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GENERAL PRINCIPLES 4. Other monetary welfare benefits, including
occupational safety and health standards (Batong Buhay
SOCIAL JUSTICE Gold Mines inc. vs. Dela Serna, 312 SCRA 22 [1991]).
Social justice is neither communism, nor despotism, nor
atomism nor anarchy, but the humanization of laws and LABOR RELATIONS LAW
the equalization of social and economic forces by the That which defines the status, rights, and duties and
State so that justice in its rational and objectively secular institutional mechanisms that govern the individual and
conception may at least be approximated. collective interactions of employers and employees.
Social justice means the promotion of the welfare of all - That which requires payment of benefits by
people, the adoption by the government of measures government agencies to the worker or his family when
calculated to ensure economic stability of all component an while he cannot work, by reason of sickness,
elements of the society through the maintenance of disability, old age, death and similar hazards.
proper economic and social equilibrium in the
interrelations of the members of the community, LABOR SOCIAL
constitutionally, through the adoption of measures legally LEGISLATION LEGISLATION
justifiable, or extra constitutionally, through the exercise Directly affects Governs the effects of
of powers underlying the existence of all governments, employment (like employment (like
on the time honored principle of salus populi est wages) compensation for
suprema lex (Calalang vs. Williams, GR No. 47800, Dec. injuries)
2, 1940) Designed to meet the Involves long range
daily needs of the benefits
INTERPRETATION OF LABOR LAWS worker
Art. 1700. The relations between capital and labor are Affects work of the Affects life of the
not merely contractual. They are so impressed with employee employee
public interest that labor contracts must yield to the Covers employment Covers employment
common good. Therefore, such contracts are subject to for profit or gain for profit and non-
the special laws on labor unions, collective bargaining, profit
strikes and lockouts, closed shop, wages, working Benefits are paid by Benefits are paid by
conditions, hours of labor and similar subjects. employers government agencies

It is well settled doctrine that if doubts exist between the LABOR AS PROPERTY RIGHT
evidence presented by the employer and the employee, the Under the mantle of constitutional protection, labor is
scale of justice must be tilted in favor of the latter. It is a treated as a property right. No person shall be deprived
time honored rule that in controversies between labor and of his life, liberty or property without due process of law,
the employee, doubts necessarily arising from the evidence, nor shall he be denied equal protection of the same.
or in the implementation of the agreement and writing
should be resolved in favor of the labor EQUAL PROTECTION CLAUSE (B-A-G-A) for
there to be a valid classification:
LABOR LEGISLATION a. Classification must be BASED on substantial
Consists of statutes, regulations and jurisprudence distinction which makes real differences;
governing the relations between capital and labor, by b. Classification must APPLY to present and future
providing for certain employment standards and a legal conditions;
framework for negotiating, adjusting and administering c. Classification must be GERMANE to the
those standards and other or their representatives. purpose of the law; and
It seeks to stabilize the relation between employers and d. Classification must apply to ALL persons
employees, to forestall and thresh out their differences belonging to the same class.
through the encouragement of collective bargaining and
settlement of labor disputes through conciliation, RIGHTS OF LABOR
mediation, and voluntary and compulsory arbitration. BASIC RIGHTS OF WORKERS AS GURANTEED BY
THE CONSTITUTION: (art XIII, section 3, 2nd par.)
LABOR STANDARD VS. LABOR RELATIONS a. Under Labor Standards –
LABOR STANDARDS LAW 1. Right to security of tenure;
The minimum requirements prescribed by existing laws, 2. Right to receive a living wage;
rules and regulations relating to – 3. Right to share in the fruits of production;
1. Wages; 4. Right to work under humane conditions.
2. Hours of work;
3. Cost living allowance; and b. Under Labor Relations –
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1. Right to organize themselves; 2. Employees of government corporations created by
2. Right to conduct collective bargaining or negotiation special or original charter (Juco vs. NLRC, GR No.
with the management; 98107, Aug. 18, 1987);
3. Right to engage in peaceful concerted activities 3. Foreign governments (JUSMAG Philippines vs.
including strike; and NLRC, GR No. 108813, Dec. 15, 1994);
4. Right to participate in policy and decision –making 4. International Agencies (Lasco vs. UNRFNRE, GR No.
process. 109095 – 109107, Feb. 23, 1995);
5. Employees of inter-governmental or international
CO-DETERMINATION organization (SEAFDEC- AQD vs. NLRC, GR No.
Under Art. XIII, Sec. 3 of the Constitution, the workers 86773, Feb. 14, 1992);
shall participate in policy and decision-making affecting 6. Corporate officers/ Intra-corporate disputes which fall
their rights, duties, welfare and benefits, through labor- under PD 902-A and now fall under the jurisdiction of the
management councils (See, Art. 211[g] and 255 of the Regular Courts pursuant to the New Securities
Labor Code). The workers‘ rights do not include Regulation Code (NACPIL vs. IBC, GR No. 144767,
membership in the Board of Directors of a Corporation March 21, 2002).; and
(See Meralco v. Meralco Employees, G.R. No. 127598, 7. Local water district (Tanjay Water District vs.
January 27, 1999). Gabaton, GR No. 63742 and 84300, April 17, 1989)

