the exclusion of NLRC. jurisdiction. But it is precisely the DOLE that will be faced with that evidence, and it is
b. If the DOLE finds that there is no er-ee relationship, the jurisdiction is properly the DOLE that will weigh it, to see if the same does successfully refute the existence of
with the NLRC an employer-employee relationship. (PEOPLE'S BROADCASTING (BOMBO
c. If a complaint is filed with the DOLE, and it is accompanied by a claim for RADYO PHILS., INC.) vs. SECRETARY OF DOLE G.R. No. 179652)
reinstatement, the jurisdiction is properly with the Labor Arbiter, under Art
217(3) Right to control means and methods or right to control the result, what happens?
d. If a complaint is filed with the NLRC, and there is an existing er-ee a. What law would govern?
relationship, the jurisdiction is properly with the DOLE When the control test is not sufficient to give a complete picture of the relationship
between the parties, two- tiered test must be applied. The proper standard of economic
Does the Regional Director have the power to determine Employer – employee dependence is whether the worker is dependent on the alleged employer for his
relationship? continued employment in that line of business.
YES. No limitation in the law was placed upon the power of the DOLE to determine the
existence of an employer-employee relationship. No procedure was laid down where the There are instances when, aside from the employers power to control the employee with
DOLE would only make a preliminary finding, that the power was primarily held by the respect to the means and methods by which the work is to be accomplished, economic
NLRC. The law did not say tht DOLE would first seek the NLRC’s determination of the realities of the employment relations help provide a comprehensive analysis of the true
existence of an er-ee relationship, or that should the existence of the er-ee relationship classification of the individual, whether as employee, independent contractor, corporate
be disputed, the DOLE would refer the matter to the NLRC. The DOLE must have the officer or some other capacity. The better approach would therefore be to adopt a two-
power to determine whether or not an er-ee relationship exists, and from there to decide tiered test involving: (1) the putative employer’s power to control the employee with
whether or not to issue compliance orders in accordance with Art. 128(b) of the Labor respect to the means and methods by which the work is to be accomplished; and (2) the
Code, as amended by RA 7730. underlying economic realities of the activity or relationship.
How was the visitorial power expanded? The determination of the relationship between employer and employee depends upon
No limitation in the law was placed upon the power of the DOLE to determine the the circumstances of the whole economic activity, such as: (1) the extent to which the
existence of an employer employee relationship. No procedure was laid down where the services performed are an integral part of the employers business; (2) the extent of the
DOLE would only make a preliminary finding, that the power was primarily held by the workers investment in equipment and facilities; (3) the nature and degree of control
NLRC. The law did not say that the DOLE would first seek the NLRC’s determination exercised by the employer; (4) the workers opportunity for profit and loss; (5) the
of the existence of an employer-employee relationship, or that should the existence of amount of initiative, skill, judgment or foresight required for the success of the claimed
the employer-employee relationship be disputed, the DOLE would refer the matter to independent enterprise; (6) the permanency and duration of the relationship between the
the NLRC. The DOLE must have the power to determine whether or not an employer- worker and the employer; and (7) the degree of dependency of the worker upon the
employee relationship exists, and from there to decide whether or not to issue employer for his continued employment in that line of business.
compliance orders in accordance with Art. 128(b) of the Labor Code, as amended by
RA 7730.
LABOR RELATIONS
A.Y. 2018 - 2019
It must be taken into account that the two-tiered test is not applied automatically or which provides that the Labor Arbiter has original and exclusive jurisdiction over those
immediately. The same is only to be applied when there is a clear ambiguity, doubt or cases involving wages, rates of pay, hours of work, and other terms and conditions of
difficulty in using the four-fold test solely. (ANGELINA FRANCISCO vs. employment, if accompanied by a claim for reinstatement. If a complaint is filed with
NATIONAL LABOR RELATIONS COMMISSION G.R. No. 170087) the NLRC, and there is still an existing employer-employee relationship, the jurisdiction
is properly with the DOLE. The findings of the DOLE, however, may still be questioned
b. Why is the power to control important? through a petition for certiorari under Rule 65 of the Rules of Court. (PEOPLE'S
The control test is the most important test our courts apply in distinguishing an employee BROADCASTING (BOMBO RADYO PHILS., INC.) vs. SECRETARY OF
from an independent contractor. This test is based on the extent of control the hirer DOLE G.R. No. 179652)
exercises over a worker. The greater the supervision and control the hirer exercises, the
more likely the worker is deemed an employee, and the less control the hirer exercises, If there is power to control, does that mean there is automatically an employer –
the more likely the worker is considered an independent contractor. (JOSE Y. SONZA employee relationship?
vs. ABS-CBN BROADCASTING CORPORATION G.R. No. 138051) Yes. As held in Sonza vs. ABS-CBN Broadcasting Corporation, the greater the
supervision and control the hirer exercises, the more likely the worker is deemed an
If there is an Employer – employee relationship based on 4 fold test, does LA always employee. On the contrary, the less control the hirer exercises, the more likely the
have jurisdiction? worker is considered an independent contractor.
There is a view that despite Art. 128(b) of the Labor Code, as amended by RA 7730,
there is still a threshold amount set by Arts. 129 and 217 of the Labor Code when money What if there is a problem as to the determination of whether the alleged employer
claims are involved, i.e., that if it is for PhP 5,000 and below, the jurisdiction is with the has power to control, is there any other way to determine an employer – employee
regional director of the DOLE, under Art. 129, and if the amount involved exceeds PhP relationship?
5,000, the jurisdiction is with the labor arbiter, under Art. 217. The view states that Yes. We apply the two-tiered approach laid down in the case of Francisco vs. National
despite the wording of Art. 128(b), this would only apply in the course of regular Labor Relations Commission.
inspections undertaken by the DOLE, as differentiated from cases under Arts. 129 and
217, which originate from complaints. There are several cases, however, where the In certain cases the control test is not sufficient to give a complete picture of the
Court has ruled that Art. 128(b) has been amended to expand the powers of the DOLE relationship between the parties, owing to the complexity of such a relationship where
Secretary and his duly authorized representatives by RA 7730. In these cases, the Court several positions have been held by the worker. There are instances when, aside from
resolved that the DOLE had the jurisdiction, despite the amount of the money claims the employers power to control the employee with respect to the means and methods by
involved. Furthermore, in these cases, the inspection held by the DOLE regional director which the work is to be accomplished, economic realities of the employment relations
was prompted specifically by a complaint. Therefore, the initiation of a case through a help provide a comprehensive analysis of the true classification of the individual,
complaint does not divest the DOLE Secretary or his duly authorized representative of whether as employee, independent contractor, corporate officer or some other capacity.
jurisdiction under Art. 128(b).
The better approach would therefore be to adopt a two-tiered test involving:
To recapitulate, if a complaint is brought before the DOLE to give effect to the labor 1. The putative employer’s power to control the employee with respect to the means
standards provisions of the Labor Code or other labor legislation, and there is a finding and methods by which the work is to be accomplished; and
by the DOLE that there is an existing employer-employee relationship, the DOLE 2. The underlying economic realities of the activity or relationship. (Francisco vs.
exercises jurisdiction to the exclusion of the NLRC. If the DOLE finds that there is no NLRC)
employer-employee relationship, the jurisdiction is properly with the NLRC. If a
complaint is filed with the DOLE, and it is accompanied by a claim for reinstatement, Is there a Labor Code provision on the four-fold test? – There is none.
the jurisdiction is properly with the Labor Arbiter, under Art. 217(3) of the Labor Code,
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A.Y. 2018 - 2019
Why do we apply the four-fold test if it is not found on the Labor Code? RULING:
Jurisprudence has laid down the basis in determining employee-employer relationship. 1. YES. In this jurisdiction, there has been no uniform test to determine the existence
It is not the Labor Code but court rulings that explain the indicators or tests of an of an employer-employee relation. Generally, courts have relied on the so-called
employer-employee relationship. right of control test where the person for whom the services are performed reserves
a right to control not only the end to be achieved but also the means to be used in
Does the Labor Code define an employer or employee? What about the employer reaching such end. In addition to the standard of right-of-control, the existing
– employee relationship? economic conditions prevailing between the parties, like the inclusion of the
Yes. Under Art. 219(e), an “employer” includes any person acting in the interest of an employee in the payrolls, can help in determining the existence of an employer-
employer, directly or indirectly. The term shall not include any labor organization or employee relationship.
any of its officers or agents except when acting as employer. On the other hand, under
Art. 219(f), an “employee” includes any person in the employ of an employer. The term By applying the control test, there is no doubt that petitioner is an employee of Kasei
shall not be limited to the employees of a particular employer, unless the Code so Corporation because she was under the direct control and supervision of Seiji Kamura,
explicitly states. It shall include any individual whose work has ceased as a result of or the corporations Technical Consultant. She reported for work regularly and served in
in connection with any current labor dispute or because of any unfair labor practice if various capacities as Accountant, Liaison Officer, Technical Consultant, Acting
he has not obtained any other substantially equivalent and regular employment. Manager and Corporate Secretary, with substantially the same job functions, that is,
rendering accounting and tax services to the company and performing functions
Employer-employee relationship is not defined under the Labor Code. necessary and desirable for the proper operation of the corporation such as securing
business permits and other licenses over an indefinite period of engagement.
Francisco v. NLRC
FACTS: Under the broader economic reality test, the petitioner can likewise be said to be an
Petitioner Angelina Francisco was hired by respondent Kasei Corporation during its employee of respondent corporation because she had served the company for six years
incorporation stage as Accountant and Corporate Secretary and later as Liaison Officer. before her dismissal, receiving check vouchers indicating her salaries/wages, benefits,
Subsequently she was also designated Acting Manager until she was replaced by Liza 13th month pay, bonuses and allowances, as well as deductions and Social Security
Fuentes, but was assured by the company that she was still connected as Technical
contributions from August 1, 1999 to December 18, 2000. When petitioner was
Consultant. Thereafter, Kasei Corporation reduced petitioner’s salary by P 2,500 a
month until it was later withheld despite repeated follow-ups. Petitioner once again designated General Manager, respondent corporation made a report to the SSS signed
asked for her salary but was informed that she is no longer connected with the company. by Irene Ballesteros. Petitioners membership in the SSS as manifested by a copy of the
Petitioner then no longer reported to work and filed an action for constructive dismissal SSS specimen signature card which was signed by the President of Kasei Corporation
before the Labor Arbiter. Respondent Kasei Corporation averred that petitioner is not and the inclusion of her name in the on-line inquiry system of the SSS evinces the
their employee as she performed her work at her own discretion without their control existence of an employer-employee relationship between petitioner and respondent
and supervision. Both the Labor Arbiter and NLRC tribunal found for petitioner. CA corporation.
reversed the decision.
Based on the foregoing, there can be no other conclusion that petitioner is an employee
ISSUES:
of respondent Kasei Corporation. She was selected and engaged by the company for
1. Whether there was an employer-employee relationship between petitioner and
compensation, and is economically dependent upon respondent for her continued
private respondent Kasei Corporation; and
employment in that line of business. Her main job function involved accounting and tax
2. if in the affirmative; whether petitioner was illegally dismissed
services rendered to respondent corporation on a regular basis over an indefinite period
of engagement. Respondent corporation hired and engaged petitioner for compensation,
with the power to dismiss her for cause. More importantly, respondent corporation had
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A.Y. 2018 - 2019
the power to control petitioner with the means and methods by which the work is to be d. Application of Two – tiered test
accomplished. The better approach would therefore be to adopt a two-tiered test involving: (1) the
putative employers power to control the employee with respect to the means and
2. YES. The corporation constructively dismissed petitioner when it reduced her methods by which the work is to be accomplished; and (2) the underlying economic
salary by P2,500 a month from January to September 2001. This amounts to an realities of the activity or relationship.
illegal termination of employment, where the petitioner is entitled to full
backwages. Since the position of petitioner as accountant is one of trust and This two-tiered test would provide us with a framework of analysis, which would take
confidence, and under the principle of strained relations, petitioner is further into consideration the totality of circumstances surrounding the true nature of the
entitled to separation pay, in lieu of reinstatement. relationship between the parties. This is especially appropriate in this case where there
is no written agreement or terms of reference to base the relationship on; and due to the
A diminution of pay is prejudicial to the employee and amounts to constructive complexity of the relationship based on the various positions and responsibilities given
dismissal.Constructive dismissal is an involuntary resignation resulting in cessation of to the worker over the period of the latters employment.
work resorted to when continued employment becomes impossible, unreasonable or
unlikely; when there is a demotion in rank or a diminution in pay; or when a clear e. Economic Reality Test
discrimination, insensibility or disdain by an employer becomes unbearable to an Under economic reality test, the benchmark in analyzing whether employment relation
employee. exists between the parties is the economic dependence of the worker on his employer.
That is, whether the worker is dependent on the alleged employer for his continued
a. Was the petitioner prevented from returning back to work? employment in the latter’s line of business.
No. Petitioner did not report for work since she was not being paid her salary and instead
filed an action for constructive dismissal before the labor arbiter f. What are the factual reasons that led the court to apply the two – tiered test?
In view of today’s highly specialized workforce, the court are often faced with situations
b. What kind of dismissal? where the right-of-control-test alone can no longer adequately determine the existence
Constructive Dismissal - an involuntary resignation resulting in cessation of work of employer-employer relationship. Thus, another test has been devised to fill the gap,
resorted to when continued employment becomes impossible, unreasonable or unlikely; known as the economic reality test.
when there is a demotion in rank or a diminution in pay; or when a clear discrimination,
insensibility or disdain by an employer becomes unbearable to an employee. Constructive Dismissal
An involuntary resignation resulting in cessation of work resorted to when continued
c. Application of control test employment becomes impossible, unreasonable or unlikely; when there is a demotion
By applying the control test, there is no doubt that petitioner is an employee of Kasei in rank or a diminution in pay; or when a clear discrimination, insensibility or disdain
Corporation because she was under the direct control and supervision of Seiji Kamura, by an employer becomes unbearable to an employee
the corporations Technical Consultant. She reported for work regularly and served in
various capacities as Accountant, Liaison Officer, Technical Consultant, Acting When do we apply the two-tiered approach?
Manager and Corporate Secretary, with substantially the same job functions, that is, Generally, the four-fold test is applied to determine the employee-employer relationship
rendering accounting and tax services to the company and performing functions except when there is difficulty, doubt or ambiguity in defining the employee-employer
necessary and desirable for the proper operation of the corporation such as securing relationship the two-tiered test is applied. Economic realities of the employment
business permits and other licenses over an indefinite period of engagement. relations help provide a comprehensive analysis of the true classification of the
individual, whether as employee, independent contractor, corporate officer or some
other capacity.
LABOR RELATIONS
A.Y. 2018 - 2019
Labor dispute SC RULING:

