~ATENEO

VCENTRAL
I BAR OPERATIONS 20191

JORGE ALFON$0 C. MELO

Bar Review Coordinator

LEILA S. LIM
Bar Review Secretariat

ATENEO CENTRAL BAR OPERATIONS

PATRICK EDWARD BALISONG

Chairman

KATRINA Y. COSCOLLUELA JONATHAN VICTOR NOEL CZARINA CHER CUERPO

GENICA THERESE ENDALUZ JOHN STEPHEN PANGILINAN BENIGNO ENCISO
·, Administration Committee Heads Academics Committee Heads Hotel bperations Committee Heads
.»
RYAN QUAN
LABOR LAW Faculty Adviser

HEZP.O CAANOOY
( .
CZARINA CHER CUE~PO
CHARLES DANIEL LOVENSKY FERNANDEZ
DONNA NIKKI VARGAS
ETHICS AND LEGAL FG:>.'.MS Subject Heads

EUNICE A. MALA YO
FRANCES CHRISTINE F.'SAYSON
Central Bar Operations
Academics Understudies

0
0 TANYA GAYE INIGO
REINE GUSTILO
HOSEA SALAZAR
JOHN PAULO VICENCIO
EL}EL TIMBOL
GIOAGUll.A
t t CHRISTINE FLORES RAMTRINA MARIE ATRIAS JULIA HANNA SORIANO
v ETHICS AND LEGAL FORMS Volunteers

0
. r·.,
v
'
'-J'.
 TABLE OF CONTENTS

I.GENERAL PROVISIONS 1
A. BASIC POLICY ON LABOR , 1
B. CONSTRUCTION IN FAVOR OF LABOR; 1
C. CONSTITUllONAL ANO CIViL CODE PROVISIONS RELATING TO LABOR LAW 1
II. PRE-EMPLOYMENT 4
A. RECRUITMENT AND PLACEMENT OF LOCAL AND MIGRANT WORKERS {LABOR
CODE AND RA 8042, AS AMENDED BY RA 10022) , 5
1.ILLEGAL RECRUITMENT , 5
a. Elements 9
\ > b. Types of Illegal Recruitrnent 13
c. Illegal recruitment versus estafa 13
2. Liability of Local Recruitment Agency and Foreign Employer · 14
/•
a. Solidary Liability 14
' , b. Theory of Imputed Knowledge 15
I ;
3. Termination of Contract of Migrant Worker Without Just or Valid Cause 15
' 4. Ban on Direct hiring , '. 16
B. EMPLOYMENT OF NON-RESIDENT ALIENS , 17
Ill. LABOR STANDARDS 19
(.;
A. CONDITIONS OF EMPLOYMENT 20.
1. Coveraqe.. · 20
'· i 2. Hours of Work , 21 .
..:....~ a. Normal Hours of Work 21
'·
b. Meal Periods , · 23
.,'\ c. Night Shift Differential : 25
'~-;'
d. Overtime Work 26
e. Computation of additional compensation (rates only); facilities vs. supplements 29
3. Weekly Rest Periods : : 30
4. Holidays ; : 31
5. Service incentive leaves : '.34
6. Ser.tice Charges , 35
() ·~ ·.
7. 13 Month Pay
.
, , , .. ,
.
36
B. WAGES 38
1. Payment of Wages 41
0 .2. Prohibitions regarding wages : , .. 43
3. Wage Order; Wage Distortion, concept.. ; 44
0 4.. Non-diminution of benefits ; , 46
C. LE.A.VES , 47
u 1. Service Incentive Leave (SIL) (supra) 47
2: Maternity Leave 47
3. Paternity Leave (R,A. No. 8187) · 48
4. Solo Parent Leave 49
5. Leaves Benefits for Women Workers Under RA 9710 and RA 9262 49
'
D. SPECIAL GROUPS OF EMPLOYEES 51
1. Women .. 51
a. Discrimination .' 51
b. Stipulation Against Marriage 51
i ; c. Prohibited Acts , 52
~--

\...
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

d. Sexual Harassment (RA 7877) 52

2. Miners (R.A.No. 7610, as amended by RA. No. 9231 ) '. 54
3. Kasambahay (R.A. No. 10361) 55
4. Homeworkers , 57
5. Night Workers , 58
6. Apprentices and Learners .- 60
7. Persons with C,isabilities ' 61
a. Discrimination 62
b. Incentives for Employers (Sec. 8) : : 63
IV. SOCIAL WELFARE LEGISLATION , 64
A. SOCIAL S.ECURITY ACT OF 1997 (R.A. No. 8282) , 64
B. GOVERNIV!ENT SERVICE INSURANCE ACT OF 1997 (R.A. No. 8291) ; ' 64
C. DISABILITY AND DEATH BENEFITS ; 73
V. LABOR RELATIONS : 78
A. RIGHT TO SELF-·oRGANIZATION ,. 79
1. COVERAGE· WHO MAY/MAY NOT EXERCISE THE RIGHT 80
2. INELIGIBILITY OF MANAGERIAL EMPLOYEES; RIGHT OF SUPERVISORY
EMPLOYEES ; .: , , 84.
4. NON-ABRIDGMENT OF THE RIGHT TO SELF-ORGANIZATION 85
B! BARGAINING UNIT · _.. ~ , .. 93
\ '
v >
C. BARGAINING REPRESENTATIVE 95
D. RIGHTS OF LABOR ORGANIZATIONS : ; 114
1. CHECK OFF, ASSESSMENT FEES, AGENCY FEES: 115 .
2. COLLECTIVE BARGAINING , ; 116 i '
',.;'

E. UNFAIR LABOR PRACTICE ., '. 124

1. NATURE AND ASPECTS 124
2. ULP BY EMPLOYERS .- : 125
3. ULP BY LABOR ORGANIZATIONS : 138
F. PEACEFUL CONCERTED ACTIVITIES 142
1. STRIKE :
2. PICKETING .......................................................................................•............. · ,
-142
·149 .
It.,)~
.
3. LOCKOUTS : 150·
3. ASSUMPTION OF JURISDICTION BY THE DOLE SECRETARY ; 154 · (}
5. INJUNCTIONS ........................................................................................•............ .. ~ 160
I~.

A. EMPLOYER • EMPLOYEE RELATIONSHIP 162 l_J

1. TESTS TO DETERMINE EMPLOYER-EMPLOYEE RELATIONSHIP 163
2. KINDS OF EMPLOYMENT 166 . I',,_.;
'·
"'

a. REGULAR El\~PLOYMENT , , 166 l .,.

1
b. CASUAL EMPLOYMENT 167 ......;:'-'·'
c. PROBATIONARY EMPLOYMENT , 167
d. PROJECT EMPLOYMENT _ 169 0
e. SEASONAL EMPLOYMENT . · 171
t ii
f. FIXED-TERM EMPLOYMENT : · .. 171 v
g. SECURITY GUARDS .- : , 172
3. LEGITIMATE SUBCONTRACTING vs. LABOR-ONLY CONTRACTING , 175
a. ELEMENTS , 176
PAGE 3 OF 244 ·

.,.... .,,,
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW
-,

b. TRILATERAL RELATIONSHIP , 178

c. SOLIDARY LIABILITY , , 181 .
B. TERMINATION BY EMPLOYER 188
1. JUST CAUSES 188
2 .. AUTHORIZED CAUSES 194
3. DUE PROCESS · 200
a. TWIN-NOTICE REQUIREMENT 200
b .. HEARING; AMPLE OPPORTUNITY TO BE HEARD ; 201
D. TERMINATION BY EMPLOYEE 203
1. RESIGNATION VERSUS CONSTRUCTIVE DISMISSAL 203
F. PREVENTIVE SUSPENSION 205
E. RELIEFS FROM ILLEGAL DISMISSAL ; :. 206
G. RETIREMENT '. 211
VII. MANAGEMENT PREROGATIVE 214
A. DISCIPLINE : ; 216
B. _TRANSFER OF EMPLOYEE , ~ 216
C. PRODUCTIVITY STANDARD 216
'
\J D. BONUS ...................................•..........•....•...................................................................... ~ .. 217.
E. CHANGE OF WORKING HOURS '. 217
F. Bona Fide Occupational Qualifications , ; 217
' .
G. POST ..EMPLOYMENT BAN i18
VIII. JURISDICTION AND RELIEFS ~ 219
A. LABOR ARBITER ,.,u .. , .i 220
B. NATIONAL LABOR RELATIONS COMMISSION (NLRC) , 226
t·. r\
C. JUDICIAL REVIEW OF LABOR RULINGS '. 2,27
0 D. BUREAU OF LABOR RELA TION-S 228
E. NATIONAL CONCILIATION AND MEDIATION BOARD 230
(J
F. DOLE REGIONAL
. DIRECTORS . 230
() G. DOLE SECRETARY 231
r~ ....I
H. GRIEVANCE MACHINERY 234
I. VOLUNTARY ARBITRATORS : 234
J. PRESCRIPTION OF ACTIONS .. ." 236
u
0
0

PAGE4 OF 244
0

()

· ... ;·
 ATENEO CENTRAL
BAR OPERATIONS 2019
I. GENERAL PROVISIONS
TOPIC OUTLINE UNDER THE SYLLABU$
A. Basic policy on labor
B. Construction in favor of labor
C. Constitutional and Civil Code provisions
relating to Labor Law
A. BASIC POLICY ON LAB_OR
B. CONSTRUCTION IN FAVOR OF LABOR.
C. CONSTITUTIONAL ANO CIVIL CODE
PROVISIONS RELATING TO LABOR LAW
A. Legal Basis
B. 1987 Constitution
1. Article II: State Policies
Sec. 9. The State shall promote a just and
,. \ dynamic social order that will ensure the prosperity
and independence of the nation and free the
people from poverty through policies that provide
adequate social services, promote full
( -_ · employment, a rising standard of living, and an
improved quality of life for all.
{ ~
., Sec. ·to. The State shall promote social justice in
all phases of national development.
Sec. 18. The State affirms labor as a primary
.social economic force. It shall protect the rights of
workers and promote their welfare.
Sec. 20. The State recognizes the indispensable
role of the private sector, encourages private
enterprise, and provides incentives to needed
c, investments.
0 Social Justice
Social justice is neither communism, nor
u despotism, nor atomisrn, nor anarchy, but the
humanization of laws and the equalization of social
and economic forces by the State so that justice in
,1,· its rational and objectively secular conception may -
v at least be approximated. (Calalang v. Williams,
G.R. No. 47800, 1940)
()
PAGE 1 OF 244
LABOR LAW
Welfare state based on social Justice
The welfare state concept is found in the
constitutional clause on the promotion of social
justice t6 ensure the well-being and economic
security of all the people, and in the pledge of
protection to labor with specific authority to
regulate the relations between landowners and
tenants and between labor and capital. (Alalayan
v. National Power Corp., G.R. No. L-24396, 1968)
Limitations of Social Justice
" Social justice should be used only to correct an
injustice. It must be founded on the recognition of
the ~ecessity of interdependence among diverse
units of a society, and Of the protection that should
be equally and evenly extended to all groups as a
combined force. in our social and economic life .
. (Agabon v. NLRC, G.R. No. 158693, 2004)
Social justice is not _ intended to countenance
wrongdoing simply because it is committed by the
underprivlieged. At best it may mitigate the penalty
but it certainly will not condone the offense.
Compassion for the poor is an imperative of every
humane society but only when the recipient is not
a rascal claiming an undeserved privilege. Social
justice cannot be permitted to be a refuge of
scoundrels any more than can equity be an
impediment to the punishment Of the guilty.
{Tirezone v. Philippine EDS Tectmo-Service, G.R.
No. 169712, 2009)
Laissez-Faire not fully embraced by the
Constitution
The Constitution is primarily a document of social
justice, and although it has recognized the
importance of the private sector, it has not
embraced fully the concept of laissez-faire or
relied on pure market forces to govern the
economy. (Employers Confederation v. NWPC,
G.R. No. 96169, 1991)
Balancing of interests
It is high time that employer and employee cease
to view each other as adversaries and instead
recognize that theirs is a symbiotic relationship,
wherein they must rely on each other to ensure the
success of the business. When they consider only
their own self-interests, and when they act only
with their own benefit in mind, both parties suffer
from short-sightedness, failing to realize that they
both have a stake in the business.
 ATENEO CENTRAL
BAR OPERATIONS 2019
The employer wants the business to succeed,
considering the investment that ha8 been made.
· The employee in turn, also wants the business to
succeed, as continued employment means a
living, and the chance to better one's lot in life. It is
clear then that they both have the same goal, even
if the benefit that results may be greater for one
party than the other. If this becomes a source of
conflict, there are various, more amicable means
of settling disputes and of balancing interests that
do not add fuel to the fire, and instead open
avenues for understanding and cooperation
between the employer and the employee. (Toyota
Motor Phils. Corp Workers Ass'n. v. NLRC, G.R.
No. 158786, 2007)
' employed in the public and private sectors, to form
PAGE2 OF 244
---···---
LABOR LAW
2. Article Ill: Bill Of Rights
Sec. 1. No person shall be deprived of life, liberty,
or property without due process c,f law, nor shall
any person be dehied the equal protection of the
laws.
Due process
Under the Labor Code, the requirements for the
lawful dismissal of an employee by his employer
are two-fold: the substantive and the procedural.
Not only must the dismissal be for a valid or
authorized cause as provided by law, but the
rudimentary requirements of due process, basic to
which are that an opportunity to be heard and to
defend oneself must be observed before an
employee may be dismissed. (Metro f=ye Security
v. Selsone, G.R. No. 1671367, 2007)
To constitute valid dismissal from employment,
two requisites must concur: (1) the dismissal must
be for a just or authorized cause; and (2) the
employee must be afforded an opportunity to be
heard and to defend himself. (Nacague v. Sulpicio ;/l .
\ :·
Lines, G.R. No. 17258G, 2010)
Labor as Property Right ·
One's employment is a property right, and the
wrongful interference therewith is an actionable
wrong. ihe right is considered to be property
within the protection of the constitutional
guarantee of due process of law. (Texon Mfg. v.
Millena, G.R. No. 141380, 2004)
Sec. 4. No law shall be passed abridqinq the
freedom of speech, of expression, or of the press,
or the right of the people peaceably to assemble t.}
and petition the government for redress of
grievances.
Wearing armbands and putting up placards to
express one's views without violating the rights of
3rd parties are legal per se and even
constitutionally protected. (Bascon v. CA, G.R. No.
144899, 2004) . .
Sec. 8. The right of the people, including those 0
unions, associations, or societies for purposes Mt
contrary to law shall not be abridged.
.11
 ATENEO CENTRAL
· BAR OPERATIONS 2019
Sec. 16. All persons shall have the right to a
speedy disposition of their cases before all judicial,
quasi-judicial, or administrative bodies.
Sec. 18(2). No involuntary servitude in any form
shall exist except as a punishment for a crime
whereof the party shall have been duly convicted.
3. Article XIII: Social Justice And Human
.Rights
Sec. 2. The promotion of social justice shall
include the commitment to create economic
opportunities based on freedom of initiative and
self-reliance.
Sec; 3. The State shall afford full protection . to
labor, local and overseas, organized and
unorganized, and promote full employment and
equality of employment opportunities for all.
It shall guarantee the rights of all workers to self-
organization, collective bargaining and
negotiations, and peaceful concerted activities,
including the right to strike in accordance with law.
They shall be entitled to security of tenure,
humane conditions of work, and a living wage.
( c They shall also participate In policy and decision-
making processes affecting their rights and
;
\
.
/
benefits as may be provided by law.
The State shall promote the principle of shared
responsibility between workers and employers
and the preferential use of voluntary modes In
settling disputes, Including conciliation, and shall
r '. enforce their mutual compliance therewith to foster
i, . .J'-
industrial peace.
0 The State shall regulate the relations between
workers and employers, recognizing the right of
labor to its just share in the fruits of production and
the right of enterprises to reasonable returns to
investments, and to expansion and qrowth.
vt
' . Sec 13. The State shall establish a special agency .
for disabled person for their rehabilitation, self-
. development, and self-reliance, and their
,1· integration into the mainstream of society.
v are not merely contractual, They are so impressed
E ;
Sec. 14. The State shall protect working women
lJ by providing safe and healthful working conditions,
taking into account their maternal functions, and
PAGE 3 OF 244
t ,.'
LABOR LAW
such facilities and opportunities that will enhance
their welfare and enable them to realize their full
potential in the service of the nation.
Management prerogative
See discussion in Part V.
Seven basic rights of workers guaranteed by
. the Constitution: (WHOSE-CD)
1. To participate in policy and Qecision-rnaking
processes affecting their rights and benefits as
may be provided by law
2 . .To receive a living Wage
3. To conduct ~ollective bargaining or
negotiation with management
4. To work under tlumarie conditions
5. Right to Organize
6. To enjoy .§.ecurity of tenure
7. To _!;ngage in peaceful concerted activities,
including strike in accordance with law
Rights Guaranteed by the Labor Code
the State shall afford protection to labor, promote·
, full employment, ensure equal work opportunities
regardless of sex, race or creed and regulate the·
relatjons between workers and employers. The
State shall assure the right of workers to self-
organization, collective bargaining, security of
tenure, and just and humane conditions of work.
(Labor Code, Art. 3)
The constitutional policy to provide full protection
to labor is not meant to be a sword to oppress
employers. The commitment of this Court to the
cause of labor does not prevent us from sustairling
the employer when it is in the right. (Serocetn v.
. tnterorient Marine, G.R. No. 167813, 2006)
Principle of Co-Determination
Refers to the right of workers to participate in the
policy and decision making processes directly
affecting their rights and benefits, without intruding
into matters pertaining · to management
prerogative. (PAL v. NLRC, G.R. No. 85985, 1993)
C. Articles 1700 to 1703, Civil Code
Art. 1700. The relations between capital and labor
with public interest that labor contracts must yield ·
to the common good. Therefore, such contracts
are subject to the special laws on labor unions,
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

