FAQ’s on Labor Law

Does the NLRC commit grave abuse of discretion if it finds the violation of a return to
work order despite the failure of an employer to prove otherwise?

Yes. Where the employer fails to satisfactorily establish any violation of the Labor
Secretary's retun-to-work-order, any contrary finding by the Labor Arbiter and the
National Labor Relations Commission is committed with grave abuse of discretion.

What are the elements of the crime of illegal recruitment in large scale?

The essential elements of the crime of illegal recruitment in large scale are: (1) the
accused engages in acts of recruitment and placement of workers defined under Art.
13(b) or in any prohibited activities under Art. 34 of the Labor Code; (2) the accused has
not complied with the guidelines issued by the Secretary of Labor and Employment,
particularly with respect to the securing of a license or an authority to recruit and deploy
workers, either locally or overseas; and (3) the accused commits the unlawful acts
against three or more persons, individually or as a group.

When is abandonment a valid ground for dismissal?

For an abandonment to constitute a valid ground for dismissal there must be a clear,
deliberate and unjustified refusal to resume employment and a clear intention to sever
the employer-employee relationship on the part of the employee.

How is an appeal taken to the NLRC?

An appeal from the Labor Arbiter's decision to the NLRC may be taken (1) by filing a
verified memorandum of appeal and (2) by paying the appeal fees within ten calendar
days from receipt of a decision, award or order of the Labor Arbiter,both of which
requisites must be satisfied, otherwise the running of the prescriptive period for
perfecting an appeal will not be tolled.

Is the Secretary of Labor empowered to determine the effectivity of arbitral awards?

In the absence of a specific provision of law prohibiting retroactivity of the effectivity of

arbitral awards issued by the Secretary of Labor, he is deemed vested with plenary and
discretionary powers to determine the effectivity thereof.

How are findings of fact by the Labor Department treated upon appeal?

Factual findings of quasi-judicial agencies, like the labor department, which have
acquired expertise in matters entrusted to their jurisdiction are accorded by the
Supreme Court not only respect but finality if supported by substantial evidence.

In recruitment and placement, who is a non licensee or non holder of authority?

A non-licensee or non-holder of authority means any person, corporation or entity which

has not been issued a valid license or authority to engage in recruitment and placement
by the Secretary of Labor, or whose license or authority to engage in recruitment and
placement by the Secretary of Labor, or whose license or authority has been
suspended, revoked or cancelled by the POEA, or the Secretary.

What elements consitute abandonment of work?

To constitute abandonment, two elements must concur: (1) the failure to report for work
or absence without valid or justifiable reason, and (2) a clear intention to sever the
employer-employee relationship. If the employee's aim is to secure the benefits due
them from their employer, abandonment would surely be an illogical and impractical
recourse, especially for simple laborers.
Is mere absence from work considered as abandonment?

For abandonment to arise, there must be concurrence of two things: (1) lack of intention
to work; and (2) the presence of overt acts signifying the employee's intention not to
work. While absence from work for a prolonged period may suggest abandonment in
certain instances, mere absence of one or two days would not be enough to sustain
such a claim.

How is an employee dismissed based on loss of trust and confidence?

Loss of trust and confidence to be a valid ground for an employee's dismissal must be
clearly established. A breach is willful if it is done intentionally, knowingly and purposely,
without justifiable excuse, as distinguished from an act done carelessly, thoughtlessly,
heedlessly or inadvertently. It must rest on substantial grounds and not on the
employer's arbitrariness, whims, caprices or suspicion, otherwise, the employee would
remain at the mercy of the employer.

When are moral damages available in dismissal cases?

In dismissal cases, moral damages are recoverable only where the dismissal of the
employee was attended by bad faith or constituted an act oppressive to labor or was
done in a manner contrary to morals, good customs or public policy while exemplary
damages may be awarded only if the dismissal was effected in a wanton, oppressive or
malevolent manner.

Are managerial personnel entitled to labor law protection?