“Labor dispute” includes any controversy or matter concerning terms and conditions of YES, there is employer-employee relationship between the petitioners and PLDT. From
employment or the association or representation of persons in negotiating, fixing, the foregoing circumstances, reason dictates that we conclude that petitioners remained
maintaining, changing or arranging the terms and conditions of employment, regardless at their post under the instructions of respondent. We can further conclude that
of whether the disputants stand in the proximate relation of employer and employee. respondent dictated upon petitioners that the latter perform their regular duties to
(Art. 211[l]) secure the premises during operating hours. This, to our mind and under the
circumstances, is sufficient to establish the existence of an employer-employee
a. Is it necessary that the parties have employer – employee relationship? relationship.
Yes. Dispute arises from employer-employee relationship, although disputants need not
be proximately “employee” or “employer” of the other. To reiterate, while respondent and SSCP no longer had any legal relationship with the
termination of the Agreement, petitioners remained at their post securing the premises
Locsin Case of respondent while receiving their salaries, allegedly from SSCP. Clearly, such a
Doctrine: The power of control, in this case, has been explained as the “right to control situation makes no sense, and the denials proffered by respondent do not shed any light
not only the end to be achieved but also the means to be used in reaching such end.” to the situation. It is but reasonable to conclude that, with the behest and, presumably,
With the conclusion that respondent directed petitioners to remain at their posts and directive of respondent, petitioners continued with their services. Evidently, such are
continue with their duties, it is clear that respondent exercised the power of control over indicia of control that respondent exercised over petitioners.
them; thus, the existence of an employer-employee relationship.
Such power of control has been explained as the right to control not only the end to
FACTS: be achieved but also the means to be used in reaching such end. With the conclusion
Respondent PLDT and the Security and Safety Corporation of the Philippines that respondent directed petitioners to remain at their posts and continue with their
entered into a Security Services Agreement whereby SSCP would provide armed duties, it is clear that respondent exercised the power of control over them; thus, the
security guards to PLDT to be assigned to its various offices. Pursuant to such existence of an employer-employee relationship. Evidently, respondent having the
agreement, petitioners Raul Locsin and Eddie Tomaquin, among other security guards, power of control over petitioners must be considered as petitioners’ employer from the
were posted at a PLDT office. termination of the Agreement onwards as this was the only time that any evidence of
control was exhibited by respondent over petitioners.
Then respondent issued a Letter terminating the Agreement. Despite the termination
of the Agreement, however, petitioners continued to secure the premises of their Citibank Case
assigned office. They were allegedly directed to remain at their post by representatives DOCTRINE: Non-renewal of Security Guard Service agreement is a civil dispute and
of respondent. In support of their contention, petitioners provided the Labor Arbiter with not a labor dispute.
copies of petitioner Locsin’s pay slips for the period after the said termination of
Agreement. FACTS:
Citibank and El Toro Security Agency, Inc. (hereafter El Toro) entered into a contract
Then, after a year, petitioners’ services were terminated. Thus, petitioners filed a for the latter to provide security and protective services. In 1990, the contract between
complaint before the Labor Arbiter for illegal dismissal and recovery of money claims. Citibank and El Toro expired. Integrated Guards Labor Alliance-SEGA-TUPAS/FSM
(hereafter CIGLA) filed with the National Conciliation and Mediation Board (NCMB)
ISSUE: Whether or not there is an employer-employee relationship between the a request for preventive mediation citing Citibank as respondent therein giving as issues
petitioners and PLDT for preventive mediation the following: (1) Unfair labor practice (2) Dismissal of union
officers/members; and (3) Union busting.Three days after, Citibank served on El Toro a
LABOR RELATIONS
A.Y. 2018 - 2019
written notice that the bank would not renew anymore the service agreement with the 2. No. It is a civil dispute.
latter. Simultaneously, Citibank hired another security agency, the Golden Pyramid Article 212, of the LC: Labor dispute = includes any controversy or matter concerning
Security Agency, to render security services at Citibank's premises. terms or conditions of employment or the association or representation of persons in
negotiating, fixing, maintaining, changing or arranging the terms and conditions of
Hence, CIGLA filed a manifestation with the NCMB that it was converting its request employment, regardless of whether the disputants stand in the proximate relation of
for preventive mediation into a notice of strike for failure of the parties to reach a employer and employee.
mutually acceptable settlement of the issues, which it followed with a supplemental
notice of strike alleging as supplemental issue the mass dismissal of all union officers If at all, the dispute between Citibank and El Toro security agency is one regarding the
and members. The following day the guards of El Toro were replaced by guards of the termination or nonrenewal of the contract of services. This is a civil dispute. El Toro
Golden Pyramid Security Agency. They threatened to go on strike against Citibank and was an independent contractor. No employer-employee relationship existed between
picket its premises. CIGLA filed a notice of strike directed at the premises of the Citibank and the security guard members of the union in the security agency who were
Citibank main office. assigned to secure the bank's premises and property.
Citibank filed with the Regional Trial Court, Makati, a complaint for injunction and Since, there was no labor dispute, there was no right to strike against the bank. It is a
damages to which respondent CIGLA filed with the trial court a motion to dismiss the basic rule of procedure that "jurisdiction of the court over the subject matter of the action
complaint. The motion alleged that the Court had no jurisdiction, this being labor is determined by the allegations of the complaint, irrespective of whether or not the
dispute. plaintiff is entitled to recover upon all or some of the claims asserted therein. The
jurisdiction of the court cannot be made to depend upon the defenses set up in the answer
ISSUES: or upon the motion to dismiss, for otherwise, the question of jurisdiction would almost
1. Is there an employer-employee relationship? entirely depend upon the defendant. "What determines the jurisdiction of the court is the
2. Is there a labor dispute between Citibank and the security guards, members of nature of the action pleaded as appearing from the allegations in the complaint. The
respondent CIGLA, regardless of whether they stand in the relation of employer averments therein and the character of the relief sought are the ones to be consulted."
and employees?
Austria v. NLRC
SC RULING: DOCTRINE: Under the Labor Code, the provision which governs the dismissal of
1. No. In determining the existence of an employer-employee relationship, the employees, is comprehensive enough to include religious corporations, such as the SDA,
following elements are generally considered: in its coverage.
a. The selection and engagement of the employee;
b. The payment of wages; FACTS:
c. The power of dismissal; and Private Respondent Central Philippine Union Mission Corporation of the Seventh-Day
d. The employer's power to control the employee with respect to the means and Adventists (SDA) is a religious corporation. Petitioner, on the other hand, was a Pastor
methods by which the work is to be accomplished. of the SDA until 31 October 1991, when his services were terminated. Petitioner
received several communications from Mr. Eufronio Ibesate, the treasurer of the Negros
It has been decided also that the Labor Arbiter has no jurisdiction over a claim filed Mission asking him to admit accountability and responsibility for the church tithes and
where no employer-employee relationship existed between a company and the security offerings collected by his wife, Mrs. Thelma Austria, in his district which amounted to
guards assigned to it by a security service contractor. In this case, it was the security P15,078.10, and to remit the same to the Negros Mission.
agency El Toro that recruited, hired and assigned the watchmen to their place of work.
It was the security agency that was answerable to Citibank for the conduct of its guards.
LABOR RELATIONS
A.Y. 2018 - 2019
Petitioner reasoned out that he should not be made accountable since it was private coverage. Article 278 of the Labor Code on postemployment states that the provisions
respondents Pastor Gideon Buhat and Mr. Eufronio Ibesate who authorized his wife to of this Title shall apply to all establishments or undertakings, whether for profit or not.
collect the tithes and offerings since he was very sick to do the collecting at that time. Obviously, the cited article does not make any exception in favor of a religious
corporation. This is made more evident by the fact that the Rules Implementing the
On 16 October 1991, Petitioner went to the office of Pastor Buhat, the president of the Labor Code, particularly, Section 1, Rule 1, Book VI on the Termination of Employment
Negros Mission. During said call, petitioner tried to persuade Pastor Buhat to convene and Retirement, categorically includes religious institutions in the coverage of the law,
the Executive Committee for the purpose of settling the dispute between him and the to wit:
private respondent, Pastor David Rodrigo. The dispute between Pastor Rodrigo and
petitioner arose from an incident in which petitioner assisted his friend, Danny Diamada, Section 1. Coverage. This Rule shall apply to all establishments and undertakings,
to collect from Pastor Rodrigo the unpaid balance for the repair of the latters motor whether operated for profit or not, including educational, medical, charitable and
vehicle which he failed to pay to Diamada. Due to the assistance of petitioner in religious institutions and organizations, in cases of regular employment with the
collecting Pastor Rodrigos debt, the latter harbored ill-feelings against petitioner. When exception of the Government and its political subdivisions including government-owned
news reached petitioner that Pastor Rodrigo was about to file a complaint against him or controlled corporations.
with the Negros Mission, he immediately proceeded to the office of Pastor Buhat on the
date abovementioned and asked the latter to convene the Executive Committee. Pastor With this clear mandate, the SDA cannot hide behind the mantle of protection of the
Buhat denied the request of petitioner since some committee members were out of town doctrine of separation of church and state to avoid its responsibilities as an employer
and there was no quorum. Thereafter, the two exchanged heated arguments. under the Labor Code.
A fact-finding committee was created to investigate petitioner. Subsequently, petitioner a. What is an ecclesiastical affair?
received a letter of dismissal citing misappropriation of denominational funds, willful An ecclesiastical affair is "one that concerns doctrine, creed, or form of worship of the
breach of trust, serious misconduct, gross and habitual neglect of duties, and commission church, or the adoption and enforcement within a religious association of needful laws
of an offense against the person of employers duly authorized representative, as grounds and regulations for the government of the membership, and the power of excluding from
for the termination of his services. Reacting against the adverse decision of the SDA, such associations those deemed unworthy of membership."
petitioner filed a complaint before the Labor Arbiter for illegal dismissal against the
SDA and its officers and prayed for reinstatement with backwages and benefits, moral Based on this definition, an ecclesiastical affair involves the relationship between the
and exemplary damages and other labor law benefits. church and its members and relate to matters of faith, religious doctrines, worship and
governance of the congregation. To be concrete, examples of this so-called ecclesiastical
Private respondents contend that by virtue of the doctrine of separation of church and affairs to which the State cannot meddle are proceedings for excommunication,
state, the Labor Arbiter and the NLRC have no jurisdiction to entertain the complaint ordinations of religious ministers, administration of sacraments and other activities with
filed by petitioner. Since the matter at bar allegedly involves the discipline of a religious attached religious significance.
minister, it is to be considered a purely ecclesiastical affair to which the State has no
right to interfere. b. Can the Labor Arbiter take cognizance over the case? Is it not a violation of
the separation of church and state?
ISSUE: Does the LA have jurisdiction over the case? Yes, the Labor Arbiter may take cognizance. The case at bar does not concern an
ecclesiastical or purely religious affair as to bar the State from taking cognizance of the
SC RULING: same. While the matter at hand relates to the church and its religious minister it does not
YES. Under the Labor Code, the provision which governs the dismissal of employees, ipso facto give the case a religious significance. Simply stated, what is involved here is
is comprehensive enough to include religious corporations, such as the SDA, in its the relationship of the church as an employer and the minister as an employee. It is
LABOR RELATIONS
A.Y. 2018 - 2019
purely secular and has no relation whatsoever with the practice of faith, worship or Halaguena v. PAL
doctrines of the church. Doctrine:
Not every controversy or money claim by an employee against the employer pr vice-
In this case, petitioner was not excommunicated or expelled from the membership of the versa is within the exclusive jurisdiction of the labor arbiter. Actions between employees
SDA but was terminated from employment. Indeed, the matter of terminating an and employer where the employer-employee relationship is merely incidental and the
employee, which is purely secular in nature, is different from the ecclesiastical act of cause of action preceded from a different source of obligation is within the exclusive
expelling a member from jurisdiction of the regular court
the religious congregation.
FACTS:
Requirements to become a LA Petitioners were employed as female flight attendants of PAL. They are members of the
1. Must be a member of the Philippine Bar Flight Attendants and Stewards Association of the Philippines (FASAP), the exclusive
2. Must be engaged in the practice of law in the Ph for at least 10 years bargaining representative of the flight attendants.
3. Must have experience/exposure in handling labor management relations for at
least 5 years Section 144A of the PAL-FASAP CBA, provides that: “3. Compulsory Retirement.
Subject to the grooming standards provisions of this Agreement, compulsory retirement
Tripartite membership in the NLRC, what are the 2 sectors? shall be 55 for females and 60 for males. xxx”
Tripartism is the representation of the three sectors in the policy making bodies of the
government namely: Petitioners and several female cabin crews manifested that the aforementioned CBA
1. Public government provision on compulsory retirement is discriminatory, and demanded for an equal
2. Employers treatment with their male counterparts. This demand was reiterated in a letter.
3. The workers
Mr. Anduiza, President of FASAP submitted their 2004-2005 CBA proposals and
Composition of the NLRC manifested their willingness to commence the collective bargaining negotiations
One (1) chairman and twenty-three (23) members between the management and the association, at the soonest possible time.
How many divisions are there? Petitioners, filed a Special Civil Action for declaratory relief with prayer for the issuance
There are 8 divisions with 3 members each to be headed by the Chairman and 7 other of TRO and Writ of preliminary injunction with the RTC of Makati City against
members as Presiding Commissioners respondents for the invalidity of Section 144, Part A of PAL-FASAP CBA
Qualifications of the Commissioner ISSUE: Whether or not the RTC has jurisdiction over the Petitioners’ action
1. Must be a member of the Philippine Bar challenging the legality or constitutionality of the provisions of the compulsory
2. Must have been engaged in the practice of law in the Philippines for at least 15 retirement age contained in the CBA between respondent PAL and FASAP
years
3. Must have experience or exposure in handling labor management relations for at SC RULING:
least 5 years YES. The said issue cannot be resolved solely by applying the Labor Code. Rather, it
4. Preferably a resident of the region where he is to hold office requires the application of the Constitution, labor statutes, law on contracts and
Convention on the Elimination of All Forms of Discrimination Against Women, and the

LABOR RELATIONS
A.Y. 2018 - 2019
power to apply and interpret the constitution and CEDAW is within the jurisdiction of d. What was the convention?
trial courts, a court of general jurisdiction. Convention on the Elimination of All Forms of Discrimination Against Women
(hereafter, CEDAW), a multilateral convention that the Philippines ratified in 1981.
The jurisdiction of the LA and the NLRC under Article 217 of the Labor Code is limited The Government and its agents, including our courts, not only must condemn all forms
to disputes arising from an employer-employee relationship which can only be resolved of discrimination against women, but must also implement measures towards its
by reference to the Labor Code, other labor statutes, or their CBA. elimination.
Not every controversy or money claim by an employee against the employer or vice- e. What was the justification for ruling that the jurisdiction is properly lodged
versa is within the exclusive jurisdiction of the LA. Actions between employees where with in the RTC despite the existence of the employer – employee
the employer-employee relationship is merely incidental and the cause of action relationship?
precedes from a different source of obligation is within the exclusive jurisdiction of the From the petitioners' allegations and relief prayed for in its petition, it is clear that the
regular court. Here, the employer-employee relationship between the parties is merely issue raised is whether Section 144, Part A of the PAL-FASAP CBA is unlawful and
incidental and the cause of action ultimately arose from different sources of obligation. unconstitutional. Here, the petitioners' primary relief in Civil Case No. 04-886 is the
annulment of Section 144, Part A of the PAL-FASAP CBA, which allegedly
a. What was the prayer in the complaint? discriminates against them for being female flight attendants. The subject of litigation is
PRAYER incapable of pecuniary estimation, exclusively cognizable by the RTC, pursuant to
WHEREFORE, it is most respectfully prayed that the Honorable Court: Section 19 (1) of Batas Pambansa Blg. 129, as amended.Being an ordinary civil action,
c. after trial on the merits: the same is beyond the jurisdiction of labor tribunals.
(I) declare Section 114, Part A of the PAL-FASAP 2000-2005 CBA INVALID, NULL
and VOID to the extent that it discriminates against Petitioners; x x x x 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
From the petitioners' allegations and relief prayed for in its petition, it is clear that the on the Elimination of All Forms of Discrimination Against Women,and the power to
issue raised is whether Section 144, Part A of the PAL-FASAP CBA is unlawful and apply and interpret the constitution and CEDAW is within the jurisdiction of trial courts,
unconstitutional. Here, the petitioners' primary relief in Civil Case No. 04-886 is the a court of general jurisdiction.
annulment of Section 144, Part A of the PAL-FASAP CBA, which allegedly
discriminates against them for being female flight attendants. Kawachi v. Del Acero
a. How is it different from Halaguena?
b. Where was the complaint filed? On Kawachi v. Del Acero, the RTC has no jurisdiction because the claim asserted
Petitioners filed a Special Civil Action for Declaratory Relief with Prayer for the has a causal connection between the ee-er relations..
Issuance of Temporary Restraining Order and Writ of Preliminary Injunction with the
Regional Trial Court (RTC) of Makati City, Branch 147. Article 217(a) of the Labor Code, as amended, clearly bestows upon the Labor Arbiter
original and exclusive jurisdiction over claims for damages arising from employer-
c. What were the laws invoked in support of the complaint? employee relations —in other words, the Labor Arbiter has jurisdiction to award not
In the instant case, the thrust of the Petition is Sec. 144 of the subject CBA which is only the reliefs provided by labor laws, but also damages governed by the Civil Code.
allegedly discriminatory as it discriminates against female flight attendants, in violation
of the Constitution, the Labor Code, and the CEDAW. Under the reasonable causal connection rule, if there is a reasonable causal connection
between the claim asserted and the employer-employee relations, then the case is within