collective bargaining, strikes and lockouts, closed

shop, wages, working conditions. hours of labor . II. ·PRE-EMPLOYMENT
. " ..
and similar subjects.
TOPIC OUTLINE UNDER THE SYLLABUS
Article 1701. Neither capital nor labor shall act
oppressively against the other, or impair the
A. Recruitment and placement of local and
interest or convenience of the public. migrant workers [l.abor Code and RA
8042, as amended by RA 10022)
Art.1702. In case of doubt, all labor legislation and
all labor contracts shall be construed in favor of the 1. Illegal recruitment and other
safety and decent living for the laborer. prohibited activities
a. Elements
Article 1703. No contract which practically b. Types of Illegal recruitment
amounts to involuntary servitude, under any guise c. Illegal recruitment vs. estete
whatsoever, shall be valid.
2. Liability of local recruitment agency
Construction in favor of labor; limitations and foreign employer
All doubts in the implementation and interpretation a. Solidary liabllity.
of the provisions of this Code, including its b. Theory of imputed knowledge
implementing rules and regulations, shall be
resolved in favor of labor. (Labor Code, Art. 4) 3. Termination of contract of migrant
worker without just or valid cause
It is construed in favor of labor if there is a doubt 4. Ban on direct hiring
as to the meaning of the legal and contractual
provrsron. If the provision is clear and a. Employment of non-resident aliens \ -

unambiguous, it must be applied in accordance . ·,.,

with its express terms. (MERALCO v. NLRC, G.R.
No. 78763, 1989)

The law also recognizes that management has

rights, which are also entitled to respect and
enforcement in the interest of fair play. (St. Luke's
v. NLRC, G.R. No. 162053, 2007)

· While labor laws should be construed liberally in 0

favor of labor, we must be able to balance this with
the equally important right of the [ employer] to due
c;
... ,.,.;

process. (Gaguiv. Dejero, G.R. No. 196036, 2013)

If doubts extst between the evidence presented by

{\
the employer and the employee, the scale of :.,J

justice must be tilted in favor of the latter.

(Dreamland Hotel Reson v. Johnson, G. R. No.
191455, 2014).

--- end of topic ---

u
()
{J
\ ,.
\ . .§
PAGE4 OF244
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

A. RECRUITMENT AND PLACEMENT OF LOCAL Private Employment Agency v. Private

AND MIGRANT WORKl:~S (LABOR CODE AND Recruitment Entity
RA 8042, AS AMEN OED BY RA 100.ll} PR VATE PRIVAll'E
EMPL YMENT RECRUITMENT
1. ILLEGAL RECRUITMENT AG NCY . E.NTITY
"Private employment 1 "Private recruitment
Worker- refers to any member of the labor force, agency" means any entity" means any
whether employed or unemployed. (Labor Code, person/ entity engaged person/association
Art. 13{a}). in the recruitment ano engaged in the
placement of workers recruitment and
Overseas Filipino - Dependents of migrant for a fee which is placement of workers,
workers and other Filipino nationals abroad who charged, directly or locally or overseas,
are In distress as mentioned in Sections 24 and 26 indirectly, from the· without charging,
of the Migrant Workers Act. (R.A. No. 8042, Sec. workers, employers, or directly· or indirectly,
3[c]) both. any fee from the
workers or
Overseas Filipino Worker - is a person who is to employers.
be engaged, is engaged or has been engaged in
-----~------+----~~~-----<
Requires a license. Requires an
( '
a remunerated activity in a state of which he or she authority.
is not a citizen or on board a vessel navigating the (Labor Code, Art. 13)
(·
foreign seas other than a government ship used
for military or non-commerclal purposes or on an Recruitment and Placement is any act · of:
installation located offshore or on the high seas; to (CETCH UP-CRAP)
be used interchangeably .with migrant worker. • ~anvassing
(R.A. No. 8042, Sec. 2[a]) • .!;.nlisting
,. ",:- • Irahsporting
'' .. · Private Emplc>yment Agency ., means any
• ~ontracting
person or entity engaged in recruitment and
• tliring
placement of workers for a fee which is charged,
• !,!tilizing, or
directly or indirectly, from the workers or
• .e_rocuring workers
employers or both, (Labor Code, Art. 13[c])
• and includes:
(} Private Recruitment Entity - means any person
.Qontract of services
Referrals
or association engaged In. the recruitment and
0 placement of workers, locally or overseas, without Advertising for employment
fromising for employment locally or
charging, directly or indirectly, any fee from the ,
(.J abroad, whether for profit or not.
workers or employees, (Labor Code, Art. 13[e])
(Labor Code, Art. 13)
0 License v. Authority
LICEN~E AUT •• Any person or entity which, in any manner, offers
or promises for a fee, employment to two or more
0 License - means a Authority - means a
persons shall be deemed engaged in recruitment
document issued by document issued by
{] the DOLE authorizing the DOLE authorizing
and placement. (Labor Code, Art. 13[b])
a person/entity to a person/association
u operate a private fee- to
charg Ing.
engage
recruitment
in
and
The number of persons dealt with is not the basis
in determining whether or not an act constitutes
recruitment and placement.
0 employment agency. placement activities
as a private
recruitment entity.

i- L
\._j

PAGE5 OF 244

L ..

·--··- -----------------------------
ATENEO CENTRAL
.BAR OPERATIONS 2019
Tho proviso about "two or more persons" merely
lays down a rule of evidence: where fee is
collected because of a promise or offer of
employment to two or more prospective workers,
the individual or entity dealing with them shall be
deemed to be engaged in the act of recruitment
and placement. The words "shall be deemed"
create that presumption. Also, profit is not
necessary to constitute recruitment. (People v.
Panis, G.R. No. L-58674-77, 1986)
Acts of referral
The act of referral, which is included in
recruitment, is "the act of passing along or
forwarding of an applicant for employment after an
initial interview of a selected applicant for
employment to a selected employer, placement
officer or bureau." (Rodolfo vs. People, G.R. No.
146964, 2006)
Promising employment
Promising employment as factory workers and
receiving money allegedly for processing papers
without authorization or license is engaging in
unlawful recruitment and placement activities. The
absence of the necessary license or authority
renders all of accused-appellant's recruitment
activities criminal. (Labor Code, Art. 13[b]) (People
VS. Saulo, GR. No. 125903, 2000)
Perfection of employment contract gives rise
to Illegal recruitment · as a guarantee on the part of the receiving country
The commencement of the employment .
· relationship must be treated separately from the
perfection of an employment contract.
The perfection of the contract, which (as a general
rule)coincides with the date of execution, occurred
when the parties agreed on the object and the
cause, and the terms and conditions. Despite the
non-deployment (which caused the non-
commencement of the employment relationship),
rights have arisen based on the perfected contract.
(C.F. Sharp v. Pioneer Insurance, G.R. No.
179469, 2012)
PAGE 6 OF 244
LABOR LAW
ILLEGAL RECRUITMENT UNDER THE LABOR
CODE (Art. 38) vs. MIGRANT WORl(ERS ACT
(Sec. 6)
Any recruitment activities, including the prohibited
practices enumerated under Art. 34 of the Labor
Code, 'IO be undertaken by non-licensees or
non-holders of authority, shall be deemed illegal
and punishable under Art. 39. (Labor Code, Art.
38)
, The Department of Labor and Employment or any
law enforcement officer may initiate complaints.
(Lab.or Code, Art. 38)
Any act of canvassing, enlisting, contracting,
transporting, utilizing, hiring, or procuring workers
and includes referring, contract services,
promising or advertising for employmer.t abroad,
whether for profit or not, when undertaken by
non-licensee or non-holder of authority
contemplated under the Labor Code. (R.A. No.
8042, Sec. 6)
Policy of Selective Deployment
The State shall allow the deployment of overseas
Filipino workers only in countries where the rights
of Filipino migrant workers are protected. ! · i.
The government recognizes any of the following . ~
I. f
for the protection of the rights of overseas Filipino
workers:
a. It has exlstlnq labor and social laws protecting
the ri9hts of workers, including rnigrant
workers;
_j~
b. It is a signatory to and/or a ratifier of
multilateral conventions, declarations or
resolutions relating to the protection of
workers, including migrant workers; and (l
c. It has concluded a bilateral agreement or v
arrangement with foe government on the
protection of the rights of overseas Filipino
Workers: Provided, That the receiving country
is taking positive, concrete measures to
(j
protect the rights of migrant workers in
furtherance of any of the guarantees under 0
subparagraphs (a), (b) and (c) hereof. (R.A.
No. 8042, Sec. 3)
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

Illegal Recruitment (Art. 38) Illegal Recruitment (Sec. 6):

Any recruitment activity including 1. Any recruitment activity committed by non-licensees I
Prohibited Acts under Art. 34 non-holders of authority; OR
committed by non-licensees or 2. Prohibited Acts (same as Art. 34 of LC) committed by any
non-holders of authority. person, whether a non-licensee, non-holder, licensee
or holder of authority.
Elements: 3. Added the following in the list of Prohibited Acts
1. That the offender has no valid . (DEMIL-RETSI): . .
license or authority required by a. Fail to actually Deploy Without valid reason;
law to enable one to lawfully b. Fail to reimburse Expenses incurred by the worker in
engage in recruitment and connection with his/her documentation and
placement of workers; and, processing for purposes of deployment, in cases
2. That the offender undertakes where the deployment does not actually take place
either any activity within the without the worker's fault
meaning .of recruitment and c. To allow a non-Filipino citizen to head or Manage a
placement defined under Article licensed recruitment/manning agency.
. . . . I
13(b), or any of the prohibited d. Grant a loan to an OFW with Interest exceeding 8%
practices enumerated under per annum, to be used for payment of legal and
Article 34. allowable placement fees and make the OFW issue
postdated Checks In relation to the said loan;
e. Impose a compulsory and exclusive arrangement
whereby an OFW is required to avail of a Loan only
from specifically designated institutions, entities or
persons;
f. Refuse to condone or renegotiate a loan incurred by
an OFW after the latter's employment contract has
been prematurely terminated through no fault of his or
her own;
g. Impose a compulsory and Exclusive arrangement
whereby an OFW is required to undergo health
examinations only from specifically designated
medical clinics, institutions, entities or persons,
0 (except in the case of a seafarer whose medical exam
cost is shouldered by the principal/ ship-owner);
() h. Impose a compulsory and exclusive arrangement
whereby an OFW is required to undergo Training,
0 seminar, instruction or schooling of any kind only from
specifically designated institutions, entities or
n.
v persons, except for recommendatory trainings
mandated by principals/ ship owners where the latter
(} shoulder the cost of such trainings;
i. For a Suspended recruitment/manning agency. to
{J engage in ar.y kind of recruitment activity lncludinq the
processing of pending workers' applications;
0 j. For a recruitment/ manning agency or a foreign
prirdpal/ employer to pass on the OFW or deduct
from his or her salary the payment of the cost of
Insurance fees, premium or other insurance related
{J charges, as provided under the compulsory worker's
insurance coverage.

PAGE 7 OF 244

. --- - - -- -- -· ----------------------------'---------,.--
 ATENEO CENTRAL
· BAR OPERATIONS 2019 LABOR LAW

A Non-Licensee I Non-Holder of
authority is any person, corporation
or entity which has not been issued a
The offender may be a non-licensee or a non-holder of
valid license or authority to engage in
authorityand commitsany of the acts of recruitment' OR
recruitment and placement by the
A licensee or holder of authority commits any' of the
Secretary of Labor, or whose license
prohibited acts under section 6, RA 8042, as amended.
or authority has been suspended,
revoked or cancelledby the POEA or
the Secretary.

,'·'
1 ·.,
t .. ·

n.. J
(_)

I-~.