Managerial personnel and other employees occupying positions of trust and confidence
are entitled to security of tenure, fair standards of employment, and the protection of
labor laws. However, the rules on termination of employment, penalties for infractions,
and resort to concerted action are not necessarily the same as those for ordinary
employees.

What is the effect of a strike undertaken despite issuance of an assumption order by the
Secretary of Labor?

A strike that is undertaken despite the issuance by the Secretary of Labor of an

assumption or certification order becomes a prohibited activity and thus illegal, pursuant
to the second paragraph of Art. 264 of the Labor Code as amended (Zamboanga Wood
Products, Inc. v. NLRC, G.R. 82088, October 13, 1989; 178 SCRA 482). The Union
officers and members, as a result, are deemed to have lost their employment status for
having knowingly participated in an illegal act.

Are non-members of a union entitled to the benefits of a CBA entered into by the union
and employer?

When a collective bargaining contract is entered into by the union representing the
employees and the employer, even the non-member employees are entitled to the
benefits of the contract. To accord its benefits only to members of the union without any
valid reason would constitute undue discrimination against nonmembers. It is even
conceded, that a laborer can claim benefits from a CBA entered into between the
company and the union of which he is a member at the time of the conclusion of the
agreement, after he has resigned from said union.

What is permanent total disability?

Permanent total disability means disablement of an employee to earn wages in the

same kind of work, or work of similar nature that he was trained for or accustomed to
perform, or any kind of work which a person of his mentality and attainment could do. It
does not mean absolute helplessness.It has also been held that in disability
compensation, it is not the injury which is compensated, but rather it is the incapacity to
work resulting in the impairment of one's earning capacity.
Is the approval of the POEA necessary for the validity of a contract for overseas
employment?

Article 21(c) of the Labor Code requires that the Philippine Overseas Employment
Administration (formerly NSB) should approve and verify a contract for overseas
employment. A contract, which is approved by the National Seamen Board is the law
between the contracting parties; and where there is nothing in it which is contrary to law,
morals, good customs, public policy or public order, the validity of said contract must be
sustained.

What are the essential elements of due process in cases of employee dismissal?

The twin requirements of notice and hearing constitute essential elements of due
process in cases of employee dismissal: the requirement of notice is intended to inform
the employee concerned of the employer's intent to dismiss and the reason for the
proposed dismissal; upon the other hand, the requirement of hearing affords the
employee an opportunity to answer his employer's charges against him accordingly to
defend himself therefrom before dismissal is effected. Neither of these two requirements
can be dispensed with without running afoul of the due process requirement of the 1987
Constitution.

What is the definition of wage?

"Wage" paid to any employee shall mean the remuneration or earnings, however
designated, capable of being expressed in terms of money, whether fixed or ascertained
on a time, task, piece, or commission basis, or other method of calculating the same,
which is payable by an employer to an employee under a written or unwritten contract of
employment for work done or to be done, or for services rendered or to be rendered and
includes the fair and reasonable value, as determined by the Secretary of Labor, of
board, lodging, or other facilities customarily formatted by the employer to the
employee.

In a certification election, does a med-arbiter have the power to determine who the
eligible voters are?
Under Article 256 of the Labor Code, to have a valid certification election at least a
majority of all eligible voters in the unit must have cast their votes. It is apparent that
incidental to the power of the med-arbiter to hear and decide representation cases is the
power to determine who the eligible voters are. In so doing, it is axiomatic that the med-
arbiter should determine the legality of the employees' membership in the union.

What are the two methods used in the adjustment of minimum wage?

Historically, legislation involving the adjustment of the minimum wage made use of two
methods. The first method involves the fixing of determinate amount that would be
added to the prevailing statutory minimum wage. The other involves "the salary-ceiling-
method" whereby the wage adjustment is applied to employees receiving a certain
denominated salary ceiling.

When is the taking of private property under the Comprehensive Agrarian Reform Law
an exercise of police power and when is it an exercise of eminent domain?