LABOR RELATIONS
A.Y. 2018 - 2019
the jurisdiction of our labor courts. In the absence of such nexus, it is the regular courts Powers of the NLRC
that have jurisdiction. 1. Power to hear Certified Cases
2. Contempt — the chairman or any commissioner or labor arbiter may summarily
Jurisdiction of the court is determined on the basis of the material allegations of the adjudge guilty of direct contempt any person;
complaint and the character of the relief prayed for irrespective of whether plaintiff is 3. Indirect contempt;
entitled to such relief. 4. Injunction — the power of the NLRC to enjoin or restrain the commission of any
or all prohibited or unlawful acts under Art. 225 (e) of the Labor Code can only
Contrary to the HALAGUEÑA, et. al. v. PAL, the issue in the case cannot be resolved be exercised in a labor dispute; and
solely by applying the Labor Code. Rather, it requires the application of the Constitution, 5. Issue Writ of Execution.
labor statutes, law on contracts and the Convention on the Elimination of All Forms of 6. Power to grant Extraordinary Remedies
Discrimination Against Women, and the power to apply and interpret the constitution
and CEDAW is within the jurisdiction of trial courts, a court of general jurisdiction. PAL v. NLRC
Thus, the RTC has the jurisdiction over the case. DOCTRINE: INJUNCTION CAN ONLY BE AN ANCILLARY WRIT IN
ORDINARY LABOR DISPUTES.
Jurisdiction of NLRC
ARTICLE 294: EXCLUSIVE AND ORIGINAL JURISDICTION OF THE NLRC The power of the NLRC to issue an injunctive writ originates from “any labor dispute”
1. Certified Cases — Cases certified to it by compulsory arbitration by the SOLE upon the application by a party thereof, which application if not granted “may cause
under Artile 278(g) or the President under Artile 279(a); grave and irreparable damage to any party or render ineffectual any decision in favor of
2. Verified Petition to annum or modify the order or resolution (including those such party”. The term “labor dispute” is defined as “any controversy or matter
issued during execution proceedings) of the Labor Arbiter concerning terms and conditions of employment x x x x”. The term “controversy” is
3. Petition for Injunction in: likewise defined as “a litigated question or a justiciable controversy”. A “justiciable
a. Ordinary Labor Cases (Art. 225 (e)) controversy” is “one involving an active antagonistic assertion of a legal right on one
b. Strikes and Lockouts (Art. 278); and side and a denial thereof on the other concerning a real, and not a mere theoretical
c. Contempt Cases (Art, 225) question or issue”. Given the definitions, it is thus essential that there must be a labor
dispute between the contending parties before the LA to enable the NLRC issue a
EXCLUSIVE APPELLATE JURISDICTION OF NLRC injunction writ.
1. Cases decided by the Regional Offices of the DOLE in the exercise of
their adjudicatory functions under Art. 129 over monetary claims of workers FACTS:
NOT exceeding P5,000.00; Pineda and Cabling were flight stewards of PAL. Both were dismissed from service for
2. Cases decided by the Labor Arbiters under Article 224(b) of the Labor Code and their alleged smuggling in Hong Kong of a bag said to contain some PHP2.5 Million in
Section 10 of Migrant Worker’s Act; cash. Instead of filing a case for illegal dismissal, Pineda and Cabling filed a Petition for
3. Cases decided by the Labor Arbiters pursuant to Article 124 of the Labor COde Injunction, with a prayer for the issuance of TRO, against PAL before the NLRC,
on Wage Distortion problem in non-unionized establishment and cases certified seeking to prohibit PAL from enforcing their Order of Dismissal against them and to
by the Regional Director under Art. 128 (b); and ultimately reinstate them upon a favorable decision.
4. Denial of the claim of the 3rd party where property was levied by the Sheriff of
Labor Arbiter can be appealed to the NLRC. NLRC RULING: TRO GRANTED The NLRC adopted the view that Pineda and
Cabling have been illegally dismissed, for the reason that PAL’s Code of Discipline was
formulated without the participation of its employees. The baseless dismissal has caused
LABOR RELATIONS
A.Y. 2018 - 2019
Pineda and Cabling “grave and irreparable injury with no speedy and adequate remedy 7. Appeal from any interlocutory order of the Labor Arbiter, such as but not limited
at law”. PAL filed the present petition for certiorari. to, an order:
a. Denying a motion to dismiss;
ISSUE: Can the NLRC issue an injunctive writ even without a complaint for illegal b. Denying a motion to inhibit;
dismissal before the LA? c. Denying a motion for issuance of writ of execution; or
d. Denying a motion to quash writ of execution.
RULING: 8. Appeal from the issuance of a certificate of finality of decision by the Labor
NO. The power of the NLRC to issue an injunctive writ originates from “any labor Arbiter;
dispute”, which means that there must be an existing controversy or a litigated question 9. Appeal from orders issued by the Labor Arbiter in the course of execution
before it can issue the same. Since there is no labor dispute between the parties as there proceedings;
has yet been no complaint for illegal dismissal filed before the labor arbiter by Pineda 10. Such other proceedings, motions and petitions of similar nature intended to
and Cabling against PAL, the NLRC cannot, therefore, issue the assailed Order. circumvent above provisions.
Contrary to the findings of the NLRC, there is no grave and irreparable damage in this If you are the Labor Arbiter and there is a complaint filed by the Laborer. He
case because Pineda and Cabling can be adequately compensated if they are indeed submits a duly accomplished form of complaint. After receiving the complaint
illegally dismissed. It cannot be also said that there is no adequate remedy because form, what should you look for?
Pineda and Cabling can still file a complaint for illegal dismissal with the LA. The existence of Employer and Employee relationship. This is so because the same is
It should also be noted that the Petition for Injunction filed before the NLRC is really in essential to determine which shall have jurisdiction over the complaint filed.
the nature of an action for illegal dismissal. As such, it falls under the original and
exclusive jurisdiction of the LA. The NLRC cannot therefore entertain the petition since How do you require the conciliation – mediation proceedings?
it only exercises appellate jurisdiction over illegal dismissal cases. Conciliation – Mediation Proceedings are required by the issuance of summons
according to Rule V, Sec. 3 of the 2011 NLRC Rules of Procedure:
Pareto principle; why is it called such? Within two (2) days from receipt of a complaint or amended complaint, the Labor
The 80-20 Rule — “for many events, roughly 80% of the effects come from 20% of the Arbiter shall issue the required summons, attaching thereto a copy of the
causes” — Pareto complaint or amended complaint and its annexes, if any. The summons shall
specify the date, time and place of the mandatory conciliation and mediation
Therefore, 20% of the effort produces 80% of the results but the last 20% of the results conference in two (2) settings.
consumes 80% of the effort
Who are the parties? (Rule III, Sec. 2)
Prohibited pleadings under 2011 NLRC Rules of Proceedings 1. The party initiating the action – “Complainant” or “Petitioner”
1. Motion to dismiss the complaint except on the grounds of lack of jurisdiction over 2. The opposing party – “Respondent”
the subject matter, improper venue, res judicata, prescription and forum 3. Their counsel
shopping;
2. Motion for a bill of particulars; Aside from legal counsel, who may appear for the parties?
3. Motion for new trial; According to Rule III, Sec. 6 (b) of the NLRC Rules:
4. Petition for Relief from Judgment;
5. Motion to declare respondent in default; A non-lawyer may appear in any of the proceedings before the Labor Arbiter or
6. Motion for reconsideration of any decision or any order of the Labor Arbiter; Commission only under the following conditions:
LABOR RELATIONS
A.Y. 2018 - 2019
1. He/she represents himself/herself as party to the case; How will the parties be informed that there will be a mandatory conciliation
2. He/she represents a legitimate labor organization, as defined under Article 212 conference?
and 242 of the Labor Code, as amended, which is a party to the case: Provided, According to Rule V, Sec. 3:
that he/she presents to the Commission or Labor Arbiter during the mandatory Within two (2) days from receipt of a complaint or amended complaint, the Labor
conference or initial hearing: Arbiter shall issue the required summons, attaching thereto a copy of the
i. a certification from the Bureau of Labor Relations (BLR) or Regional Office complaint or amended complaint and its annexes, if any.
of the Department of Labor and Employment attesting that the organization
he/she represents is duly registered and listed in the roster of legitimate labor In relation to that, according to Rule V, Sec. 4:
organizations; Summons shall be served personally upon the parties by:
ii. a verified certification issued by the secretary and attested to by the president 1. The bailiff or;
of the said organization stating that he/she is authorized to represent the said 2. duly authorized public officer within three (3) days from his/her receipt
organization in the said case; and thereof; or
iii. a copy of the resolution of the board of directors of the said organization 3. by registered mail; or
granting him such authority; 4. by private courier authorized by the Commission; or
3. He/she represents a member or members of a legitimate labor organization that is 5. in accordance with pertinent provisions of the Rules of Court under special
existing within the employer’s establishment, who are parties to the case: circumstances
Provided, that he/she presents:
i. a verified certification attesting that he/she is authorized by such member or If you are the respondent, what are you supposed to do with the summons?
members to represent them in the case; and If I were the respondent, I would file an Answer to the summons since the complaint is
ii. a verified certification issued by the secretary and attested to by the president attached therein. An Answer is a responsive pleading, according to the Rules of Court,
of the said organization stating that the person or persons he/she is representing applying suppletorily.
are members of their organization which is existing in the employer’s
establishment; As the Respondent, I may also, in accordance with Rule V, Sec. 6, file a Motion to
4. He/she is a duly-accredited member of any legal aid office recognized by the Dismiss based on the grounds provided in Sec. 5(a) of this Rule, before the date set for
Department of Justice or Integrated Bar of the Philippines: Provided, that he/she the mandatory conciliation and mediation conference.
i. presents proof of his/her accreditation; and
ii. represents a party to the case;   What will happen if you are the respondent and you do not respond to the
summons?
5. he/she is the owner or president of a corporation or establishment which is a party Rule V, Sec. 10 of the Rules provide for the following in case the Respondent fails to
to the case: Provided, that he/she presents: respond to the summons:
i. a verified certification attesting that he/she is authorized to represent said In case of non-appearance by the respondent during the first scheduled
corporation or establishment; and conference, the second conference as scheduled in the summons shall proceed. If
ii. a copy of the resolution of the board of directors of said corporation, or other the respondent still fails to appear at the second conference despite being duly
similar resolution or instrument issued by said establishment, granting him/her served with summons, he/she shall be considered to have waived his/her right to
such authority file position paper. The Labor Arbiter shall immediately terminate the mandatory
conciliation and mediation conference and direct the complainant or petitioner to
file a verified position paper and submit evidence in support of his/her causes of

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A.Y. 2018 - 2019
action and thereupon render his/her decision on the basis of the evidence on You are the complainant, you fail to appear twice without valid excuse, what will
record. be the consequences? With or without prejudice?
The case will be dismissed. Dismissal of the case for the second time due to the
Duly accomplished complaint, notarized at the back – the complaint is raffled to unjustified non-appearance of the complainant or petitioner who was duly notified
you as the Labor Arbiter. How will you now set into motion the proceedings? thereof shall be with prejudice (NLRC RULES, RULE V, Sec. 10).
Under the 2011 NLRC Rules of Procedure, the Labor Arbiter within 2 days from the
receipt of the complaint or an amended complaint (Sec 3, Rule 5) shall issue As the respondent, you have been notified for the conciliation – mediation, but you
SUMMONS. Such Service of Summons be served personally upon the parties by the have a valid ground not to appear on said date, and it is already the second setting.
bailiff within 3 days from receipt (Sec. 4 Rule 5) What will you do?
I will file a motion to lift the order of waiver. As provided under Rule V, Sec. 22 of the
What is stated in the summons? NLRC Rules, “[a] party declared to have waived his/her right to file a position paper
The summons shall specify the date, time and place of the mandatory conciliation and may at any time after notice thereof and before the case is submitted for decision, file a
mediation conference in two (2) settings. (Sec 3, Rule 5) motion under oath to set aside the order of waiver upon proper showing that his/her
failure to appear was due to justifiable and meritorious grounds.”
How do you call the one filing the complaint according to the Rules of Procedure?
In all cases filed with the Commission or with any of its Regional Arbitration Branches, Can the Labor Arbiter decide the case based on the complaint?
the party initiating the action shall be called the "Complainant" or "Petitioner", and the Yes. If the respondent fails to appear at the second conference despite being duly served
opposing party the "Respondent". (Sec 2. Rule 3) with summons, he/she shall shall be considered to have waived his/her right to file
position paper. The LA shall immediately terminate the mandatory conciliation and
Most important thing that you have to state in the summons? mediation conference and direct the complainant or petitioner to file a verified position
The summons shall specify the date, time and place of the mandatory conciliation and paper and submit evidence in support of his/her causes of action and thereupon render
mediation conference in two (2) settings. (Sec 3, Rule 5) his/her decision on the basis of the evidence on record (NLRC RULES, RULE V, Sec.
10).
What is the consequence if the respondent fails to file his answer?
THE NON-APPEARANCE BY THE RESPONDENT: at the second conference Primary purpose of conciliation and mediation
despite being duly served with summons, he shall be considered to have waived his/her The mandatory conciliation and mediation conference shall be called for the purpose of:
right to file position paper. LA immediately terminates the MCMC and directs the (AR-NIET)
complainant to file a verified position paper and submit evidence in support of his causes 1. Amicably settling the case upon a fair compromise;
of action and thereupon render his decision on the basis of the evidence on record. (Sec 2. Determining the Real parties in interest;
10, Rule 5) 3. Determining the Necessity of amending the complaint and including all causes of
action;
Requirement for the filing of the answer – difference between the Rules of Court 4. Defining and simplifying the Issues in the case;
and the Rules of Procedure 5. Entering into admissions or stipulations of facts; and
Under the Rules of Court, the answer is filed by the defendant wherein he sets forth his 6. Threshing out all other preliminary matters (NLRC RULES, Rule V, Sec. 8)
defenses based on the allegations in the complaint. Under the NLRC Rules, verified
position papers are submitted by the parties simultaneously, accompanied by the If there is amicable settlement, will the LA decide base on that?
supporting documents and affidavits. Within 10 days from receipt of the position paper Yes. Under the 2011 NLRC Rules on Procedure, a compromise agreement duly entered
of the adverse party, a reply may be filed. into in accordance with the requirements set by law, shall be final and binding upon the
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A.Y. 2018 - 2019
parties and shall have the force and effect of a judgment rendered by the LA. (Sec. 8, 3. issues (parties’ arguments and discussions)
(d)) 4. relief or prayer
Requisites: What are examples of attachments?