RIGHTS OF EMPLOYER: MANAGEMENT JURISDICTION

PREROGATIVE
Under the “doctrine of management prerogative”, every NATIONAL LABOR RELATIONS
employer has the inherent right to regulate, according to COMMISSION
his own discretion and judgment, all aspects of A. Exclusive and Original
employment, including hiring, work assignments, 1. Certified cases – cases certified to it for compulsory
working methods, the time, place and manner of arbitration by the Secretary of Labor under art. 263 or
work, work supervision, transfer of employees, lay- the President under art. 264.
off of workers, and discipline, dismissal, and recall 2. Injunction cases under arts. 218 and 264; and
of employees (Rural Bank of Cantilan vs. Julve, GR No. 3. Contempt cases.
169750, Feb. 27, 2007).
THE EMPLOYER HAS THE RIGHT TO: B. Exclusive Appellate
1. Conduct business; 1. Cases decided by Labor Arbiter under art. 217[b] of
2. Prescribe rules; the LC, and sec. 10 of RA 8042 (Migrant Worker’s Act);
3. Select and hire employees; and
4. Transfer or discharge employees;
5. Return of investment and expansion of business. 2. Cases decided by the Regional Offices of DOLE in the
exercise of adjudicatory functions under art. 129 over
Management prerogative, however, is subject to monetary claims or workers amounting to not more than
limitations provided by - 5,000, without claim for reinstatement.
a) Law;
b) Contract, or CBAs; LABOR ARBITER
c) General principles of justice and fair play (Mendoza EXCLUSIVE ORIGINAL JURISDICTION OF LABOR
vs. Lukban, GR No. 155421, July 7, 2004). ARBITERS: (clue words/summary)
1. ULP cases;
INJUNCTION IN LABOR CASES 2. Termination disputes;
As a rule no injunction. Exception: Labor secretary, in 3. Claims involving wages, rates of pay, hours of work,
cases where there is strike or lockout in industries and other terms/conditions of employment, with a claim
indispensable to national interest, may issue a return to for reinstatement;
work order which is treated as automatic injunction. 4. Claims for damages (Actual, moral, exemplary and
(Infra) other forms of damages) arising from ERR;
Moral damages would be recoverable where dismissal of
APPLICABILITY OF LABOR CODE employee was not only effected without just or
GR: The code applies to all workers, whether agricultural authorized cause or due process but also –
or non-agricultural, including employees in a government a. Was attended with bad faith or fraud;
corporation incorporated under the Corporation Code b. Constituted an act oppressive to labor;
(see art. 244). c. Done in a manner contrary to morals, good customs
EXCEPTIONS: or public policy (Suario vs. BPI, GR No. 50459, Aug.
1. Government employees; 1989)..
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5. Cases arising from violation of art. 264 (prohibited
activities);
6. Employer’s claim for actual damages against the
employee arising as it does from EER and being
necessarily connected with the dispute over the
employee’s dismissal should be entered as a
counterclaim in illegal dismissal case; it cannot be filed
with a regular court (Banez vs. Hon. Valdevilla, GR No.
128024, May 9, 2000);
7. Questions involving legality of strikes and lockouts;
8. All other claims arising from EER;
9. Claims of persons in domestic or household service
involving an amount exceeding 5,000 whether or not
accompanied by a claim for reinstatement (art. 129);
10. Monetary claims of overseas contract workers
arising from EER under RA 8042, sec. 10;
11. Wage distortion disputes in unorganized
establishments not voluntarily settled by the parties
pursuant to RA 6727;
This happens when the parties failed to settle their
dispute in the NCMB.
12. Enforcement of compromise agreements when there
is non-compliance by any of the parties pursuant to
article 227 of the Labor Code;
13. Questioning the enforcement order issued under art.
128; and
14. Other cases as may be provided by law.
a. Sec. 10, R.A. 8042, [effective June 7, 1995], what we have
is a claim "arising out of an employer-employee relationship or
by virtue of any law or contract involving Filipino workers for
overseas deployment including claims for actual, moral,
exemplary and other forms of damages", cognizable by the
"Labor Arbiters of the National Labor Relations Commission"
(NLRC) who have the original and exclusive jurisdiction
thereon
Note: Even if there is no EER, so long as the case involves Filipino
Overseas by virtue of any law or contract
BE CAREFUL: Although the provision speaks of EXCLUSIVE and
ORIGINAL jurisdiction of Labor Arbiters, the cases
enumerated may instead be SUBMITTED to a VOLUNTARY
ARBITRATOR/S by AGREEMENT of the parties under art. 262,
LC.
LABOR ARBITER HAS NO JURISDICTION OVER THE
FOLLOWING:
1. Foreign governments (JUSMAG Philippines vs.
NLRC, GR No. 108813, Dec. 15, 1994);
2. International agencies (Lasco vs. UNRFNRE, GR No.
109095 – 109107, Feb. 23, 1995).
3. Intra-corporate disputes which fall under PD 902-A,
and now under the jurisdiction of the regular courts
pursuant to the new Securities Regulation Code (Nacpil
vs. IBC, March 21, 2002).
Controversy concerns the –
a. Election; or
b. Appointment of directors, trustees, officers or
managers of corporations, partnerships or associations
(Dy, et al. v. NLRC, GR No. 68544, Oct. 27, 1986).
Ruling holds true even if the complainant is claiming for
backwages, employment benefits, and damages.
(Espino vs. NLRC and PAL, GR No. 109642-43, Jan. 5,
1995)
4. Exacting money claims against the government (GR
No. 104269, Nov. 11, 1993);
5. Cases involving GOCC’s with original charters, which
are governed by civil service law, rules and regulations
(art. IX-B, sec. 2, 1987 Constitution);
6. Local water district (Tanjay Water District vs.
Gabaton, supra);
7. The aggregate money claim does not exceed 5,000
pesos and without claim for reinstatement (art. 129, LC);
8. Claim of employee for cash prize under the innovation
program of the company, although arising from EER, is
one requiring application of general civil law on contracts
which is within the jurisdiction of the regular courts (San
Miguel Corp. vs. NLRC, GR No. L-80774, May 31,
1988);
9. Cause of action is based on quasi-delict or tort which
has no reasonable connection with any of the claims
enumerated in art. 217, LC (Ocheda vs. CA, GR No.
85517, Oct. 16, 1992);
10. Complaint arising from violation of a training
agreement (Singapore Airlines vs. Pano, GR No. L-
47739, June 22, 1983);
11. The Labor Arbiter is without jurisdiction over the case
once his judgment has assumed the character of finality
(Cayena
VOLUNTARY ARBITRATOR
JURISDICTION OF VOLUNTARY ARBITRATORS
(EXLUSIVE ORIGINAL JURISDITION Conferred by
Law):
1. All grievances arising from the interpretation of the
CBA;
2. Those arising from the interpretation or enforcement
of company personnel policies;
3. Hear and decide wage distortion issues arising from
the application of any wage orders in organized
establishments (art. 124,LC); and
4. Unresolved grievances arising from the interpretation
and implementation of the productivity incentive
programs under RA 6071.
NCMB
EXCLUSIVE AND ORIGINAL JURISDICTION OF THE
BLR:
To act at its own initiative or upon the request of either or
both parties on all –
1. INTRA –union conflicts;
2. INTER – union conflicts;
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3. Other related labor relations disputes.
NOTE: The parties may, by agreement, settle their differences
by submitting their cases to a voluntary arbitrator rather than
taking the case to the BLR (ART. 262, LC).
INTRA-UNION DISPUTES
Refer to any conflict between and among union
members, including grievances arising from any violation
of the rights and conditions of membership, violation of
or disagreement over any provision of union’s
constitution and by-laws, or disputes arising from
chartering or affiliation.
INTER-UNION DISPUTES
Refer to any conflict between and among legitimate labor
organizations involving representation questions for purposes
of collective bargaining or to any other conflict or dispute
between legitimate labor organizations based on any
violations of their rights as labor organizations.
REGIONAL TRIAL COURT
Where no EER exists between the parties and no issue is
involved which may be resolved by reference to the LC, other
labor statutes or any collective bargaining agreement, it is the
RTC that has jurisdiction (Lapanday Agricultural Dev’t Corp.
vs. CA, GR No. 112139, Jan. 31, 2000).
INTRA-CORPPORATE DISPUTE
It is a conflict between the stockholders, members, or
partners and the corporation, association, or partnership,
regarding the regulation of the corporation. The
controversy must arise out of intra-corporate relations of
the parties, or between such corporation and the state in
so far as it concerns their individual franchise.
Jurisdiction lies with the RTC designated as Special
Commercial Courts pursuant to new Securities
Regulation Code.
Dismissal of vice-president of a corporation is not always
an intra-corporate dispute. The office must be created
under its Articles of Incorporation or the By-Laws, for the
dismissal to be an intra-corporate dispute. Otherwise, it
is an ordinary dismissal of employment of a laborer
which falls in the jurisdiction of the Labor Arbiter.
SECRETARY OF LABOR
The DOLE Secretary (art. 35) and the POEA
Administrator (sec. 1, Rule II, Book VI, New Rules on
Overseas Employment) have CONCURRENT
JURISDICTION to suspend or cancel a license (Trans
Action Overseas Corp. vs. Sec. of Labor, GR No.
109583, Sept. 5, 1997).
NOTE: The POEA has the power to order refund or
reimbursement of fees fraudulently or illegally collected, or in
excess of what is legally allowed (Eastern Assurance and
Surety Corporation vs. Secretary of Labor, GR No. 79436-50,
Jan. 17, 1990).
JUDICIAL REVIEW (RULES)
No law allows an appeal from a decision of the Secretary
of Labor or the NLRC, or of a Voluntary Arbitrator.
Decisions of voluntary arbitrators are appealable to the
CA under Rule 43 of the Rules of Court in relation to
sec. 9 of BP 129. Voluntary arbitrators are considered as
quasi-judicial agencies whose decisions are appealable
to the CA (Luzon Dev’t Bank vs. Association of Luzon
Dev’t Bank, GR No. 120319, Oct. 6, 1995).
1. The way to review NLRC decisions is be special civil
action for certiorari, prohibition and mandamus under
Rule 65, Rules of Court.
A petition for certiorari shall not stay or suspend the
execution of the assailed decision of the NLRC, unless a
TRO is issued by CA or SC (sec. 10, Rule XI, NLRC
Rules, 2005).
2. Jurisdiction belongs to the SC and CA, but in line with
the doctrine of hierarchy of courts, the petition should be
initially presented to the CA (St. Martin’s Funeral Home
vs. NLRC, supra).
LABOR RELATIONS
EXCLUSIVE BARGAINING REPRESENTATIVE
Legitimate labor union duly recognized or certified as the sole
and exclusive bargaining representative or agent of all the
employees in a bargaining unit.
AUTOMATIC RENEWAL CLAUSE
Art. 253 provides that it is the duty of the parties to keep the
status quo and to continue in full force and effect the terms
and conditions of the existing agreement during the freedom
period and/or until a new agreement is reached.
BARGAINING REPRESENTATIVE
Bargaining representative" means a legitimate labor
organization whether or not employed by the employer.
METHODS OF DETERMINING BA.
A. CERTIFICATION ELECTION
The process of determining by secret ballot the sole and
exclusive bargaining agent in an appropriate bargaining
unit, for purposes of collective bargaining.
Included in the election are employees in the 3 payroll
periods prior to the certification election).
Note: Certification Election is not necessary when
employer voluntarily recognizes the said union and the
employees designate the union as the bargaining
representative.
NATURE: Certification is not a litigation but merely an
investigation of a non-adversarial fact-finding character in
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which the BLR plays the part of a disinterested investigator
seeking merely to ascertain the desire of the employees as to
the matter of their representation (Airline Pilots Ass. of the
Phils. vs. CIR, 76 SCRA 274).
REQUISITES BEFORE A LABOR UNION CAN BE
DECLARED A WINNER (Double Majority Rule)
1. Majority of the ELIGIBLE VOTERS (in the
appropriate bargaining unit) cast their votes; and
2. Majority of the VALID VOTES cast is for such union.
HOW DOUBLE MAJORITY RULE DETERMINED
1. In determining whether majority of the members of the
bargaining unit (BU) cast their votes [1 st Majority] –
include the spoiled ballots.
2. In determining the majority of the valid votes cast [2 nd
Majority] – exclude spoiled ballots BUT include
challenged votes (but separated- only opened if it is
material to the determination of the winner).
RUN-OFF ELECTION
A run-off election is proper if the following conditions
exist –
1) Valid election took place, that is majority of the
members of the BU have cast their votes;
2) The said election presented at least 3 choices (e.g.
Union A, Union B, and No Union);
REMEMBER: No Union is not a choice in the Run-off
election.
3) Not one of the choices obtained the majority (50% + 1
– 2nd Majority) of valid votes cast;
4) The total votes for the unions is at least 50% of the
votes cast;
5) There is no unresolved challenged votes or election
protest which if sustained can materially alter the results;
and
6) The two choices which garnered the highest votes will
be voted and the one which garners the highest number
of votes (in the run-off election) will be declared the
winner provided that they get the majority of the total
votes cast.
WHO PARTICIPATES IN THE RUN-OFF
The unions receiving the highest and second highest number
of votes cast.
B. CONSENT ELECTION – voluntarily agreed upon by
the parties with or without the intervention of DOLE. To
determine the issue of majority
representation of all the workers in the appropriate
bargaining unit mainly for the purpose of determining the
administrator of the CBA when the contracting union
suffered massive disaffiliation but not for the purpose of
determining the bargaining agent for purposes of
collective bargaining.
Direct Certification
The process whereby the Med-Arbiter directly certifies a
labor organization of an appropriate bargaining unit of a
company after a showing that such petition is supported
by at least a majority of the employees in the bargaining
unit. This is no longer allowed by virtue of EO No. 111,
effective on March 4, 1987).
C. VOLUNTARY RECOGNITION – the process whereby
the employer recognizes a labor organization as the
exclusive bargaining representative of the employees in
the appropriate bargaining unit after a showing that the
labor organization is supported by at least majority of the
employees in the bargaining unit.
Note: Voluntary Recognition is allowed only in an enterprise
being unionized for the first time and there is only one
legitimate labor organization seeking recognition to represent
the bargaining unit.
CLOSED SHOP PROVISION
DIFFERENT KINDS OF UNION SECURITY
ARRANGEMENTS (exceptions to the employees’
right to self-organization)
1. Closed-Shop Agreement
The employer undertakes not to employ any individual
who is not a member of the contracting union and the
said individual once employed MUST, for the duration of
the agreement, remain a member of the union in good
standing a condition for continued employment.
Not retroactive.
Apply only to new hires.
Exceptions:
a. Employees belonging to religious sect which forbids
affiliation of their members with any labor organization
(Victoriano vs. Elizalde Rope Workers, GR No. L-25246,
Sept. 12, 1974).
b. Members of rival union;
c. Confidential employees excluded from the rank-and-
file bargaining unit;
d. Employees excluded by express terms of the
agreement.
2. Union Shop Agreement
Stipulation whereby any person can be employed by the
employer but once employed such employee must,
within a specific period, become a member of the
contracting union and remain as such in good standing
for continued employment for the duration of the CBA.
Note: Exceptions in number 1 applies.
3. Maintenance of Membership Shop Agreement.
The agreement does not require non-members to join
the contracting union, but provides that those who are
members thereof at the time of the execution of the CBA
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and those who may thereafter on their own volition,
become members must for the duration of the
agreement maintain their membership in good standing
as a condition for continued employment in the company
for the duration of the CBA.
4. Preferential Shop Agreement
An agreement whereby the employer merely agrees to
give preference to the members of the bargaining union
in hiring, promotion or filing vacancies and retention in
case of lay-off. The employer has the right to hire from
the open market if union members are not available.
5. Agency Shop Agreement
An agreement whereby employees must either join the
union or pay to the union as exclusive bargaining agent
a sum equal to that paid by the members.
Note: this is directed against “free riders” employees who
benefit from the union activities without contributing support
to the union, to prevent a situation of non-union members
enriching themselves at the expense of the union members.
The principle underlying this is that “no one shall unjustly
enrich himself at the expense of another.
BAR IN CERTIFICATION ELECTION
1. Contract Bar Rule
While a valid and registered CBA of a fixed duration is
subsisting, the BLR is not allowed to hold an election
contesting the majority status of the incumbent union
except during the 60-day period immediately prior to the
expiration of the CBA.
2. Deadlock Bar Rule
A petition for certification election cannot be entertained
if, before the filing of the petition for certification election,
a bargaining deadlock to which an incumbent or certified
bargaining agent is a party, had been submitted to
conciliation or arbitration or had become the subject of a
valid notice of strike or lockout.
Deadlock – arises when there is an impasse, which
presupposes a reasonable effort at good faith bargaining
which, despite noble intentions, did not conclude in an
agreement between the parties.
Indications of a genuine deadlock:
1) The submission of the deadlock to a 3 rd party
conciliator or arbitrator; or
2) The deadlock is the subject is the subject of a valid
notice of strike.
3. Negotiation Bar Rule
A petition for certification election cannot be entertained
if, before the filing of the petition for certification election,
the duly recognized or certified union has commenced
negotiations with the employer in accordance with art.
250, LC.
But in one case the winning union failed to conclude a
CBA within one year, hence another union filed for
certification election. Although filed outside the one year
bar, the petition was nonetheless dismissed, and the
court upheld the dismissal and explained that ordinarily,
a bargaining agent who failed to secure a CBA within 1
year could be suspected as a tool of management and
should deserve to be replaced. But if the circumstances
show that the reason for not having concluded a CBA
was not the union’s fault, such union should not be
blamed, and certification election should not be
authorized. The situation takes the nature of a “deadlock
bar” (Capitol Medical Center
Alliance, vs. Laguesma, GR No. 118915, Feb. 4, 1997).
4. Certification Year Rule
No petition for certification election may be filed within
one year from the date of a valid certification election,
consent election, or run-off election or from the date of
voluntary recognition.
The 12 month prohibition presupposes that there was an
actual conduct of election. In case there was no
certification election conducted precisely because first
petition was dismissed on the ground that it did not
include all the employees who should be properly
included in the collective bargaining unit, the certification
year bar does NOT apply (Transport Corp. vs.
Laguesma, GR No. 106830, Nov. 6, 1993).
Certification year rule will not apply if in fact there was
failure of election because less than majority of the
members of the bargaining unit voted. Another petition
for certification election may be filed within 6 months.
Certification year rule WILL APPLY even if “no union”
choice won during the certification election (Samahang
Mangagawa sa Permex vs. Sec. of Labor, GR No.
107792. March 2, 1998).
CBA COVERAGE