\ .. ~

PAGE 8 OF244
 ATENEO CENTRAL
BAR OPERATIONS 2019
.,
a. Elements
The essential elements of illegal recruitment vary
in accordance with the following classifications:
1. Simple illegal recruitment
• Local workers
• Migrant workers
,,. -. 2. When committed by a syndicate; or
3. When committed in large scale.
Simple Illegal Recruitment for Local Workers
(Labor Code)
1. The person charged with the crirne must have
undertaken recruitment activities:
a. Defined under Art. 13 (b) or
b. Prohibited activities defined under Art.
34;and
2. The said person does not have a license or
authority to do so. (Labor Code, Art. 38)
· Profit or Lack Thereof· Immaterial
It is the lack of the necessary license or authority,
i~--"'
not the fact of payment that renders the
l
recruitment activity of the agency unlawful. (C.F.
c
Sharp vs. Espanol, G.R. No. 155903, 2007)
Accused must give the impression of ability to
send complainant abroad
· It must be shown that the accused gave
complainants the distinct impression that she had
(; the power or ability to send complainants abroad
for work such that the latter were convinced to part
(} with their money in order to be employed. (People
v. Ochoa, G.R. No. 173792, 2011)
0 2, The accused has not complied with the
Simple Illegal Recruitment for Migrant Workers
(J (R.A. No. 8042, as amended by R.A. No. 10022)
(l First type of Illegal Recruitment:
1. Person charged undertakes any recruitment
0 activity as defined in Art.13 (b) of the Labor
Code; and
2. Said person does not have a license or
authority to do so.
{J
Second type of Illegal Recruitment:
0 1. Person charged commits any of the
enumerated acts under Sec. 6 of R.A. 8042,
(J as amended by, R.A. No. 10022.
2. It is immaterial whether he is a holder or not of
l.t any license or authority.
PAGE 9 OF 244
LABOR LAW
Illegal recruitment shall mean any act of
canvassing, enlisting, contracting, transporting,
utiliz1i1g, hiring, or procuring workers and includes
referrlng, contract services, promising or
advertising for employment abroad, whether for
profit or not, when undertaken by non-licensee or
non-holder of authority contemplated under Article
13(f) of the Labor Code;
Provided, That any such non-licensee or non-
holder who, in any manner, offers or promises for
a fee employment abroad to two or more persons
, shall be deemed so engaged. (R.A. No. 8042, Sec.
6)
Illegal recruitment by a syndicate
1. The offender undertakes either any activity
within the meaning of "recruitment and
placement" defined under Art. 13(b), or any of
the prohibited practices enumerated under
Art. 34 of the Labor Code;
2. He has no valid license or authority required
by law to enable one to lawfully engage .in
recruitment and placement of workers; and
3. The illegal recruitment is committed by a
group of three (3) or more persons
conspiring or confederating with one another.
(People v. Gallo, G.R. No. 187730, 2010)
Illegal recruitment in la~ge scale
1. The accused engages in acts of recruitment
and placement of workers defined under Art.
13(b) of the Labor Code or ih any prohibited
activities under Art. 34 of the Labor Code;
guidelines issued by the Secretary Of Labor
and Employment, particularly with respect to
the securing of license or an authority to recruit
and deploy workers, either locally or overseas;
and
3. TM accused commits the unlawful acts
against three or more persons individually
or as a group.
Note:
Syndicate - count the conspirators
Largo scale - count the victims
ATENEO CENTRAL
BAR OPERATIONS 2019
Doctrines: Illegal Recruitment
Where illegal recruitment is proved but the
elements of "large scale" or "syndicate" are
absent, the accused can be convicted only of
"simple illegal recruitment". (People v. Balagan
and Avila, G.R. No. 183099, 2010)
These categories are separate or independent
categories. if there is only one complainant In
several complaints,there is no Illegal recruitment
in large scale. But where there are three
conspiringrecruiters,there is illegalrecruitmentby
a syndicate. (People v. · Fernandez, et. al., G.R.
No. 141221-36, 2002)
Appellant's acts, which were clearly described in
the lucid testimoniesof the three victims, such as
collectingfrom each of the complainantspayment
for passport, medical tests, placementfee, plane
tickets and other sundry expenses, promising
them employment abroad, contracting and
advertising for employment, constitute acts of
large scale illegal recruitment. (People v. Diaz,
G.R. No. 112175, 1996)
Receipt of payments, after the expiration of the
license, for services rendered before said
b. Prohibited Activities ·
LABORICQQE
It shall be unlawful for any individual, entity,
licensee,or holder of authority:
1. To charge or accept, directly or indirectly, any
amount greater than that specified in the
schedule of allowable fees prescribed by the
Secretary of Labor, or to make a worker pay
any amount greaterthan that actually received
by him as a loan or advance;
2. To furnish or publish any false notice or
information or document in relation to
recruitmentor employment;
3. To give any false notice,testimony,information
or document or commit any act of
misrepresentationfor the purpose of securing
a license or authorityunder this Code.
4. To induce or attempt to induce a worker
already employed to quit his employment in
order to offer him to anotherunless the transfer
is designed to liberate the worker from
~~--~~~~~~---~~~~~~~~--.L.---"
PAGE 10 OF 244
LABOR LAW
expiration does not constitute illegal recruitment.
Recruitmentrefers to the offering of inducements
to qualified personnelto enter a particdar job or
employment. The advertising, the promise of
future employmentand other come-onstook place
while the recruiterwas still licensed.The payments
)
are necessary in order to defray the expenses
entailed in any overseas contract of employment. ,\
They are intendedfor administrativeand business
expenses and for the traveling expenses of the
applicants once cleared for overseas travel.
(Aquino V. CA, G.R. No. 91896, 1991)
It is not the issuanceor signing of receiptsfor the
placement fees that makes a case for illegal
recruitment, but rather the undertaking of
recruitment activities without the necessary
license or authority. (People v. Senoron, G.R. No.
119160, 1997)
By themselves, procuring a passport, airline
tickets and foreign visa for another individual,
without more, can hardly qualify as recruitment
activities. IR· must be proved beyond reasonable
doubt. (Darvin v. CA, G.R. No. 125044, 1998)
J. , .
-,)
• ' : ·I ~
-. .
•- •
Illegal· recruitment shall likewise include the
following acts, whether committed by any person,
I I J \
\ .. ,J
whether a non-licensee, non-holder, licensee or
holder of authority (SHOW-FROG-IN-DISC)
1. .§.ubstituting or altering DOLE-approved
er-iployment contracts
2. Recruitingworkers in jobs that are !:!.armful to
public health or moralityof the Philippines
3. Becoming an Qfficer or member of the Board
of a travel agency or to be engaged directly or (";..
I ,
-.#
indirectlyin the managementof a travelagency
4. Withholdingor denying travel documents from
applicant workers before departure for
unauthorized monetary or financial
l)
considerations
5. furnishing or publishing any false notice or
information or document in relation to
recruitmentor employment
6. In case of non-deployment, failing to
Reimburseexpenses incurred by the worker in
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

oppressive terms and conditions of connection with his documentation and

employment; processing for purposes of deployment
5. , To Influence or to attempt to lntluence any 7. Qbstructing or attempting to obstruct
person or entity not to employ any worker who inspection by the Secretary of Labor or by his
has not applied for employment through his duly authorized representatives
agency; 8. Qiving any false notice, testimony, information
6. To·engage in the recruitment or placement of or document or commit any act of
" . workers in jobs harmful to public health or
morality or to the dignity of the Republic of the
misrepresentation for the purpose of securing
a license or authority under this Code
Philippines; · 9. [nduclnqor attempting to induce a worker to
7. To obstruct or attempt to obstruct inspection by quit his employment in place of another
the Secretary of Labor or by his duly authorized , UNLESS the transfer is designed to liberate the
representatives; worker from oppressive terms and conditions
8. To fail to file reports on the status of of employment
employment, placement vacancies, remittance 10. Aliowing a ,Non-Filipino citizen to head or
of foreign exchange earnings, separation from tr.anage a licensed recruitment/manning
jobs, departures and such other matters or agency
information as may be required by the ·11. Failing to actually Qeploy without valid reason
Secretary of Labor. as determined by DOLE.
9. To substitute or alter employment contracts 12. fnfluencing or attempting to influence any
approved and verified by the Department of person or entity not to employ any worker who
Labor from the time of actual signing thereof by has not applied for employment through his
"l. ) the parties up to and including the periods of agency ·,~ •c,

expiration of the same without the approval of 13. Failing to file reports oh the §.talus of
the Secretary of Labor;
10. To become an officer or member of the Board
of any corporation engaged in travel agency or
to be engaged directly or indirectly in the
management of a travel agency; and
11. To withhold or deny travel documents. from 14. s;_hargin~J or accepting, directly or indirectty,
( applicant workers before departure for
monetary or financial considerations other than
(} those authorized under this Code and its
implementing rules and regulations. (Labor
() Code, Art. 34; PERTICPM Manpower v.
Vlnuya, G.R. No. 197528, 2012)
(~- -~;s .
0 the following prohibited acts: (8-LR2A21)
£~
'v >'
{j
()
employment, placement vacancies, remittance
of foreign exchange earnings, separation from
jobs, departures and such other matters or
information as may be required by the
Secretary of Labor ·
any amount greater than that specified in the
schedule of allowable fees prescribed by the
Secretary of Labor, or to make a worker pay
any amount greater than that actually received
by him as a loan or advance
In addition to the acts enumerated above, it shall
also be unlawful for any person or entity to commit
• Grant a loan to an overseas Filipino worker with
interest exceeding eight percent (~%) per
annum, which will be used for payment of legal
and allowable placement fees and make the
migrant worker issue, either personally or
through a guarantor or accommodation party,
postdated checks in relation to the said loan;
• . Impose a compulsory and exclusive
arrangement whereby an overseas Filipino
worker is required to avail of a !,oan only from
specifically designated institutions, entities or
persons;

.i
\;.:_J
PAGE 11 OF 244
r .

\
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

• ,Befuse to condone or renegotiate a loan

incurred by an overseas Filipino worker after
the latter's employment contract has been
prematurely terminated through no fault of his
or her own;
• For a suspended recruitment/manning agency
to engage in any kind of Recruitment activity
including the processing of pendinc workers'
applications
• Impose a compulsory and exclusive
Arrangement whereby an overseas Filipino
worker is requirnd to undergo health
examinations only from specifically designated
medical clinics, institutions, entities or persons,
except in the case of a seafarer whose medical
examination cost is shouldered by the
principal/shipowner;
• Impose a compulu.ory and exclusive
Arrangement whereby an overseas Filipino
worker is required to undergo training, seminar,
instruction or schooling of any kind only from
specifically designated institutions, entities or \,. .s
persons, except for recommendatory trainings .
mandated by principals/shipowners where the
latter shoulder the cost of such trainings; and

For a recruitment/manning agency or a foreign

principal/employer to pass on the overseas Filipino _f ·:.

worker or deduct from his or her salary the payment

of the cost of Insurance fees, premium or other 1 ·j;
\. j
insurance related charges, as provided under the
compulsory worker's insurance coverage.

Differences Between Prohibited Acts: Labor Code, Art. 34 vs, Migrant Workers Act, Ser... 6
LABOR CO.OE 1, · • • · MIGRANT. WORKERS ACT ·
Illegal recruitment may only be committed by a Committed by either iicensee or non-licensee· (RA.
non-licensee (Labor Code, Art. 34) No. 8042, Sec. 6)
If the recruiter is licensed, it may commit a
prohibited activity (Labor Code, Art. 38)
11 enumerated acts 14 enumerated acts considered as illegal
recruitment, including the ff:
• Fallure to actually deploy a contracted worker
without valid reason;
• Failure to reimburse expenses incurred by the
worker in connection with his documentation
and processing for purposes of deployment, in
-,
case of non-deployment;
• To allow a non-Filipino citizen to head or
rnanaqe a licensed recruitment/manning
agency.
Plus, 7 additional prohibited acts.
'-.i-
PAGE 12 OF 244
,. .j

-- -- --···----------------------------------
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

b. Types of Illegal Recruitment c. Illegal recruitment versus estafa

Two Kinds of Illegal Recruiters .ILL~GAL

l:STAFA1 I
RECRUITMENT I
(1) Non-Licensee or Non-Holder of Authority It is ma/um prohibitum It is ma/um in se
The offender commits:
The criminal intent of The criminal Jntent is
• Any of the acts defined in Art. 13(b) of the
the accused is not imperative
Labor Code as recruitment and
necessary ·,·
.. .I placement;
Penalized under the Penalized under the
• Illegal recruitment as defined i,1 11 1, Sec.
Labor Code Revised Penal Code
6 of R.A. No. 8042, or amended; or
Limited in scope Wider in scope and
• Any of the 14 acts enumerated in Sec. 6
covers deceits
of R.A. No. 8042, as amended
whether related or not
related to recruitment
(2) Licensed Rec,uiter or Holder of Authority
activities
The offender commits any of the 14 wrongful acts
enumerated in Sec. 6 of R.A. No. 8042, as
Note: Conviction under the Labor Code for illegal
amended (Sto. Tomas v. Sa/ac, G.R. No. 152642,
recruitment does not preclude punishment under
2012)
the RPC for estafa (People v. Fernandez, G.R. No.
199211, 2014)
Kinds of Illegal Recruitment
A worker who suffers· pecuniary damage,
(a) Simpla Illegal Recruitment
regardless of amount, as a result of previous or
( Illegal recruitment committed by a person who is
\ -, simultaneous false pretense resorted to by a non-
c neither a licensee nor a holder of authority;
licensee or non-holder of authority, may complain
(b) Illegal Recruitment as Economic Sabotage of e:;tafa under Art. 315; par. 2(a) of the RPC,
Illegal recruitment when committed: aside from illegal recruitment. (People v.
l ;:., Fernandez, G.R. Nos. 141221-36, 2002)
• By a syndicate; or
• In large scale,
I -.
shall be considered an offense involving sconomlc • Estafa is committed by any person who
\. -· '.
sabotage. (R.A. No. 10022, Sec. 5[m]) defrauds another by using fictitious name,
(; or falsely pretends to possess power,
Illegal Recruitment shall be considered an offense influence, qualifications, property, credit,
involving economic sabotage If any of the following agency, business or imaginary
qualifying circumstances exist· transactions, or by means cf similar
deceits executed prior to or
....... J'·
{ ILLEGAL • . ILq:GAL -
simultaneously with the commission of the
RECRUITM~NT' 1 RECR~ITMENT
fraud. (Revised Penal Code, Ari . 315)
0 COMMITTED BY , COM 1\rreo IN
SYNDICAl:E. LARG. SCALE
• The offended party must have relied on
() Carried out by a group Committed against 3
the false pretense, fraudulent act or
of 3 or more persons or more persons
conspiring and/or individually or as a fraudulent means of the accused-
confederating with group appellant and as a result thereof, the
one another in offended party suffered damages.
carrying out any
unlawful or illegal
transaction, enterprise
or scheme falling
under illegal
recruitment

PAGE 13 OF 244

L
\, ..
ATENEO CENTRAL
BAR OPERATIONS 2019
2. Liability of Local Recruitment Agency and
Foreign Employer
Venue of Criminal Action
The complainant, may, at his option, file at the
RTC of the province or city:
• Where the offense was committed; or
• . Where the offended party resides at the
time of the commission of the offense
(R.A. No. 8042, Sec. 9)
Within 5 years from Within 20 years from
time the illegal the time the illegal
recruitment happened recruitment happened
When maximum penalty is Imposed:
• If the person illegally recruited ii, less than 18
years of age; or
• If committed by a non-licensee or non-holder
of authority (R.A. No. 8042, Sec. 7)
Local Recruitment Agency
The persons criminally liable are the principals,
accomplices and accessories. In case of juridical
persons, the officers having ownership, control,
management or direction of their business who are
responsible for the commission of the offense and
the responsible employees/agents thereof shall be
liable. (RA 8042, as amended, Section 6)
• Local Recruitment Agency is solidarily liable
with foreign principaL (/RR of the Labor Code,
Book I, Rule V, Sec. 11)
• Severance of relations between local . agent
and foreign principal does not affect liability of
local recruiter.
Where the workers themselves insisted for the
recruitment agency to send them back to their
foreign employer despite their knowledge of its
inability to pay their wages, the Supreme Court
absolved the agency from liability (Feagle
Construction Corp. v. Dorado, G.R. No. 86042,
1991)
PAGE 14 OF 244
LABOR LAW
Foreign Employer
In case of a final and executory judgement against
a foreign ernployerrprlncipal.. it shall be
automatically disqualified, without further
proceedings, from participating in the POEA
Program and from recruiting and hiring Filipino
workers until and unless it fully satisfies the
judgement award. (R.A. No. 8042, Sec. 10)
a. Solidary Liability
The liability of the principal/employer and the
recruitment/placement agency for any and all
claims under this section shall be joint and several.
This provision shall be incorporated in the contract .
for overseas employment and shall be a condition
precedent for its approval. (R.A. No. 8042, as
amended, Sec. 10)
• Even if the recruiter and the principal had
already severed their agency agreement at
the time employee was injured, the recruiter
may still be sued for a violation of the
employment contract because no notice of the
agency agreement's termination was given to
the employee.
• The obligations covenanted in the recruitment
agreement entered into by and between the.
local agent and its ~oreign principal are not t ~
coterminous with the term of such agreement '··· i
so that if either or both of the parties decide to
end the agreement, the responsibilities of
such parties towards the contracted
employees under the agreement do not at all
end, but the same extends up to and until the
expiration of the employment contracts of the.
employees recruited and employed pursuant
to the said recruitment agreement. (Catan v.
NLRC, G.R. No. 77279, 1988).
Purpose of Solidary Liability
The agency agreement with the principal even If
ended as between them, still extends up to and
until the expiration of, the employment contracts of l)
the employees recruited and employed pursuant
to the said recruitment agreement. (OSM Shipping
Phil, Inc. v. NLRC, G.R. No. 138193, 2003) I ·~
\.,;
 ATENEO CENTRAL
BAR OPERATIONS 2019
b. Theory of Imputed Knowledge
• [Thls theory means] knowledge of the agent is
knowledge of the principal. (New Life v. CA,
G.R. No. 94()71, 1992)
• For the liability of the agent to attach, this
1' ' theory states that the agent knew of and
consented to the extension of period of
employment. Otherwise, the liability of the
recruitment agency shall expire from the
termination of the worker's original contract.
(Sunace International Management v. NLRC,
G.R. No. 161757, 2006, Carpio Morales, J. as
seen in Veloso' answers to the 2011 Bar
Examination)
Posting of Cash Bond by Recruiter
• The requirement for the posting of a cash bond
{ .. - is also an indispensable requirement. By
\ .. l
posting such, the agency undertakes to
.,. ..... assume jcint and solidary liability with the
l__; employer for all claims and liabilities which
may arise in connection with the
implementation of the overseas employment
contract and to guarantee compliance with
i
' - existing Philippine labor laws and the laws of
country of employment.
· .. _ ..
r -, • The peculiar nature of overseas employment
\ .; makes It VP.ry difficult for the Filipino overseas
worker to effectively go after his foreign
(; employer for employment-related claims and,
hence, public policy dictates that the
() recruitment or placement agency in the
Phlllpplnes be made to share in the employer's
C' responsibility. (Capricorn Travel & Tours v.
CA, G.R. No. 91096, April 3, 1990)
0 upon promulgation ofR.A.10022 in ;w10, the
,.
\,)
• The surety bond is intended to insure that if the
rights of overseas workers are violated by their
employers, recourse would still be available
against the. local companies that recruited
them for the foreign principal. (Stronghold
Insurance Co. v. CA, G.R. No. 88050, 1992)
PAGE 15 OF 244
L.
--------------------~---~---
LABOR LAW
3. Termination of Contract of Migrant Worker
Without Just or Valid Cause
Under the Migrant Workers' Act
A worker dismissed from overseas employment
without just, valid or authorized cause as defined
by law or contract, is entitled to:
a. Full reimbursement of the placement fee
with interest at 12% per annum PLUS
b. Hls salary for unexpired portion of his
employment contract OR salary for 3
months for every year of the unexpired
term, WHICHEVER IS LESSER. (R.A.
No. 8042, Sec. 10)
Rule before Serrano (1995-2009): 3-month
salary rule
• The employment contract involved in the
instant case covers a two-year period but the
overseas contract worker actually worked for
only 26 days prior to his illegal dismissal.
Thus, the three months' salary rule applies .
(Flourish Maritime Shipping v. Almanzar, G.R. ,,..
No. 177948, 2008)
Rule after Serrano (2009-present): It
invalidated the 3-month salary cap clause
• Full reimbursement of the placement fee ..
with interest at 12% per annum. This decision.
held that Sec. 1 O of 8042, which limited the ·
separation pay to three months, was
unconstitutional for violating the equal
protection clause. (Serrano v. Gallc•nt, G.R.
No. 167614, 2009)
,. • Despite the fact that the clause "or for three (3)
months for every year of the unexpired term,
whichever is less" was reinstated in R.A 8042
Supreme Court reiterated its finding in
Serrano v. Gallant Maritime that limiting
wages that could be recovered by an
illegally dismissed overseas worker to
three months is both a violation of due
process and the equal protection clauses
of the Constitution. (Sameer Overseas
Placement Agency v. Cabiles, G.R 170139,
2014)
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