1. The parties understand the agreement, its terms, conditions and consequences; Affidavits of witnesses
2. Was freely and voluntarily entered into; and Other supporting documents, such as: Pay slip or ID card
3. Not contrary to law, morals and public policy
Will the LA conduct trial? What if you have witnesses, can you present their
What if they can’t settle? testimonies?
If the parties fail to agree on an amicable settlement, either in whole or in part, the LA No. Upon the submission by the parties of their position papers or replies, or the laps of
or said duly authorized personnel shall proceed to the other purposes of said conference, the period to submit the same, the case shall be deemed submitted for decision. (Sec.
such as: 16)
1. determining the real parties-in-interest;
2. determining the necessity of amending the complaint and including all causes of This is unless the LA calls for a hearing or clarificatory conference, which necessity is
action; determined by the LA. (Sec. 13) During the preliminary conference, the there may be:
3. defining and simplifying the issues in the case; 1. Presentation of testimonial evidence;
4. entering into admissions or stipulations of facts; and 2. Right of cross-examination by the opposing parties; and
5. threshing out all preliminary matters 3. Presentation of evidence limited to matters relevant to the issue before them.
(Sec. 9)
Upon termination of the hearing or conference, the case is submitted for decision. (Sec.
How many days for the simultaneous filing? 16)
The simultaneous filing of verified position papers with supporting documents and
affidavits, shall be on a date set by the LA within ten (10) calendar days from the date After the position paper, what’s next?
of termination of the mandatory conciliation and mediation conference. (Sec. 12 (b)) LA will now decide if there is a need for a clarificatory hearing.
ATTY USITA: Usually, 10 days is given. But the LA may grant 15 days. Clarificatory hearing
As soon as the parties have submitted their position papers/memorandum, the Labor
Arbiter shall, motu propio, determine whether there is a need for a formal trial or
What is a position paper? What are its contents? Are you supposed to attach or hearing. The Labor Arbiter may, at his discretion, ask clarificatory questions to further
elicit facts or information, including but not limited to the subpoena of relevant
append to your paper?
documentary evidence from any party or witness.
The position papers of the parties shall cover only those claims and causes of action
stated in the complaint or amended complaint, accompanied by all supporting After the decision, then what?
documents, including affidavits of witnesses, which shall take the place of their direct LA must come up with Summary of proceeding which will be submitted for decision. It
testimony, excluding those that may have been amicably settled. (Sec. 12©) will be final and executory
ATTY USITA: Position papers include:

1. names of the parties;
2. brief statement of facts;
LABOR RELATIONS
A.Y. 2018 - 2019
How long should the Labor Arbiter determine the case after the clarificatory Options available to employer in complying with an order of reinstatement:
hearing? What if there is no clarificatory hearing? From when do you reckon that 1. Actual Reinstatement – employer can admit the dismissed employee back to
period? work:
The Arbiter shall render his decision within thirty (30) calendar days, without extension, a. Under the same terms and conditions prevailing prior to his
after the submission of the case by the parties for resolution, even in the absence of dismissal/separation
stenographic notes, provided however that cases involving Overseas Filipino Workers b. To a substantially equivalent position if the former position is already filled up
shall be decided within ninety (90) calendar days after the filing of the complaint which
shall be deemed perfected upon acquisition by the labor arbiter of jurisdiction over the 2. Payroll reinstatement – the employer can reinstate the employee merely in the
respondent/s. (Sec. 5, Rule 5, NLRC Rules as Amended) payroll with payment of the accrued salaries
Can it be also later than receipt? Must pleading before the LA be verified?
It may be extended due to the volume of the cases handled by the LA. Yes, but the lack of verification of the position paper-affidavit is a formal, rather than
substantial defect. It is not fatal. It could easily be corrected by requiring an oath.
After submission of position papers, may the parties submit another paper?
Within ten (10) days from receipt of the position paper of the adverse party, a reply may If you are not in favor of the decision?
be filed on a date agreed upon and during a schedule set before the Labor Arbiter. The Decisions, awards, or orders of the Labor Arbiter are final and executory unless
reply shall not allege and/or prove facts and any cause or causes of action not referred appealed to the Commission by any or both parties within ten (10) calendar days from
to or included in the original or amended complaint or petition or raised in the position receipt of such decisions, awards, or orders. Such appeal may be entertained only on
any of the following grounds:
paper. (Sec 11 (d), Rule 5, NLRC Rules of Procedure)
1. If there is prima facie evidence of abuse of discretion on the part of the Labor
Arbiter;
Appeal based on NLRC Rules of Procedure
2. If the decision, order or award was secured through fraud or coercion, including
Decisions, awards, or orders of the Labor Arbiter shall be final and executory unless
graft and corruption;
appealed to the Commission by any or both parties within ten (10) calendar days from
3. If made purely on questions of law; and
receipt thereof; and in case of decisions or resolutions of the Regional Director of the
4. If serious errors in the findings of facts are raised which would cause grave or
Department of Labor and Employment pursuant to Article 129 of the Labor Code, within
irreparable damage or injury to the appellant.
five (5) calendar days from receipt thereof. If the 10th or 5th day, as the case may be,
falls on a Saturday, Sunday or holiday, the last day to perfect the appeal shall be the first In case of a judgment involving a monetary award, an appeal by the employer may be
working day following such Saturday, Sunday or holiday. (Sec 1, Rule 6, NLRC Rules perfected only upon the posting of a cash or surety bond issued by a reputable bonding
of Procedure) company duly accredited by the Commission in the amount equivalent to the monetary
award in the judgment appealed from.
You are the employer, you receive the decision. Dispositive portion states that the In any event, the decision of the Labor Arbiter reinstating a dismissed or separated
respondent is guilty of illegal dismissal. He is ordered to reinstate the complainant employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, even pending appeal. The employee shall either be admitted back to work
and to pay the following amounts: P100,000 for back wages, etc.; P50,000 for moral
under the same terms and conditions prevailing prior to his dismissal or separation or,
damages; P50,000 for exemplary damages; 10% total attorney’s fees. What are the at the option of the employer, merely reinstated in the payroll. The posting of a bond by
options that are available to you? the employer shall not stay the execution for reinstatement provided herein.
If reinstatement is ordered by the Labor Arbiter in an illegal dismissal case, it is
immediately executory even pending appeal. Such award does not require a writ of
execution.
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A.Y. 2018 - 2019
Requirements to perfect the appeal the working man. On the other hand, working day is considered every official work day
a. The appeal shall be: of the week.
1. Filed within the reglementary period provided in Section 1 of this Rule;
2. Verified by the appellant himself/herself in accordance with Section 4, Rule Reglementary period
7of the Rules of Court, as amended; Reglementary period refers to the number of days within which the party must file
his/her pleading to court/tribunal/body.
3. in the form of a memorandum of appeal which shall state the grounds relied
upon and the arguments in support thereof, the relief prayed for, and with a
How much is the appeal bond?
statement of the date the appellant received the appealed decision, award or
Either be in the form of cash deposit or surety bond equivalent in amount to the monetary
order;
award, exclusive of damages and attorney’s fees.
4. in three (3) legibly typewritten or printed copies; and accompanied by:
100 million pesos – 10 days; must be raised to perfect your appeal. If the amount is
i. proof of payment of the required appeal fee and legal research fee;
too much, do you have another option?
ii. posting of a cash or surety bond as provided in Section 6 of this Rule; and
File a Motion to Reduce Appeal Bond
iii. proof of service upon the other parties.
What is the effect if you were not able to perfect your appeal?
b. A mere notice of appeal without complying with the other requisites aforestated The decision becomes final and executory; it cannot be amended.
shall not stop the running of the period for perfecting an appeal.
c. The appellee may file with the Regional Arbitration Branch or Regional Office McBurnie Case
where the appeal was filed, his/her answer or reply to appellant's memorandum of FACTS:
appeal, not later than ten (10) calendar days from receipt thereof. Failure on the McBurnie, an Australian citizen filed an illegal dismissal case against EGI. The Labor
part of the appellee who was properly furnished with a copy of the appeal to file Arbiter ruled in favor of McBurnie, awarding US$ 985 162 as salary and benefit plus
his/her answer or reply within the said period may be construed as a waiver on 2M damages and 10% attorney’s fees. EGI appealed to the NLRC, posted an appeal
his/her part to file the same d) Subject to the provisions of Article 218 bond of 100K and filed a memorandum of appeal appeal and a motion to reduce bond.
of the Labor Code, once the appeal is perfected in accordance with these Rules, NLRC denied the motion and required an additional 54M. Because of failure to post the
the Commission shall limit itself to reviewing and deciding only the specific issues required additional bond, NLRC dismissed EGI’s appeal.
that were elevated on appeal. (4a)
(Sec 4, Rule VI, NLRC Rules of Procedure) ISSUE: Whether or not the filing of a motion to reduce bond shall be sufficient to
suspend the running of the period to file a appeal
How would you know if you have perfected the appeal?
In case the decision of the Labor Arbiter or the Regional Director involves a monetary RULING:
award, an appeal by the employer may be perfected only upon the posting of a bond, Filing of a motion to reduce bond, coupled with compliance with the two conditions:
which shall either be in the form of cash deposit or surety bond equivalent in amount to 1. the motion must be must be based on meritorious grounds;
the monetary award, exclusive of damages and attorney’s fees. 2. a bond in a reasonable amount is posted shall suffice to suspend the running of the
period to perfect an appeal from the labor arbiter's decision to the NLRC.
How is 10 calendar days different from 10 working days?
Calendar days mean that Saturdays, Sundays, and Legal Holidays are not to be excluded, All motions to reduce bond that are to be filed with the NLRC shall be accompanied by
but included, in counting the 10-day period. This is in line with the objective of the law
the posting of a cash or surety bond equivalent to 10% of the monetary award that is
for speedy disposition of labor cases with the end in view of protecting the interests of
LABOR RELATIONS
A.Y. 2018 - 2019
subject of the appeal, which shall provisionally be deemed the reasonable amount of the Discussed in Sara lee vs. Macatlan
bond in the meantime that an appellant's motion is pending resolution by the a. McBurnie case
Commission. Only after the posting of a bond in the required percentage shall an The Corporations gravely misappreciated the ruling in McBurnie. The 10% requirement
appellant's period to perfect an appeal under the NLRC Rules be deemed suspended. pertains to the reasonable amount which the NLRC would accept as the minimum of the
The NLRC retains its authority and duty to resolve the motion and determine the final bond that should accompany the motion to reduce bond in order to suspend the period
amount of bond that shall be posted by the appellant, still in accordance with the to perfect an appeal under the NLRC rules. The 10% is based on the judgment award
standards of "meritorious grounds" and "reasonable amount. Should the NLRC, after and should in no case be construed as the minimum amount of bond to be posted in order
considering the motion's merit, determine that a greater amount or the full amount of the to perfect appeal. There is no room for a different interpretation when McBurnie made
bond needs to be posted by the appellant, then the party shall comply accordingly. The it clear that the percentage of bond set is provisional.
appellant shall be given a period of 10 days from notice of the NLRC order within which
to perfect the appeal by posting the required appeal bond. b. Lepanto case
The underlying purpose of the appeal bond is to ensure that the employer has properties
a. How many employees were there? – One. Only McBurnie. on which he or she can execute upon in the event of a final, providential award. Thus,
non-payment or woefully insufficient payment of the appeal bond by the employer
b. How much was the award? - S985 162 as salary with 2M damages frustrates these ends. As a matter of fact, the appeal bond is valid and effective from the
date of posting until the case is terminated or the award is satisfied. Our Decision
What else should accompany the bond? highlights the importance of an appeal bond such that said amount
In case of surety bond, the same shall be issued by a reputable bonding company duly should be the base amount for negotiation between the parties.
accredited by the commission and shall be accompanied by original or certified true
copies of the following: Meritorious ground as a condition for the reduction of the appeal bond
1. A joint declaration under oath by the employer, his or her counsel, and the bonding a. McBurnie vs. Ganzon
company attesting that the bond posted is genuine and shall be in effect until final The requirement on the existence of a "meritorious ground" delves on the worth of the
disposition of the case parties' arguments, taking into account their respective rights and the circumstances that
2. An indemnity agreement between the employer-appellant and bonding company attend the case. The condition was emphasized in University Plans Incorporated v.
3. Proof of security deposit or collateral securing the bond: provided, that a check Solano, 95 wherein the Court held that while the NLRC's Revised Rules of Procedure
shall not be considered as an acceptable security "allows the [NLRC] to reduce the amount of the bond, the exercise of the authority is
4. Notarized board resolution or secretary’s certificate from the bonding company not a matter of right on the part of the movant, but lies within the sound discretion of the
showing its authorized signatories and their specimen signatures NLRC upon a showing of meritorious grounds." 96 By jurisprudence, the merit referred
to may pertain to an appellant's lack of nancial capability to pay the full amount of the
What is the effect of posting reduction and 10%? bond, 97 the merits of the main appeal such as when there is a valid claim that there was
It shall be sufficient to suspend the running of the period to perfect an appeal from the no illegal dismissal to justify the award, 98 the absence of an employer-employee
labor arbiter's decision to the NLRC. relationship, 99 prescription of claims, 100 and other similarly valid issues that are
raised in the appeal. 101 For the purpose of determining a "meritorious ground", the
SUSPENSION OF PROCEEDINGS NLRC is not precluded from receiving evidence, or from making a preliminary
To allow labor cases to proceed would clearly defeat the purpose of the automatic stay determination of the merits of the appellant's contentions.
and severely encumber the management committee’s time and resources.

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A.Y. 2018 - 2019
What other legal principles are we supposed to learn from McBurnie case? You are the complainant. You received a decision in your favor, but for whatever
The lawmakers clearly intended to make the bond a mandatory requisite for the reason, you are not satisfied. You filed a motion for reconsideration. What is the
perfection of an appeal by the employer as inferred from the provision that an appeal by effect?
the employer may be perfected only upon the posting of a cash or surety bond. The word Having filed an MR, the petitioner is allowed to file for further or subsequent remedies.
only makes it clear that the posting of a cash or surety bond by the employer is the A motion for reconsideration of the Resolution of the Secretary of DOLE is a
essential and exclusive means by which an employers appeal may be perfected. On the precondition for subsequent remedies pursuant to the doctrine of exhaustion of
other hand, the word may refers to the perfection of an appeal as optional on the part of administrative remedies.
the defeated party, but not to the compulsory posting of an appeal bond, if he desires to
appeal. The meaning and the intention of the legislature in enacting a statute must be Diamond Taxi v. Llamas
determined from the language employed; and where there is no ambiguity in the words FACTS:
used, then there is no room for construction. Llamas worked as a taxi driver for petitioner Diamond Taxi, owned and operated by
petitioner Bryan Ong. On July 18, 2005, Llamas filed before the Labor Arbiter (LA) a
You are compliant with the McBurnie case, can you now say to the NLRC – you complaint for illegal dismissal against the petitioners.
have to grant my motion for Reduction of Bond because you will be violating the
McBurnie ruling? The petitioners claimed that Llamas had been absent without official leave for several
No. While the bond may be reduced upon motion by the employer, this is subject to the days. The petitioners submitted a copy of the attendance logbook to prove that Llamas
conditions that (1) the motion to reduce the bond shall be based on meritorious grounds; had been absent. They also pointed out that Llamas committed several traffic violations
and (2) a reasonable amount in relation to the monetary award is posted by the appellant, and that they had issued him several memoranda for acts of insubordination and refusal
otherwise the filing of the motion to reduce bond shall not stop the running of the period to heed management instructions. They argued that these acts – traffic violations,
to perfect an appeal. The qualification effectively requires that unless the NLRC grants insubordination and refusal to heed management instructions – constitute grounds for
the reduction of the cash bond within the 10 day reglementary period, the employer is the termination of Llamas’ employment. The LA rendered a decision dismissing
still expected to post the cash or surety bond securing the full amount within the said Llamas’ complaint for lack of merit. The LA declared that Llamas left his job and had
10-day period. If the NLRC does eventually grant the motion for reduction after the been absent for several days without leave.
reglementary period has elapsed, the correct relief would be to reduce the cash or surety
bond already posted by the employer within the 10-day period. In his position paper, Llamas claimed that he failed to seasonably file his position paper
because his previous counsel, despite his repeated pleas, had continuously deferred
Otherwise stated, compliance with the McBurnie guidelines merely suspends the compliance with the LA’s orders for its submission. Hence, he was forced to secure the
running of the 10-day reglementary period by which to perfect an appeal. The NLRC services of another counsel in order to comply with the LA’s directive.
retains its authority and duty to resolve the motion to reduce bond.
He then filed before the LA a motion for reconsideration. The LA treated Llamas’
Prohibited pleading – motion for reconsideration; what is the consequence if a motion as an appeal per Section 15, Rule V of the 2005 Revised Rules of Procedure of
party files a motion for reconsideration? the NLRC. In its resolution, the NLRC dismissed for non-perfection Llamas’ motion for
Rule V, Section 5 of the 2011 NLRC Rules, prohibits a motion for reconsideration of reconsideration treated as an appeal. The NLRC pointed out that Llamas failed to attach
any decision or order of the labor arbiter. However, this prohibition does not accord with the required certification of non-forum shopping per Section 4, Rule VI of the 2005
the ruling in Philtranco requiring the filing of an MR as requisite of certiorari. NLRC Rules. Llamas moved to reconsider the resolution but this was denied.
The CA reversed the NLRC, excusing the failure to attach the required certification on
equitable grounds.
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A.Y. 2018 - 2019
ISSUES: e. We should remember that "the dismissal of an employee’s appeal on purely