The benefits of a CBA are extendible to all employees
regardless of their membership in the union because to
withhold the same from non-union members would be to
discriminate against them. (National Brewery & Allied
Industries Labor Union of the Philippines v. San Miguel
Brewery, Inc., G.R. No. L-18170, August 31,1963)
CBA INTERPRETATATION
Any dispute should be resolved thru the grievance
machinery in the CBA. Unresolved issue should be
brought to NCMB. Failure in NCMB, go to Voluntary
Arbitrator. From VA, mode of appeal is to CA pursuant to
Rule 43 (supra)
MANDATORY SUBJECT OF BARGAINING
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WAGE INCREASE
Non-union members will benefit also from the increase
under the CBA. Bargaining representative (union) does
not act for its members alone. It represents all the
employees covered by the bargaining unit. (Mactan
Workers Union v. Aboitiz, G.R. No. L-30241, June 30,
1972) However, nonmembers who avail of CBA benefits
are required under the law to pay agency fees.
CONFIDENTIAL EMPLOYEES
A confidential is one entrusted with confidence on delicate
matters, or with the custody, handling, or care and protection
of employer’s property.
The confidential relationship must exist between the
employee and his supervisor, and the supervisor must handle
the prescribed responsibilities relating to labor relations. As
such, the rationale behind the ineligibility of managerial
employees to form, assist or join a labor union equally applies
to them. (PIDI vs. NLRC, GR No. 88957, June 25, 1992). Under
the doctrine of necessary implication, confidential employees
are similarly disqualified (NATU-Republic Planters Bank vs.
Torres, GR No. 93468, Dec. 29, 1994).
MANAGERIAL EMPLOYEES
SUPERVISORY VS. RANK AND FILE
MANAGERIAL EMPLOYEES
Those who are vested with powers or prerogatives to lay
down and execute management policies and/or to hire
transfer suspend, lay-off, recall, discharge, assign or
discipline employees.
The prohibition of unionization of managerial employees
does not violate the Philippine Constitution (United-Pepsi
Cola Products, Phils. vs. Laguesma, GR No. 122226,
March 25, 1998).
SUPERVISORY EMPLOYEES
Those who, in the interest of the employer, effectively
recommend such managerial actions if the exercise of
such authority is not merely routinary or clerical in nature
but requires the use of independent judgment.
Supervisory employees may form, assist, or join a
labor organization on their own and not with the
rank-and-file employees.
NOTE: It is the nature of the employee’s functions and
not the nomenclature or title given to his job which
determines whether he has rank-and-file or managerial
status (Engineering Equipment, Inc. vs. NLRC, GR No.
L-59221, Dec. 26, 1984).
A union whose membership is a mixture of supervisors
and rank-and-file is not and cannot become a legitimate
labor organization, it cannot be recognized as the
bargaining representative, it cannot strike (Toyota Motor
Phil. vs. Toyota Motor Phil. Labor Union and Sec. of
Labor, GR No. 121084, Feb. 19, 1997).
NOTE: The rank-and-file union and the supervisor’s union
operating within the same establishment may join the same
federation or national union (as amended by RA 9481).
RELIGIOUS OBJECTORS
May not be compelled to join labor union if their religion
forbids them BUT they may form their own separate
union, if they so desire.
RIGHT TO STRIKE: Requisites
TESTS IN DETERMINING LEGALITY OF A STRIKE
A. Purpose Test – the strike must be due to either
bargaining deadlock or ULP.
B. Compliance with Procedural and Substantive
Requirements of Law –
1. Notice of Strike – must be filed prior to the intended
strike, taking into consideration the cooling-off period.
The failure of the union to serve the company a copy of the
notice of strike is a clear violation of sect. 13, Rule XXII, Book
V, IRLC. The constitutional precepts of due process mandate
VS. the other party be notified of the adverse action of the
opposing party (Filipino Pipe and Foundry Corporation vs.
NLRC, 318 SCRA 68).
2. Cooling-off Period before the intended date of actual
strike subject to the 7-day strike ban.
a. Bargaining deadlock – 30 days.
b. ULP – 15 days.
c. Union Busting – no cooling-off period needed and
union may take action immediately after the strike vote is
conducted and results are submitted to the Regional
Branch.
Cooling-Off Period – That period of time given the
NCMB to mediate and conciliate the parties. It is that
span of time allotted by law for the parties to settle their
disputes in a peaceful manner, before staging a strike or
lockout.
3. 24-hour prior notice rule – mandatory requirement.
Notice to the NCMB prior to the taking of the strike vote.
4. Strike Vote – a requirement wherein the decision to
declare a strike must be –
a. Approved by a majority of the total union membership
in the bargaining unit (not the whole bargaining unit);
and
b. Obtained by a secret ballot in a meeting or referenda
called for the purpose.
Purpose: To ensure that the intended strike is a majority
decision.
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5. 7-day Strike Ban – The 7-day waiting period before
the date of the purported strike (within which the union
intending to conduct a strike must at least submit a
report to the Department as to the result of the strike
vote) intended to give the Department an opportunity to
verify whether the projected strike really carries the
imprimatur of the majority of the union members IN
ADDITION to he cooling-off period before actual strike.
GOOD FAITH STRIKE DOCTRINE
A strike may be considered legal where the union
believed that the company committed ULP and the
circumstances warranted such belief in good faith,
although subsequently such allegations of ULP are
found out as not true (Bacus vs. Ople, 56856, Oct. 23,
1984).
NON-STRIKEABLE ISSUES (art. 263 [b]; Department
Order No. 9, Rule 12, sec. 2):
1. Violations of the CBA which are not gross in character
shall be resolved via he grievance machinery;
2. Inter-union or intra-union disputes falling under the
BLR – Med-Arbiter under art. 226,LC;
3. Labor standards cases such as wage orders;
4. Those issues which had already been brought to
voluntary or compulsory arbitration;
5. Wage distortion disputes.
DOCTRINE OF MEANS AND PURPOSES
A strike is legal if lawful means concur with lawful
purpose (GOP –CCP Workers vs. CIR, Sept. 10, 1979).
WHEN STRIKE IS ILLEGAL: (6 Factors Affecting
Legality of Strike/s)
1. Contrary to specific prohibition of law;
2. Violates specific requirement of law;
3. Declared for an unlawful purpose, such as inducing
the employer to commit ULP against non-union
employees;
4. Employs unlawful means pursuant to its objective
such as widespread terrorism of non-strikers;
5. Declared in violation of an existing injunction;
6. Contrary to an existing agreement, such as no strike
clause or conclusive arbitration clause (I Teller 314 –
317).
Note: A “no strike clause” in a CBA is applicable only to
economic strikes. Therefore, if the strike is founded on an
unfair labor practice, the strike declared is not a violation of
the “no strike clause” (Philippine Metal Foundries, Inc. vs.
CIR, 90 SCRA 135, [1979]).
STRIKE: INJUNCTION IN INDUSTRIES
INDESPENSABLE TO NATIONAL INTEREST
RETURN TO WORK ORDER (Assumption
Power)
WHEN CAN Secretary of labor assume jurisdiction
over a strike:
There exists a labor dispute causing or likely to cause a
strike or lockout in an industry indispensable to national
interest.
The discretion to assume jurisdiction may be exercised
by the Secretary of Labor WITHOUT the necessity of
prior notice of hearing given to any of the parties
disputants (Magnolia Poultry Employees Union vs.
Sanchez, GR No. 76227-28, Nov. 5, 1986).
WHAT TO DO – the Sec. of Labor may –
a. Assume jurisdiction and decide the case; or
b. Certify the same to the NLRC for compulsory
arbitration.
What constitutes industry “indispensable to national interest”
is based solely upon the (sound) discretion of the Sec. of
Labor.
No strike or lockout shall be declared after
assumption of jurisdiction by the President or the
Minister or after certification or submission of the
dispute to compulsory or voluntary arbitration or
during the pendency of cases involving the same
grounds for the strike or lockout.
DISMISSAL DUE TO STRIKE
Any union officer who knowingly participates in an illegal
strike and any worker or union officer who knowingly
participates in the commission of illegal acts during a strike
may be declared to have lost his employment status:
Provided, That mere participation of a worker in a lawful
strike shall not constitute sufficient ground for termination
of his employment, even if a replacement had been hired by
the employer during such lawful strike.
EFFECTS of assumption of Jurisdiction by the
Secretary:
1. AUTOMATICALLY ENJOINS the intended or
impending strike or lockout as specified in the
assumption or certification order;
2. If one has already taken place at the time of
assumption or certification, all striking or locked-out
employees shall immediately RETURN TO WORK; and
Note: Those strikers who defy the order and refuse to
return to work cannot complain if they are deemed to
have forfeited their employment as a consequence of
their intransigence (Sarmiento vs. Tuico, GR No. 75272-
73).
Both union officers and union members who defy return-
to-work order are subject to dismissal. They are deemed
to have participated in an illegal act (St. Scholastica’s
College vs. Torres, GR No. 100158, June 29, 1992).
BUT to justify dismissal, the defiance of the return-to-
work order must be proved to be deliberate. The
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employee must be afforded enough time to resume to
work from time of the receipt of the return-to-work order
(Batangas Laguna Tayabas Bus Co. vs. NLRC, GR No.
101858, Aug. 21, 1992).
3. The employer shall immediately resume operations
and RE-ADMIT all workers under the same terms and
conditions prevailing before the strike or lockout.
Note: A Motion for Reconsideration (of the assumption
order) does not suspend the effects as the assumption order
is immediately executory (St. Scholastica’s College vs. Torres,
GR No. 100158, June 19, 1992)..
UNFAIR LABOR PRACTICES
UNFAIR LABOR PRACTICE BY EMPLOYER/S:
1. Interference – to interfere with, restrain or coerce
employees in the exercise of their right to self-
organization.
TEST: Whether the employer has engaged in conduct
which, it may reasonably be said, tends to interfere with
the free exercise of the employees’ right and it is not
necessary that there be direct evidence that any
employee was in fact intimidated or coerced by the
statements of threats or the employer if there is a
reasonable inference that the anti-union conduct of the
employer does not have an adverse effect of self-
organization and collective bargaining (The Insular Life
Assurance-NATU vs. The Insular Life Assurance Co. Ltd
No. L-25291, Jan. 30, 1971).
TOTALITY OF CONDUCT DOCTRINE
The culpability of the employer’s remarks is to be
evaluated not only on the basis of their implications, but
against the background of and in conjunction with
collateral circumstances (Ibid.)
Expression of opinion by an employer, though innocent
in themselves, frequently were held to be culpable
because of the circumstances under which they were
uttered, the history of the particular employer’s labor
relations or anti-union bias or because of their
connection with an established collateral plan of
coercion or interference.
Under this doctrine, an expression which might be
permissibly uttered by one employer might be deemed
improper when spoken by a more hostile employer and
consequently actionable as an ULP.
An employer who interfered with the right to self-
organization before a union is registered can be held
guilty of ULP (Samahan ng Mangagawa sa Bandolino-
LMLC vs. NLRC, GR No. 125195, July 17, 1997).
It is a prerogative of the company to promote,
transfer, or even demote its employees to other positions
when the interest of the company reasonably demands
it. Unless there are circumstances which directly point to
interference by the company with the employees’ right to
self-organization, the
transfer of an employee should be considered as within
the bounds allowed by law (like despite transfer to lower
position, his original rank and salary remained
undiminished) [Rubberworld Phils. vs. NLRC, GR No.
75704, July 19, 1989).
In the absence of showing that the illegal dismissal
was dictated by anti-union motives, the same does not
constitute an unfair labor practice as would be a valid
ground to strike. The remedy is an action for
reinstatement with backwages and damages
(AHS/Philippine Employees Union vs. NLRC, GR No.
87321, March 31, 1987).
EXAMPLES of unlawful acts to discourage
membership in a labor union:
1) Dismissal of union members upon their refusal to give
up their membership, under the pretext of retrenchment
due to reduced dollar allocation (Manila Pencil Co. vs.
CIR, 14 SCRA 953);
2) Refusal over a period of time to give salary
adjustment according to the improved salary scales in
the CBA (Benguet Consolidated vs. BCI Employees and
Workers Union, 22 SCRA 129);
3) Dismissal of an old employee allegedly for
inefficiency, on account of her having joined a union and
engaging in union activities (East Asiatic Co. vs. CIR, 16
SCRA 820);
4) Dismissal of teachers for fear by the school that there
would be strike the following semester (Rizal Memorial
Colleges Faculty Union vs. NLRC, GR No. 59012-13,
Oct 12, 1989);
5) A company’s capital reduction efforts, to camouflage
the fact that it has been making profits to justify the mass
lay-off of its employees especially union members
(Madrigal and Company, Inc. vs. Zamora, GR No. L-
4823, June 30, 1987).
2. Yellow Dog Conditions – a promise exacted from
workers as a condition of employment that a person or
an employee shall not join a labor organization or shall
withdraw from one to which he belongs.
YELLOW DOG CONTRACT
A promise exacted from workers as a condition of
employment that they are not to belong to, or attempts to
foster, a union during their period of employment. It is
null and void because –
1) It is contrary to public policy for it is tantamount to
involuntary servitude;
2) It is contrary to law.
3. Contracting Out
To contract out services or functions being performed by
union members when such will interfere with, restrain or
coerce employees in the exercise of their right to self-
organization.
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NOTE: Contracting out services is not ULP per se. it is a. It prohibits discrimination in terms and conditions of
ULP only when the following condition exists – employment in order to encourage or discourage
1) The service contracted out are being performed by membership in the union;
union members; and b. It gives validity to union security agreements; and
2) Such contracting out interferes with, restrains, or c. It allows an agency shop arrangement whereby
coerce employees in the exercise of their right to self- agency fees may be collected from non-union members.
organization.
To constitute an ULP, the discrimination committed by
However, when the contracting out is being done for business the employer must be in regard to the hire or tenure of
reasons such as decline in business, inadequacy of equipment employment or any term or condition of employment to
or to reduce cost, then it is a valid exercise of management encourage or discourage membership in any labor
organization. The exaction by the company, from
prerogative. returning strikers to work, of a promise not to destroy
company property and not to commit acts of reprisals
against union members who did not participate in the
4. Company Domination of Union strike, cannot be considered as intended to encourage
To initiate, dominate, assist, or otherwise interfere with or discourage union membership. It is actually an act of
the formation or administration of any labor organization, self-preservation and designed to for the maintenance of
including the giving of financial or other support to it or peace and order in the premises (Pagkakaisan
its organizers or officers. Itinataguyod ng mga Magagawa sa Ang Tibay vs. Ang
COMPANY UNIONISM/CAPTIVE UNIONISM Tibay, GR No. L-22273, may 16, 1967).
Considered ULP because the officers will be beholden to There is unfair and unjust discrimination in the granting
the employers and they will not look after the interest of of salary adjustments where the evidence shows that –
whom they represent. a) The management paid the employees of UN-
FORMS: unionized branch;
a. Initiation of the company union idea by – b) Salary adjustment was granted to employees of un-
1) Outright formation of the employer of his unionized branch despite the fact that it is losing in its
representatives; operations;
2) Employee formation on outright demand or influence c) Total salary adjustment given every ten of its
by employer; and unionized employee would not even equal the salary
3) Managerially motivated formation by employees. adjustments given one employee in the non-unionized
branch (Manila Hotel Company vs. Pines Hotel
b. Financial support to the union by – Employees; Assn., GR No. L-308818).
1) Employer defrays union expenses;
2) Pays attorney’s fees of the lawyer who drafted the CONSTRUCTIVE DISCHARGE
constitution and by-laws of the union. A ULP where employer prohibits employees from
exercising their rights under the Code, on pain of
c. Employer encouragement and assistance – discharge, and the employee quits as a result of the
prohibition.
Immediately granting of exclusive recognition as 6. Discrimination because of testimony
bargaining agent without determining whether the union
represents majority of the employees. To dismiss, discharge or otherwise prejudice or
d. Supervisory assistance – discriminate against an employee for having given or
being about to give testimony under the LC.
Soliciting membership, permitting union activities during Note: Subject matter of testimony can be anything under
work time or coercing employees to join the union by the Labor Code.
threats of dismissal or demotion. What is ULP is the employer’s retaliatory act regardless
of the subject of the employee’s complaint or testimony.
5. Discrimination In effect, if a retaliatory act is done under art 118, the
consequence is ULP under art. 248[f] (Mabeza vs.
To discriminate in regard to wages, hours of work, and NLRC, GR No. 118506, April 18, 1997).
other terms and conditions of employment in order to
encourage or discourage membership in any labor SURFACE BARGAINING
organization. Is going through the motions of negotiating without any
TEST: Whenever benefits or privileges given to one is legal intent to reach an agreement. It involves the
not given to the other under similar or identical question of whether or not the employer’s conduct
conditions when directed to encourage or discourage demonstrates and unwillingness to bargain in good faith
union membership. or merely hard bargaining (Standard Chartered Bank vs.
3 COMPONENTS OF DISCRIMINATION: Confessor, GR No. 114974, June 16, 2004).
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8. Paid negotiation
To pay negotiation or attorney’s fees to the union or its
officers or agents as part of the settlement of any issue
in collective bargaining or any other disputes.
9. Violation of CBA
The violation must be gross, flagrant and/or malicious
refusal to comply with the economic provisions of the
CBA (art. 261, LC).
Note: If the violation is not gross, it is not ULP but a
grievance under the CBA.
NOTE: All the aforementioned acts (except art. 248[f])
must have a relation to the employees exercise of their
right to self-organization. Anti-union or anti-organization
motive must be proved because it is a definitional
element of ULP.
ULP COMMITTED BY UNION
a. To restrain or coerce employees in the exercise of
their right to self-organization. However, a labor
organization shall have the right to prescribe its own
rules with respect to the acquisition or retention of
membership;
NOTE: Interference by a labor organization is not ULP
as long as the interference does not amount to restrain
or coercion.
b. To cause or attempt to cause an employer to
discriminate against an employee, including
discrimination against an employee with respect to
whom membership in such organization has been
denied or to terminate an employee on any ground other
than the usual terms and conditions under which