4. Ban on Direct hiring Employers cannot directiy hire workers for

overseas employment EXCEPT· through
General Rule: No employer tnay hire a Filipino authorized entities. (See below)
worker for overseas employment except through • The reason for the ban is to ensure full
the Boards arid entities authorized by the regulation of employment in order to avoid
Secretary of Labor. exploitation.
,,
Exceptions: Entities Authorized To Engage In Recruitment
1. Members ofthe diplomatic corps, And Placement
2. International organizations and 1. Public employment offices
3. Such other employers as may be allowed by 2. Philippine Overseas Employment
the Secretary of Labor is exempted from this ' Administration (POEA)
provision. (Labor Code, Art. 18) 3. Private recruitment entities
4. Name hirees - those individuals who are able 4. '?rivate employment agencies
to secure contracts for overseas employment 5. Shipping or manning agents or
on their own efforts and representation without representatives
the assistance or participation of any agency. 6. Such other persons or entities as may be
Their hiring, nonetheless, has to be processed authorized by the DOLE Secretary
through the POEA. (Part Ill, Rule Ill of the 7. Construction contractors
· POEA Rules Governing Overseas
Employment as amended in 2002)

.
Summary of Penalties and Prescriptive Periods
. "
. .
• ..
,,

. II
:; ... •
; ACTS. ALL CASl:S
j
I .·
. .
.
. .,;·

Imprisonment of not Life imprisonment Imprisonment of not Automatic revocation of the

less than 12 years and AND . less than 6 years and 1 license or registration . bf
1 day but not more than day but not more than the recruitment/ manning
20 years 12 years agency, I.ending
AND institutions, training
schools or medical clinic.

MAXIMUM PENAL TY If ALIEN

• if person illegally • Deportation without
recruited is less need for
than 18 years old, proceedings,
or
l}
• if committed by a
non-licensee /non-
holder of authority ~J
l)

PAGE 16 OF 244
-.»
 ATENEO CENTRAL
BAR OPERATIONS 2018
B. EMPLOYMENT OF NON-RESIDENT ALIENS
ART. 40. Employment Permit of Non-resident
Aliens. - Any alien seeking admission to the
Philippines for employment purposes and any
domestic or foreign employer who desires to
engage an alien for employment in the
r' \ Philippines shall obtain an employment permit
from the Department of Labor.
The employment permit may be issued to a
non-resident alien or to the applicant
employer after a determination of the non-
availability of a person in the Philippines who
is competent, able and willing at the time of
r application to perform the services for which
j
the alien is desired.
For an enterprise registered in preferred
areas of investments, said employment
permit may be issued upon recommendation
of the government agency charged with the.
supervision of said registered enterprise.
ART. 41. Prohibition Against Transfer of
Employment. (a) After the issuance of an
employment permit, the alien shall not
! t.
transfer to another job or change his employer
without prior approval of the Secretary of
f \ Labor.
l ..
. . .,·
(b) Any non-resident alien who shall take up
(} employment in violation of the provision of this
Title and its implementing rules and
()
~} regulations shall be punished in accordance
with the provisions of Articles 289 and 29043
( 1.
. ./ of the Labor Code .
In addition, the alien worker shall be subject
to deportation after service of his sentence.
ART. 42. Submission of List. Any employer
t) employing non-resident foreign nationals on
the effective date of this Code shall submit a
u list of such nationals to the Secretary of Labor
within thirty (30) days after . such date
(j indicating their names, citizenship, foreign
and local addresses, nature of employment
and status of stay in the country. The
Secretary of Labor shall then determine if they
(j are entitled to an employment permit.
1
\)
PAGE 17 OF 244
- - -···----------'--------------------------------'-----
LABOR LAW
C. REGULATION OF RECRUITMENT AND
PLACEMENT ACTIVITIE~
1. Suspension or Cancellation of License or
Authority
Power to suspend or cancel any license or
authority to recruit employees for overseas
employmentis concurrently vested with the POEA
and the Secretaryof Labor. (Labor Code, Art. 35)
The Secretary of Labor has the power, under Art.
35 of the Code, to apply the sanctions, as well as
the authority, conferred by Art. 36, not only to
restrict and regulate the recruitment and ·
placement activities of all agencies, but also to
promulgate rules and regulationsto carry out the
objectives and implement the provisions
governing said activities. 1
Pursuant to this rule-makinq power thus granted,
the Secretary of Labor gave the POEA on its own
initiative or upon filing of a complaint or report or
upon request for investigation by any aggrieved
person, (authority to) conduct the necessary
proceedingsfor the suspensionor cancellation of
the license or authorityof any agency or entity for
certain enumerated offenses Including:
1. The imposition or acceptance, directly or .
indirectly, of any amount of money, goods or ·,
services,or any fee or bond in excess of what
is prescribedby the Administration.
2. Any other violation of pertinent provisions of
the Labor Code and other relevant laws, rules
and regulations.
The Administrator was also given the power to
order the dismissalof the case or the suspension
of the license or authority of the respondent
agency or contractor or recommend to the
Secretary the cancellation thereof. (Eastern ·
Assurance& Surety Corp. v. Secretary of Labor,
G.R. No. L-79436-50, 1990)
Termination/ Ban On Deployment
Notwithstanding the provisions of Section 4 of
. ._ R.A. No. 8042, as amendedby R.A. No. 10022, in
pursuit of the national interest or when public
welfare so requires, the POEA Governing Board,
after' consultation with the Departmentor Foreign
Affairs, may, at any time, terminate or impose a
ATENEO CENTRAL
BAR OPERATIONS 2018
ban on the deploymert of migrant workers. (R.A.
No. 10022, Sec. 5)
Under Section 4 of R.A. No. 8042, as amended
by Section l ofR.A. No.10022, it is provided that
the State shall allow the deployment of overseas
Filipino workers only in countries where the rights
of Filipino migrant workers are protected.
The government recognizes any of the following
as a guarantee on the part of the receiving country
for the protection of the rights of overseas Filipino
workers:
(a) It has existing labor and social laws protecting
the rights of workers, including migrant
workers;
(b) It is a signatory to and/or a ratifier of
multilateral conventions, declarations or
resolutions relating to the protection of
workers, including migrant workers; and
(c) It has concluded a bilateral agreement or
arrangement with the government on the
protection of the rights of overseas Filipino
· Workers:
Provided, That the receiving country is taking
positive, concrete measures to protect the rights of
migrant workers in furtherance of any of the
guarantees under subparagraphs (a), (b) and (c)
hereof. · cases, which are administrative in character,
In the absence of a clear showing that any of the
aforementioned guarantees exists in the country of
destination of the migrant workers, no permit for
deployment shall be issued by the POEA. (R.A.
No. 8042, Sec. 4)
2. Regulatory and Visitorial Powers of the
DOLE Secretary
Regulatory & Rule-Making Powers
The Secretary of Labor shall have the power to
restrict and regulate the recruitment and
placement activities of all agencies within the
coverage of this Title and is hereby authorized to
issue orders and promulgate rules and regulations
to carry out the objectives and implement the
provisions of this Title. (Labor Code, Art. 36)
PAGE 18 OF 244
-- --··---------------------------------------
LABOR LAW
Vlsltorial Powers
The Secretary of Labor or his r:fuly authorized ·
representatives may, at any titne, inspect the
premises, books of accounts and records of any
person or entity covered by this Title, require it to
submit reports regularly on prescribed forms, and
act on violations of any provisions of this Title.
(Labor Code, Art. 37)
In Salazar vs. Achacoso, G.R. No. 81510, 1990,
the SC ruled that Art. 38 Of the LC is
unconstitutional and that the Secretary of Labor
and Employment cannot issue a warrant of arrest.
· DOLE Secretary does not have the power to issue
search warrants and warrants of arrest. ( Sa/azar
v. Achacoso, G.R. No. 81510, 1990).
3. Prohibited Activities
See above discussion on Page 10.
Jurisdiction of the POEA
Original and exclusive jurisdiction to hear and
decide:
' a. All cases, which are administrative in
character, involving or arising out of violations
.r.f rules and regulations relating to !icensing
and registration of recruitment and
employment agencies or entities
b. Disciplinary action cases and other special
involving employers, principals, contracting
partners and Filipino migrant workers (/RR of ()
R.A. no. 8042, Rule X, Sec. 6)
Outside of POEA Jurisdiction
a. Foreign Judgment - POEA has no jurisdiction
to hear and decide a claim for enforcement of a
foreign [udqment (Pacific Asia Overseas v. NLRC,
G.R. No. 76595, 1988)
<J.
b. Torts - Fall under the provisions of the Civil
Code (Mckenzie v. Cui, G.R. No. 48831, 1989)
Remittance of Foreign Exchange Earnings
It shall be mandatory for all Filipino workers
abroad to remit a portion of their foreign earninqs
to their families, dependents, and/or beneficiaries
in the country. (Labor Code, Art. 22)
Amount required to be remitted (I=. 0. No. 857) l)
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

The amount of one's salary required to be remitted '

depends on the type or nature of work Ill. LABOR STANDAROS
performed by the employee.
TOPIC OUTLINE UNDER THE SYLLABUS
Percentages of foreign exchange remittance
required from various kinds of migrant workers: A. Conditions of employment
1. Seaman or mariner - 80% of basic salary 1. coverage
2. Workers for Filipino contractors and 2. Hours of work
construction companies - 70% a. Normal hours of work;
3. Doctors, engineers, teachers, nurses and hours worked
other professional workers whose contract b. Meal periods
provide for free board and lodging - 70% c. Night-shift differential
4. All other professional workers whose d. Overtime work
employment contracts do not provide for free e. Computation of additional
board and. lodging facilities - 50% compensation (rates
5. Domestic and other service workers - 50% only); facilities vs.
6. All other workers not falling under the supplements
( . aforementioned categories - 50% 3. Weekly Rest Periods
'. ,· 7. Performing artists - 50% 4. Holidays
5. Service incentive leaves
Individuals exempted from the mandatory 6. Service Charges
remittance requirement: 7. 1:-11h month pay
1. The immediate family members, dependents
r '
or beneficiaries of migrant workers residing B. Wages
t · with the latter abroad;
2. FilipiM servicemen working within US military 1. Payment of wages
Installations; 2. Prohibitions regarding 'wages
3. Immigrants and Filipino professionals working 3. Wage distortion; concept
with the United Nations and its agencies or 4. Non-dimunitlon of benefits
other specialized bodies.
( ;
4. Missionaries actually engaged in missionary C. Leaves i
work 1. Service lncentive Leave
(J 5. All aliens granted exemption by special laws 2. Maternity Leave
and all those whose employment in the Phil. 3. Paternity Leave
0 determined by the Secretary of Labor to be 4. Solo parent leave
beneficial to national interest. 5. Leave benefits for women workers
( ): under RA 9110 or the Magna Carta
--- end of topic --- for Women and RA 9262 or the
0 Anti.Violence against VVomen and
. Children Act of 2004
CF.
\,;•
D. Special Groups of Employees
1. Women
a) Discrimination
u b) Stipulation against marriage
c) Prohibited acts
0 d) Sexual Harassment (RA 78"17) ·
2. Minors (R.A. No. 7610, as
u amended by R.A. No. 9231)
3. Kasambahay (R.A. No. 10361)
4. Homeworkers ·
5. Night workers

PAGE 19 OF 244
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

6. Apprentices and learners A. CONDITIONS OF EMPLOYMENT .

7. .Persons with Disabilities
(a) Discrimination
(b) Incentives for employers
1 . Coverage
Book Ill of the Labor Code provides the conditions
or standards of employment. These standards
apply only if an employer-employee relationship
(EER) exist.

Excluded Employees (Go-Ma-Off-FiFa-DoPe)

a. Government employees

b. Managerial employees if they meet all of

the following conditions:
(a) Their primary duty consists of the
management of the establishment in
which they are employed or of a
department or sub-division thereof.
(b) They customarily and regularly direct the
work of two or more employees therein.
(c) They have the authority to hire or fire
employees of lower rank; or their
suggestions and recommendations as to
hiring and firing and as to the promotion or
any other change of status of other
employees, are given particular weight.
(!RR Labor Code, 8ook Ill, Rwe I, Sec. 2)
i '\:.
c. Officer or members of a managerial staff if .,;,'

they perform the following duties and . / }.