The issue of the constitutionality of the taking of private property under the CARP Law
has already been settled by the Supreme Court holding that where the measures under
challenge merely prescribe the retention limits for landowners, there is an exercise of
police power by the government, but where to carry out such regulation, it becomes
necessary to deprive such owners of whatever lands they may own in excess of the
maximum area allowed, then there is definitely a taking under the power of eminent
domain for which payment of just compensation is imperative. To be sure, the
determination of just compensation is a function addressed to the courts of justice and
may not be usurped by any branch or official of the government.

What is the essence of "minimum wage"?

"Minimum wages" underlies the effort of the State, as Republic Act No. 6727 expresses
it, "to promote productivity-improvement and gain-sharing measures to ensure a decent
standard of living for the workers and their families; to guarantee the rights of labor to its
just share in the fruits of production; to
enhance employment
generation in the countryside through industry dispersal; and to allow business and
industry reasonable returns on investment, expansion and growth," and as the
Constitution expresses it, to affirm "labor as a primary social economic force.

Does a certificate of land title granted under P.D. 27 vest ownership to the
farmer/grantee?

The mere issuance of the certificate of land transfer does not vest in the farmer/grantee
ownership of the land described therein. At most, the certificate merely evidences the
government's recognition of the grantee as the party qualified to avail of the statutory
mechanisms for the acquisition of ownership of the land titled by him as provided under
Presidential Decree No. 27. Neither is this recognition permanent nor irrevocable. Thus,
failure on the part of the farmer/grantee to comply with his obligation to pay his lease
rentals or amortization payments when they fall due for a period of two (2) years to the
landowner or agricultural lessor is a ground for forfeiture of his certificate of land
transfer.

Can a person be denied Service Incentive Leave and thirteenth month pay?

The award of Service Incentive Leave pay is a statutory benefit which cannot be denied
to employees (See Article 95, Labor Code), the same is true with respect to the 13th
month pay since P.D. 851 states that "all employers are required to pay all their
employees receiving a basic salary of not more than P1,000.00 a month, regardless of
the nature of their employment, a 13th month pay not later than December 24 of every
year.

Are articles 263 and 264 of the Labor Code still valid and operational?

Yes. No law has ever been passed by Congress expressly repealing Articles 263 and
264 of the Labor Code. Neither may the 1987 Constitution be considered to have
impliedly repealed the said Articles considering that there is no showing that said
articles are inconsistent with the said Constitution. Moreover, no court has ever declared
that the said articles are inconsistent with the 1987 Constitution. On the contrary, the
continued validity and operation of Articles 263 and 264 of the Labor Code has been
recognized by no less than the Congress of the Philippines when the latter enacted into
law R.A. 6715, otherwise known as Herrera Law, Section 27 of which amended
paragraphs (g) and (i) of Article 263 of the Labor Code.

Do Articles 263 (g) and 264 of the Labor Code have any constitutional foundation?

It must be noted that Articles 263 (g) and 264 of the Labor Code have been enacted
pursuant to the police power of the State, which has been defined as the power inherent
in a Government to enact laws, within constitutional limits, to promote the order, safety,
health, morals and general welfare of society (People vs. Vera Reyes, 67 Phil. 190).
The police power, together with the power of eminent domain and the power of

taxation, is an inherent power of government and does not need to be expressly

conferred by the Constitution. Thus, it is submitted that the argument that Articles 263
(g) and 264 of the Labor Code do not have any constitutional foundation is legally
inconsequential.

What is the nature of assumption and certification orders of the Secretary of Labor?

The underlying principle embodied in Art. 264(g) on the settlement of labor disputes is
that assumption and certification orders are executory in character and are to be strictly
complied with by the parties even during the pendency of any petition questioning their
validity. This extraordinary authority given to the Secretary of Labor is aimed at arriving
at a peaceful and speedy solution to labor disputes, without jeopardizing national
interests

Can striking workers continue with their strike even after an assumption order is made
by the Secretary of Labor?