membership or continuation of membership is made
available to other members;
Note: A union member may not be expelled from the
union, and consequently from his job, for personal or
impetuous reasons or for causes foreign to the closed-
shop agreement (Manila Mandarin Employees Union vs.
NLRC, GR No. L-76989, Sept. 29, 1987).
c. To violate the duty, or refuse to bargain collectively
with the employer, provided it is the representative of the
employees;
BLUE-SKY BARGAINING
Defined as the making exaggerated or unreasonable
proposals. Whether or not the union is engaged in blue-
sky bargaining is determined by the evidence presented
by the union as to its economic demands. Thus, if the
union requires exaggerated or unreasonable economic
demands, it is guilty of ULP (Standard Chartered Bank
vs. Confessor, supra).
d. To cause or attempt to cause an employer to pay or
deliver or agree to pay or deliver any money or other
things of value, in the nature of an exaction, for services
which are not performed or not to be performed,
including the demand for fee for union negotiations;
FEATHERBEDDING (make-work activities)
Refers to the practice of the union or its agents in
causing or attempting to cause an employer to pay or
deliver or agree to pay or deliver money or other things
of value, in the nature of exaction, for services which are
not performed or not to be performed, as when a union
demands that the employer maintain personnel in
excess of the latter’s requirements.
Note: It is not featherbedding if the work is performed no
matter how unnecessary or useless it may be.
e. To ask for or accept negotiation or attorney’s fees
from employers as part of the settlement of any issue in
collective bargaining or any other dispute; or
SWEETHEART DOCTRINE
Considers it ULP for a labor organization to ask for or
accept negotiation or attorney’s fees from the employer
in the settling a bargaining issue or dispute.
The resulting CBA is considered a “sweetheart
contract”, a CBA that does not substantially improve the
employees’ wages and benefits and whose benefits are
far below those that are provided by law.
f. To violate a collective bargaining agreement.
The provisions of the preceding paragraph notwithstanding,
only the officers, members of governing boards,
representatives or agents or members of labor associations or
organizations who have actually participated in, authorized or
ratified unfair labor practices shall be held criminally liable.
(As amended by Batas Pambansa Bilang 130, August 21,
1981)
LABOR STANDARDS
EER-RELATIONSHIP: FOUR-FOLD TEST
ELEMENTS OF EER: (4 FOLD TEST)
1. Selection and engagement of the employee (hiring);
An employment relation arises from contract of hire,
express or implied (Ruga vs. NLRC, 181 SCRA 266).
2. Payment of wages;
Payment of compensation by way of commission does
not militate against the conclusion that EER exists.
Under art. 97, LC, wage shall mean however
designated, capable of being expressed in terms of
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money, whether fixed or ascertained on a time, task,
price or commission basis (Insular Life Assurance Co.
vs. NLRC, GR No. 119930, March 12, 1998).
3. Power of dismissal; and
Disciplinary power exercised by employer over the
worker and the corresponding sanction imposed in case
of violation of any of its rules and regulations.
4. Power of control.
CONTROL TEST
Refers to the employer’s power to control or right to
control not only as to the result of the work to be done
but also as the means and methods by which the same
is to be accomplished.
The control test is the most important test our courts
apply in distinguishing an employee from an
independent contractor. This test is based on the extent
of control the hirer exercises over a worker. The greater
the supervision and control the hirer exercises, the more
likely the worker is deemed as employee. The converse
holds true as well – the less control the hirer exercises,
the more likely that the worker is considered an
independent contractor (Sonza vs. ABS-CBN
Broadcasting Corp. GR No. 138051, June 10, 2004).
The control test merely calls for the existence of the right
of control the manner of doing the work, not the actual
exercise of the right. (Zannote Shoes vs. NLRC, GR No.
100665, Feb. 13, 1995).
NOTE: The issuance by the principal of (mere)
guidelines does not establish control by principal (Coca
Cola Bottlers Phil. Inc. vs. Climaco, GR No. 146881,
Feb. 5, 2007).
Not every form of control will have the effect of establishing
the ERR. The line should be drawn between rules that merely
serve as guidelines towards the achievement of mutually
desired results without dictating the means or methods to be
employed in attaining it, and those that control or fix the
methodology and bind or restrict the party hired to the use of
such means. The fist, which aim only to promote the result,
create no EER unlike the second, which address both the
result and the means used to achieve it and hence, EER exists
(Insurance Life Assurance Co. Ltd. vs. NLRC, GR No. 84484,
Nov. 15, 1989).
ECONOMIC RELATIONS TEST (Sevilla Doctrine –
Sevilla vs. CA)
A subordinate/alternative test. Existing economic
conditions between the parties are used to determine
whether EER exists, like –
1. Payment of PAG-IBIG FUND contributions;
2. Payment or remittance of contributions to the State
Insurance Fund;
3. Deduction of withholding tax;
4. Deduction/remittance of SSS contributions.
NOTE: The Labor Code applies with or without
employment relationship between disputants, depending
on the kind of issue involved. The presence or absence
of employer-employee relationship (EER) is itself a labor
question (Azucena, 2007).
INSTANCES WHERE LABOR CODE APPLIES
DESPITE ABSENCE OF EER:
1. Yellow Dog Contract [ULP] – art 248 (b);
2. Violation of Anti-Sexual Harassment Act (making
condition for employment sexual favors) – RA 7877;
3. Labor contracting (independent) – employee of the
contractor has no EER with the Principal (person who
hired the contractor);
4. Illegal recruitment.
CASES WHERE THERE IS NO EER:
1. Farm workers are not employees of the sugar central
(Victorias Milling Co. Inc. vs. NLRC, GR No. 116347,
Oct. 3, 1996);
2. Working scholars are not employees of the schools
(Filamer Christian Institute vs. IAC, supra.);
3. Collecting agents on commission basis (Singer
Sewing Machine Co. vs. Drilon, GR No. 91116, Jan. 24,
1991);
4. Shoe shine boys (Besa vs. Trajano, GR No. 72409,
Dec. 29, 1986);
5. Softdrinks company vs. independent contractors
selling softdrinks (Mafinco Trading Corp. vs. Ople, GR
No. L-37790, March 25, 1976).
6. Resident physicians in training provided there is a
training agreement between them and the training
program is duly accredited or approved by the
appropriate government agency.
7. “Masiador” and “Sentenciador” in cockpit (Semblante
vs. CA, GR No. 196426, Aug. 15, 2011).
EMPLOYMENT OF ALIENS
Alien Employment Permit (AEP)
Is required for entry into the country for employment
purposes and is issued after determination of the non-
availability of a person in the Philippines who is competent,
able and willing at the time of application to perform the
services for which the alien is desired.
REQUISITE FOR EMPLOYMENT OF RESIDENT
ALIENS:
Immigrants and resident aliens are not required to secure a
working permit. They are required to secure their Alien
Employment Registration Certificate [AERC] (Almodiel vs.
NLRC, GR no. 100641, June 14, 1993).
APPRENTICESHIP
Apprenticeship" means practical training on the job
supplemented by related theoretical instruction.
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LEARNERSHIP employs members of his/her family – under the following
Learners are persons hired as trainees in semi-skilled and conditions:
other industrial occupations which are non-apprenticeable a. Employment does not endanger the child’s life, safety,
and which may be learned through practical training on the health and morals;
job in a relatively short period of time which shall not exceed b. Employment does not impair the child’s normal
three (3) months. development; and
c. The parent/legal guardian provides the child with the
APPRENTICESHIP LEARNERSHIP primary and/or
Duration secondary education and prescribed by DepEd.
Not less than 3 months Practical training on the
2. When the child’s employment or participation in public
practical training on the job job not to exceed 3
entertainment or information through cinema, theater,
but not more than 6 months
radio, or television is essential, provided that –
months
a. Employment does not involve advertisements or
Concept
commercials promoting alcoholic beverages, intoxicating
Practical training on the job Hiring of persons as
drinks, tobacco, and its by-products or exhibiting
supplemented by related trainees in semi-skilled
violence;
theoretical instruction and other industrial
occupations which are b. There is written contract approved by the DOLE;
non-apprenticeable and c. The conditions prescribed for the employment of
which may be learned minors are met (person between ages of 15 and 18 may
through practical training be employed in any non- hazardous work).
on the job in a relatively
short period of time NON-HAZARDOUS WORK or UNDERTAKING
Commitment to hire One where the employee is not exposed to any risk
which constitutes an imminent danger to his safety and
No commitment to hire With a commitment to
health.
employ the learner as
HAZARDOUS WORKPLACES:
regular employee if he
1. Nature of the work exposes the workers to dangerous
desires upon completion
environmental elements, contaminants or work
of learnership
conditions;
Effect of pretermination
2. Workers are engaged in construction work, logging,
fire fighting, mining, quarrying, blasting, stevedoring,
WORKING SCHOLAR dock work, deep-sea fishing, and mechanized farming;
There is NO EER between students on one hand, and 3. Workers are engaged in the manufacture or handling
schools on the other hand, when there is agreement of explosives and other pyrotechnic products;
between them under which the former agree to work for 4. Workers use or are exposed to heavy or power-driven
the latter in exchange for the privilege to study free of machinery or equipment; and
charge, provided students are given real opportunities, 5. Workers use or are exposed to power-driven tools.
including such facilities as may be reasonable and
necessary to finish their chosen courses under such
agreement (sec. 14, Rule X, Book II, RILC). HOUSEHELPERS
RA 10361- Kasambahay Law.
NOTE: This is only for the purpose of benefits available "Domestic or household service" shall mean service in
to employees. BUT this rule will not apply to the employer’s home which is usually necessary or
TORTUOUS acts committed by the student under art. desirable for the maintenance and enjoyment thereof
2180, NCC. and includes ministering to the personal comfort and
Under this article, the student is not considered as an convenience of the members of the employer’s
employee. But if he causes damage or injury to a 3 rd person, household, including services of family drivers.
the school may be held liable under art. 2180, NCC (Filamer
NOTE: The definition of a “househelper” cannot be
Christian Institute vs. IAC, GR No. 75112, Aug. 17, 1992).
interpreted to include househelp or laundrywomen working
in staffhouses of a company, like petitioner who attends to
EMPLOYMENT OF CHILDREN the needs of the company’s guests and other persons availing
GR: No child below 15 shall be employed. of said facilities (Apex Mining Co. vs. NLRC, GR No. 94951,
Exceptions/conditions of employment of a child April 22, 1991).
below 15:
1. When the child works directly under the sole
responsibility of his/her parents or legal guardian who HOMEWORKER
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Industrial worker who accepts work to be fabricated or LABOR-ONLY CONTRACTING
processed at home for a contractor, which work, when An arrangement where the contractor or subcontractor
finished, will be returned to or repurchased by said merely recruits, supplies or places workers to perform a
contractor. job, work or service for principal, and any of the following
elements is present –
HANDICAPPED WORKERS a. No substantial capital or investment which relates to
Handicapped workers are those whose earning capacity is the job, worked or service to be performed;
impaired by age or physical or mental deficiency or injury. b. The contractor or subcontractor are performing
HANDICAPPED HANDICAPPED activities which are directly related to the main business
WORKER (art. 78, LC) PERSONS (RA 7277, of the principal;
Magna Carta for Disabled c. The contractor does not exercise the right to control
Persons) over the performance of the work of the contractual
employee.
those whose earning Those suffering from
capacity is impaired by age restriction or different SUBSTANTIAL CAPITAL
or physical or mental disabilities, as a result of a Capital stocks and subscribed capitalization in the case
deficiency or injury mental, physical or of corporations, tools, equipment, implements,
sensory impairment, to machineries and work premises, actually and directly
perform an activity in the used by the contractor or subcontractor on the
manner or within the range performance or completion of the job, work or service
considered normal for a contracted out.
human being.
PROHIBITED LABOR CONTRACTING
1. Labor-only contracting;
2. Contracting that terminates the employment of regular
ANTI-SEXUAL HARASSMENT employees, or reduces their work hours, or reduces or
(AIM-WET-IHO) splits a bargaining unit, if such contracting out is not
Asking of sexual favors (express or implied) by a person done in good faith and not justified by business
who has AUTHORITY, INFLUENCE, OR MORAL exigencies;
ASCENDANCY in a WORK-ENVIRONMENT, 3. Contracting with a cabo – person/s or labor group
EDUCATIONAL OR TRAINING INSTITUTION, which which, in the guise of labor organization, supplies
causes INTIMIDATING, HOSTILE AND OR workers to an employer, with or without any monetary or
OPPRESSIVE ENVIRONMENT. other consideration whether in the capacity of an agent
of the employer or as an ostensible independent
INDEPENDENT CONTRACTOR (JOB contractor;
CONTRACTING) 4. Contracting with in-house agency;
An arrangement whereby a principal agrees to put-out or 5. Contracting because of a strike or lockout; and
farm-out with a contractor or subcontractor the 6. Contracting that constitutes ULP under art. 248, LC.
performance or completion of a specific job, work or
service within a definite or predetermined period, RECRUITMENT AND PLACEMENT
regardless of whether such job, work, or service is to be "Recruitment and placement" refers to any act of
performed or completed within or outside the premises canvassing, enlisting, contracting, transporting, utilizing,
of the principal. hiring or procuring workers, and includes referrals,
contract services, promising or advertising for
SOLIDARY LIABILITY employment, locally or abroad, whether for profit or not:
Every employer or indirect employer shall be held Provided, That any person or entity which, in any
responsible with his contractor or subcontractor for any manner, offers or promises for a fee, employment to two
violation of any provision of this Code. For purposes of or more persons shall be deemed engaged in
determining the extent of their civil liability under this recruitment and placement. (Art. 13-b)
Chapter, they shall be considered as direct employers.
GR: No person or entity shall engage in the recruitment
NOTE: The principal shall be SOLIDARILY liable with and placement of workers, locally and overseas.
the contractor in the event of any violation of any Exceptions:
provision of the LC, including failure to pay wages. This 1. Public employment offices;
will not prevent the principal from claiming 2. Private recruitment entities;
reimbursement from the contractor (AISA vs. NLRC, GR 3. Private employment agencies;
No. 111722, May 27, 1997). 4. Shipping or manning agents or representatives;
5. POEA;
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6. Construction contractors if authorized by the DOLE
and the Construction Industry Authority;
7. Members of the Diplomatic Corps (but hiring must
also go through the POEA);
8. Other persons as may be authorized by the DOLE
Secretary; and
9. Name-hirees.
JURISDICTION TRANSFERRED TO THE LABOR
ARBITERS OF THE NLRC (sec. 10, RA 8042)
1. Claims arising out of an EER relationship or by virtue
of any law or contract involving Filipino workers for
overseas deployment including claims for actual, moral,
exemplary or other forms of damages.
2. Venue of money claims or claims for damages should
be filed before the Regional Arbitration branch of the
NLRC where the complainant resides or where the
principal office of the respondent/employer is situated, at
the option of the complainant (2005, NLRC Rules of
Procedure). (Supra)
CLAIM FOR PREMATURE TERMINATION OF
CONTRACT
Under sec. 10 R.A. 8042, a worker dismissed from
overseas employment without just, valid or authorized
cause is entitled to full reimbursement of his placement
fee with interest at 12% per annum,
GR: Direct hiring of Filipino workers for overseas
employment is not allowed.
EXCEPTIONS:
1. Members of diplomatic corps;
2. International organizations;
3. Other employers as may be allowed by the Secretary
of DOLE;
4. Name hirees.
NAME HIREES
Individual workers who are able to secure contracts for
overseas employment on their own efforts and
representations without the assistance or participation of any
agency. Their hiring nonetheless, shall pass through the POEA
for processing purposes (POEA Rules).
ILLEGAL RECRUITMENT
Any recruitment activities, including the prohibited
practices enumerated under Article 34 of this Code, to
be undertaken by non-licensees or non-holders of
authority, shall be deemed illegal and punishable under
Article 39 of this Code. The Department of Labor and
Employment or any law enforcement officer may initiate
complaints under this Article.
ECONOMIC SABOTAGE
Illegal recruitment when committed by a syndicate or in
large scale shall be considered an offense involving
economic sabotage.
Illegal recruitment is deemed committed by a syndicate if
carried out by a group of three (3) or more persons conspiring
and/or confederating with one another in carrying out any
unlawful or illegal transaction, enterprise or scheme defined
under the first paragraph hereof. Illegal recruitment is
deemed committed in large scale if committed against three
(3) or more persons individually or as a group.
WAGE DISTROTION
A situation where an increase in prescribed wage rates results
in the elimination or severe contraction of intentional
quantitative differences in wage or salary rates between and
among employee groups in an establishments as to
effectively obliterate the distinctions embodied in such wage
structure based on skills, length of service or other logical
basis of differentiation.
CORRECTION OF WAGE DISTORTION:
A. Organized establishment (with a union) –
1. Employer and union shall negotiate to correct the
distortion;
2. Any dispute arising therefrom should be resolves
through grievance procedure under their CBA;
3. If the dispute remains unresolved, it shall be resolved
through voluntary arbitration.
B. Unorganized establishment (without a union)
1. The employer and employees shall endeavor to
correct the distortion;
2. Any dispute arising therefrom shall be settled through
the National Conciliation and Mediation Board (NCMB);
3. If it remains unresolved after 10 days of conciliation, it
shall be referred to the NLRC, Regional Arbitration
Branch – Labor Arbiter.
CORRECTION OF WAGE DISTORTION:
A. Organized establishment (with a union) –
1. Employer and union shall negotiate to correct the
distortion;
2. Any dispute arising therefrom should be resolves
through grievance procedure under their CBA;
3. If the dispute remains unresolved, it shall be resolved
through voluntary arbitration.
B. Unorganized establishment (without a union)
1. The employer and employees shall endeavor to
correct the distortion;
2. Any dispute arising therefrom shall be settled through
the National Conciliation and Mediation Board (NCMB);
3. If it remains unresolved after 10 days of conciliation, it
shall be referred to the NLRC, Regional Arbitration
Branch – Labor Arbiter.
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UNPAID WAGES (PREFERENCE OF CREDIT CONSIDERED AS WORKED HOURS