; '1
responsibilities:
a. The primary duty consists o~ the
performance of work directly related to t')
management policies of their employer;
b, Customarily and regularly exercise 0
discretion and independent judgment;
and
c. (i) Regularly 'and directly assist a '£"),.
proprietor or a managerial employee v
whose primary duty consists of the
management of the establishment in
which he is employed or subdivision
thereof; or (ii) execute under general
supervision work along specialized or
technical lines requiring special training, l;
experience, or knowledge; or (iii) t -,
execute, under general supervision, 1.,,i
special assignments and tasks; and
d. Who do not devote more than 20 percent u
J '

of their hours worked in a v/ork week to

activities which are not directly and
closely related to the performance of the
~-1'
PAGE 20 OF 244

------- -----------------------------------------
 ATENEO CENTRAL
BAR OPERATIONS 2018
work described in paragraphs (1 ), (2) and
(3) above.
d, Non-agricultural Field Personnel
Non-agricultural employees who regularly
perform their duties away from the principal
place of business or branch office of the
employer and whose actual hours of work in
the field cannot be determined with
reasonable certainty) (Autobus Transport v;
Bautista, G.R. No. 1563'37, 2005)
e. Members of the fs.n'lily of the employer
who are dependent on him for support
f. Domestic Helpers
The mere fact that the househelper or
domestic servant is working within the
premises of the business of the employer and
in relation to or in connection with its business,
as in its staff houses for lts guest or even for
its officers and employees, warrants the
conclusion that such househelper or domestic
servant is and should be considered as a
regular employee of the employer and not as
a mere family househelper or domestic
servant. (Apex Mining Company v. NLRC,
G.R. No. 94951, 1991).
[ .
g. Persons in the personal service of another
h, Workers who are paid by B_esults (/RR
() Labor Code, Book Ill, Rule I, Sec. 2)
0 2. Hours of Work
(_}. Principles in Determining Hours Worked
1. All hours are hours worked which the
() employee is required to give to his employer,
regardless of whether or not such hours are
() spent in productive labor Or involve physical or
mental exertion.
r.. 2. An employee need not leave the premises of
\.)
the workplace iii order that his rest period shall
o not be counted, it being enough that he stops
working, may rest completely and may leave
0 his workplace.
3. If the work performed was necessary or it
benefited the employer, or the employee could
net abandon his work at the end of his normal
working hours because he had no
replacement, all time spent or such work shall
be considered as hours worked, if the work
PAGE 21 OF 244
LABOR LAW
was with the knowledge of his employer or
immediate supervisor.
4. The time during which an employee is inactive
by reason of interruptions in his work beyond
his control shall be considered workihg time
either if:
a. The imminence of the resumption of work
requires the employee's presence at the
place of work; or
b. The interval is too brief to be utilized
effectively and gainfully in the employee's
own interest. (/RR of Labor Code, Sec. 4,
' Book if/, Rule I)
Concldered as Compensable Hours Worked
1. All time during which an employee is required
to be on duty or to be at the employer's
premises or to be ata prescribed work place;
2. All time during which an employee is suffered
or permitted to work; (!RR Labor Cede, Book
Ill, Rule I, Sec. 3) and
3. Rest periods of short duration during working
hours, (Philippine Airlines v. NLRC, G.R. NO;····
132805, 1999).
a. Normal Hours of Wor~
General Rule: The normal hours of work of any
employee shall not exceed eight (8) hours a day.
(Labor Code, Art. 83)
Part-time work, or a day's work of less than 8
hours, is not prohibited (Legend Hotel v. Realuyo,
G.R. No. 153511, 2012)
Purpose of the Law
To protect the health of the workers.
The law is desiqned to minimize unemployment by
forcing employers,' in case where more than eight-
hour operation is necessary, to utilize different
shifts of laborers or employees working only for
eight hours each. (Mani/a Terminal Company v.
CIR, G.R. No. L-4148, 1952).
Exception to 8-Hour Law: Work Hours of
Health Personnel
Health Personnel in:
a. Cities arid municipalities with a population
of at least one million (1,000,000) or
ATENEO CENTRAL
BAR OPERATIONS 2018
b. Hospitals and clinics with a bed capacity
of at least one hundred (100) shall hold
regular office hours for eight (8) hours a
day, for five (5) days a week, exclusive of
time for meals, except where the
exigencies of the service require that such
personnel work for six (6) days or forty-
eight (48) hours (Labor Code, Art. 83)
· WORK DAY • CALEN i • • I .t
24-hour period 24-hour period
commencing from the commencing at 12
time an employee midnight and ending at
regularly starts to work 11 :59 p.m.
regardless of whether
the work is broken or
continuous.
(1) Compressed Work Week (CWW)
Department Order No. 21-90/ DOLE Advisory No.
2-09 and No. 02-04
Resorted to by the employer to prevent serious
losses due to causes 1:::eyond his control (i.e. when
there is substantial slump in demand for his goods
and services or when there is lack of raw
materials). (DOLE Explanatory Bulletin, July 23,
.1985)
Under this scheme, the number of workdays Is
reduced, but the number of work hours in a day is
increased to more than eight (8), but no overtime
pay may be claimed. Thus; a CWW scheme is an
.alternative arrangement wherein the normal
workweek is reduced to less than six (6) days but
the total number of normal work hours per week
shall remain at 48 hours. (Azucena Vol. I, gth ed.,
p. 265).
Conditions for implementation of the CWW
(DOLE Department Advisory No. 02 Series of
2004)
a. The scheme is expressly and voluntarily
supported by majority Of employees affected;
b. In firms using substances, -or operating In
conditions that are hazardous to health, a
certification is needed from an accredited
safety organization or the firm's safety
committee that work beyond eight (8) hours is
within the limits or levels of exposure set by
PAGE 22 OF 244
LABOR LAW
DOL~'s occupational safety and health
standards; arid
c. The DOLE Regional Office is duly notified.
Effects of a CWW Scheme:
a. Unless there is a more favorable practice
existing in the firm, work beyond eight (8)
hours will not be compensable by overtime
premium provided the total number of hours
worked per day shall not exceed twelve ( 12)
hours. In any case, any work performed
beyond 12 hours a day or 48 hours a week
shall M subject to overtime premium.
b. Consistent with Articles 85 of the Labor Code,
employees under a CWW scheme are entitled
to meal periods of not less than sixty (60)
minutes. Nothing herein shall impair the right
of employees to rest days as well as to holiday
pay, rest day pays &r leaves in accordance
with law or applicable collective bargaining
agreement or company practice.
c. Adoption of the CWW scheme shall in no case
result in diminution of existing benefits.
Reversion to the normal eight-hour workday
shall not constitute a diminution of benefits.
The reversion shall be considered a legitimate
exercise of management prerogative,
provided that the employer shall give the
employees prior notice of such reversion
within a reasonable period of time. / :,
Health Personnel in Hospitals and Clinics
0
Hospital and clinic personnel can start and end
work at any hour on any day but would not work
()
for more than 8 hours in a day, nor more than 40
hours in one week.
()
Hospital and clinic personnel may be scheduled to 0
work for more than 5 days or 40 hours in a week,
if they are paid overtime. (+ at least 30% regular
(.}
rate). (Labor Code, Art. 83)
(2) Power Interruptions/Brownout
l}
Brownouts not exceeding twenty (20) minutes
shall be treated as hours worked. 0
-;
Brownouts running for more than twenty (20) 0
minutes rnay not be treated as hours worked
provided that any of the following conditions are
present:
 ATENEO CENTRAL
BAR OPERATIONS 2018
a. The employees can leave their work place
or go elsewhere whether within or without
the work premises; or
b. The employees can use the time
effectively for their own interest. (Policy
Instruction No. 36, cited in Durabuilt
Recapping Plant & Co. vs. NLRG, G.R.
No. 76746, 1987)
The time during which an employee is inactive by
reason of work interruptions beyond his control is
considered working time, either if the imminence
of the resumption of work requires the employee is
presence at the place of work or if the interval is
too brief to be utilized effectively and gainfully in
the employee's own interest. (/RR Labor Code,
Sec. 4[d], Rule 1, Book Ill)
b. Meal Periods
General Rule: Meal periods are NOT
compensable. Meal periods should not be less
\... .i than 60 minutes. (Labor Code, Art. 85)
! '
Exceptions:
1. Where the lunch period or meal time is
predominantly spent for the employer's
benefit;
2. Meal periods of 1 hour are deemed
, compensable when the employee is on
t. . . : contlnuous shift (National Dev't Corp. v. CIR,
G.R. No. 15422, 1962)
3. Shortened meal period of less than 1 hour
must be compensable (/RR Labor Code, Book
0 Ill, Rule 1, Sec. 7)
(j Meal period of not less than 20 minutes in the
following cases are compensable hours worked:
0 a. Where the work is non-manual work in nature
or does not involve strenuous physical
(J exertion;
b. Where the establishment regularly operates
not less than 16 hours a day;
c. In case of actual or Impending emergencies or
(J them is urgent work to be performed on
machineries, equipment or installations to
() avoid serious loss which the employer would
otherwise suffer; and
d. Where the work is necessary to prevent
serious loss of perishable goods (/RR Labor
Code, Book Ill, Rule 1, Sec. 7)
PAGE 23 OF 244
t ..
LABOR LAW
Note: Rest periods or coffee breaks running from
5-20 minutes shall oe considered compensable
working time. (/RR Labor Code, Book Ill, Rule 1,
Sec. 7)
Note: To shorten meal time to less than 20
minutes is not allowed. If it is less than 20 minutes,
it becomes only a REST PERIOD and is
considered working time (Labor Code, Art. 84, ~ 2)
If standby is for emergency work, meal break
is part of hours worked. (Pan-American World
Airways System Philippines v. Pan-American
Employees Association G.R. No.L-16275, 1961)
Exception to the exception: Shortened meal
breaks upon the employee's request are NOT
compensable, provided that:
1. The employees voluntarily agree in writing to
a shortened meal period of 30 minutes and are
willing to waive the overtime pay for · such
shortened meal period;
2. There will be no diminution whatsoever in the.
salary and other fringe benefits of the
employees existing before the effectivity of the
shortened meal period;
3. 7"11e work of the employees does not involve
strenuous physical exertion and they are
provided with adequate "coffee breaks" in the
morning and afternoon.
4. The value of the benefits derived by the
employees from the proposed work
arrangement is equal to or commensurate with
the compensation due them for the shortened
meal period as well as the overtime pay for 3()
minutes as determined by the employees
concerned;
5. The overtime pay of the employees will
become due and demandable if ever they are
permitted or made beyond 4:30pm; and
6. The effectivity of the proposed working time
arrangement shall be of temporary duration as
determined by the Secretary of Labor (2004
awe Manual on Labor Standards).
Note: For a full one (1) hour undisturbed lunch
break, the employees can freely and effectively
use this hour not only for eating but also for their
rest and comfort. Since the employees are no
longer required to work during this t-hour lunch
break, there is no more need for them to be
.. ·- - -~--------~--------
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

compensated for this period. (Sime Darby Pilipinas
v. NLRC, G.R. No. 119205, 1998)
Waiting Time
Whether waiting time constitutes working time
depends upon the circumstances of each
particular case. The facts may show that the
. employee was engaged to wait or may show that
he waited to be engaged. The controlling factor
is whether waiting time spent In idleness Is
spent predominantly for the employer's benefit
or the employee's (Azucena Vol. l, gth ed., p.
231).
A laborer need not leave the premises of the
factory, shop or boat in order that his period of rest
shall not be counted, It being enough that he
"cease to work", may rest completely and leave or
may leave at his will the spot where he actually
stays while working, to go somewhere else,
' whether within or outside the premises of said
factory, shop or boat. If these requisites are
complied with, the period of such rest shDII not be
counted. (Luzon Stevedoring v. Luzon Marine
Department Union, G.R. No. L-9265, 1957)
Waiting time spent by an employee shall be
considered as working time if:
1. Waitir1g is an integral part of his work; or
2. The employee is required or engaged by the
employer to wait. (/RR Labor Code, Sec. 5[a},
Rule 1, Book Ill)
When Employee is Considered Working while
on call - When employee
1. Is required to remain on call in the employer's
premises or so close thereto; or ·
2. Cannot use the time effectively and g,1infuily for
his own purpose (/RR Labor Code, Sec. 5[b], Rule
1, Book Ill)

Travel Time

1
Travel that is All I · • '
• W k ,. Travel Away from Home -
Days or :. 1

Normal travel from home to work which is Time spent by an Travel that keeps an employee
not work time employee in travel as away from home overnight
part of his principal
activity, like travel
from jobsite to jobsite
during the workday

The fact that [petitioner Rada] picks up employees adopted not so much for the convenience of the
at certain specified points in l::DSA in going to the employees, but primarily for the benefit of the
project site and drops them off at the same time on employer. Since the assigned task of fetching and
his way back from the field office going home to delivering employees is indispensable· and
Mari,kina is not merely incidental to his job as a · consequently mandatory, then the time required of
driver. Said transportation arrangement had been and used by petitioner in going from his residence
PAGE 24 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

to the field office and back should be paid as teachers.(University of Pangasinan Faculty Union
overtime work. (Rada v. NLF?C, G.R. No. 96078, v. Univ. of Pangasinan, G.R. 64821-23, 1993).
1992)
c. Night Shift Differential
Sleeping Time
Night Worker:
Whether sleeping time allowed an employee will Any employed person I whose work requires
be considered as part of his working time will performance of a substantial number of hours of
depend upon the express or implied agreement of night work which exceed a specified limit. This limit
the parties. In the absence of an agreement, It will shall be fixed by the Secretary of Labor after
. depend upon the nature of the service and its consulting the workers' representatives/labor
relation to the working time. organizations and employers. (Labor Code, Att..
154, as amended by R.A. No. 10151)
When Sleeping is Considered Working Time
CONSLDERED , NOT CONSIDER.ED
WORKING TIME , W~RKING TIME Night Shift Differential, defined (RA. 10151)
If sleepihg time is If there an opportunity Definition: Every employee shall be paid a night
subject to serious for comparatively shift differential of not less than 10% of his regular
interruption, or takes uninterrupted sleep wage for each hour of work performed between
place under conditions under fairly desirable ten o'clock in the evening (10 pm) and six o'clock
substantially less conditions in the morning (6 am). (Labor Code, Art. 86)
desirable than would
be likely to exist at the Coverage:
employee's home This benefit applies to ALL employees EXCEPT:
(Azucena Vol. l, 9th ed., p. 233). (Go-FR-PMS)
1. Those ofthe government and any of its
~' '
political subdivisions, including
Lectures, Meeting, Trainings, Programs
Getleral Rule: Considered working tiine government-owned and/or controlled ·
Exception: NOT considered working time if the corporations;
following conditions are met: 2. Those of retail and service establishments
1. Attendance is outside of the employee's regularly employing not more than five (5)
regular working hours workers;
(J 2. Attendance is voluntary 3. Domestic helpers and persons in the
3. The employee does not perform any personal service of another;
productive work during ouch attendance. (!RR . 4. Managerial employees as defined in Book
Labor Code, Sec. 6, Book Ill, Rule 1) Three of this Code;
{. - )1.

0- . COMP~NSABLE
HOURS WORKED
;or
COMP NSABLE
5. Field personnel and other employees
whose time and performance
unsupervised by the employer inc!uding
is

HOUR~ WORKED those who are engaged on task or

1. Attendance in 1. Attendance in contract basis, purely commission basis,
lectures, meetings, hearings in cases filed
or those who are paid a fixed amount for
and training periods by the employee
performing work Irrespective of the time
.., t sanctioned by the 2. Participation in
v employer strikes
consumed in the performance thereof.
(/RR Labor Code, Book Ill, f?u/e II, Sec. 1)
2. Attendance in CBA
(J negotiations or
grievance meetings
u
Semestral break of teachers is compensable .
hours worked for it Is a form of interruption beyond
their control. Applies only for regular full-time

PAGE 25 OF 244
ATENEO CENTRAL
BAR OPERATIONS 2018
=
NSD (10% x regular wage/hr.) x no. ofhrs. of
work between 10 pm - 6 am
NOl'E: If work done between 10 pm and 6 am is
OT work, the NSD should be based on the OT rate.
·NOTE: Additional compensation for nighttime
work Is founded on public policy. (M1~rcury Drug v.
Dayao, G.R. No. L-30452) NSD is not waivable
except for higher and bigger benefits.
d. Overtime Work
OVERTIME PAY (OT)
Work exceeding eight hours within the worker's
24-hour workday regardless whether the work
covers 2 calendar days. Work wlthin the
employee's shift is not overtime.
Coverage:
. This benefit applies to all employees EXCEPT
(Go-Ma-Off·FIFa-DoPe):
a. Government employees
b. Managerial employees if they meet all of
· the following conditions:
(a) Their primary duty consists of the
management of the establishment in
which they are employed or of a
department or sub-division thereof.
(b) They customarily and regularly direct the
· work of two or more employees therein.
(c) They have the authority to hire or fire
employees of lower rank; or their
suggestions and recommendations as to
hiring and firing and as to the promotion or
any other change of status of other
employees, are given particular weight.
(/RR Labor Code, Book Ill, l~ule /, Sec. 2)
c. Officer or members of a managerial staff if
they perform the following duties and
responslbilltles:
a. The primary duty consists of the
performance of work directly related to
management policies of their employer;
b. Customarily and regulerly exercise
discretion and independent judgment;
and
c. (i) Regularly and directly assist a
proprietor or a managerial employee
Whose primary duty consists of the
PAGE 26 OF 244
LABOR LAW
management of the establishment in
which he is employed or subdivision
thereof; or (ii) execute under general
supervision work along specialized or
technical lines requiring special training,
experience, or kr.owledge; or (iii)
execute, under general supervision,
special assignments and tasks; and
d. Who do not devote more than 20 percent
of their hours worked in a work week to
activities which are not directly and
closely related to the performance of the
work described In paragraphs (1 ), (2) and
(3) above.
d. Non-agricultural Field Personnel
Non-agricultural employees who regularly
perform their duties away from the principal
place of business or branch office of the
employer and whose actual hours of work in
the field cannot be determined with
reasonable certainty) (Autobus Transport v.
Bautista, G.R. No. 156367, 2005)
e. Members of the Family of the employer
who are dependent on him for support ! r.
f. Domestic Helpers
The mere fact that the househelper or
domestic servant is working within the
premises of the business of the employer and
in relation to or in connection with its business,
as in its staff houses for its guest or even for
its officers and employees, warrants the
concluslon that such househelper or domestic
servant is and should be considered as a
regular employee of the employer and not as
a mere family househelper or domestic '·1,.
servant. (Apex Mining Company v. NLRC, v
G.R. No. 94951, 1991).
g. Persons in the personal service of another !"~.
1 ·.·
'-.#
h. Workers who are paid by Results (l~R
Labor Code, Book Ill, Rule I, Sec. 2)
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Overtime Pay Rates Overtime Pay Premium Pay