1. Whether or not the NLRC acted with grave abuse of discretion in denying the technical ground is inconsistent with the constitutional mandate on protection
motion for reconsideration? to labor."
2. Whether or not there is abandonment or constructive dismissal
2. There is constructive dismissal
HELD: a. To constitute abandonment of work, two elements must concur:
1. Yes. i. the employee must have failed to report for work or must have been absent
a. Article 223 (now Article 229) of the Labor Code states that decisions (or without valid or justifiable reason; and
awards or orders) of the LA shall become final and executory unless appealed ii. there must have been a clear intention on the part of the employee to sever
to the NLRC within ten (10) calendar days from receipt of the decision. the employer-employee relationship manifested by some overt act.
b. Indisputably, Llamas did not file a memorandum of appeal from the LA’s
decision. Instead, he filed, within the ten (10)-day appeal period, a motion for b. The employer bears the burden of proving the employee’s unjustified refusal
reconsideration. Under Section 15, Rule V of the 2005 NLRC Rules, motions to resume his employment. In this case, they did not present proof of some
for reconsideration from the LA’s decision are not allowed. They may, overt act of Llamas that clearly and unequivocally shows his intention to
however, be treated as an appeal provided they comply with the requirements abandon his job. We note that, aside from their bare allegation, the only
for perfecting an appeal. The NLRC dismissed Llamas’ motion for evidence that the petitioners submitted to prove abandonment were the
reconsideration treated as an appeal for failure to attach the required certificate photocopy of their attendance logbook and the July 15, 2005 memorandum that
of non-forum shopping they served on Llamas
c. Ordinarily, the infirmity in Llamas’ appeal would have been fatal and would c. The CA, therefore, correctly regarded Llamas as constructively dismissed for
have justified an end to the case. However, a careful consideration of the the petitioners' failure to prove the alleged just cause -abandonment - for his
circumstances of the case would allow the appeal: dismissal. Constructive dismissal exists when there is cessation of work
i. In his motion for reconsideration of the NLRC’s resolution, Llamas attached because continued employment is rendered impossible, unreasonable or
the required certificate of non-forum shopping. unlikely. Constructive dismissal is a dismissal in disguise or an act amounting
ii. He was only able to file a belated paper because of the hiring of the new to dismissal but made to appear as if it were not.
counsel. While not the fault of the LA, Llamas, nevertheless, did not have a d. In constructive dismissal cases, the employer is, concededly, charged with the
meaningful opportunity to present his case, refute the contents and burden of proving that its conduct and action were for valid and legitimate
allegations in the petitioners’ position paper and submit controverting grounds. The petitioners' persistent refusal to give Llamas the key to his
evidence. assigned taxi cab, on the condition that he should first sign the resignation
d. Under Article 221 (now Article 227) of the Labor Code, "the Commission and letter, rendered, without doubt, his continued employment impossible,
its members and the Labor Arbiters shall use every and all reasonable means unreasonable and unlikely; it, thus, constituted constructive dismissal.
to ascertain the facts in each case speedily and objectively and without regard
to technicalities of law or procedure, all in the interest of due process." Disposition: Petition Granted.
Consistently, we have emphasized that "rules of procedure are mere tools
designed to facilitate the attainment of justice. A strict and rigid application There is a decision by the LA. The employer was able to perfect the appeal. What
which would result in technicalities that tend to frustrate rather than promote is now the effect of the perfected appeal to the decision?
substantial justice should not be allowed As Provided under Section 9 of Rule XI
The perfection of an appeal shall stay the execution of the decision of the Labor
Arbiter on appeal, except execution for reinstatement pending an appeal.
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A.Y. 2018 - 2019
What are the conditions of the Rules that will give effect to the execution of the Can the LA cite the employer in contempt?
reinstatement? Yes. Section 9 of Rule XI provides that the Sheriff shall serve the writ of execution upon
Section 18 of Rule V provides that in case the decision of the Labor Arbiter includes an the employer or any other person required by law to obey the same. If he/she disobeys
order of reinstatement, it shall likewise contain: a) a statement that the reinstatement the writ, such employer or person may be cited for contempt in accordance with Rule
aspect is immediately executory; and b) a directive for the employer to submit a report IX.
of compliance within ten (10) calendar days from receipt of the said decision.
What are the two types of reinstatement?
Is there any provision in the Rules that will support reinstatement pending appeal? Actual Reinstatement- if execution pending appeal is granted, the employee concerned
YES Section 9 of Rule XI OF 2011 NLRC Rules of Procedure which provides shall be admitted back to work under the terms and conditions prevailing prior to his
SECTION 9. EXECUTION OF REINSTATEMENT PENDING APPEAL. - In dismissal or separation.
case the decision includes an order of reinstatement, and the employer disobeys
the directive under the second paragraph of Section 18 of Rule V or refuses to Payroll Reinstatement - a reinstatement were an employee is not actually admitted back
reinstate the dismissed employee, the Labor Arbiter shall immediately issue writ to work, nevertheless he would still be included in the payroll and entitled to receive her
of execution, even pending appeal, directing the employer to immediately salary and other benefits as if he were in fact working.
reinstate the dismissed employee either physically or in the payroll, and to pay the
accrued salaries as a consequence of such non-reinstatement in the amount Is it possible that the decision will not immediately become final and executory
specified in the decision. when a motion for reconsideration is filed?
Yes. In the case of Diamond Taxi v. Llamas, the Supreme Court held that although
The Sheriff shall serve the writ of execution upon the employer or any other respondent filed a motion for reconsideration, they may, however, be treated as an
person required by law to obey the same. If he/she disobeys the writ, such appeal provided they comply with the requirements for perfecting an appeal.
employer or person may be cited for contempt in accordance with Rule IX.
Article 223 (now Article 229) of the Labor Code states that decisions (or awards or
What can the LA do if the employer refuses to comply with the order for orders) of the LA shall become final and executory unless appealed to the NLRC within
reinstatement? ten (10) calendar days from receipt of the decision, consistent with Article 223,
In case the decision includes an order of reinstatement and the employer disobeys the Section 1, Rule VI of the 2005 NLRC Rules also provides for a ten (10)-day period for
directive under second paragraph of Section 18 of Rule V ( In case the decision of the appealing the LA’s decision. Under Section 4(a), Rule VI of the 2005 NLRC Rules,
Labor Arbiter includes an order of reinstatement, it shall likewise contain: a) a statement the appeal shall be in the form of a verified memorandum of appeal and accompanied
that the reinstatement aspect is immediately executory; and b) a directive for the by proof of payment of the appeal fee, posting of cash or surety bond (when
employer to submit a report of compliance within ten (10) calendar days from receipt of necessary), certificate of non-forum shopping, and proof of service upon the other
the said decision.) or refuses to reinstate the dismissed employee, the Labor Arbiter shall parties. Failure of the appealing party to comply with any or all of these requisites
immediately issue (a) writ of execution, even pending appeal, directing the employer to within the reglementary period will render the LA’s decision final and executory.
immediately reinstate the dismissed employee either physically or in the payroll, and to Indisputably, Llamas did not file a memorandum of appeal from the LA’s decision.
pay the accrued salaries as a consequence of such non-reinstatement in the amount Instead, he filed, within the ten (10)-day appeal period, a motion for reconsideration.
specified in the decision. Under Section 15, Rule V of the 2005 NLRC Rules, motions for reconsideration from
the LA’s decision are not allowed; they may, however, be treated as an appeal provided
Also as provided under sec.9 of Rule XI, if he/she disobeys the writ, such employer or they comply with the requirements for perfecting an appeal.
person may be cited for contempt in accordance with Rule IX.

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A.Y. 2018 - 2019
You are not a party to the case, but NLRC sheriff took away your property after In all of the foregoing actions, petitioner raised a common issue, which is that it is
showing a writ of execution. What is your remedy? the owner of the properties located in the compound and buildings of Artex
In the case of Yupangco Cotton Mills v. CA, the Supreme Court held a third party Development Corporation, which were erroneously levied upon by the sheriff of the
whose property has been levied upon by a sheriff to enforce a decision against a NLRC as a consequence of the decision rendered by the said Commission in another
judgment debtor is afforded with several alternative remedies to protect its labor case.
interests. The third party may avail himself of alternative remedies cumulatively, and
one will not preclude the third party from availing himself of the other alternative ISSUE: Whether or not the Court of Appeals erred in dismissing the action on the
remedies in the event he failed in the remedy first availed of. ground of lack of jurisdiction of the trial court
Thus, a third party may avail himself of the following alternative remedies: RULING:
1. File a third party claim with the sheriff of the Labor Arbiter, and A third party whose property has been levied upon by a sheriff to enforce a decision
2. If the third party claim is denied, the third party may appeal the denial to the against a judgment debtor is afforded with several alternative remedies to protect
NLRC. its interests. The third party may avail himself of alternative remedies cumulatively,
and one will not preclude the third party from availing himself of the other alternative
Even if a third party claim was denied, a third party may still file a proper action with remedies in the event he failed in the remedy first availed of.
a competent court to recover ownership of the property illegally seized by the
sheriff. As shown in Section 17 (now 16), Rule 39, Revised Rules of Court. Thus, a third party may avail himself of the following alternative remedies:
1. File a third party claim with the sheriff of the Labor Arbiter, and
YUPANGCO COTTON MILLS, INC. vs. COURT OF APPEALS 2. If the third party claim is denied, the third party may appeal the denial to the
FACTS: NLRC.
Petitioner filed the following:
1. It filed a notice of third-party claim with the Labor Arbiter on May 4, 1995. Even if a third party claim was denied, a third party may still file a proper action with
2. It filed an Affidavit of Adverse Claim with the National Labor Relations a competent court to recover ownership of the property illegally seized by the
Commission (NLRC) on July 4, 1995, which was dismissed on August 30, 1995, sheriff. As shown in Section 17 (now 16), Rule 39, Revised Rules of Court.
by the Labor Arbiter.
3. It filed a petition for certiorari and prohibition with the Regional Trial Court of The aforesaid remedies are nevertheless without prejudice to any proper action
Manila, Branch 49, docketed as Civil Case No. 95-75628 on October 6, 1995. The that a third-party claimant may deem suitable to vindicate his claim to the
Regional Trial Court dismissed the case on October 11, 1995 for lack of merit. property. Such a proper action is, obviously, entirely distinct from that explicitly
4. It appealed to the NLRC the order of the Labor Arbiter dated August 13, 1995 prescribed in Section 17 of Rule 39, which is an action for damages brought by a third-
which dismissed the appeal for lack of merit on December 8, 1995. party claimant against the officer within one hundred twenty (120) days from the date
5. It filed an original petition for mandatory injunction with the NLRC on November of the filing of the bond for the taking or keeping of the property subject of the terceria.
16, 1995. This was docketed as Case No. NLRC-NCR-IC. 0000602-95. This case The remedies above mentioned are cumulative and may be resorted to by a third-
is still pending with that Commission. party claimant independent of or separately from and without need of availing of
6. It filed a complaint in the Regional Trial Court in Manila which was docketed as the others.
Civil Case No. 95-76395. The dismissal of this case by public respondent
triggered the filing of the instant petition. In light of the above, the filing of a third party claim with the Labor Arbiter and the
NLRC did not preclude the petitioner from filing a subsequent action for recovery of
property and damages with the Regional Trial Court.
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A.Y. 2018 - 2019
How would you characterize these remedies? Cumulative? Refund Doctrine (Pfizer case)
The remedies are cumulative and may be resorted to by a third-party claimant Even outside the theoretical trappings of the discussion and into the mundane realities
independent of or separately from and without need of availing of the others. If a third- of human experience, the "refund doctrine" easily demonstrates how a favorable
party claimant opted to file a proper action to vindicate his claim of ownership, he must decision by the Labor Arbiter could harm, more than help, a dismissed employee. The
institute an action, distinct and separate from that in which the judgment is being employee, to make both ends meet, would necessarily have to use up the salaries
received during the pendency of the appeal, only to end up having to refund the sum in
enforced, with the court of competent jurisdiction even before or without need of filing case of a final unfavorable decision. It is mirage of a stop-gap leading the employee to
a claim in the court which issued the writ, the latter not being a condition sine qua non a risky cliff of insolvency.
for the former. In such proper action, the validity and sufficiency of the title of the third-
party claimant will be resolved and a writ of preliminary injunction against the sheriff Advisably, the sum is better left unspent. It becomes more logical and practical for the
may be issued. employee to refuse payroll reinstatement and simply find work elsewhere in the interim,
if any is available. Notably, the option of payroll reinstatement belongs to the employer,
What are the legal remedies available if properties are levied against? even if the employee is able and raring to return to work. Prior to Genuino, it is
The following are the remedies available: unthinkable for one to refuse payroll reinstatement. In the face of the grim possibilities,
1. Motion for Exclusion or Release of the property wrongfully levied on; the rise of concerned employees declining payroll reinstatement is on the horizon.
2. Service by the third party claimant on the officer making the levy and upon the
judgment creditor of an affidavit of title (RULES OF COURT, Rule 39, Sec. 16). a. Is it not contrary to unjust enrichment doctrine?
This is also known as terceria; Further, the Genuino ruling not only disregards the social justice principles behind the
3. If the third party claim is denied, the third party may appeal the denial to the rule, but also institutes a scheme unduly favorable to management. Under such scheme,
NLRC (Yupangco Cotton Mills v. CA); the salaries dispensed pendente lite merely serve as a bond posted in installment by the
4. Independent civil action to recover the title and possession of the property 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
wrongfully levied on execution (RULES OF COURT, Rule 39, Sec 16).
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
Perfected appeal and there was payroll reinstatement. Pending 2Y, EE still keeps stay the execution for reinstatement."
collecting wages.
Employee is entitled to the collection of wages pending appeal and there having been a In playing down the stray posture in Genuino requiring the dismissed employee on
payroll reinstatement. payroll reinstatement to refund the salaries in case a final decision upholds the validity
of the dismissal, the Court realigns the proper course of the prevailing doctrine on
reinstatement pending appeal vis-à-vis the effect of a reversal on appeal.
Payroll reinstatement exists when an employee is paid his monthly salary without
making him perform actual work. It applies in termination cases where the labor court
b. Does that mean the employee can work somewhere else?
declares the dismissal illegal and orders reinstatement of the employee, but the employer Yes. It becomes more logical and practical for the employee to refuse payroll
does not want to actually or physically reinstate him and instead, at the employer’s
reinstatement and simply find work elsewhere in the interim, if any is available.
option, merely reinstates the employee in the payroll pending appeal.
Since reinstatement is immediate, is there a need for an issuance of a writ of
Moreover, in the case of Pfizer Inc v. Velasco, the Court reiterates the principle that
execution?
reinstatement pending appeal necessitates that it must be immediately self-executory
The order of reinstatement is immediately executory. The unjustified refusal of the
without need for a writ of execution during the pendency of the appeal, if the law is to
employer to reinstate a dismissed employee entitles him to payment of his salaries
serve its noble purpose, and any attempt on the part of the employer to evade or delay
effective from the time the employer failed to reinstate him despite the issuance of a writ
its execution should not be allowed.
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of execution. Unless there is a restraining order issued, it is ministerial upon the Labor Inter – union dispute involving election of officers, is it possible?
Arbiter to implement the order of reinstatement. In the case at bar, no restraining Yes
order was granted. Thus, it was mandatory on PAL to actually reinstate Roquero or
reinstate him in the payroll. Having failed to do so, PAL must pay Roquero the salary Inter – union disputes; give an example.
he is entitled to, as if he was reinstated, from the time of the decision of the NLRC until It refers to any conflict between and among legitimate labor unions involving
the finality of the decision of the Court.||| (Pfizer, Inc. v. Velaso, G.R. No. 177467, representation questions for purposes of collective bargaining or to any other conflict or
[March 9, 2011], 660 PHIL 434-455) dispute between legitimate labor organizations.
Example: dispute as to who will be the sole and exclusive bargaining agent
Functions of the BLR
1. Set policies, standards, and procedures on the registration and supervision of Compromise agreement
legitimate labor union activites including denial, cancellation, and revocation of It is a contract whereby the parties, by making reciprocal concessions, avoid litigation
labor union permits; or put an end to one already commenced
2. Set policies, standards, and procedures relating to collective bargaining
agreements, and the examination of financial records of accounts of labor When is it valid and binding?
organizations to determine compliance with the relevant laws; and Substantial Requirements:
3. Provide proper orientation to workers on their schemes and projects for 1. It must be freely entered into
improvement of the standards of living of workers and their families. 2. It must not be contrary to law, morals, or public policy
3. It must be reasonable
Administrative Functions of the BLR 4. It must be approved by the authority before whom the case is pending
1. Regulation of registration of the labor unions;
2. Keeping of a registry of labor unions Formal Requirements:
3. Maintenance of a file of CBAs; and 1. In writing
4. Maintenance of a file of all settlements or final decisions of the Supreme Court, 2. Signed in the presence of the Regional Director or his duly authorized
Court of Appeals, NLRC, and other agencies on labor disputes. representative
Jurisdiction of BLR; What types of disputes do they handle? It may be effected at any stage of the proceedings and even when there is already a final
The exclusive and original jurisdiction of BLR executory judgment
To act on its own initiative or upon the request of either or both parties on all:
1. Intra-union conflicts Requisites of a valid compromise agreement
2. Inter-union conflicts The substantial requisites of a valid compromise agreement are the following:
3. Other related labor relations dispute First, it must be freely entered into by the parties; Second, it must not be contrary to law,
morals or public policy; Third, it must be reasonable; and Fourth, its must be approved
Intra – union disputes; give an example. by the authority before whom the case is pending.
It refers to any conflict between and among union members, including grievances arising
from any violation of the rights and conditions of membership, violation of or Formal Requisites: (1) It must be in writing and (2) Signed in the presence of the regional
disagreement over any provision of the union’s consitution and by-laws, or disputes director or his duly authorized representative (Rules on Disposition of Labor Standard
arising from chartering or affiliation of union Cases in Regional Offices)
Example: propriety of the disqualification of candidates in the union elections
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Can there be a valid compromise during: convenient, provided they are not contrary to law, morals, good customs, public order,
a. Mediation or public policy. (1255a)
YES. The primary purpose of Mediation Conference under Article 234 of the Labor
Code and Section 8, Rule V of the 2011 NLRC Rules of Procedure is to amicably settle Art. 1409. The following contracts are inexistent and void from the beginning:
the case upon a fair compromise. It is highly encouraged that the parties enter into a 1. Those whose cause, object or purpose is contrary to law, morals, good customs,
compromise agreement to give a speedy and inexpensive assistance in any kind of labor public order or public policy; xxx
issue or conflict.
How does it violate public policy?
b. Presentation of evidence It will violate public policy because there would be no end to litigation when the case is
YES. A compromise agreement covering a case which is either pending trial, or on supposed to end because it is already in the execution stage. What is left is the execution
appeal, or with final judgment, is allowed and valid, assuming that the elements of a of the judgment and all things and issues already settled. It will only stay and delay the
valid contract are present. (Mabanua v. Uy) resolution of the case.
c. After final judgment What is a union?