IN FAVOE OF EMPLOYEES) A. Waiting Time – considered as hours worked if
waiting –
Establish a preference of credit and not a lien 1. An integral part of work;
(Development Bank of the Philippines vs. Secretary of 2. The employee is required or engaged by the employer
Labor, GR No. 79351. Nov. 28, 1989). to wait; or
Applicable only to ordinary preferred credit, hence, 3. When the employee is required o remain on call in the
must yield to special preferred credits (secured employer’s premises or so close thereto that he cannot
creditors). use the time effectively and gainfully for his own
This article did not sweep away the overriding purpose.
preference accorded under the scheme of Civil Code to
tax claims of the government.
B. Working While On Call –
WORKING HOURS When employee is required to remain on call in the
Coverage. Apply to employees in all establishments and employer’s premises or so close thereto that he cannot
undertakings whether for profit or not, but not to use the time effectively and gainfully for his own
government employees, managerial employees, field purpose.
personnel, members of the family of the employer who are
However, if he is not required to remain on the
dependent on him for support, domestic helpers, persons in
employer’s premises but is merely required to leave
the personal service of another, and workers who are paid by
word at his home or with company officials where he
results as determined by the Secretary of Labor in may be reached, he is not considered working while on
appropriate regulations. call.
MANAGERIAL MANAGERIAL
EMPLOYEES (under EMPLOYEES (under
C. Preliminary and Postliminary Activities –
Labor Standards – art. Labor Relations – art.
Preliminary – before work
82) 212)
Postliminary - after actual work; compensable when:
Used only for purposes of Used only for purposes 1. Controlled or required by employer; and
Book III (working of Book V (forming and
2. Are pursued necessarily and primarily for the
conditions, rest periods, joining unions,
employer’s benefit.
hours of work, etc.) certification elections,
collective bargaining)
One whose primary duty One who is vested with D.Travel Time –
consists of the powers or prerogatives
management of the to lay down and execute a) Travel from Home to Work - Normal travel from
establishment in which management policies home to work which is not work time;
they are employed or of a and/or to hire, transfer, GR: NOT COMPENSABLE.
department or subdivision suspend, lay-off, recall, Exceptions:
thereof and to other discharge, assign or 1) Where the worker is made to work on an emergency
members of the discipline employees call and travel is necessary in proceeding to the
managerial staff workplace;
Supervisors are deemed Supervisors are not 2) Travel is done through a conveyance provided by the
members of the members of the m employer;
managerial staff (National 3) Travel is done under the control and supervision of
Sugar Refineries Corp. the employer;
vs. NLRC, March 24, 4) Travel is done under vexing and dangerous
1993) conditions.