Additional Additional
SCENARIO • R E· compensation for compensation
'
OT ONA Regular waqe + at least work performed required by .law for
REGULAR DAY 25% thereof beyond 8 hours a day. work performed within
OT ONA Rest day or special Every employee who 8 hours on non-
HOLIDAY/SPECIAL holiday wage rate is entitled to premium working days, such as
t ' DAY/EMPLOYEES (130%) + 30% thereof. pay is likewise entitled rest days, and regular
REST DAY to the benefit of and special holidays.
OT ON A HOLIDAY Rest day & hollday overtime pay.
WHICH FALLS ON wage rate (150%) +
A REST DAY 30% thereof. Conditions to be entitled to OT pay
1. Actual rendition of OT work
NOTE: Since OT work is considered hourly, the 2. Submission of sufficient proof that said work
pay rate is computed on per hour basis. The daily was actually performed (Cagampan v. NLRC,
. ,
wage is divided by 8 to get the hourly base rate . G.R. No. 85122-24)
l
3. OT work is with the knowledge and consent of
If employee is paid on a monthly salary basis, the the employer (Azucena, 254)
daily rate is obtained by the followinq formula:
NOTE: On rest days and holidays, written
Daily Rate= monthly salary x 12 authority after office hours is required for
Total no of days considered entitlement to compensation (Global Incorporated
paid in a year v. Atienza)
( -.
It is permissible for the employer to stipulate that · Proof of Hours Worked
the employee's monthly salary constitutes Entitlement to overtime pay must first be
payment foe all the days of the month, including established by proof that said overtime work was
( rest days and holidays, where the employee's actually performed, before an employee may avail
monthly salary, when converted by the increased of said· benefit. (Lagatic v. NLRC, GR. No.
, .... '
{ divisor into its dally equivalent, would still meet 121004, 1998) .
\. .;
minimum wage. (lnterphil Laboratories Employees
Union-FFWv. lnterphil Laboratories, inc., GR. No. Burden of Proof: When an employer alleges that
(_ j;
142824, 2001) his employee works less than the normal hours of
employment as provided for in the law, . the
0 Regular Wage employer bears· the burden of provjng his
. \ Includes the cash waqe only, without deduction on allegation with clear and satisfactory evidence.
( _;:
account of facilities provided by the employer. (Prangan v. NLRC, G.R. No. 126569, 1998)
(Bisig ng Manggagawa ng Philippino Refining Co.
v. Pf'lllipine Refining Co., G.R. No. L-2776, 1981) Emergency OT Work
General Rule: Employees cannot be compelled to
(J NOTE: When the overtime work is performed on render overtime work against their will.
the employee's rest day or on special days or
regular holidays (Labor Code, Arts. 93-94), the Exceptions: (P2W21M)
,{ t premium pay must be included in the computation 1. When the country is at war or when any
\.J of overtime pay (Bureau of Working Conditions, other national or local emergency has
Handbook on Worker's Statutory Monetary been declared by Congress or the Chief
0 Benefits, p. 19, 2006) Executive;
, 2. · When overtime work is necessary to
prevent loss of life or property, or in case
of imminent danger to public safety due to
actual or impendinq emergency in the
t .;. locality caused by serious accident, fire,
~ .• .r

PAGE 27 OF 244

t.,
ATENEO CENTRAL
BAR OPERATIONS 2018
floods, typhoons, earthquake, epidemic or
other disaster or calamities;
3. Whan 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
causes of similar nature;
4. When the work is necessary to prevent
loss or damage to perishable goods;
5. When the completion or continuation of
work started before the 8th hour is
necessary to prevent serious obstruction
or prejudice to the business or operations
of the employer; or
6. When overtime work is necessary to avail
of favorable weather or environmental
conditions Where performance or quality
of work is dependent thereon (/RR Labor
Code, Book Ill, Rule I, Sec. 10)
Note: This is an exclusive list. (/RR Labor Code,
Book Ill, Rule I, Sec. 10)
Undertlme NOT offset by .OT
Offsetting of undertlmc hours against the OT hours
whether on the same or any other day is prohibited
by law. (Labor Code; Art. 88)
Overtime pay does not preclude ;nig.ht shift
differential pay
When the tour of duty of a laborer falls at nighttime
[between 1 O:OOpm and 6:00am], the receipt of
overtime pay will not preclude the right to night
differential pay. The latter is payment for work
done during the night while the other is payment
for the excess of the regular eight-hour work.
(Naric v. Naric Workers Union, G.F?. No. 12075,
1959)
Waiver of overtime pay
Right to OT pay cannot be waived. But when the
alleged waiver of OT pay is in consideration of
benefits and privileges, which may even exceed
the OT pay, the waiver may be permitted. (Bisig
Manggagawa sa Tryco v. NLRC, GR. No. 151309,
2008)
. In lnterlranz Container Lines, Inc. v. Bautista,
(G.R. No. 187693, 2010), the Court held that an
employee may not sweepingly claim that overtime
work was performed and consequent payment for
such work is compensable absent any evidence
that overtime work was indeed performed
PAGE 28 OF 244
LABOR LAW
considering that a pre-approved overtime
schedule and daily time record is required before
overtime pay can be claimed.
While as a general rule, the parties may enter into
any kind of stipulation in a contract and the same
shall be considered as the law between them,
however, it must be emphasized that a labor
contract is not an ordinary contract since it is
impressed with public interest. Thus, the parties
are prohibited to enter into any stipulation which
may result in the reduction of any employee
benefits. (Labor Code, Art. 100; Republic Planters
Bank v. NLRC, G.R. 117460, 1997)
The employer and the employee are not prohibited
under the law to enter into an agreement for the
increase of whatever benefit being mandated by
law for the simple reason that any" such increase
certainly redounds to the benefit of the employee.
Thus, the employer and the employee may legal!y
and validly agree to increase the minimum
percentage provided for night differential pay,
-. overtime pay, and premium pay. (Repµblic
' Planters Bank v. NLRC, G.R. 117460, 1997) ·
NoM: Compressed work week is an exception to
OT (DOLE Advisory No. 2-04)
Work Hours of Seamen
Seamen are required to stay on board of their
vessels by the very nature of their duties, and it is
for this reason that, in addition to their regular
()
compensation, they are given free living quarters
to be on board. It could not have been the purpose
of the law to require their employers to pay them
overtime pay even when they ate not actually
..
'-!>,
~ .... f'
working. The correct criterion in determining
whether sailors are entitled to overtime pay is
whether they actually rendered service in excess
t
I\i_.,r.'•
of said number of hours. (Cagampan v. NLRC,
G.R. No. 85122-24, 1991)
Composit13 or package pay Is not per se illegal I ;,
Composite or "package pay" or "all-inclusive \j
salary" is an arrangement where the employee's
salary includes the overtime pay. 'The overtime
(j
pay is "built-in" (Trans-Asia Phils. Employees
Association v. NLRC, G.R. No. 118289, 1999) 0
'·...._;: .
'!';,
~-... i
• t'.
u
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Two conditions for validity of such arrangement: e. Computation of additional compensation

1) There is a clear written arrangement knowingly
and freely entered by the employee; and
2) The mathematical result shows that the agreed
legal wage rate and the overtime pay, computed
separately, are equal to or higher than the
; ' separate amounts legally due (Damasco v. NLRC,
G.R. No. 1 ·J 5755, 2000)
Synthesis: Overtime Rules
1) An employer cannot compel ah employee to
work overtime
Exception: En'lergency overtime work (Labor
Code, Art. 89)
{rates only); facilities vs. supplements
Facilities versus supplements
(a) Facilities
Articles or services for the benefit of the employee
· or his family but shall not include tools of the trade
or articles or ; may be deducted from the
employees' wages.
Acceptance of Facilities
In order that the cost of facilities furnished by the
employer rnay be charged against an employee,
the employee's acceptance of such facllttles.must
be voluntary.

2) Additional compensation is demandable only if Requirements for deducting value of facilities:

the employer had knowledge and consented to the 1. Proof must be shown that such facilities are
... overtime work rendered by the employee customarily furnished by the trade
\ 2. The provision of deductible facilities must be
.,· .
.
\._ _;
Exception: Express approval by a superior NOT
a requisite to make overtime compensable:
voluntarily accepted in writing by the
employee
1. If the work performed is necessary, or that it 3. The facilities must be charged at fair and
( '
benefited the company; or reasonable value. (SLL International Cable
2. That the employee could not abandon his work Specialists v. NLRC, G.R. No. 172161, 2011).
at the end of his eight-hour work because
there was no substitute ready to take his place Note: As regards meals and snacks, the employer
(Manila Railroad Co. v. CIR, G.R. No. L-4614, may deduct from the wages not more than 70% of
1952) the value of ti 1e meals and snacks enjoyed by the
{ :: employees, provided that such deduction is
NOTE: The claim for overtime is not justified authorized in writing by the employees.
. {"·,
' il in the absence of a written authority to render
overtime after office hours during Sunday's The remaining 30% of the value has to be
0 and holidays (Global Incorporate v. Atienza, subsidized by the employer. (/RR Labor Code,
Sec. 1, Rule VII-A, Book Ill)
G.R. No. L-51612, 1986)
(.... .Fl
3) Compensation for work rendered in excess of (b) Supplements
0 the 8 normal working hours a day The benefit or privilege given to the employee which
constitutes an extra remuneration over and above
1. For ordinary days, additional 25% of the
( i basic hour1yrate · his basic or ordinary earning or wage, is supplement.
J
2. For rest day/special day/holiday, additional Thus, free meals supplied by the ship operator to
{' ·, crew members, out of necessity, cannot be
\_i 30% of the basic hourly rate
considered as facilities but supplements which could
4) A given day is considered an ordinary day, not be reduced having been given not as part of
unless it is a rest day wages but as a necessary matter in the maintenance
(.) of the health and efficiency of the crew personnel
5) Undertime does not offset overtime (Labor during the voyage. (States Marine <;;orporationand
Code, Art. 88) Royal Line, Inc. v. Cebu Seamen's Association, lnc.,
G.R. No. L-12444, 1963).
\)

... .,
i, i

PAGE 29 OF 244
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Criterion: In determining whether a privilege is a 3. t:mployee's preference based on religious

facility, the criterion is not so much its kind but its grounds
PURPOSE (Mil/ares v NLRC & PICOP, G. R. no.
122827, 1999) Preference of employee - The preference of the
employee as to his weekly day of rest shall be
respected by the employer lf the same is based on
religious wounds. (Labor Code, Art. 91)
Necessary items of Extra remuneration or
expense, articles, or special privileges/ The employee shall make known his preference
services benefits/ articles or to the employer in writing at least seven (7) days
services I tools of the before the desired effectivity of the initial rest day
trade so preferred. (/RR Labor Code, Sec. 4, Rule Ill,
Book Ill)
For the benefit of the For the benefit or
employee and his convenience of the Exception: Where, the choice of the employee as
family; for their employer to his rest day based on religious grounds will
existence and inevitably result in serious prejudice or obstruction
subsistence to the operations of the undertaking and the ·,.
employer cannot normally be expected to resort to
Part of the wage Independent of the other remedial measures, the employer may
wage schedule the weekly rest day of his choice for
Deductible from the Not wage deductible at least two (2) days in a month. (/RR Labor
·,.,,,
wage Code, Sec. 4, Rule Ill, Book Ill)

Rest Periods . Schedule of Rest Day

a. Where the weekly rest is given to all
3. Weekly Rest Periods employees simultaneously - the employer
shall make known such rest period by means
I ,··
Applies to all employers whether operating. for of a written notice posted conspicuously in the
profit or not, including public utilities operated by work place at least one week before it
private persons becomes effective
b. Where the rest period is not granted to all ()
It is the duty of every employer, whether operating employees simultaneously and collectively -
for profit or not, including public utilities operated the employer shall make known to the
by private persons, to provicie each of his employees their respective schedules of
employees a rest period of not less than 24 weekly rest through written · notices posted
consecutive hours for every 6 normal work days. conspicuously in the work place at least one
(Labor Code, Art. 91) week before they become effective

Business on Sundays/Holidays
establishments and enterprises may operate or
All Employer May Require Work on Rest Day ( l
\j'
.
General Rule: The employer may not require the
open for business on Sundays and holidays employees to work on a rest day.
provided that the employees are given the weekly
rest day and the benefits as provided. Exceptions: (UAAP FAN)
1. In case of ,!!rgent work to be performed on
Who Determines Weekly Rest Days .: machineries, equipment or installations to
The . employer determines and schedules the avoid serious loss which the employer would
l)
weekly rest period subject to the following: otherwise suffer
1. Collective Bargaining Agreement; 2. In case of Actual or impending 0
2. Rules and regulations issued by the Secretary emergencies caused by serious accident,
of Labor; and fire, flood, typhoon, earthquake, epidemic or
other disaster or calamity, to prevent loss of
L]
PAGE 30 OF 244

. ···--
'
-------------------------------
 ATENEO CENTRAL
BAR OPERATIONS 2018
life or property, cir in cases of force maieure or
imminent danger to public safety
3. In the event of Abnormal pressure of work
due to special circumstances, where the
employer cannot Ordinarily be expected to
resort to other measures
4. To prevent serious loss of ferishable goods
5. Where the Nature of the work is such that the
employees have to work continuously for 7
days In a week or more, as in the case of the
crew members of a vessel to complete a
voyage and in other similar cases (!RR Labor
Code, Sec. 6, Rule Ill, Book Ill)
6. Under other Analogous or similar
circumstances
7. Where nature of work requires continuous
I
t operations and the stoppage of work may
result· in irreparable injury or loss to the
employer (Labor Code, Art. 92)
/ ....
\
Other than the above circumstances, no employee
shall be required against his will to work on his
scheduled rest day.
{ ..
\. When an employee volunteers to work on his rest
day under other circumstances, he shall express
such desire in writing, subject to payment of
additional compensation.
An employee shall be entitled additional
compensation for work performed on a Sunday
only when it is his established rest day.
The failure to work during an employer's rest day
-, Benefits, Bureau of Working Conditions, p. 12,
does not justify the disciplinary sanction of outright
dismissal from employment as such is so severe a
(1__ j
consequence, moreso when justifiable grounds
exist for said failure (Remerco Garments
Manufactuing v. Minister of Labor, G.R. No; L-
56176-77, J985)
( \
"-.4
r, Employees NOT covered
\.) Employees excepted under Article 82 of the
Labor Code are, generally, not covered by the
{) rule on additional compensation.
0 Remuneration of employee working on a rest
day - REGULAR REMUNERATION (100%) +
PREMIUM PAY (additional sum of at least 30% of
the regular remuneration)
PAGE 31 OF 244
\_,...-
LABOR LAW
Note: There can be no valid waiver of
compensation for work done oh a rest day or
holiday.
Synthesis of the Rules .J
1. Rest day of not less than 24 consecutive hours
after 6 consecutive days of work.
2. No work, no pay principle applies
3. If an employee works on his designated rest
day, he is entitled to a premium pay.
4. Premium pay is additional 30% of the basic
pay.
5. Employer selects the rest day of his
employees
6. However, employer must consider the
religious reasons for the choice of a rest day.
7. When the choice of the employee as to his rest
day based on religious grounds will inevitably
result in serious prejudice or obstruction to the
operations and the employer cannot normally
be expected to resort to other measures, the
employer may so schedule the weekly rest day ·
of his choice for at least two days in a month.
(!RR Labor Code, Sec. 4, Book Ill, Rule Ill)
4. Hblldays
Holiday Pay: Coverage; Exclusions
Right to Holiday Pay
Holiday pay refers to the payment of the regular
daily wage for any unworked regular holiday.
(Handbook on Workers' Statutory Monetary
2016)
·,
Coverage:
General Rule: Applies to ALL employees.
Exceptions:
1. Those of the government and sny of the
political subdivision, including
government-owned and controlled
corporation;
2. Those of retail and service establishments
regularly employing less than ten (10)
workers;
3. Domestic helpers and persons in the.
personal service of another;
4. Managerial employees as defined in Book
Three of the Code;
5. Field personnel and other employees
whose time and performance · is
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