YES. A compromise agreement may be effected at any stage of the proceedings and A union is any labor organization in the priate sector organized for the collectie
even when there is already a final executory judgment (Article 2040 of the Civil bargaining and for other legitimate purposes.
Code). The Court noted that Article 2040 impliedly allowed such agreements; there was
no limitation as to when these should be entered into. (Magbanua v. Uy, G.R. No. What is a Legitimate Labor Organization?
161003, [May 6, 2005], 497 PHIL 511-527) Rights may be waived through a A legitimate labor organization is any labor organization which is duly registered with
compromise agreement, notwithstanding a final judgment that has already settled the DOLE; the term includes a local/chapter directly chartered by a legitimate federation or
rights of the contracting parties. To be valid it must be voluntarily, freely and national union which has been duly reported to the Department in accordance with
intelligently executed by the parties who have knowledge of the judgment and it must Section , Rule VI, Book V of the Implementing Rules.
not be contrary to law, morals, good customs and public policy.
Labor organization v. Legitimate Labor organization
However, it cannot be entered into when the final judgment is already in the process if A labor organization is an union or association of employees which exxists in whole or
execution (Jesalva v. Bautista). in part for the purpose of collectie bargaining with employers concerning terms and
conditions of employment.
d. During the decision of final judgment
YES. A compromise agreement covering a case which is either pending trial, or on Does a labor organization have a legal personality?
appeal, or with final judgment, is allowed and valid, assuming that the elements of a As a general rule, it is only the government, through the DOLE that can clothe a labor
valid contract are present. (Mabanua v. Uy) organization with a legal personality to exercise the rights that are provided by law. The
exception would be that chapters, created by the issuance of a duly registered legitimate
Provision in the Civil Code prohibiting compromise agreement in the execution federation or national union of a charter certificate indicating the establishment of the
stage aforementioned chapters, would have a Tentative Legal Personality only for the purpose
Art. 1306. The contracting parties may establish such stipulations, clauses, terms and of filing a petition for certification election.
conditions as they may deem convenient, provided they are not contrary to law, morals,
good customs, public order, or public policy. (1255a)Art. 1306. The contracting parties Furthermore, we would note though that those labor organizations organized under the
may establish such stipulations, clauses, terms and conditions as they may deem Corporation Code and is issued a certificate of incorporation by the SEC shall only have
LABOR RELATIONS
A.Y. 2018 - 2019
a juridical capacity before the regular courts of justice and will not acquire the rights Company union – any labor organization whose formation, function or administration
and privileges of a legitimate labor organization. has been assisted by any act defined as ULP under the LC.
Labor organization is registered where? Bargaining Representative – means a legitimate labor organization whether or not
1. For registration of: independent labor unions, chartered locals, or worker’s employed by the employer.
associations, it shall be filed with the Regional office where the applicant
principally operates. It shall be processed by the Labor Relations Division at the Exclusive Bargaining Representative – Is a legitimate labor union duly recognized or
Regional office. certified as the sole and exclusive bargaining representative or agent of all the employees
2. Applications for registration of federations, national unions or workers association in a bargaining unit.
operating in more than one region shall be filed with the Bureau or Regional
offices, but shall be processed by the Bureau. Legitimate Worker’s Association – Is an association of workers organized for mutual
aid and protection of its members or for any legitimate purpose other than collective
bargaining registered with the DOLE.
How do you create a labor organization?
Modes of Acquiring Legitimacy for Labor Organizations: National Union/Federation – any labor organization with at least 10 locals/chapters
1. Registration with the BLR (Independent Union) each of which must be a duly certified or recognized collective bargaining agent.
2. Chartering or issuance of a federation or national union of a charter certificate.
Industry Union – group of legitimate LLO within an identified industry, organized for
Rights of LLO collective bargaining or for dealing with employers concerning terms and conditions of
1. Deliberative and Decision- Making Right- the right to participate in deliberations employment within an identified industry or for participating in the formulation of social
on major policy questions and decide by secret ballot. and employment policies, standards, and programs in such industry registered with
2. Right to information- the right to be informed about: A.) the organization’s DOLE.
constitution and by laws; B.) The collective bargaining Agreement, and labor laws
3. Rights over Money-matters- the rights of members: Trade Union Center – group of registered national unions/ federations organized for
a. against imposition of excessive fees mutual aid and protection of its members and for assisting such members in collective
b. Against unauthorized collection of contributions or unauthorized bargaining or for participating in the formulation of social and employment policies,
disbursements standards and programs duly registered with the Department.
c. To require adequate records of income and expenses
d. To access financial records Alliance – aggregations of unions existing in one line of industry or in a conglomerate,
e. To vote on officer’s compensation a group of franchisees, a geographical area, or an industrial center.
f. To vote on special assessment
g. To be deducted of special assessment only with the member’s written Is there any special power or privilege granted by law to a Federation?
authorization Yes, they are given the power to clothe a labor organization with a legal personality to
4. Political right- the right to vote and be voted for subject to lawful provisions on
exercise the rights that are provided by the law. A power which is vested only to the
qualifications and disqualifications.
Government, through the DOLE.
Types of Legitimate Labor Organization
Independent Union – Is any labor organization operating at the enterprise level whose How is this exercised? – By issuing a charter certificate
legal personality is derived through independent action for registration with the BLR or
DOLE prescribed under Art. 240 of the LC. It may be affiliated with a federation,
national or industry union, in which case it may also be referred to as an affiliate.
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Tentative Legal Personality If you are the BLR, and those documents are submitted to you, do you think they
A duly registered federation or national union may directly create a local chapter by are sufficient?
issuing a charter certificate indicating the establishment of a local chapter. The chapter No. The documents submitted have to be reviewed as a ministerial duty.
shall acquire legal purposes for purposes of filing a petition for certification election
from the date it was issued a charter certificate. What is supposed to be the action of the Bureau if those requirements are
complete?
What is a trade union? Why is it referred to as such? It becomes mandatory for the BLR to check if the requirements under Art. 240 have
It is a group of registered national unions or federations organized for the mutual aid been sedulously complied with.
and protection of its members and for assisting such members in collective bargaining
or for participating in the formulation of social and employment policies, standards, and Can the Bureau deny the application? On what grounds?
programs duly registered with the Department. If its application for registration is vitiated by falsification and serious irregularities,
especially those appearing on the face of the application and the supporting documents,
What is an independent union? a labor organization should be denied recognition as a legitimate labor organization.
Any labor organization operating at the enterprise level whose legal personality is
derived through an independent action for registration with the BLR or DOLE Chartering
prescribed under Art. 240 of the Labor Code. It may be affiliated with a federation, A duly registered federation or national union may directly create a local chapter by
national or industry union, in which case it may also be referred to as an affiliate. issuing a charter certificate indicating the establishment of the local chapter. The chapter
shall acquire legal personality only for purposes of filing a petition for certification
ILU Requirements for Registration election from the date it was issued a charter certificate.
1. The name of the applicant labor union, its principal address, the name of its
officers and their respective addresses, approximate number of employees in the Outline the procedure for chartering
bargaining unit where it seeks to operate, with a statement that it is not reported 1. A duly registered federation or national union issues a charter certificate indicating
as a chartered local of any federation or national union; the establishment of the local chapter.
2. The minutes of the organizational meeting(s) and the list of employees who 2. The charter certificate is filed with the Regional Office or BLR within 30 days
participated in the said meeting(s); after the issuance of the charter certificate
3. The name of all its members comprising at least 20% of the employees in the 3. The chapter shall be entitled to all other rights and privileges of a legitimate labor
bargaining unit; organization only upon the submission of the additional requirements:
4. The annual financial reports if the applicant has been in existence for one or more a. Names of the chapter’s officers, their addresses, and the principal office of the
years, unless it has not collected any amount from the members, in which case a chapter
statement to this effect shall be included; b. Chapter’s constitution and by-laws
5. The applicant’s constitution and by - laws, minutes of its adoption or ratification, c. Provided, that where the chapter’s constitution and by-laws are the same as that
and the list of the members who participated in it. The list of ratifying members of the federation or the national union, this fact shall be indicated accordingly
shall be dispensed with where the constitution and by - laws was ratified or 4. The additional requirements shall be certified under oath by the secretary or
adopted during the organizational meeting. In such a case, the factual treasurer of the chapter and attested by its president.
circumstances of the ratification shall be recorded in the minutes of the
organizational meeting(s).

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What is its purpose? purposes, shall be free from taxes, duties and other assessments. The exemptions
The purpose is for a duly registered federation or national union may directly create a provided herein may be withdrawn only by a special law expressly repealing this
local chapter which shall acquire legal personality only for purposes of filing a petition provision.
for certification election from the date it was issued a charter certificate.
Employees of San Miguel Corporation – Rank and file; are you qualified to be a
Rights and Privileges of a Legitimate Labor organization member of the SMC’s employee union?
(USER-FOE) Yes. Under Art.292(c), any employee, whether employed for a definite period or not,
1. Undertake activities for the benefit of the organization and its members; shall beginning on his first day of service, be eligible for purposes of union membership.
2. Sue and be sued;
3. Exclusive representative of all employees; Does it follow that if you are member, may you run as its officer?
4. Represent union members; Yes. Under Art.250(c), no qualification requirements for candidacy to any position shall
5. Furnished by employers of audited financial statements; be imposed other than membership in good standing in subject labor organization. And
6. Own properties; and provided that the member is not an individual belonging to any subversive organization
7. Exemption from taxes or engaged in any subversive activity nor convicted of a crime involving moral
turpitude.(Art 250(e)&(f)).
Art.251: “A legitimate labor organization shall have the right:
1. To act as the representative of its members for the purpose of collective To be a member, must you not be convicted of a crime that makes you a subversive?
bargaining; Yes. Under art 250(e),”no labor organization shall knowingly admit as members or
2. To be certified as the exclusive representative of all the employees in an continue in membership any individual who belongs to a subversive organization or who
appropriate bargaining unit for purposes of collective bargaining; is engaged directly or indirectly in any subversive activity.”
3. To be furnished by the employer, upon written request, with its annual audited
financial statements, including the balance sheet and the profit and loss statement, How about convicted of moral turpitude?
within 30 calendar days from the date of the receipt of the request, after the union Under Art. 250(f), “no person who has been convicted of a crime involving moral
has been duly recognized by the employer or certified as the sole and exclusive turpitude shall be eligible for election as a union officer or for appointment to ang
bargaining representative of the employees in the bargaining unit, or within 60 position in the union.” So as long as the person is not running as an officer or for any
calendar days before the expiration of the existing collective bargaining position in the union, the person may become a member of the union.
agreement, or during the collective bargaining negotiation;
4. To own property, real or personal , for the use and benefit of the labor organization Rights and Conditions of Membership in a Labor Organization
and its members; Please refer to Art.250 of the labor code.
5. To sue and be sued in its registered name; and
6. To undertake all other activities designed to benefit the organization and its You are an employee in good standing – is there any reason why you may be
members, including cooperative, housing, welfare and other projects not contrary disqualified in joining a union?
to law. Yes, if I am one of the employees disqualified to join a union.
Notwithstanding any provision of a general or special law to the contrary, the income Who are disqualified from joining a union?
and the properties of legitimate labor organizations, including grants, endowments, gifts, 1. Employees of international organizations with immunities such as UN, IRRI and
donations and contributions they may receive from fraternal and similar organizations, International Catholic Migration Commission;
local or foreign, which are actually, directly and exclusively used for their lawful
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A.Y. 2018 - 2019
2. Members of the Armed Forces of the Philippines, including police officers, interest. The union can also become company-dominated with the presence of
policemen, firemen and jail guards; managerial employees in union membership. (Bulletin Publishing Co, Inc. v. Sanchez)
3. Managerial employees
a. Whose functions are normally considered as policy – making or managerial; Is it possible to have 2 unions at the enterprise level?
b. Whose duties are of a highly confidential or highly technical in nature; Yes, it is possible to have 2 unions or more representing different trades per enterprise.
4. Confidential employees whose position are linked to labor relations matters
5. High – level or managerial government employees; 10,000 employees in X Company located in only one compound. Can you have 10
6. Aliens without valid working permits; or aliens with valid working permits but unions of Rank and File employees?
are nationals of a country which do not allow Filipinos to exercise the right of self No. 20% of the employees is the required minimum members for an independent union.
– organization and to join or assist labor organizations; In this case, 20% of 10,000 employees is 2,000. Hence, only 5 independent unions of
7. Non – employees; rank and file employees are allowed.
8. Government employees, including Government – owned and controlled
corporations with original charters; By implication, the maximum number of members that an LLO could have is the entire
9. Employees of cooperatives who are at the same time its members; number of employees of the company. It should not exceed the said number, because
10. Subversives or those engaged in subversive activities. the LLO will have unqualified members if that happens.
Is double membership allowed?