b) Travel that is all in day’s work – The time spent by

CONDITIONS FOR A VALID CWW SCHEME:
an employee in travel as part of his principal activity, like
1. It is expressly and voluntarily supported by majority of
travel from jobsite to jobsite during the work day;
the employees affected;
COMPENSABLE
2. If work is hazardous, a certification is needed from an
c) Travel away from home – Travel that keeps an
accredited safety organization or the firm’s safety
employee away from home overnight; COMPENSABLE
committee that work beyond 8 hours is within the limits
when it cuts across an employee’s workday because it
or levels of exposure set by the DOLE’s occupational
substitutes for the hours the employee should have been
safety and health standards;
in the office.
3. The DOLE is duly notified.
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The fact of picking up employees at certain specified
points in going to the project site and drops them of at
the same time on his way back from the field office going
home is not merely incidental to petitioner’s job as a
driver. Said transportation arrangement is primarily for
the benefit of the employer. Then the time required of
and used by petitioner in going from his residence to the
field office and back should be paid as overtime work
(Rada vs. NLRC, 205 SCRA 69, [1992]).
E. Power Interruptions
1) 1st 20 minutes is compensable;
2) Succeeding minutes not compensable;
3) If despite the lapse of the 1 st 20 minutes, the
employees are required to stay in their workplaces, such
time is compensable.
F. Semestral Break of Teachers
Compensable hours worked for it is a form of interruption
beyond their control. Applies only to regular full-time
teachers (University of Pangasinan Faculty Union vs.
University of Pangasinan, GR N0. L-63122, Feb. 20,
1984).
G. Lectures, Meetings, Trainings, Programs.
Not counted as working time if all the following
conditions are met –
1) Attendance is outside of the employee’s working
hours;
2) Attendance is in fact voluntary;
3) Employee does not perform any productive work
during such attendance.(sec. 6, Rule I, Book III, IRLC).
H. Attendance in Labor Relations Activities –
1. CBA Negotiations – GR: not compensable, except if:
a. There is an agreement, for compensability in the
parties’ Ground Rules;
b. There is an established practice or policy allowing
compensability; and
c. When it is done during regular work hours.
2. Grievance Meeting – GR; compensable, except
when there is a CBA, policy or practice to the contrary.
NIGHT SHIFT DIFFERENTIAL
Every employee shall be paid a night shift differential of not
less than ten percent (10%) of his regular wage for each hour
of work performed between ten o’clock in the evening and six
o’clock in the morning.
OVERTIME
The employee is given OT pay because he is made to work
longer than what is commensurate with his agreed
compensation for the statutorily fixed or voluntarily agreed
hours of labor he is supposed to do (PNB vs. PEMA, GR No. L-
30279, July 30, 1982).
NOTE: A verbal instruction to render OT work prevails
over a memorandum prohibiting such work (A. L.
Ammen Transportation Co. vs. Borja, GR No. L-17750,
Aug. 31, 1962).
OVERTIME PAY INTEGRATED IN THE BASIC
SALARY (“Built In” Overtime Pay)
The stipulation between employer and employee that the
latter’s regular or basic salary already includes the overtime
pay is not per se illegal. This is also called composite or
package pay or all-inclusive salary.
WAIVER OF OVERTIME PAY
GR: Overtime pay cannot be waived expressly or
impliedly. Any contrary stipulation is NULL and VOID, as
it is intended to benefit laborers and employees.
Exceptions:
1. When the waiver is made in consideration of benefits
and privileges which may be more than what will accrue
to them in overtime pay; and
2. Compressed work week.
QUITCLAIM IN RELATION TO OVERTIME PAY
A quitclaim whereby laborers agree to forego their benefits
due from their employer is NULL and VOID in its entirety since
it runs counter with article 22 of the NCC which provides
against unjust enrichment and is contrary to public policy
(Pampanga Sugar Development Co. Inc. vs. CIR, GR No. L-
39387, June 29, 1982).
Undertime not offset by overtime. Undertime work on any
particular day shall not be offset by overtime work on any
other day. Permission given to the employee to go on leave
on some other day of the week shall not exempt the
employer from paying the additional compensation
Emergency overtime work. Any employee may be
required by the employer to perform overtime work in
any of the following cases:
a. When the country is at war or when any other national
or local emergency has been declared by the National
Assembly or the Chief Executive;
b. When it is necessary to prevent loss of life or property
or in case of imminent danger to public safety due to an
actual or impending emergency in the locality caused by
serious accidents, fire, flood, typhoon, earthquake,
epidemic, or other disaster or calamity;
c. When there is urgent work to be performed on
machines, installations, or equipment, in order to avoid
serious loss or damage to the employer or some other
cause of similar nature;
d. When the work is necessary to prevent loss or
damage to perishable goods; and
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e. Where the completion or continuation of the work
started before the eighth hour is necessary to prevent
serious obstruction or prejudice to the business or
operations of the employer.
Any employee required to render overtime work under this
Article shall be paid the additional compensation required
b. Worked – daily wage rate of 100% plus 30% of the
daily rate; in case of overtime, plus 30% of hourly rate on
said day.
c. Falling on the employee’s rest day and if worked –
I. Daily wage of 100% plus 50% of the daily rate.
II. In case of overtime, plus 30% of the hourly rate on
said day.