unsupervised by the employer including Muslims and Christians working within the
those who are engeged on task or Muslim areas may not report for work on the
contract basis, · purely commission basis, days designated by law as Muslim Holidays.
or those who are paid a fixed amount for (SMC v. CA, G.R. No. 146775, January 30, 2002).
performing work irrespective of the time
consumed in the performance thereof.
Successive Regular Holidays
(/RR Labor Code, Sec. 1, Rule IV, Book
Where there are 2 successive regular holidays,
Ill)
like Holy Thursday and Good Friday, an employee
Regular Holidays may not be paid for both holidays if he absents
1. New Year's Day - Jan. 1 , himself · from work on the day immediately
2. Maundy Thursday - Movable Date preceding the first holiday, unless he works on the
3. Good Friday - Movable Date first holiday, in which case he Is entitled to his
4. Araw ng Kagitingan - April 9 holiday pay on the second holiday.
5. Labor Day - May 1
6. Independence Day - June 12 Double Holiday
7. Nat'! Heroes Day - Last Mon. of Aug. 1. If unworked - employee entitled to 200% of
8. Bonifacio Day - Nov. 30 basic wage, provided he was present or on
9. Eid al Fit'r - Movable Date leave with pay on the praceding work day
10. Eid al Adha -- Movable Date 2. If worked - employee entitled to 300% of basic
11. Christmas Day - Dec. 25 wage. Only an employee who works on the day
12. Rizal Day -- Dec. 30 immediately preceding or after a regular
holiday shall be entitled to the holiday pay. A
Special Days paid legal holiday occurring during the
1. Ninoy Aquino Day - August 2·1 scheduled vacation leave will result in holiday
2. All Saints' Day - l'Jov. 1 payment in addition to normal vacation pay but
3. Last Day of the Year - Dec. 31 will not entitle the employee to another vacation
4. Special Non-Working Days leave. (Asian Transmission v. CA, GR No.
5. Special Public Holidays 144664, March 15, 2004)
6. Special National Holiday
Holiday-Sunday
Muslim Holidays A legal holiday falling on a Sunday creates no legal
obligation for the employer to pay extra, aside from
General Rule: Muslim holidays are observed only
the usual holiday pay, to its monthly-paid
()
in specified areas
1. Amun Jadid (New Year) employees.
2. Mau/Id un-/\labi (Birthday of the Prophet
Muhammad) In cases temporary cessation of work
3. Lailatul lsra Wal Miraj (Nocturnal Journey and Regular holidays falling within this period are
compensable (i.e. yearly inventory, repair or
the Ascenclon of the Prophet Muhammad)
cleaning of machineries or equipment, etc).
()
Exception: Eid al Fit'r and Eid ul Adha
(Celebrated nationwide) However, in the case of1a regular holiday during
the cessation of operations due to business
Muslim employees working outside of the reverses as authorized by the Secretary of Labor,
specified areas shall be excused from reporting for the employer may not pay the regular holidays
work during the observance of the Muslim holidays during this period. \j
as recognized by law, without diminution of salary
or wages during the period. In cases of periodic and temporary closures, the l)
Omnibus Rules Implementing tile Labor Code
Considering that all private corporations, offices, Book 3 Rule IV Section 7provides that in cases 0
agencies, arid entities or establishments operation of temporary or periodic shutdown and temporary
within the designated Muslim provinces and cities cessation of work of an establishment, as when a ()
are required to observe Muslim holidays, both yearly inventory or when the repair of cleaning

PAGE 32 OF 244
\, __ ;r
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

machines and equipment is undertaken, the minimum wage shall not be less than the statutory
regular holidays falling within the period shall be minimum wage multiplied by 365 days divided by
compensated. twelve," arid to pay that salary "for all days in the
month whether worked or not," and "irrespective of
Teachers, Pieceworkers, Takay, Seasonal the number of working days therein." (Wellington
Workers, Seafarers v. Trajano, GR No. 114698, 1995)

Holiday Pay of Certain Employees: Divisors

. 1. Private School teachers including faculty
members of college and universities - may
J.
· not be paid for the regular holidays during
semestral vacations. Paid for the regular
holidays during Christmas· vacation (Jose
Rizal College v, NLRC & NA TOW, G.R. No. L-
65428, 1987)
2. Employee paid by results (payment on
piece-work) - holiday pay shall not be less
than his average daily earnings for the last 7
actual working days preceding the regular
holiday; Provided, However, that in no case
shall the holiday pay be less than the
applicable statutory minimum wage rate
l_;: 3. Seafarers - any hours of work or duty
including hours of watch keeping performed
on designated rest days and holidays shall be
paid rest day or holiday
4. Seasonal workers - may not be paid the
required holiday pay during off-season when
they are not at work
{ . 5. Workers without regular working days -
t . ;: entitled tothe benefits, under item d, Section
8, Rule IV of the Omnibus Rules Implementing
the Labor Code.
The divisor assumes an important role in
determinlnq whether or not holiday pay is already
included in the monthly paid employee's salary
and ir. the computation of his daily rate. (Union of
Filipro Empt. v. Vivar, Jr., G.R. No. 79255, 1~92)
The divisor used in arriving at an employee's daily
rate for the purpose of computing salary-related
benefits is 261. From thl!: 365 days in a year, we
deduct 104 rest days which gives a total of 261
days. Now, if 261 days is the number of working
days of the employees then, there is a disputable
presumption that the employees are paid their
holiday pay. (Producer's Bank v. NLRC, G.R.
No.100701, 2001)
The 251 working days divisor is the result of
subtracting all Saturdays, Sundays and the ten
(10) legal holidays from the total number of
calendar days in a year. If the employees are
already paid for all non-working days, the divisor
should be 365 and not 251. (Chartered Bank v. ·
Opie, GR No. L-44717, 1985)

() Holiday pay is a legislated benefit enacted as part

. i of the Constitutional imperative that the State shall
(. :I afford protection to labor. Its purpose is not merely
;., "to prevent diminution of the monthly income of the
v workers on account of work interruptions. In other
words, although the worker is forced to take a rest, .
() he earns what he should earn, that is, his holiday
pay." (RFM Corporation v. Kasapian, GR No.
162324, 2009)

(J There is no provision of law requmnq any c-

employer to make such adjustments in the monthly
(J salary rate set by him to take account of legal
holidays falling on Sundays in a given year, or,
contrary to the legal provisions bearing on the
point, otherwise to reckon a year at more than 365
.._,,
i-., :.
days. What the law requires of employers opting
to pay by the month is to assure that "the monthly

PAGE 33 OF 244

{
·,
\. _ r

·-------------------------------------
ATENEO CENTRAL
BAR OPERATIONS 2018 · LABOR LAW

NO PAY, unless there is a 5. Those already enjoying this benefit;

favorable company policy, 6. Those enjoying vacation leave with pay of at
Unworked practice or CBA granting least five (5) days; and
payment of wages on special 7. Those employed in establishments regularly
days even if uhworked employing less than ten (10) employees. (/RR
Labor Code, Sec. 1, Rule V, Book Ill)

Meaning of "at least 1 year of service"

Service for not less than 12 months, whether
continuous or broken reckoned from the date the
employee started working, including authorized
absences and paid regular holidays unless the
working days in the establishment as a matter of
practice or policy, or that provided in t~e
employment contract is less than 12 months, in
which case said period shall be considered as one
year (Integrated Contractor and Plumbing Works
v. NLRC, G.R. No. 152427, 2005)

5. Service incentive leaves Usage/Conversion to Cash

General Rule: Commutable to its money
Right To Service Incentive Leave
, equivalent if not used or exhausted at the end of
Definition: Every employee who has rendered at
the year. (Fernandez v. NLRC, G.R. No. 105982,
least 1 year of service shall be entitled to a yearly
1998)
service incentive leave of 5 days with pay. (Labor
Code, Art. 95) ~
Note: The basis for the computation is the salary (

at the date of commutation/conversion of the SIL.

Coverage:
This benefit applies to all employees, EXCEPT:
Exception: Under the Kasambahay Law, a
1 .. Government employees, whether employed
domestic worker who has rendered at least one (1)
by the National Government or any of its
. year of service shall be entitled to an . annual
political subdivisions, including those
service incentive leave of five (5) days with pay,
employed in government-owned and/or
provided that any unused portion of said annual
controlled corporations with original charters
leave shall NOT be cumulative or carried over to
or created under special laws;
the succeeding years. Unused leaves shall NOt
2. House helpers and persons in the personal .......
be convertible to cash. (R.A. No. 10361, Sec. 29)
service of another; i j
3. Managerial employees, if they meet all of the
Illegal Dismissal
following conditions.
An employee who is illegally dismissed is entitled
3.1. Their primary duty Is to manaqe the
to service incentive leave benefits computed 1
establishment in which they are
year from the date she started working un_til the
employed or of a department or
date of her actual reinstatement. (tmoutkto v.
subdivision thereof;
NLRC, GR.. No. 114734, 2000)
3.2. They customarily and regularly direct the
work of two or more employees therein;
Prescription of Claim for SIL
3.3. They have the authority to hire or fire
Art. 306 is not a prescription of a period of time for
other employees of lower rank; or their
the computation of money claims but is a tJ
suggestions and recommendations as to
hiring, firing, and promotion, or any other
prescription of filing an action upon monetary .
claims from the time the cause of action accrued.
('v.....}
change of status of other employees are
The employee may use his SIL benefits as leave .' ~
given particular weight. l ...)
days or he may collect its monetary value. To. limit
4. Field personnel and those whose time and
performance is unsupervised by the employer;
PAGE 34 OF 244

I 1
u
 ATENEO CENTRAL
BAR OPERATIONS 20~8 ' LABOR LAW

the award to 3 years is to unduly restrict such right. charges such as hotels, restaurants, lodging
(Fernandez v. NLRC, G.R. No. 105892, 1998) · houses, night clubs, cocktail lounge, massage
clinics, bars, casinos and gambling houses, and
The cause . of action of an entitled employee to similar enterprises, including those entities
claim his service incentive leave pay accrues from operating primarily as private subsidiaries of the
the moment the employer refuses to remunerate Government. (Labor Code, Art. 96)
. its monetary equivalent if the employee did not
make use of said leave credits but instead chose Coverage
to avail of its commutation. Accordingly, if the All employees of covered employers, regardless of
employee wishes to accumulate his leave credits their positions, designations or employment
and opts for its commutation upon his resignation status, and irrespective of the method by which
or separation from employment, his cause of their wages are paid
action to claim the whole amount of his
accumulated service incentive leave shall arise EXCEPT to managerial employees
when the employer fails to pay such amount at the
time of his resiqnatlon or separation from Service Charge different from Tip
employment. (Autobi.Js Transport System Inc. v. Tip, not normally part of the salary, it being given
Bautista, G.R. No. 156367, 2005) voluntarily by the customer; Service charges ate
considered part of the cost of the food, goods, or
Vacation Leave (VL) I Sick Leave (SL) services ordered by the customers.
Not required by law and depends on voluntary
employer policy (management prerogative) or Distribution
collective bargaining. (see Sugue v. Trimpuh a. 85% distributed equally among the coveredz s.
International [Ph/ls], G.R. No. 164804, 2009) employees
b. 15% for the disposition by management to
.f i It can be waived, as the VL/SL may be considered answer for losses and breakages and
a concession or act of grace of the employer. distribution to managerial employees at the
discretion of the management · in the latter
• • • IONS case
NSD Holiday SIL c. Distributed and paid to the employees not less ·
Pay than once every 2 weeks or twice a month at
,,,.. ·~:, Gov't x x x intervals not exceeding 16 days
l ..r employees d. Supervisors Share in the 15%. LC speaks of
Retail/ Service 5 and 9 and 9 and below "management," and not "managerial
Establishments below below ( establishments employees."
in general) ~
Domestic x x x Abolition and Integration
Workers In case the service charge is abolished, the share
0 Managerial x x x of the covered employees shall be integrated into
Employees their wages. (Labor Code, Art. 96)
() Field x x x
Personnel The basis of the amount to be integrated shall be
the average monthly share of each employee for
· 6. Service Charges the past 12 months immediately preceding the
abolition of withdrawal of the charges. (/RR Labor
Definition: Code, Sec. 5, Rule VI, Book 3)
0 Service charges are considered part of the cost of
the food, goods, or services ordered by the
customers.

Establishments
Applies only to establishments collecting service
PAGE 35 OF 244

'
ATENEO CENTRAL
BAR OPERATIONS 2018
7. 13th Month Pay
Governing laws
P.O. No. 851 (The 131h-month Pay Law) and the
Revised Guidel:nes on the Implementation of the
13th Month Pay Law
a. Coverage:
All employers are required to pay all their rank-
and-file employees, a 13th month pay not later
than December 24 of every year, provided that
they have worked for at least 1 month during a
calendar year.
b. Exempted employers:
a. Government and any of its political
subdivisions, induding GOCCs, except those
corporations operating essentially as private
subsidiaries of the Government;
b. Employers already paying their employees
13th month pay or more in a calendar year or
its equivalent at the time of issuance of PD 851
• "Its equivalent" - includes Christmas
bonus, mid-year bonus, cash bonuses
and other payments amounting to not less
than 1 /12 of the basic salary but shall not
include cash and stock dividends, COLA
and all other allowances regularly enjoyed
by the employee as well as non-monetary
benefits.
c. Employers of household helpers and persons
in the personal service of another in relation to
such workers
d. Employers of those who are paid on
commission, boundary, or task basis, and
those who are paid a fixed amount for
performance of a specific work, irrespective of
the time consumed in the performance thereof
Exception: where the workers are paid on a
piece-rate basis, in which case the employer
· shall grant the required 13th month pay to
such workers.
• Piece Rate - employees who are paid a
standard amount for every piece or unit of
work produced that is more or less
regularly replicated, without regard to the
time spent in producing the same.
Computation of 13th month pay
13th Month Pay= 1/12th of the basic salary of an
employee within a calendar year.
PAGE 36 OF 244
---- --·· --· --------------------------------
LABOR LAW
Basic Salary
INCLUDES:
All remunerations or earnings paid by an employer
to an employee for services rendered
DOES NOT INCLUDE:
1. Costof living allowances (COLA), 1
2. Profit-sharing payments and
3. All allowances and monetary benefits (e.g:
unused VL and sick leave credits, OT
premium, night differential and holiday pay)
which are not considered or integrated as part
of the regular or basic salary of the employee.
However, the above Should be included in the
computation if by individual or collective
agreement, company practice or policy.
Time of Payment .
The thirteenth-month pay shall be paid not later ,·
than December 24 of every year. An employer,
however, may give to his or her employees one-
half (1 /2) of the thirteenth-month pay before the
opening of the regular school year and the
remaining half on or before December 24 of every
year.
The frequency of payment of this monetary benefit
may be the subject of an agreement between the
employer and the recognized/collective bargaining
agent of the employees.
13th Month Pay for Certain Types of
-, Employees
1. Employees paid by results - entitled to 13th
month pay
2. those with Multi pie Employers- entitled to the
13th month pay from all their private
employers regardless of their total earnings
from each or all of their employers
3. Private School Teachers - entitled regardless
of the number of months they teach or are paid r·.j,'-
within a year, if they have rendered service for
at least 1 month within a year.
(j
13th Month Pay of Re£igned or Separated
Employee u
Employee is entitled to the benefit in proportion to
fl
the length of time he worked during the year, \J
reckoned from the time he started working during
the calendar year up to the time of his resignation (I
or termination from the service. Can be demanded
L)
.... >
 ATENEO CENTRAL
BAR OPERATIONS 2018
---------------------------·------~----------~--~~---~~------------~---
by the employee upon the cessation of EER. In· principle, where these earnings and
Non-inclusion in Regular Wage
Benefit need not be credited as part of regular
wage of employees for purposes of determining
OT pay and premium pays, fringe benefits as well
as contributions to the state insurance fund, Social
Security, Medicare, and private retirement plans.
c. Nature of 13th month pay
All employers are hereby required to pay all their
employees recelvlnq a basic salary of not more
than P1 ,000 a month, regardless of the nature of
their employment, a 13th~month pay not later than
December 24 of every year. (P.O. No. 851, Sec. 1)
The payment Of a thirteenth-month pay is a
statutory grant, and compliance therewith is
mandatory. The benefit is deemed written in every
CBA.
Food and other material things are not substitute
for 13th month pay.
Proportionate 13th month pay accrues to
employees who worked only for a period of less
than twelve months in a given year.
Note: 131h month pay is a non-strike able issue.
( ,
\ ... :' . d. Commissions vis-a-vis 13th month pay
~ ", . If the commissions may be properly considered
I ;;
'.,)' part of the basic salary-' included in computing the
13th month pay
()
If the commissions are not part of basic salary -
() excluded.
In Boie~Takeda_ Chemicals v. Hon. Laserna (GR
No. 92174, 1993) we note that productivity
0 bonuses are generally tied to the productivity, or
capacity for revenue production, of a corporation;
n
v such bonuses closely resemble profit-sharing
payments and have no clear director necessary
(J relation to the amount of work actually done by
each individual employee. More generally, a
0 bonus is an amount granted and paid ex gratia to
the employee; its payment constitutes an act of
t),
v enlightened genetosity and self-interest on the
part of the employer, rather than as a demandable
or enforceable obligation.
PAGE 37 OF 244
r .
'
L___~-~~----~----------------~~----------------------------------------~---------------------'---------
LABOR LAW
remuneration are closely akin to fringe benefits,
overtime pay or profit-sharing payments, they are
properly excluded in computing the 13th month
pay. However, sales commissions which are
effectively · an integral portion of the basic salary
structure of an employee, shall be included in
determining his 13th month pay. (Philippine
Duplicators v. NLRC, GR No. 110068, 1995)
;.. e. CBA vis-a-vis 131h month pay
Employers who are already paying their
emp'oyees a 131h month pay "or its equivalent" are
not covered by the decree. ·
Note: "Equivalent" includes:
a) Christmas bonus, mid-year bonus, cash
bonuses;
b) and Other payments amounting to not less than
1/12 of the basic salary;
c) But shall not include cash and stock dividends,
cost of living allowances, and all other aliowances
regularly enjoyed by the employee as well as non~,.__,.
monetary benefits (/RR P.D. 851, Sec. 3[e])
An employer is not obliged to give a 13u, month
salary in addition to other bonuses stipulated in a
CBA amounting to more than a month's pay. (See
Brokenshire Memorial Hospital Inc., v. NLRC, G.R.
Na. L-69741, 1986)
In Relation to Collectiv~ Sargaining
Agreements and Ernployer-Employee
Agree merits
1. Nothing in the Rules shall prevent the
employer and employee from entering into any
agreement with terms more favorable to the
employees than those granted therein, or be
used to diminish any benefit granted to the
employees under existing laws, agreement
AND voluntary employer practice. (Sec. 6,
Rule VI, Book 3, /RR)
2. The rule is without prejudice to existing, future
collective bargaining agreements. (Sec. 7,
Rule VI, Book 3, /RR)
Synthesis of the Rules
1. Service charges must be pooled;
2. Where a restaurant or similar establishment
does not collect service charges but has a
practice or policy of monitoring and pooling
tips given voluntarily by its customers to its
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

