Labor Personal Notes

May a contract of employment entered into by an OFW be terminated for no

cause? (at-will employment)
Yes. POEA’s standard Employment Contrat recognizes “Freedom to Stipulate”.
(GBMLT Manpower Services vs. Malinao, July 6, 2015)

If the employment is terminated without valid cause, what relief is the OFW
entitled to?
Section 10 of R.A. 8042 (Migrant Workers Act) entitles the employee to:
a. full reimbursement of his placement fee with 12% interest per annum;
b. salaries for the unexpired portion of his employment contract (or for three

months for every year of the unexpired term, whichever is less. – declared
unconstitutional in Serrano v. Gallant but restored in RA 10022)
Note that in Sameer Overseas Placement vs. Cabiles, August 2, 2014, said: “When
a law or a provision of law is null because it is inconsistent with the Constitution,
the nullity cannot be cured by reincorporation or reenactment of the same or a
similar law or provision. A law or provision of law that was already declared
unconstitutional remains as such unless circumstances have so changed as to
warrant a reverse conclusion.”

Does the BSP Circular lowering legal interest to 6% have the effect of changing
the 12% interest rate on placement fee specified in Sec. 10, RA 8042?
No. “The circular is not applicable where there is a law that states otherwise.” “A
Central Bank Circular cannot repeal a law. Only a law can repeal another law.” This
ruling holds although the BSP Circular applies the 6% even to judgments.
However, the same cannot be said for awards of salary for the unexpired portion of
the employment contract under R.A. No. 8042. These awards are covered by
Circular No. 799 [effective July 1, 2013] because the law does not provide for a
specific interest rate that should apply (Sameer v. Cabiles)

What is the status of a BPO employee?

In Gadia v. Sykes Asia, the Court held that BPO employees are project-based
employees only. For an employee to be considered project-based, the employer
must show compliance with two (2) requisites, namely that: (a) the employee was
assigned to carry out a specific project or undertaking; and (b) the duration and
scope of which were specified at the time they were engaged for such project. Here,
Sykes Asia substantially complied with this requisite when it expressly indicated in
petitioners’ employment contracts that their positions were "co-terminus with the
project." (Gadia et al., v. Sykes Asia, G.R. No. 209499, January 28, 2015 [Perlas-
Bernabe])

NOTE that Department Order 18-A (2011) in relation to Department Circular 1-

2012 clarifies that a BPO partakes of a vendor-vendee relationship for entire
business processes, and that the prohibition on labor-only contracting does not
contemplate IT-based services.

Do the issuances prohibiting labor-only contracting imply that the law

presumes labor-only contracting?
NO. a contractor that fails to prove that it is an independent contractor (i.e., it has
substantial capital, etc) is presumed to be a labor-only contractor. The presumption
arises from the failure to prove the attributes of an independent contractor
Additionally, under the latest DOLE Department Order (No. 18-A, Nov. 2011)
implementing the Labor Code, the supposed contractor is presumed to be a labor-
only contractor if it is not registered with DOLE. The presumption arises from non-
registration.

Does the law allow outsourcing of the functions of a redundated Department?

Determination of the advisability of retaining a particular officer or position in a
business corporation is a management prerogative. The court will not interfere with
the management’s decision unless it is shown that the action is characterized by
abuse of discretion or is arbitrary or malicious.
The closure of the Food & Beverage Department by a club and its opening to a
concessionaire, due to legitimate business considerations, is a resolution with which
the Court has no business to interfere. (Manila Polo Club Employee Union v.
Manila Polo Club GR No. 172846, July 24, 2013)

May a peaceful and moving picket be declared an “illegal obstruction” that

makes the strike illegal?
A picket, although “peaceful” and “moving,” may constitute illegal obstruction if it
effectively blocks the entry and exit points of the company premises, thus violating
the law and making the strike itself illegal. (Phimco Industries Inc. v. Phimco Labor
Union, GR No. 170830, Aug. 11, 2010)

May the SOLE assume jurisdiction without Actual Negotiation Deadlock?