REST DAY 3. For those declared as Special Working Holidays

When employer may require work on a rest day. The
employer may require his employees to work on any For work performed, an employee is entitled only to his basic
day: rate. No premium pay is required since work performed on
a. In case of actual or impending emergencies caused said days is considered work on ordinary working days.
by serious accident, fire, flood, typhoon, earthquake,
epidemic or other disaster or calamity to prevent loss of
life and property, or imminent danger to public safety;
TERMINATION OF EMPLOYMENT
b. In cases of urgent work to be performed on the
machinery, equipment, or installation, to avoid serious DISMISSAL: AUTHORIZED CAUSE
loss which the employer would otherwise suffer; AUTHORIZED CAUSES FOR TERMINATION OF
EMPLOYMENT:
c. In the event of abnormal pressure of work due to 1. Installation of Labor-Saving Devices
special circumstances, where the employer cannot (Automation/Robotics).
ordinarily be expected to resort to other measures; 2. Redundancy.
3. Retrenchment (Downsizing).
d. To prevent loss or damage to perishable goods; 4. Closure or Cessation of Operation (in good faith).
5. Other authorized causes.
e. Where the nature of the work requires continuous
operations and the stoppage of work may result in AUTOMATION/ROBOTICS
irreparable injury or loss to the employer; and There can be no question as to the right of the
manufacturer to use new labor-saving devices with a
f. Under other circumstances analogous or similar to the view to effecting more economy and efficiency in its
foregoing as determined by the Secretary of Labor and method of production (Philippine Sheet Metal Workers’
Employment. Union vs. CIR, 83 Phil. 433.
REDUNDANCY
FORMULA TO COMPUTE WAGES ON HOLIDAYS Exists where the services of an employee are in excess
(Memorandum Circular No. 1, Series of 2004) of what is reasonably demanded by the actual
1. For Regular Holidays – requirements of the enterprise (Wiltshire File Co., Inc.
a. If it is an employee’s regular work day vs. NLRC, GR No. 82249, Feb. 7, 1991).
I. Unworked - 100% The redundancy should not have been created by the
II. Worked -----200% for the first 8 hours, and additional employer.
30% of hourly rate on such day
Note: Reorganization as a cost-saving device is
b. If it is employee’s rest day also acknowledged by jurisprudence. An employer is not
precluded from adopting a new policy conducive to a
I. Unworked – 100%
more economical and effective management, and the
II. Worked ------200% plus 30% of such 200%, and an
law does not require that the employer should be
additional 30% for Overtime pay of hourly rate on said
suffering financial losses before he can terminate the
day.
services of the employee on the ground of redundancy
(Dole Philippines, Inc. vs. NLRC, et al).
2. For declared Special Days such as Special non-
REQUISITES for a valid redundancy program: (DAP
Working Day, Special Public Holiday, Special National
vs. CA, GR No. 165811, Dec. 14, 2005)
Holiday, and nationwide special days; the following rules
1. A written notice on both employees and the DOLE at
apply –
least one month prior to the intended date of
a. Unworked – No pay, unless a favorable company
retrenchment;
policy, practice, or CBA grants such payment even if
2. Payment of separation pay equivalent to at least one
unworked;
month pay or at least one month pay for every year of
service, whichever is higher;
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3. Good faith in abolishing the redundant position;
4. Fair and reasonable criteria in ascertaining what
positions are to be declared redundant and accordingly
abolished.
RETRENCHMENT
Reduction of personnel usually due to poor financial
returns so as to cut down on costs of operations in terms
of salaries and wages to prevent bankruptcy of the
company. This is linked with losses and is resorted to as
it is a cost-cutting measure made immediately necessary
by business reduction or reverses.
Note: The phrase “to prevent losses” means that
retrenchment or termination from service of some
employees is authorized to be undertaken by the
employer sometime before the losses anticipated are
actually sustained or realized. Actual losses need not set
in prior to retrenchment (Cajucom vs. IPI Philippines
Cement Corporation, GR No. 149090, Feb. 11, 2005).
The employer, to achieve economy and efficiency in its
operations, can phase out positions or group of positions
and thereafter engage the services of an independent
contractor to do the functions of the abolished positions,
unless in a CBA the employer is prohibited from such
cost-saving recourse (Serrano vs. NLRC, and Isetann
Dept. Store, GR No. 117040. Jan. 27, 2000).
GENERAL STANDARDS OF RETRENCHMENT:
1. The losses expected are substantial and not merely
de minimis in extent;
2. The apprehended substantial losses are reasonably
imminent, can be perceived objectively and in good faith
by the employer;
3. Retrenchment must be reasonably necessary to
prevent the expected losses; and
4. Expected or actual losses must be proved by
sufficient and convincing evidence (Central Azucarrera
dela Carlota vs. NLRC, GR No. 100092, Dec. 29, 1995).
REQUIREMENTS FOR VALID RETRENCHMENT:
1. Retrenchment is reasonably necessary and likely to
prevent business losses, which, if already incurred, are
not merely minimal, but substantial, serious, actual and
real, or if only expected, are reasonably imminent as
perceived objectively and in good faith;
2. The employer serve a written notice to both
employees and the DOLE at least 1 month prior to the
intended date of retrenchment;
3. Payment of separation pay equivalent to 1 month pay
or at least ½ month for every year of service;
4. Retrenchment must be in good faith and not for the
purpose of violating the employee’s right to security of
tenure;
5. The employer used fair and reasonable criteria in
ascertaining who should be dismissed and who would be
retained among the employee, such as –
a. Status
b. Efficiency
c. Seniority
d. Physical fitness
e. Age
f. Financial hardships of certain workers (Asian Alcohol
Corp. vs. NLRC, GR No. 131108, March 25, 1999).
“LAST IN, FIRST OUT” RULE
It applies to termination of employment in the line of work.
What is contemplated in the rule is that when two or more
employees are occupying the same position in the company
affected by the retrenchment program, the last one
employed will necessarily be the first to go (Maya Farms
Employees Organization vs. NLRC, GR No. 106256, Dec. 28,
1994).
CLOSURE or CESSATION OF OPERATION OF THE
ESTABLISHMENT OR UNDERTAKING
Must be in good faith.
Rules:
1. Where closure is due to serious business losses, no
separation pay is required (North Davao Mining Corp.
vs. NLRC, GR No. 112546, March 13, 1996).
2. Where closure is not due to serious business losses,
workers are entitled to separation pay.
3. Where closure is due to an act of the government, the
workers are not entitled to separation pay (National
Federation of labor vs. NLRC, GR No. 127718, March 2,
2000).
Note: Article 283 includes both the complete cessation of all
business operation of an establishment and the cessation of
only part of a company’s business (Cheniver Deco Print
Technics Corp. vs. NLRC, GR No. 122876, Feb. 17, 2000).
DISMISSAL: JUST CAUSES
CONSTRUCTIVE DISMISSAL
1. Serious Misconduct
Misconduct – has been defined as the transgression of
some established and definite rule of action, a forbidden
act, a dereliction of duty, willful in character, and implies
wrongful intent and not mere error in judgment (DOLE
Manual, Sec. 4343, 01).
The misconduct to be serious must be:
1) Of such grave and aggravated character and not
merely trivial (Micro Sales Operation Network vs. NLRC,
Oct. 11, 2005); and
2) In connection with the employees’ work.
Samples:
a. Sexual harassment;
b. Fighting within company premises;
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c. Uttering obscene, insulting or offensive words against of abandonment (Kams International, Inc. vs., NLRC,
a superior; GR No. 128806, Sept. 28, 1999).
d. Falsification of time records; The rule has no application where the complainant does
e. Gross immorality. not pray for reinstatement and asks for separation pay
instead (Jo, et al. NLRC, GR No. 121605, Feb. 2, 2000).
2. Willful Disobedience or Insubordination 4. Fraud or Willful Breach of Duty

Requisites: To constitute a just cause for terminating an employee –

1) The employee’s assailed conduct has been willful or a. The fraud must be committed against the employer or
intentional, the willfulness being characterized by a his representative; and
“wrongful and perverse attitude”; and b. In connection with the employee’s work.
2) The order violated must have been –
a. Reasonable and lawful; Like:
b. Made known to the employee; and 1) Falsification of time cards;
c. In connection with the duties which he had been 2) Theft of company property;
engaged to discharge (Acesite Corporation vs. NLRC, 3) Unauthorized use of company vehicle.
GR No. 152308, Jan. 26, 2005).
Guidelines for the Doctrine of Loss of Confidence to
Note: There is no law that compels an employee to Apply:
accept a promotion for the reason that a promotion is in a. Loss of confidence should not be simulated
the nature of a gift or reward, which a person has the (reasonable basis for loss of confidence);
right to refuse. Hence, the exercise by the employee of b. Not used as a subterfuge for causes which are
the right to refuse a promotion cannot be considered in improper, illegal or unjustified;
law as insubordination, or willful disobedience of a lawful c. Not arbitrarily asserted in the face of overwhelming
order of the employer (PT and T Corp. vs. CA, Sept. 29, evidence to the contrary;
2003). d. Must be genuine, not a mere afterthought to justify
3. Gross Habitual Neglect of Duty Gross neglect – earlier action taken in bad faith;
means an absence of that diligence that an ordinarily a e. The employee involved holds a position of trust and
prudent man would use in his own affairs. confidence.
Habitual Neglect – implies repeated failure to perform Generally, employers are allowed wider latitude of
one’s duties over a period of time, depending upon the discretion in terminating the employment of managerial
circumstances (JGB and Associates, Inc. vs. NLRC, GR personnel or those who, while not of similar rank,
No. 10939, March 7, 1996). perform functions which by nature require the employer’s
In order to constitute a just cause for the employee’s full trust and confidence (Coca-Cola Bottlers vs. NLRC,
dismissal, the neglect of duties must not only be gross GR No.82580, April 25, 1989).
but also habitual.
If the employees are ordinary rank-and-file workers,
However, there is a case wherein the SC held that such as electricians and operators of equipment, there
although the Gross negligence of the employee is not has to be some kind of proof that they are involved in the
habitual, the employer was justified in terminating the loss of company property. Mere accusations will not
employee when the employer suffered substantial suffice (Lamsan Trading, Inc. vs. Leogardo, GR No.
damage due to the gross negligence of the employee. In 73245, Sept. 30, 1986).
this particular case, the service motorcycle of the
employee was stolen because the employee left the key For loss of trust and confidence to be a valid ground
on the motorcycle while he was away despite the for an employee’s dismissal, it must be substantial and
warning of the employer never to leave the key on the not arbitrary, and must be founded on clearly established
motorcycle alone. facts sufficient to warrant the employee’s separation
from work (Labor, et al. vs. NLRC, GR No. 110388,
Forms of Neglect of Duty: Sept. 14, 1995).
1) Habitual tardiness and absenteeism;
2) Abandonment –
a. Failure to report to work or absence without valid or GUIDELINES TO DETERMINE THE VALIDITY OF
justifiable reason; TERMINATION:
b. Clear intention to sever EER being manifested by 1. Gravity of the offense;
some overt acts (Labor, et al. vs. NLRC, GR No. 2. Position occupied by the employee;
110388, Sept, 14, 1995). 3. Degree of damage to the employer;
4. Previous infractions of the same offense;
The filing of the complaint for illegal dismissal (with a 5. Length of service;
prayer for reinstatement) is inconsistent with the charge
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Note: Length of service may be overshadowed by the 1) Violation of company rules and regulations;
gravity of the offense. 2) Drunkenness;
6. Nature of business; 3) Gross inefficiency;
7. Nature of employment; 4) Illegal diversion of employer’s products.
8. Totality of infractions; 5) Habitual absenteeism and tardiness;
9. Principle of equity; 6) Habitual infractions;
10. Principle of charity/understanding 7) Conviction of a crime (carrying a penalty of
imprisonment);
TOTALITY OF INFRACTIONS DOCTRINE 8) Violation of safety rules;
It is the totality, not the compartmentalization of company 9) Immorality;
infractions that the employee had consistently committed, 10) Sexual harassment;
which justifies the penalty of dismissal (like number of 11) Change of ownership (in good faith);
violations during the period of employment] (Manila Electric 12) Failure to qualify.
13) Use of dangerous drugs (sec. 36 [d], RA 9165).
Co. vs. NLRC, GR No. 114129, Oct. 24, 1996).