Regardless therefore of their motives, or the validity of their claims, the striking workers
must cease and/or

desist from any and all acts that tend to, or undermine this authority of the Secretary of
Labor, once an assumption and/or certification order is issued. They cannot, for
instance, ignore return-to-work orders, citing unfair labor practices on the part of the
company, to justify their actions.

What is the nature of a return to work order?

The return to work order does not so much confer a right as it imposes a duty; and while
as a right it may be waived, it must be discharged as a duty even against the worker's
will. Returning to work in this situation is not a matter of option or voluntariness but of
obligation. The worker must return to his job together with his co-workers so the
operations of the company can be resumed and it can continue serving the public and
promoting its interest.

Can a return-to-work order be issued pending the determination of the legality or

illegality of the strike?

It must be underscored thatthe return-to-work order is issued pending the determination

of the legality or illegality of the strike. It is not correct to say that it may be enforced only
if the strike is legal and may be disregarded if the strike is illegal, for the purpose
precisely is to maintain the status quo while the determination is being made.
Otherwise, the workers who contend that their strike is legal can refuse to return to work
to their work and cause a standstill on the company operations while retaining the
positions they refuse to discharge or allow the management to fill. Worse, they will also
claim payment for work not done, on the ground that they are still legally employed
although actually engaged in the activities inimical to their employer's interest.

What is the effect of an assumption and/or certification order of the Secretary of Labor?

An assumption and/or certification order of the Secretary of Labor automatically results

in a return-to-work of all striking workers, whether or not a corresponding order has
been issued by the Secretary of Labor. Article 264(g) is clear, once an
assumption/certification order is issued, strikes are enjoined, or if one has already taken
place, all strikers shall immediately return to work.
What is the nature of the assumption of jurisdiction by the Secretary of Labor over labor
disputes?

The assumption of jurisdiction by the Secretary of Labor over labor disputes causing or
likely to cause a strike or lockout in an industry indispensable to the national interest is
in the nature of a police power measure.The compelling consideration of the Secretary's
assumption of jurisdiction is the fact that a prolonged strike or lockout is inimical to the
national economy and thus, the need to implement some measures to suppress any act
which will hinder the company's essential productions is indispensable for the promotion
of the common good.

What is the function of the NLRC when it is sitting in a compulsory arbitration certified to
by the Secretary of Labor?

When sitting in a compulsory arbitration certified to by the Secretary of Labor, the NLRC
is not sitting as a judicial
court but as an administrative body charged with the duty to implement the order of the
Secretary. Its function only is to formulate the terms and conditions of the CBA and
cannot go beyond the scope of the order. Moreover, the Commission is further tasked to
act within the earliest time possible and with the end in view that its action would not
only serve the interests of the parties alone, but would also have favorable implications
to the community and to the economy as a whole. This is the clear intention of the
legislative body in enacting Art. 263 paragraph (g) of the Labor Code, as amended by
Section 27 of R.A. 6175.

What must an accusation of unfair labor practice include?

We have already held that when a labor union accuses an employer of acts of unfair
labor practice allegedly committed during a given period of time, the charges should
include all acts of unfair labor practice committed against any and all members of the
union during that period. The union should not, upon dismissal of the charges first
preferred, be allowed to split its cause of action and harass the employer with
subsequent charges based upon acts committed during the same period of time
(Dionela, et al. v. CIR, No. L-19334, August 31, 1963, 8 SCRA 832 at 837).
What must an employer establish in dismissal of employees based on loss of
confidence?

Now, there is no gainsaying that loss of confidence is a recognized ground for the
discharge of an employee from employment. But such a ground must be founded from
facts established by substantial evidence. And the burden of establishing such facts as
reasonably cause loss of confidence in an employee such facts as reasonably generate
belief by the employer that the employee is connected with some misconduct and the
nature of his participation therein is such as to render him unworthy of the trust and
confidence demanded of his position is on the employer. The fact that the employee
has been absolved in a criminal prosecution involving said misconduct does not
preclude the employer from attempting to prove the same before the labor arbiter or the
latter from accepting that evidence as sufficient foundation for a finding of lawful
termination of employment. Withal, the employer's evidence, although not required to be
of such degree as is required in criminal cases, i.e., proof beyond reasonable doubt,
must be substantial, must clearly and convincingly establish the facts upon which loss of
confidence in the employee may fairly be made to rest.