Confidential employees – illustrate.
Yes, it is possible in case of an enterprise where there are or more labor unions
Those who by reason of their positions or nature of work are required to assist or act in
representing different trade in that enterprise.
a fiduciary manner to managerial employees and hence, are likewise privy to sensitive
and highly confidential records. Although Article 245 of the Labor Code limits the
SAMPLEX QUESTIONS
ineligibility to join, form and assist any labor organization to managerial employees,
jurisprudence has extended this prohibition to confidential employees. By the very
OBJECTIVE
nature of their functions, they assist and act in a confidential capacity to, or have access
to confidential matters of, persons who exercise managerial functions in the field of
DEFINE THE FOLLOWING:
labor relations. As such, the rationale behind the ineligibility of managerial employees
Collective Bargaining Unit
to form, assist or join a labor union equally applies to them. (Philips Industrial
It is a group of employees of a given employer, comprised of all or less than all the entire
Development v. NLRC; Metrolab Industries, Inc. vs. Roldan-Confesor) This rationale
body of employees, which, consistent with equity to the employer, indicate to be the
holds true also for confidential employees such as accounting personnel, radio and
best suited to serve the reciprocal rights and duties of the parties under the collective
telegraph operators, who having access to confidential information, may become the
bargaining provision of the law.
source of undue advantage. (Golden Farms, Inc. vs. Ferrer-Calleja)
Unfair Labor Practice
Why are managerial employees disqualified from forming unions?
Art 258 of the Labor Code provides “Unfair labor practices violate the constitutional
Conflict of interest. Managerial Employees are the alter ego of the employers and thus
right of workers and employees to self-organization, are inimical to the legitimate
they are supposed to be on the side of the employer to act as its representatives, and to
interests of both labor and management, including their right to bargain collectively
see to it that its interests are well-protected. The employer is not assured of such
and otherwise deal with each other in an atmosphere of freedom and mutual respect,
protection if these employees are union members. In the same manner, the labor union
disrupt industrial peace and hinder the promotion of healthy and stable labor
might not be assured of their loyalty to the union in view of the evident conflict of
management relations. It is also a violation of the civil rights of both labor and

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management, and a criminal offense against the State which shall br subject to executing a contract incorporating such agreements if requested by either party but such
prosecution and management.” duty does not compel any party to agree to a proposal or to make any concession.
The elements of Unfair Labor Practice are: Constructive Dismissal

1. Employer-employee relationship between the offender and the offended Constructive dismissal exists when there is cessation of work because continued
2. Act done is expressly defined in the code as an act of unfair labor practice employment is rendered impossible, unreasonable or unlikely. Constructive dismissal is
a dismissal in disguise or an act amounting to dismissal but made to appear as if it were
Regular seasonal employees not. (Diamond Taxi v Llamas, Jr.)
Seasonal Employees are considered Regular Employees:
a. When there is reasonable connection between the particular activity performed Featherbedding
by the employee in relation to the usual trade or business of the employer; and The act of causing or attempting to cause an employer to pay or deliver any money or
b. When seasonal workers are repeatedly engaged to perform the same tasks for other things of value for services which were not performed or not to be performed
more than 1 season. (Ungos, 2015)
Doctrine of apparent authority Yellow Dog Contract

Also known as the Holding Out theory / Doctrine of Ostensible Agency / Agency by An agreement which requires as a condition of employment, that a person or employee:
estoppel. This doctrine imposes liability, not as the result of the reality of a contractual a. Declares that he is not a member of a labor organization;
relationship, but rather because of the actions of a principal or an employer in somehow b. Refrains from joining a labor organization;
misleading the public into believing that the relationship or the authority exists. Under c. Withdraws his membership in a labor organization; or
the rule, the principal is bound by the acts of his agent with the apparent authority which d. Quits his employment upon joining a labor organization
he knowingly permits the agent to assume, or which he holds to the agent out to the
public as possessing. The question in every case is whether the principal has by his Labor Dispute
voluntary act placed the agent with business usages and the nature of the particular Article 219 (l):
business, is justified in presuming that such agent has authority to perform the particular “Labor dispute” includes any controversy or matter concerning terms and conditions of
act in question. employment or the association or representation of persons in negotiating, fixing,
maintaining, changing or arranging the terms and conditions of employment, regardless
Contract bar rule of whether the disputants stand in the proximate relation of employer and employee.
Art. 238 of the Labor Code refers to the contract bar rule which means that while a valid
and registered CBA is subsisting, the Bureau is not allowed to hold an election Affiliate
contesting the majority status of the incumbent Union. An affiliate is an independent union affiliated with a federation or national union; or a
chartered local which was subsequently granted an independent registration but did not
Duty to bargain collectively (Not included in MT coverage) disaffiliate from its mother federation or national union
Art. 263. Meaning of Duty To Bargain Collectively.-- The duty to bargain collectively
means the performance of a mutual obligation to meet and convenec promptly and Modified Union Shop
expeditiously in good faith for the purpose of negotiating an agreement with respect to Modified Union Shop Agreement is a union security which provides that the employees
wages, hours of work and all other terms and conditions of employment including who are not union members at the time of signing the CBA need not join the union, but
proposals for adjusting any grievances of questions arising under such agreement and all the workers hired thereafter must join.

LABOR RELATIONS
A.Y. 2018 - 2019
Trade Union Center The so-called “extraordinary remedies” under the 2011 NLRC Rules of Procedure
Group of Registered national unions or federations organized for the mutual aid and that may be availed of by a party aggrieved by an order or resolution of the Labor
protection of its members and assisting such members in collective bargaining or for Arbiter, including those issued during execution proceedings
participating in the formulation of social and employment policies, standards and A party aggrieved by any order or resolution of the Labor Arbiter including those issued
programs duly registered with the DOLE. during execution proceedings may file a verified petition to annul or modify such order
or resolution. The petition may be accompanied by an application for the issuance of a
Exclusive original jurisdiction of NLRC temporary restraining order and/or writ of preliminary or permanent injunction to enjoin
1. Certified Cases under Art. 278 and 279 the Labor Arbiter, or any person acting under his/her authority, to desist from enforcing
2. Injunction Cases under Arts. 225 and 278 said resolution or order. (Section 1, Rule XII, 2011 NLRC Rules of Procedure)
3. Contempt Cases
4. Verified Petition How to criminally prosecute an employer for a ULP-related offense
5. Petition to annul or modify the order or resolution of the Labor Arbiter The officers and agents of corporations, associations or partnerships who have actually
participated in, authorized or ratified unfair labor practices shall be liable.
DISCUSS BRIEFLY THE FOLLOWING:
To prosecute ULP as criminal offense is not possible until after finality of judgment in
Factors to be considered in determining the appropriateness of a CBU (Not the labor case, finding that respondent indeed committed ULP. But such judgment will
included in Midterms Coverage) not serve as evidence of ULP in the criminal case; the criminal charge must be proved
1. Community of Interest Doctrine or Substantial Mutual Interest Rule independently from the labor case and proof beyond reasonable doubt is needed to
Characterized by the similarity of employment status, same duties and responsibilities convict in the criminal case of ULP.
and substantially similar compensation and working conditions
The legal remedies of an aggrieved party in case of CBA violations
2. Globe Doctrine Under Article 261 of the Labor Code, as amended by R.A. No. 6715, violations of a
This is based on the expressed will or desire of the employees. collective bargaining agreement, except those which are gross in character, shall no
longer be treated as unfair labor practice and shall be resolved as grievances under the
3. Employment Status collective bargaining agreement. Gross violations of a collective bargaining agreement
Status such as temporary, seasonal and probationary employee shall mean flagrant and/or malicious refusal to comply with the economic provisions of
such agreement
4. Prior Collective Bargaining History
The aggrieved parties may file a complaint for ULP based on gross violation of CBA—
When bargaining even to the point of impasse is not equivalent to bargaining in as long as they are able to show prima facie the concurrence of two things, namely: [1]
bad faith gross violation of the CBA; and [2] the violation pertains to the economic provisions of
The adamant insistence on a bargaining position to the point where the negotiations the CBA.
reach an impasse does not establish bad faith.
How the DOLE Secretary’s visitorial and enforcement powers have been
strengthened by RA 7730
Under Art. 129 of the Labor Code, the power of the DOLE and its duly authorized
hearing officers to hear and decide any matter involving the recovery of wages and other
monetary claims and benefits was qualified by the proviso that the complaint shall not
LABOR RELATIONS
A.Y. 2018 - 2019
include a claim for reinstatement, or that the aggregate money claims shall not exceed are automatically deemed removed from the list of members of said union. In other
PhP 5,000. RA 7730 did away with the PhP 5,000 limitation, allowing the DOLE words, their removal from the said list is by operation of law.
Secretary to exercise its visitorial and enforcement power for claims beyond PhP 5,000.
The only qualification to this expanded power of the DOLE was that, there still be an Reason: after the certificate of registration is issued to a union, its legal personality
existing employer-employee relationship. cannot be subject to a collateral attack. It may be questioned only via a petition for
cancellation, under the grounds provided for in Art. 246 (Tagaytay Highlands
If there is no employer-employee relationship, whether it has been terminated or it has International Golf Club vs. Tagaytay Highlands Employees Union, GR. No. 142000,
not existed from the start, the Department of Labor and Employment (DOLE) has no Jan. 22, 2003)
jurisdiction. An employer-employee relationship must exist for the exercise of the
visitorial and enforcement power of the Department of Labor and Employment (DOLE). The doctrine of the “employer being a mere bystander”
Indeed, the demand of the new law and policy for an employer to take a strict, hands-
The effectivity and duration of a collective bargaining agreement off stance in certification elections is based on the rationale that the employees’
EFFECTIVITY: bargaining representative should be chosen free from any extraneous influence of the
1. If the CBA is the very first of the bargaining unit, the parties have to decide the management; that to be effective, the bargaining representative must owe its loyalty to
CBA’s effectivity date the employees alone and no other (Holy child catholic school v. Sto. Tomas, G.R. No.
2. Those made within 6 mo. after the date of expiry of the CBA are subject to 179146, July 23, 2013)
automatic retroaction to the date immediately following such date of expiry
3. Those not made within 6 mo., the parties may agree on the date of retroaction How to perfect an appeal from the LA’s decision, award or order
a. The appeal shall be:
AUTOMATIC RENEWAL CLAUSE: 5. Filed within the reglementary period provided in Section 1 of this Rule;
The CBA shall remain effective and enforced even after the expiration of the period 6. Verified by the appellant himself/herself in accordance with Section 4, Rule
fixed by the parties, as long as no new agreement is reached by them. The automatic 7of the Rules of Court, as amended;
renewal pertains only to the economic provisions of CBA and does not include 7. in the form of a memorandum of appeal which shall state the grounds relied
representational aspect of CBA. upon and the arguments in support thereof, the relief prayed for, and with a
statement of the date the appellant received the appealed decision, award or
DURATION: With respect to representation aspect, the CBA lasts for 5 years. order;
However, not later than 3 years after the execution of the CBA, the economic provisions 8. in three (3) legibly typewritten or printed copies; and accompanied by:
shall be renegotiated.
iv. proof of payment of the required appeal fee and legal research fee;
The doctrine of “non-commingling” of membership v. posting of a cash or surety bond as provided in Section 6 of this Rule; and
Non-commingling of membership, as provided for by Article 256, is the inclusion as vi. proof of service upon the other parties.
union members of employees outside the bargaining unit.
b. A mere notice of appeal without complying with the other requisites aforestated
However, it bears noting that in case there is commingling or mixed membership of shall not stop the running of the period for perfecting an appeal.
supervisors and rank-and-file employees in one union, the new rule enunciated in Article c. The appellee may file with the Regional Arbitration Branch or Regional Office
256 of the Labor Code, unlike in the old law, is that it cannot be invoked as a ground for where the appeal was filed, his/her answer or reply to appellant's memorandum of
the cancellation of the registration of the union. The employees so improperly included appeal, not later than ten (10) calendar days from receipt thereof. Failure on the
part of the appellee who was properly furnished with a copy of the appeal to file
LABOR RELATIONS
A.Y. 2018 - 2019
his/her answer or reply within the said period may be construed as a waiver on Perfection of appeal
his/her part to file the same d) Subject to the provisions of Article 218 15 days
of the Labor Code, once the appeal is perfected in accordance with these Rules,
the Commission shall limit itself to reviewing and deciding only the specific issues Disaffiliation from Mother Union or Federation
that were elevated on appeal. (4a) According to Sec. 49 of the 1992 Rules of Procedure on Mediation-Arbitration, a labor
union may disaffiliate from the mother union to form an independent union only during
How to differentiate a local union from its mother union / Federation the 60-day freedom period immediately preceding the expiration of the CBA.
National Union/Federation means any labor organization with at least ten (10) locals or
chapters each of which must be a duly recognized collective bargaining agent. This rule admits of an exception. Even before the onset of the freedom period, the
disaffiliation may still be carried out, but such disaffiliation must be effected by a
A duly registered federation or national union may directly create a local chapter by majority of the union members in the bargaining unit.
issuing a charter certificate indicating the establishment of the local chapter. The chapter
shall acquire legal personality only for purposes of filing a petition for certification Valid Dismissal of an Employee under a Closed Shop Agreement
election from the date it was issued a charter certificate. A Closed Shop Agreement is a form of Union Security Clause where only union
members can be hired by a company and they must remain as union members to retain
The chapter shall be entitled to all other rights and privileges of a legitimate labor employment in the company.
organization only upon the submission of the required documents in addition to its
charter certificate. Creation of local chapter doesn't need subscription of at least 20 According to the case of Alabang Country Club, Inc. v. NLRC, in terminating the
percent of the members. employment of an employee by enforcing the union security clause, the employer needs
only to determine and prove that:
The rights and obligations of membership in a labor organization 11. the union security clause is applicable;
ARTICLE 250: RIGHTS AND CONDITIONS OF MEMBERSHIP IN A LABOR 12. the union is requesting for the enforcement of the union security provision in the
ORGANIZATION CBA; and
1. Deliberative and Decision-Making Right — the right to participate in 13. there is sufficient evidence to support the decision of the union to expel the
deliberations on major policy questions and decide by secret ballot; employee from the union.
2. Right to information — the right to be informed about:
a. The organizations’ constitution and by-laws; These requisites constitute just cause for terminating an employee based on the union
b. The collective bargaining agreement, and labor laws security provision of the CBA.
3. Rights over Money Matters — the rights of the members:
a. Against imposition of excessive fees; Remedies of Third Party whose property has been wrongfully levied to enforce a
b. Against unauthorized collection of contributions or unauthorized decision
disbursements; As held in the case of Yupangco Cotton Mills vs. CA, the third party is afforded several
c. To require adequate records of income and expenses; alternative remedies which may be availed cumulatively, and one will not preclude said
d. To access financial records; third party from availing of the other alternative remedies in case he failed in the remedy
e. To vote on officers’ compensation; first availed of. These are:
f. To vote on special assessment; and a. Third-party claim with the sheriff if the Labor Arbiter which must be filed not
g. To be deducted a special assessment only with the member’s written later than 5 days from the last day of posting or publication of the notice of
authorization. execution sale;
LABOR RELATIONS
A.Y. 2018 - 2019
b. If such claim is denied, the denial may be appealed to the NLRC; Election of union officers by union members due to mismanagement
c. Independent civil action to recover ownership of the property illegally seized; and If the election was held in violation of, or not in accordance with, the constitution and
d. Motion for Exclusion or Release of the property wrongfully levied on execution. by-laws of the union.
Pending appeal, decision of LA shall be stayed It was held in the case of UST Faculty Union vs. Bitonio that the union’s constitution
The decision of the Labor Arbiter ordering the reinstatement of a dismissed or separated and by-laws is the fundamental law which governs the relationship between and among
employee shall be immediately executory insofar as the reinstatement aspect in the members of the union. It is where the rights, duties and obligations, powers,
concerned, and the posting of the appeal bond shall not stay such execution. There is no functions, and authority of the officers and the members are defined. Moreover, it was
need for a motion for the issuance of a writ of execution as regards the reinstatement stated in the said case that worker’s organizations shall have the right to draw up their
order which is immediately self-executing. The basis for this is police power in order to constitution and rules and to elect their representatives in full freedom.
prevent the continuing threat or danger to the survival of the dismissed or separated
employee and his family. Thus, if the election of the new set of officers was done not in accordance with the
constitution and by- laws of the union, then the petition shall be denied. However, if the
Minimum membership for LLO application election of new set of officers may be effected by the union members, in such way, is
As a requirement for application or for the issuance of a certificate of registration, in sanctioned by the constitution and by-laws, then the petition shall prosper.
case the applicant is an independent union, a list of names of all its members comprising
at least 20% of all the employees in the bargaining unit must be submitted. The creation AGREE OR DISAGREE. EXPLAIN.
of a local chapter, however, does not need an initial membership of at least 20% of the To interfere with, restrain or coerce the employees in the exercise of their right to
bargaining unit. self - organization is considered unfair labor practice.
Under Article 257 of the Labor Code, it shall be unlawful for any person to restrain,
Expulsion by union members coerce, discriminate against or unduly interfere with employees and workers in their
The expulsion of a member should not be based on the whims and caprice of the union exercise of the right to self-organization. Any act intended to weaken or defeat the right
members. The provisions of the constitution and by-laws as regards the expulsion of is regarded by law as an offense, which is technically called "unfair labor practice.
union members should be stated in clear and unequivocal terms. More so, the
constitution and by-laws should be fair and reasonable. The 3⁄4 vote may be considered Following the rule on segregation, supervisors and rank - and - file employees
unreasonable and be a subject of abuse by the members who may cause the expulsion of cannot join the same union; neither can their respective unions affiliate with the
other members due to personal reasons. same federation
Under the Labor Code, as amended by RA 9481, supervisory employees shall not be
Resolution by board members eligible for membership in the collective bargaining unit of the rank-and-file employees
The resolution should not have been passed by the board of directors only. Article 250(d) but may join, assist or form separate collective bargaining units and/or legitimate labor
of the Labor Code provides that in case of any question of major policy affecting the organizations of their own. However, under the same provision, the rank and file union
entire membership—such as the undertaking in this case to supply 50% of the food in and the supervisors’ union operating within the same establishment may join the same
the university canteen and 30% of the janitorial services in the main building of the federation or national union.
university in order to raise union funds—the members shall determine by secret ballot,
after due deliberation, unless the nature of the organization or force majeure renders Managerial employees, confidential employees and temporary employees are not
such secret ballot impractical, in which case, the board of directors of the organization eligible in form, join, or assist labor organizations.
may make the decision in behalf of the general membership.