DOCTRINE OF INCOMPATIBILITY DUE PROCESS REQUIREMENT (TWIN

Where the employee has done something that is NOTICE RULE)
contrary or incompatible with the faithful performance of
his duties, his employer has a just cause for terminating DUE PROCESS TO BE OBSERVED BY THE
his employment (Manila Chauffer’s League vs. EMPLOYER IN TERMINATION OF EMPLOYEES:
Bacharach Motor Co., 40 OG 159). 1. Notice (Twin Notice Rule) – the employer is required
5. Commission of a Crime or Offense to furnish an employee who is to be dismissed with 2
written notices before such termination:
Refers to an offense by the employee against the person a. Pre-Notice - a written notice served on the employee
of his employer or any immediate member of his family specifying the ground/s for termination, and giving to
or his duly authorized representative and thus, the said employee reasonable opportunity within which to
conviction of a crime involving moral turpitude is not explain his side.
analogous thereto as the element of relation to his work b. Post-Notice – a written notice of termination served
or to his employee is lacking on the employee indicating that upon due consideration
Note: Conviction of the employee is not necessary to of all circumstances, grounds have been established to
warrant his dismissal by his employer. justify his termination. [which comes only after the
The immediate members of the family referred to are employee is given a reasonable period from receipt of
limited to – first notice to answer the charge] (Pepsi-Cola vs. NLRC,
a) Spouse GR No. 90964, Feb. 10, 1992).
b) Ascendants;
c) Descendants; 2. Hearing or Conference – a hearing or conference
d) Legitimate, or illegitimate, or adopted brothers and should be held during which the employee concerned,
sisters; with the assistance of counsel, if he so desires, is given
e) Relatives by affinity within the same degree - the opportunity to respond to the charge, present his
i. Parents-in-law; evidence or rebut the evidence presented against him
ii. Son/daughter-in-law; (GR No. 157757, June 28, 2005).
iii. Brother/sister-in-law.
SEPARATION PAY
DISMISSAL NOT AFFECTED BY ACQUITTAL
The conviction of an employee in a criminal case is not
indispensable to warrant his dismissal by his employer. TERMINATION
The fact that a criminal complaint against an employee CAUSE PAY
has been dropped by the city fiscal is not binding and Installation of labor saving Equivalent to at least 1
conclusive upon the labor tribunal (Starlite vs. NLRC, devices and Redundancy month pay or at least 1
GR No. 78491, March 16, 1989) month for every year of
service, whichever is
6. Analogous Cases higher. A fraction of at
least 6 months is
Must be due to the voluntary act/or willful act or omission considered as 1 whole
of the employee (Nadura vs. Benguet Consolidated, GR year
No. L-17780, Aug. 24, 1962). Retrenchment Equivalent to at least 1
Samples: month pay or at least ½
month pay for every
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year of service, usually necessary or desirable in the usual business or trade
whichever is higher. A of the employer, except where the employment has been
fraction of at least 6 fixed for a specific project or undertaking the completion or
months is considered 1 termination of which has been determined at the time of the
whole year. engagement of the employee or where the work or service to
Closure of Cessation NOT Equivalent to at least 1 be performed is seasonal in nature and the employment is for
due to serious business month pay or at least ½ the duration of the season.
losses or financial reverses month pay for every
year of service, Any employee who has rendered at least one year of service,
whichever is higher. A
whether such service is continuous or broken, shall be
fraction of at least 6
considered a regular employee with respect to the activity in
months is considered 1
whole year which he is employed and his employment shall continue
Disease Equivalent to at least 1 while such activity exists.
month pay or at least ½
month pay for every CASUAL EMPLOYMENT
year of service, Employment arrangement where an employee is
whichever is higher. A engaged to perform activities which are not necessary
fraction of at least 6 and desirable in the usual business or trade of the
months is considered 1 employer.
whole year. The status of regular employment attaches to the
Closure to due serious No separation pay casual employee who has rendered at least one year of
business losses or (North Davao Mining service, whether such service is continuous or broken,
financial reverses and Development Corp. with respect to the activity in which he is employed and
vs. NLRC, 254 SCRA his employment shall continue while such activity exists.
721) A casual employee is only casual for one year, and it
Closure/cessation of No separation pay is the passage of time that gives him regular status
operations due to an act of (National Federation of (KASAMMA-CCO vs. CA, GR No. 159828, April 19,
the government labor, vs. NLRC, GR 2006).
No. 127718, March 2, A “permanent casual” is a regular employee.
2000)
TEMPORARY or FIXED-PERIOD EMPLOYMENT
Employment arrangement where an employee is
REINSTATEMENT engaged to work on a specified period of time agreed
Take Note: there is no reinstatement of an illegally dismissed upon before the commencement of the employment.
OFW or a seaman. A fixed-period employee does not become regular
employee because his employment is coterminous with
NOTE: There is no reinstatement of an illegally a specific period of time.
dismissed househelper. Reason: Fiduciary nature of
his/her work. CRITERIA FOR FIXED-PERIOD EMPLOYMENT TO BE
VALID:
The posting of the bond of the employer does not have the 1. The fixed period employment was knowingly and
effect of staying the execution of the reinstatement aspect voluntarily agreed upon by the parties without any force,
of the decision of the Labor Arbiter (Pioneer Texturizing duress, or improper pressure being brought to bear upon
Corp. v. NLRC,280 SCRA 806 [1997]). the employee and absent any other circumstances
vitiating consent; or
2. It satisfactorily appears that the employer and the
PAYROL REINSTATEMENT employee dealt with each other on more or less equal
Payroll Reinstatement: one where an employee is paid his
terms with no moral dominance exercised by the former
monthly salary without making him perform actual work. It or the latter (Brent School vs. Zamora, GR No. L-48494,
applies in termination cases where the labor court declares Feb. 5, 1990).
the dismissal illegal and orders reinstatement of the
employee, but the employer does not want to actually or Fixed-term employment will not be considered valid
physically reinstate him instead. where it is apparent that the periods have been imposed
to preclude acquisition of tenurial security by the
REGULAR EMPLOYEES employee. It shall be struck down or disregarded as
An employment shall be deemed to be regular where the contrary to public policy (Purefoods Corp. vs. NLRC, GR
employee has been engaged to perform activities which are No. 122563, Dec. 12, 1997).
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Note: Seafarers cannot be considered as regular employees.
Their employment is governed by the contracts they signed
everytime they are rehired and their employment is
terminated when the contract expires. Their employment is
fixed for a certain period of time (Ravago vs. Esso Eastern
Maritime, Ltd. GR No. 158324, March 14, 2005).
PROBATIONARY EMPLOYEES
Exists where the employee, upon his engagement, is made to
undergo a trial period during which the employer determines
his fitness to qualify for regular employment based on
reasonable standards made known to his at the time of his
engagement.
CHARACTERISTICS:
1. It is an employment for a trial period;
2. It is a temporary employment status prior to regular
employment;
3. It arises through a contract with the following elements
–
a. The employee must learn and work at a particular
type of work;
b. Such work calls for certain qualifications;
c. The probation is fixed;
d. The employer reserves the power to terminate during
or at the end of the trial period; and
e. And if the employee has learned the job to the
satisfaction of the employer, he may be became a
regular employee if he is allowed to continue working
beyond the probationary period.
DURATION
GR: Probationary employment shall not exceed 6
months form the date the employee started working.
Exceptions:
1. When it is covered by an apprenticeship agreement
stipulating a longer period;
2. When the same is established by company policy;
3. When the same is required by the nature of the work
performed (Buiser vs. Leogardo, GR No. L-63316, July
13, 1984).
4. By agreement of the parties granting extension of
period of probation.
NOTE: The probationary period set for private
professors, instructors and teachers is 3 consecutive
years of satisfactory service (UST vs. NLRC, GR No.
85519, Feb. 15, 1990)..
EXTENSION OF PROBATION
The employer and employee may extend by agreement
the probationary period of employment beyond 6 months
to give the employee a chance to qualify as a regular
employee (Mariwasa Manufacturing, Inc. vs. Leogardo,
Jr., GR No. 74246, Jan. 26, 1989).
By voluntarily agreeing to such an extension, the
employee waived any benefit attaching to the completion
of the period if he still failed to make the grade during the
period of extension (Mariwasa Manufacturing, Inc. vs.
Leogardo,supra).
DOUBLE or SUCCESSIVE PROBATION NOT
ALLOWED:
The evil sought to be prevented is to discourage
scheming employers from using the system of
double/successive probation to circumvent the mandate
of the law of regularization and make it easier for them to
dismiss their employees (Holiday Inn Manila vs. NLRC,
GR No. 109114, Sept 14, 1993).
TERMINATION OF PROBATIONARY EMPLOYMENT
Also protected by the security of tenure clause of the
Constitution. Before the expiration of the probationary
period, employment may be terminated on two grounds
–
a. Just cause; and/or
b. Failure to meet the standards for qualifications for a
regular employment.
Note: Probationary employee is entitled to procedural
due process prior to dismissal from the service.
REGULAR STATUS AFTER PROBATIONARY
PERIOD
If the probationary employee is allowed to work beyond
the period of 6 months or the agreed probationary
period, said employee becomes a regular employee BY
OPERATION LAW.
SEASONAL EMPLOYEES
Employment arrangement where an employee is
engaged to work during a particular season on an
activity that is usually necessary or desirable in the usual
business or trade of the employer.
During off-season, the relationship of employer and
employee is not severed; the seasonal employee is
merely considered on leave of absence without pay.
Seasonal workers who are repeatedly engaged from
season to season performing the same tasks are
deemed to have acquired regular employment.
Seasonal employees are in regular employment
because of the nature of their job and not because of the
length of time they have worked. (Philippine Tobacco
Flue-curing and Redrying Corp. vs. NLRC, GR No.
127395, Dec. 10, 1998).
PROJECT EMPLOYEES
PROJECT EMPLOYMENT
Employment has been fixed for a specific project or
undertaking, the completion or termination of which has
been determined at the time of engagement of the
employee.
RETIREMENT
It is the result of a bilateral act of the parties; a voluntary
agreement between the employer and the employees
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whereby the latter, after reaching a certain age, agrees 3. Domestic helpers and those in the personal service of
and/or consents to sever his employment with the former another.
(Brion vs. SPUM of Seventh Day Adventist Church, GR No.
135136, May 19, 1999). In the absence of a retirement plan or agreement
providing for retirement benefits of employees in the
KINDS OF RETIREMENT SCHEMES: establishment, an employee upon reaching the age of
1. Compulsory and contributory in nature; sixty (60) years or more, but not beyond sixty-five (65)
2. One set up by agreement between the parties in CBA years which is hereby declared the compulsory
or other agreements between them (other applicable retirement age, who has served at least five (5) years in
employment contract); the said establishment, may retire and shall be entitled
3. One that is voluntarily given by the employer, to retirement pay equivalent to at least one-half (1/2)
expressly as an unannounced company policy or month salary for every year of service, a fraction of at
impliedly as in failure to contest the employee’s claim for least six (6) months being considered as one whole
retirement benefits (Marilyn Odchimar Gerlach vs. year.
Reuters Limited, Philippines, GR No. 148542, Jan. 17,
2005). Unless the parties provide for broader inclusions, the term
‘one-half (1/2) month salary’ shall mean fifteen (15) days plus
RETIREMENT AGE one-twelfth (1/12) of the 13th month pay and the cash
The age of retirement is that specified in the CBA or in equivalent of not more than five (5) days of service incentive
the employment contract. leaves.
A. Employees other than underground mining
workers - SOCIAL LEGISLATION LAWS
1. Optional – 60 years old but not beyond 65 years old.
2. Compulsory –not beyond 65 years old.
GSIS BENEFITS
B. Underground mining workers – (1) Employees compensation which shall include
1. Optional – 50 but not beyond 60 years old. both income and medical and related benefits,
2. Mandatory – not beyond 60 years old. including rehabilitation;
(2) Temporary total disability benefit;
Compulsory retirement at age below 60 is allowable if (3) Permanent total disability benefit;
duly provided for in the CBA (Pantranco North Express (4) Separation benefit; and
vs. NLRC, GR No. 95940, July 24, 1996). (5) Retirement benefit.
Restriction in private retirement plan will not prevent the
employee from retiring optionally at age 60 (Manuel L. MATERNITY BENEFITS
Quezon University vs. NLRC, GR No. 102612, June 19, 1. R.A. No.11210; Act increasing the maternity
1997). leave period of 105 days for female workers
EXTENSION OF SERVICE OF RETIREE with an option to extend for an additional of
Upon the compulsory retirement of an employee or 30 days without pay and additional 15 days
official in the public or private service, his employment is for solo mothers both in public and private
deemed terminated. The matter of extension of service sector. (IRR)
of such employee or official is addressed to the sound
discretion of the employer (UST Faculty Union vs. 2. 60 days paid leave for miscarriage and
NLRC, GR No. 89885, Aug. 6, 1990). emergency termination of pregnancy.
Note: Under section 26, RA 4670, Magna Carta for
Public School Teachers, public school teachers having
FREQUENCY OF GRANT
fulfilled the age and service requirements of the
Maternity leave shall be granted to a qualified female
applicable retirement laws shall be given ONE RANGE
worker in every instance of pregnancy, miscarriage or
SALARY RAISE upon retirement, which shall be the
emergency termination of pregnancy regardless of
basis of the computation of the lump sum of the
redundancy. (Sec. 5, IRR of R.A. No. 11210)
retirement pay and the monthly benefit thereafter.
EXEMPTED FORM THE PAYMENT OF RETIREMENT
Maternity benefit after termination of employment such
PAY:
as full payment shall be granted when pregnancy or
1. Retail, service and agricultural establishments or
miscarriage occur not more than 15 days after the
business operations employing NOT more than 10
termination of employment as the right already accrued.
employees;
This period shall not apply if the worker is terminated
2. Government employees (covered by Civil Service from employment without just cause, in which case, the
Law); employee shall be paid the full payment, in addition to
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the other daily cash maternity benefits she may receive
had she not been illegally dismissed.

PATERNITY LEAVE
Every married male employee in the private and public
sectors shall be entitled to a paternity leave of seven (7) days
with full pay for the first four (4) deliveries of the legitimate
spouse with whom he is cohabiting. (R.A. 8187)

SSS COMPULSORY COVERAGE

Any person who performs services for an
employer in which either or both mental and
physical efforts are used and who receives
compensation for such service, where there is
an Employer-Employee Relationship.

PORTABILITY PROVISION
The "portability" provisions of R.A. No. 7699 allow the
transfer of funds for the account and benefit of the
worker who transfers from one system to another.

This is advantageous to the SSS and GSIS members for

purposes of death, disability or retirement benefits. In the
event the employees transfer from the private sector to
the public sector, or vice-versa, their creditable
employment services and contributions are carried over
and transferred as well.

“Believe that all your dreams will come

true. You will be rewarded of your
hardwork and devotion by the will of the
Greatest, the Supreme and Divine.”

-Atty. Genesis M. Auza