The exercise of the assumption power under Art. 277 of the Labor Code does not
need the existence of actual deadlock in the CBA negotiation. It is enough that
controversy exists between the employer and the negotiating union because of their
differing proposal and counterproposal. In this case the union was asking for a 20
percent wage increase, while the management proposed a P80,000.00 lump sum
pay increase for all the covered employees. The union alleged that the management
was bargaining in bad faith.
Ruling: The assumption order was valid, not an abuse of discretion. A dispute exists,
a dispute causing or likely to cause a strike or lockout in an industry indispensable
to the national interest. (Tabangao Shell Refinery Employees Association vs. Pilipinas
Shell, GR No. 170007, April 7, 2014)

Does the sale of majority shares of stock of the corporation terminate the
employees’ employment?
No. Sale of assets (also called sale of business) should be differentiated from sale of
stocks. In sale of stocks there is no transfer of ownership of the business. The
transfer only involves a change in the equity composition of the corporation.
In assets sale the employees may be separated from employment, but the seller is
liable for payment of separation pay; on the other hand, the buyer in good faith is
not required to retain the affected employees, nor is it liable for the payment of their
claims.
The SC expressly reversed its ruling in Manlimos vs. NLRC (1995) because it
erroneously applied a doctrine on asset sale to a case of stock sale. (SME Bank, Inc.,
Oct. 8, 2013, en banc)

Requisites of a Valid Strike

1 – valid and factual ground
2 – Notice of Strike filed by the SEBA with the NCMB-DOLE
3 – Notice of Strike VOTE filed by the SEBA with the NCMB at least 24 hours prior to
the SEBA membership taking a strike vote
4 – Strike Vote approved by a majority of the SEBA membership
5 – Strike Vote Report filed with the NCMB at least 7 days prior to intended date of
strike
6 – COOLING OFF PERIOD, either 15 days (ULP by ER) or 30 days (CBA deadlock)
observed in full, counted from the time the Notice of Strike is filed with the NCMB–
EXCEPT cases of union busting where the cooling off period is no longer required
7 – STRIKE BAN of 7 days after submission of strike vote report to the NCMB,
counted from the expiration of the cooling off period

Batas Kasambahay (R.A. No. 10361) was signed into law on 18 January 2013, took
effect June 4, 2013.
a. “Kasambahay” is defined as a person engaged in domestic work within an
employment relationship. Includes yaya, gardener, cook, laundry person; excludes
family driver, foster children
b. Some new rights: minimum wage, SSS coverage, 5 days SIL, 13th month pay
c. All disputes to be handled by DOLE Regional Director; (Labor Arbiter not
mentioned even if claim exceeds P5,000.00)

d. Kasambahay can form labor organizations without interference from
employer.


Employment of Night Workers (R.A. No. 10361); IRR dated Jan. 20, 2012
. Repeals prohibition of night work of women 

. Employee may be required to do night work 

. Medical certificate of fitness for night work is needed 


Labor Advisory No. 13 dated October 8, 2015

. Retail/service establishments: 15 workers or less 

. Manufacturing firm: less than 10 workers 

To determine the number of workers, the number should include not only the
workers of the principal or user enterprise but also the workers of the contractors
or subcontractors deployed therein, regardless of their position, designation or
status of employment and irrespective of the method by which their wages are paid.
To determine whether the industry is agricultural or nonagricultural for purposes of
minimum wage rates, the controlling determinant shall be the nature of work of the
contractor’s workers in the premises of the principal.

D.O. No. 40-H-13, dated October 21, 2013.

This department order specifies the industries or services that are deemed
indispensable to the national interest. The enumeration is meant to minimize
recurrent disagreements on what are “national interest disputes” over which the
labor secretary may “assume jurisdiction” and prohibit a strike or lockout. The
industries enumerated include hospital sector, electric and water services, air traffic
control, and other industries to be recommended by the NTIPC.