LABOR RELATIONS
A.Y. 2018 - 2019
AGREE. Managerial Employees are the alter ego of the employers, thus they are In the absence of a certified exclusive bargaining representative, the employer
supposed to be on the side of the employer, acting as their representative and to see if cannot be legally compelled to bargain collectively with its employees. An exclusive
their interests are well protected. bargaining representative always enjoys the majority support of the CBU
members.
Confidential employees are those who, by reason of their position or nature of their work Rule VI Section 1 of Department Order No. 40-03 Policy. - It is the policy of the State
are required to assist or act in a fiduciary manner to managerial employees. As they act to promote free trade unionism through expeditious procedures governing the choice of
in a confidential capacity, and have access to confidential matters of persons who an exclusive bargaining agent. The determination of such exclusive bargaining agent is
exercise managerial functions, the ineligibility that applies to the latter also applies to a non-litigious proceeding and, as far as practicable, shall be free from technicalities of
them. law and procedure, provided only that in every case, the exclusive bargaining agent
The sample is true for non-employees when there is no EE-ER relationship. enjoys the majority support of all the employees in the bargaining unit.
Pursuant to a check - off stipulation, the employer who fails to make the requisite A Labor Arbiter’s decision cannot be immediately enforced once an appeal is
deductions may be held liable for unfair labor practice as well as for the aggregate seasonably perfected by a party.
dues or assessments uncollected from the union members, or agency fees for non - DISAGREE. When the complaint is accompanied with a claim for reinstatement, the
union employees. LA’s decision as to the reinstatement is immediately executory even pending appeal.
DISAGREE. No provision of law makes the employer directly liable for the payment There is no need for a motion for the issuance of a writ of execution as regards the
to the labor organization of union dues and assessments that the former fails to deduct reinstatement order which is immediately self-executing.
from its employees' salaries and wages pursuant to a check-off stipulation. The
employer's failure to make the requisite deductions may constitute a violation of a The basis for this is police power in order to prevent the continuing threat or danger to
contractual commitment for which it may incur liability for unfair labor practice. But it the survival of the dismissed or separated employee and his family.
does not by that omission, incur liability to the union for the aggregate of dues or
assessments uncollected from the union members, or agency fees from non-union If a motion to reconsider the Labor Arbiter’s decision is filed by a party, the same
employees. Check-offs in truth impose an extra burden on the employer in the form of shall be denied for being a prohibited pleading/ motion.
additional administrative and bookkeeping costs. It is a burden assumed by management DISAGREE.
at the instance of the union and for its benefit, in order to facilitate the collection of dues It is true that, as provided in Section 5(f), Rule V of the 2011 NLRC Rules of Procedure,
necessary for the latter's life and sustenance. But the obligation to pay union dues and a Motion for Reconsideration of any decision or any order of the Labor Arbiter is a
agency fees obviously devolves not upon the employer, but the individual employee. It prohibited pleading/motion. However, when one such motion for reconsideration is
is a personal obligation not demandable from the employer upon default or refusal of filed, it shall be treated as an appeal provided that it complies with the requirements for
the employee to consent to a check-off. The only obligation of the employer under a perfecting an appeal. (St. Martins case; Section 15, Rule v, 2002 NLRC Rules of
check-off is to effect the deductions and remit the collections to the union. The principle Procedure)
of unjust enrichment necessarily precludes recovery of union dues - or agency fees -
from the employer, these being, to repeat, obligations pertaining to the individual worker
in favor of the bargaining union. Where the employer fails or refuses to implement a
check-off agreement, logic and prudence dictate that the union itself undertake the
collection of union dues and assessments from its members (and agency fees from non-
union employees); this, of course, without prejudice to suing the employer for unfair
labor practice.

LABOR RELATIONS
A.Y. 2018 - 2019
HYPOTHETICAL QUESTIONS the heading membership and removal ("pag-aanib at pagtitiwalag"), it states: “Sec. 4.
Ang sinumang kasapi ay maaring itwalag ng Samahan pangsamantala o tuluyan sa
X Company has two recognized labor unions, one for its rank-and-file employees pamamagitan ng tatlo't ikaapat (¾) na bahagi ng dami ng bilang ng Pamunuang
(RFLU) and one for its supervisory employee (SELU). Recently, the company Tagapagpaganap. Pagkaraan lamang sa pandinig sa kanyang kaso. Batay sa
instituted a restructuring program by virtue of which A, a rank-and-employee and sumusunod…”
President of RFLU, was promoted to a supervisory position along with the 3 other
colleagues who are also active officers of RFLU. KJLU, a rival union seeking In this case, no hearing was ever conducted by the union (SAMAHAN) to look into
recognition as the rank-and-file bargaining agent, filed a petition for the petitioners' explanation of their moves to oust the union leadership under Capitle, or
cancellation of the registration of RFLU on the ground that A and his colleagues their subsequent affiliation with another union (FEDLU). While it is true that petitioners'
have remained to be members of RFLU. Is the petition meritorious? Explain. (5 actions might have precipitated divisiveness and, later, showed disloyalty to the union,
points) still, the union (SAMAHAN) should have observed its own constitution and by-laws by
No. RA 9481 or an Act Strengthening the Workers' Constitutional Rights to Self- giving petitioners an opportunity to air their side and explain their moves. If, after an
Organization made the cancellation of a union’s registration harder. investigation the petitioners were found to have violated union rules, then and only then
should they be subjected to proper disciplinary measures.
The grounds for cancellation of union registration has been reduced from ten to three,
these are: 2. In order to raise union funds, GF Union’s board of directors unanimously
a. Any falsehood about the union’s constitution and by-laws; adopts a resolution undertaking to “supply 50% of the food in the university
b. Any falsehood about the election of officers; and canteen and 30% if the janitorial services in the main building of the
c. Voluntary dissolution university”. Is the resolution valid?
The resolution is invalid. The resolution should not have been passed by the board of
The BLR may cancel a union registration based ONLY on the grounds enumerated in directors only. Article 250(d) of the Labor Code provides that in case of any question of
Article 247 as amended. major policy affecting the entire membership—such as the undertaking in this case to
supply 50% of the food in the university canteen and 30% of the janitorial services in
1. May the union’s constitution and by - laws provide that a member may be the main building of the university in order to raise union funds—the members shall
expelled from the union only “after due deliberation by, and upon a vote of determine by secret ballot, after due deliberation, unless the nature of the organization
three - fourths of its total membership”? Explain. or force majeure renders such secret ballot impractical, in which case, the board of
No. Just an officer is entitled to due process, so does a member. Such member of a labor directors of the organization may make the decision in behalf of the general membership.
union may be expelled only for a valid cause and by following the procedure outlined
in the constitution and by laws. 3. Charging their union officers with mismanagement, corruption and other
serious anomalies, 200 members of the GF Union called for a general
In the case of Ferrer v NLRC, the LA and NLRC erred in dismissing the complaint for assembly wherein they elected a new set of officers. Thereafter, the
illegal dismissal and unfair labor practice on the ground that both the company and the incumbent officers filed a petition with the Med - Arbiter to nullify and set
union merely complied with the collective bargaining agreement provision sanctioning aside the election of the new set of officers. Rule on the petition.
the termination of any employee who fails to retain membership in good standing with The petition shall prosper if the election was held in violation of, or not in accordance
the union. with, the constitution and by-laws of the union.
The union has a specific provision for the permanent or temporary "expulsion" of its It was held in the case of UST Faculty Union vs. Bitonio that the union’s constitution
erring members in its constitution and by-laws ("saligang batas at alituntunin"). Under and by-laws is the fundamental law which governs the relationship between and among
LABOR RELATIONS
A.Y. 2018 - 2019
the members of the union. It is where the rights, duties and obligations, powers, Petition for the Issuance of a Temporary Restraining Order before the
functions, and authority of the officers and the members are defined. Moreover, it was NLRC. Should the NLRC grant the petition? Explain.
stated in the said case that worker’s organizations shall have the right to draw up their
constitution and rules and to elect their representatives in full freedom.
Atty. No Case, a faithful and courageous lawyer of GF Union, died. In deep
Thus, if the election of the new set of officers was done not in accordance with the appreciation of his services to the union, the board of directors passed a resolution
constitution and by- laws of the union, then the petition shall be denied. However, if the granting a death aid benefit to Atty. No Case’s family. May such death aid benefit
election of new set of officers may be effected by the union members, in such way, is be deducted from the wages of the union members? Explain.
sanctioned by the constitution and by-laws, then the petition shall prosper. No. Article 250(n) of the Labor Code provides that “no special assessments or other
extraordinary fees may be levied upon the members of a labor organization unless
4. X, Y and Z are officers of GF union who claims that their promotions authorized by a written resolution of a majority of all the members in a general
in accordance with the CBA were bypassed by SanBida University. They membership meeting duly called for the purpose.”
filed a complaint for ULP before the LA grounded on discrimination and
violation CBA provisions on job security. Will the action prosper? Explain. Thus, the death aid benefit may not be deducted from the wages of the union members
No. Article 248 (e) and (i) states that: by virtue of a board resolution only. For the deduction to be validly made, the same must
It shall be unlawful for an employer to commit any of the following unfair labor be authorized by a written resolution of a majority of all the members in a general
practices: membership meeting duly called for the purpose.
(e) 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. A group of employees in NOPQ Factory belonging to a religious sect, in conformity
xxx with the teachings and dictates of their religion, refused to join the labor union of
(i) To violate a collective bargaining agreement. x x x the factory. The labor union was able to negotiate a substantial wage increase in its
collective bargaining agreement with the management. A provision therein stated
In the case herein, the facts averred fails to constitute unfair labor practice under Article that the wage increase would be paid to the members of the union only in view of
248(e) for it does not allege that the non-promotion was done in order to encourage or the “closed shop” union security clause in the new agreement. The members of the
discourage membership in a labor organization. The test of discrimination is whether or sect protested and demanded that the wage increase be extended to them. The
not the giving of benefits and privilege to others and not giving the same to others is officers of the sect protested and demanded that the wage increase be extended to
directed to encouraging or discouraging union membership. them. The officers of the union countered by demanding their dismissal from the
company pursuant to the closed-shop provision in the just-concluded CBA.
As regard the violation of a collective bargaining agreement under Article 248(i), on the
other hand, the said non-promotion does not amount to violation of the CBA provisions 1. Is the CBA provision valid? Explain.
on job security because the said employees were not discharged. Moreover, to amount
as unfair labor practice, Silva vs. NLRC instructs that the said violation must be a gross Respondent union in Philippine Diamond Hotel and Resort, Inc. [Manila Diamond
violation of the economic provisions of the Collective Bargaining Agreement. Hotel] v. Manila Diamond Hotel Employees Union, insists that it could validly bargain
in behalf of “its members” only. The Supreme Court, however, ruled that the same
5. Following a deadlock in the CBA negotiations, GF Union threatened the would only “fragment the employees” of petitioner. What respondent union will be
management that it will go on strike if its demands are not met. To forestall achieving is to divide the employees, more particularly, the rank-and-file employees of
their action, the management of San Bida University immediately filed a petitioner hotel. The other workers who are not members are at a serious disadvantage,
because if the same shall be allowed, employees who are non- union members will be
LABOR RELATIONS
A.Y. 2018 - 2019
economically impaired and will not be able to negotiate their terms and conditions of 3. Enumerate 5 salient features of RA 9481 which strengthen the worker’s right
work, thus defeating the very essence and reason of collective bargaining which is an to self-organization.
effective safeguard against the evil schemes of employers in terms and conditions of A. Employer as Bystander. - In all cases, whether the petition for certification
work. Petitioner’s refusal to bargain then with respondent cannot be considered an election is filed by an employer or a legitimate labor organization, the employer
unfair labor practice to justify the staging of the strike. shall not be considered a party thereto with a concomitant right to oppose a
petition for certification election. The employer's participation in such
YES. In a closed-shop agreement, only member of the union can be hired by the proceedings shall be limited to: (1) being notified or informed of petitions of
company and they must remain as union members to retain employment in the company. such nature; and (2) submitting the list of employees during the pre-election
In view of the close-shop agreement, the provision on wage increase was not conference should the Med-Arbiter act favorably on the petition.
discriminatory as it was intended to cover all the employees of the NOPQ Factory.
B. Voluntary Cancellation of Registration. - The registration of a legitimate labor
2. Should the company comply with the union’s demand of terminating the organization may be cancelled by the organization itself. Provided, That at least
services of the members of the religious sect? Explain. two-thirds of its general membership votes, in a meeting duly called for that
purpose to dissolve the organization: Provided, further, That an application to
NO. Although close-shop agreement is valid, employees belonging to any religious sect cancel registration is thereafter submitted by the board of the organization,
which prohibit affiliation of their members with any labor organization are not covered attested to by the president thereof."
by such agreement. The free exercise of religious belief is superior to contract rights.
DEF Union was voluntarily recognized as the exclusive bargaining agent by GHI C. Chartering and Creation of a Local Chapter. - A duly registered federation or
Corp, an unorganized establishment. Thereafter, a CBA was executed and national union may directly create a local chapter by issuing a charter certificate
registered. indicating the establishment of the local chapter. The chapter shall acquire legal
personality only for purposes of filing a petition for certification election from
1. Before the expiration of the freedom period, may DEF Union again request the date it was issued a charter certificate.
GHI Corp for voluntary recognition?
NO. D.O. No. 40-I-15 has already repealed and replaced the rules on voluntary D. Effect of Inclusion as Members of Employees Outside the Bargaining Unit. -
recognition in D.O. No. 40-03 with rules on request for sole and exclusive bargaining The inclusion as union members of employees outside the bargaining unit shall
agent (SEBA). Hence, as the president of Z Corporation, I can no longer voluntarily not be a ground for the cancellation of the registration of the union. Said
recognize Z Union as the exclusive bargaining representative (EBR). Z Union should employees are automatically deemed removed from the list of membership of
ask for SEBA certification from DOLE to be recognized as the EBR of the employees said union."
in the appropriate bargaining unit.
E. Reportorial Requirements. Failure to comply with the requirements shall not
2. Assuming GHI Corp agrees to the request, will such voluntary recognition be a ground for cancellation of union registration but shall subject the erring
give rise to a complaint for ULP? Why or why not? officers or members to suspension, expulsion from membership, or any
YES. If there is already an exclusive bargaining representative chosen through a appropriate penalty."
certification election, the employer will commit ULP if he voluntarily recognizes Z
Union and chooses to bargain with him rather than with the EBR.


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LABOR RELATIONS

Atty. Peter Joey B. Usita

SAN BEDA COLLEGE OF LAW – MENDIOLA

Labor dispute SC RULING:

SAN BEDA COLLEGE OF LAW – MENDIOLA

SAN BEDA COLLEGE OF LAW – MENDIOLA

SAN BEDA COLLEGE OF LAW – MENDIOLA

Requisites: What are examples of attachments?

ATTY USITA: Position papers include:

SAN BEDA COLLEGE OF LAW – MENDIOLA

ISSUES: e. We should remember that "the dismissal of an employee’s appeal on purely

SAN BEDA COLLEGE OF LAW – MENDIOLA

c. After final judgment What is a union?

SAN BEDA COLLEGE OF LAW – MENDIOLA

Is double membership allowed?

SAN BEDA COLLEGE OF LAW – MENDIOLA

The elements of Unfair Labor Practice are: Constructive Dismissal

Doctrine of apparent authority Yellow Dog Contract

SAN BEDA COLLEGE OF LAW – MENDIOLA

SAN BEDA COLLEGE OF LAW – MENDIOLA

SAN BEDA COLLEGE OF LAW – MENDIOLA

SAN BEDA COLLEGE OF LAW – MENDIOLA

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