What are the just causes for the dismissal of an employee?

Under Article 282 of the Labor Code, an employer may terminate an employment for
any of the following

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of
his employer or representative in connection with his work;

(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer
or duly authorized representative;

(d) Commission of a crime or offense by the employee against the person of his
employer or any immediate member of his family or his duly authorized
representatives; and

(e) Other causes analogous to the foregoing.

Are there instances wherein separation pay needs to be paid by the employer even if
the employee was validly dismissed?

The only cases when separation pay shall be paid, although the employee was lawfully
dismissed, are when the cause of termination was not attributable to the employee's
fault but due to: (1) the installation of

labor-saving devices, (2) redundancy (3) retrenchment, (4) cessation of the employer's
business, or (5) when the employee is suffering from a disease and his continued
employment is prohibited by law or is prejudicial to his health and to the health of his co-
employees. (Articles 283 and 284, Labor Code.) Other than these cases, an employee
who is dismissed for a just and lawful cause is not entitled to separation pay even if the
award were to be called by another name.

What are the elements of the crime of illegal recruitment?

To prove illegal recruitment, only two elements need be shown, (1) the offender
undertakes either any activity within the meaning of “recruitment and placement”
defined under Art. 13 (b), or any of the prohibited practices enumerated under Article 34
of the Labor Code; and (2) he has no valid license or authority required by law to
enable one to lawfully engage in recruitment and placement of workers.

When is there labor-only contracting?

There is “labor-only” contracting where the person supplying workers to an employer

does not have substantial capital or investment in the form of tools, equipment,
machineries, work premises, among others, and the workers recruited and placed by
such person are performing activities which are directly related to the principal business
of such employer.

Why does the POEA require cash and surety bonds from recruitment and placement
agencies?
Cash and surety bonds are required by the POEA from recruitment and employment
companies precisely as a means of ensuring prompt and effective eecourse against
such companies when held liable for applicant’s or worker’s claims. The cash and
surety bonds shall answer for all valid and legal claims arising from violations of the
conditions for the grant and use of the license, and/or accreditations and contracts of
employment. The bonds shall likewise guarantee compliance with the provisions of the
Code and its implementing rules and regulations relating to recruitment and placement,
the POEA Rules and relevant issuances of the Department and all liabilities which the
POEA may impose.

How is the existence of an employer-employee relationship determined by law?

To determine the existence of an employer-employee relationship, the Supreme Court in

a long line of decisions has invariably applied the following four-fold test: [1] the
selection and engagement of the employee; [2] the payment of wages; [3] the power of
dismissal; and [4] the power to control the employee's conduct. Among the four
requisites, control is deemed the most important that the other requisites may even be
disregarded. Under the control test, an employer-employee relationship exists if the
"employer" has reserved the right to control the "employee" not only as to the result of
the work done but also as to the means and methods by which the same is to be
accomplished. Otherwise, no such relationship exists.

What is the test used to determine whether an employee has supervisory or managerial
status?

The Supreme Court has ruled on numerous occasions that the test of supervisory or
managerial status is whether an employee possesses authority to act in the interest of
his employer which authority is not merely or clerical in nature but requires use of
independent judgment. What governs the determination of the nature of employment is
not the employee's title, but his job description. If the nature of the employee's job does
not fall under the definition of "managerial" or "supervisory" in the Labor Code, he is
eligible to be a member of the rank-and-file bargaining unit. (Pier 8 Arrastre &
Stevedoring Services, Inc. vs. Confesor, et.al., 241 SCRA 294 [1995])