employees, the pooled tips should be B. WAGES

monitored, accounted for and distributed in the
same manner as the services charges. (DOLE
Handbook on Workers' Statutory Monetary
Benefits, 2014ed.)
3. The amount collected is divided between the
company (15%) and employees (85%);
4. It shall be given twice a month with intervals of
not more than 16 days;
5. If discontinued, removed, or stopped, the
average share of the employees of their
service charge or tips shall be integrated with
their basic wage.
Wage versus salary
(a) "Wage"
Wages paid to any employee shall mean the:
1. Remuneration or earnings, . however
designated, capable of being expressed in
terms of money, whether fixed or ascertained
on a time, task, piece, or commission basis, or
other method of calculating the same, which is
payable by an employer to an employee under ·
a written or unwritten contract of employment
for work done or to be done, or for services
rendered or to be rendered;
i . -
2,' INCLUDES, the fair and reasonable value, as
determined by the DOLE Secretary, of board,
lodging, or other . facilities customarily
furnished by the employer to the employee.
(Labor Code; Art. 97)

"Fair and reasonable value" shall not . - ....

include any profit to the employer, or to any
person affiliated with the 'employer. (Id.) . I'

•. WAGE . . . I I SALARY I

Paid for skilled or Paid to white collar

unskilled manual workers and denote a
labor hi°gher grade of
employment / .,.
to Not · exempt . from \_ji
Not subject
execution, execution,
garnishment or garnishment or 0
attachment except attachment. ( Gaa v.
for debts related to CA, G.R. No. L-44169, ()
necessities (Civil 1985)
Code, Art. 1708) ()
Minimum wage is set by law or wage order issued '{J
by the Regional Tripartite Wages and Productivity
Boards (RTWPB's) or the rate which may be fixed
by the employer provided the same is not lower
than the legally mandated rnlnirnum wage for
. agricultural or non-agricultural workers.
' (;
Wage or Salary includes:
Commission; Facilities; and Commodities/ (.J)
Supplements
0
PAGE 38 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2018
No Work - No Pay Prlnciple
General Rule: A fair day's wage for a fair day's
labor. (Sugl.ie v. Triumph International [Phils.J,
G.R. No. 164804, 2009)
Exception: Where the employer was able, willing,
and ready to work but was prevented by
management or was illegally locked out,
suspended or dismissed, or otherwise illegally
prevented from working (Sugue v. Triumph
International, supra)
BUT: Where the f1:1Uure of employees to work was
not due to the employer's fault, the burden of
economic loss suffered by the employees should
not be shifted to the employer. Each party must
bear his own loss.
Equal Pay for Equal Work
( ·, Employees holding the same position and rank are
\ : presumed to be performing equal work. The rule
equal pay for equal work applies whether the
employee is hired lc.cally or abroad (/SAE v.
{ ·-. Quisumbing, G.R. No. 128845, 2000)
t .
(b) Coverage/Exclusion
The rule on wages applies to ALL workers. (SLL
( ' International Cables, G.R. No. 172161, 2011).
EXCEPT: (FaB-CD-CHR10)
1. Farm tenancy I leasehold
(} 2. .Qomestic service
3. Persons working in their respective homes in
0 needle work or in any ,g,ottage industry duly
f -~ registered in accordance with law
• I,
'- .. J 4. Barangay micro business enterprise (.!;lMBE)
under RA 9178, the BMBE Law. BMBE - any
0 business entity or enterprise engaged in the
production, processing, or manufacturing of '
() products or commodities, including agro-
pi"ocessing, trading and services, whose total
0 assets including those arising from loans but
exclusive of the land on which the particular
u business entity's office, plant and equipment
are situated, shall not be more than P3M.
(J 5. ~ooperatlves. (Benguet Electric Cooperative
v. Hon. Ferrer-Calleja, G.R. No. 79025,
0 December 29, 1989).
6. Homeworkers employed in any establishment
u duly registered with the National Cottage
PAGE 39 OF 244
f
~-
LABOR LAW
Industries and Development Authority in
accordance with RA 8470
7. Retail and service establishments regularly
employing not more than 10 workers
(c) Minimum Wage of Workers Paid BY
RESULTS
I. Workers paid by results
All workers paid by result, including those who are
paid on piecework, takay, pakyaw or task basis,
shall receive riot 11:lsS than the prescribed wage
rates per eight (8) hours of work a day, or a
proportion thereof for working less than eight (8)
hours. (Labor Code, Art. 124)
Ii. Apprentices
Wage rates of apprentices shall conform to the
rules issued by the Secretary of Labor. Wages
shall in no case be less than 75% of the applicable
minimum wage rates. (Labor Code, Art. 61 & 75)
' Note: Learners employed in piece or incentive-
rate jobs during the training period shall be paid in
full f,i'r the work done (Labor Code, Art. 76)
The Secretary of Labor may authorize the hiring of
apprentices without compensation whose training
on the job is required by the school or training
program curriculum or as a requisite for g,·aduation
or board examination. (Labor Code, Art. 72)
ill. Learners
Wages of learners shall begin at not less than 75%
of the applicable minimum wage. (Labor Code, Art.
75)
Learners employed in piece or incentive-rate jobs
during the training period shall be paid in full for
the work done. (Labor Code, Art. 76)
Iv. Persons with Disability
A qualified disabled employee shall be subject to
the same terms and conditions of employment and
the same compensation, privileges, benefits,
fringe benefits or allowances as qualified, able-
bodied persons (R.A. No. 7277, Sec. 5)
ATENEO CENTRAL
BAR OPERATIONS 2018
(d) Commissions
Commissions have been defined as the
recompense, compensation, or reward of an
agent, salesman, executor, trustee, · receiver,
factor. broker or bailee, when the same is
calculated as a percentage on the amount of his
transactions or on the profit to the principal. (Phil.
Duplicators' Inc. v. NLRC, G.R. No. 110068, 1993)
The Court held that the definition of "wages" under
Art. 97 (f) of the Labor Code explicitly includes
commissions as part of waqes, While
commissions are incentives to inspire employees
to put a little more industry on the jobs particularly
assigned to them, still, these commissions are
direct remunerations for services rendered.
. There is no law mandating that commissions be
paid only after the minimum wage has been paid
to the employee. Verily, the establishment of a
minimum wage only sets a floor below which an
employee's remuneration· cannot fall, not that
commissions are excluded from wages in the
compllance with the minimum wage law. (Iran v.
NLRC, G.R. No. 121927, 1998)
However, for commissions to be included in the
employees' sa!ary, the employee must have
earned them through performing actual business
transactions (Phil. Duplicators' Inc. v. NLRC, G.R.
No. 110068, 1995)
(e) Minimum Wage
Current Minimum Wage
PhP 512 (Wage Order No. NCR-21)
PhP 512 is the minimum wage for the non-
Agricultural Sector, and is composed of:
Basic Wage of PhP 502 + COLA of PhP 10
Standards/Criteria for minimum wage fixing
The regional minimum wages to be established by
the Regional Board shall be as nearly adequate as
is economically feasiblo to maintain the minimum
standards of living necessary for the health,
efficiency and general well-being of the employees
within the framework of the national economic and
social development program.
PAGE 40 OF 244
' LABOR LAW
In tt:e determination Of such regional minimum
wages, the Regional Board shall, among other
relevant factors, consider the following:
· 1. The demand for living waqes:
2. Wage adjustment vis-a-vis the consumer price
index
3. The cost of living and changes or increases
therein
4. The needs of workers and their families
5. The need to induce industries to invest in the
countryside
6. Improvements in standards of living·
7. The prnvailing wage levels
8. Fair return of the capital invested and capacity
to pay of employees
9. Effects on employment generation and family
income.
10. The equitable distribution of income and ·, .
wealth along the imperatives of economic and
social development (Labor Code, Art. 124)
Two Methods of fixing the minimum wage rate.
1. Floor Wage Method .·· ~
Method which involves the fixing of a determinate
amount to be added to the prevailing statutory !:.
minimum wage rates.
2. Salary Cap Method I
Method where the wage adjustment is to be
applied to employees receiving a certain
denominated salary ceiling. In other words,
workers already being paid more than the existing
()
minimum wage (up to a certain amount stated in
the Wage Order) are also to be given a wage
()
increase. (Employers Confederation of the
Philippines v. National Wages and Productivity
,· ·
(J
Commission, G.R. No. 96169, 1991).
0
Pursuant to its authority, the Regional Wage
Boards may issue wage orders which set the daily 0
minimum wage rates. It has no authority to grant (""t;
an across-the-board wage increase. (Metropolitan \J
Bank and Trust Company v. NWPC, 2007).
(J'
u
0
'
 ATENEO CENTRAL
BAR OPERATIONS 2018
1. Payment of Wages
Means of Payment
The employer cannot pay his workers by
means of any of the following:
a) Vouchers;
b) Promissory notes;
c) Any object other than legal tender;
d) Coupons;
e) Chits;
f) Tokens; or
g) Tickets (Labor Code, Art. 102)
.General Rule: No employer shall pay the wages
{ of an employee by any other means other than
t
legal tender, even when expressly requested by
the employee. {Conqson v. NLRC, G.R. No.
'.1 114250, AprU 5, 1995)
Exception: Payment of wages by bank checks,
postal checks or money orders is allowed where:
1. Such manner of wage payment is customary
r ··, on the date of the Labor Code's effectivity;
i..
2. It is stipulated .in a collective agreement;
3. All of the following conditions am met: or
a. There is a bank or other facility for
encashment within a radius of 1 kilometer
from the workplace
I ·•
b. The employer or any of his agents or
t.., __ y representatives does not receive any
pecuniary benefit directly or indirectly from
(} the arrangement
c. The employees are given reasonable time
() during bankir,g hours to withdraw their
wages from the bank which time shall be
(J considered as compensable hours
worked if done during working hours
0 d. The payment by check is with the written
consent of the employees concerned if
0 there is no collective agreement
authorizing the payment of wages by bank
checks
4. Necessary because of special circumstances
(J as specified in appropriate regulations issued
by the Secretary of Labor (/RR Labor Code,
() Sec. 2, Rule VIII, Book Ill)
Time of Payment
General Rule: At least once every 2 weeks or
twice a month at intervals not exceeding 16 days.
PAGE 41 OF 244
LABOR LAW
Exceptions:
1. In case of force tnajeure or other
circumstances beyond the employer's control,
payment must be made immediately after
such occurrence has ceased; and
2. In case of payment of wages by result
involving work which cannot be completed in
two weeks and in the absence of CSA or
arbitration award:
- Payments are made at intervals not
exceeding 16 days, in proportion to the
amount of work completed; and
Final settlement is made upon
completion of the work. (/RR Labor Code,
Sec. 3, Rule VIII, Book Ill)
In ALL Cases: No employer shall make payment
with less frequency than once a month.
If on account of force majeure or circumstances
beyond the employer's control, payment of wages
on or within the time herein provided cannot be
made, .the employer shall pay the wages
. immediately after such force majeure or
circumstances have ceased.
Place of Payment
General Rule: Payment of wages shall be made
at or near the place of undertaking
Exceptions: Payment in a place other than the
work place shall be permissible only under the
' following circumstances:
1. When payment cannot be effected at or near
}1e place of work by reason of the
deterioration of peace and order conditions, or
by reason of actual or impending emergencies
caused by fire, flood, epidemic or other
calamity rendering payment thereat
impossible
2. When the employer provides free
transportation to the employees back and forth
3. Under any other analogous circumstances;
Provided, That the time spent by the
employees in collecting their wages shall be
considered as compensable hours worked
(Labor Code, Art. 103; /RR Labor Code, Sec.
4, Rulo VIII, Book Ill)
ATENEO CENTRAL
BAR OPERATIONS 2018
Prohibited Place of Payment
General Rule: Payment cannot be made in a bar,
night or day club, drinking establishment, massage
clinic, dance hall, or other similar places or in
places where games are played with stakes of
money or things representing money
Exception: Persons employed in the
abovementioned places may be paid there (/RR
Labor Code, Sec. 4[b], Rule VIII, Book l/1)
Payment through Banks; Requisites
1. There must be a written permission of the
majority of the employees concerned in an
establishment
2. The establishment must have 25 or more
employees
3. The establishment must be located within 1
km. radius to the bank.
Payment through ATM; Requisites
Payment through automated teller machines
(ATM) of banks is allowed, provided the ff.
conditions are met [CTARRDR]:
1. The A TM system of payment is with the written
.9_onsent of the employees concerned;
2. The employees are given reasonable Iime to
withdraw their wages from the bank facility
which time, if done during working hours, shall
be considered compensable hours worked;
3. The system shall Allow workers to receive
their wages within the period or frequency and
in the amount prescribed under the Labor
Code;
4. There is a bank or ATM facility Within aBadius
of one (1) kilometer to the place of work;
5. Upon request of the concerned employee/s,
the employer shall issue a Becord of payment
of wages, . benefits and deductions for a
particular period;
6. There shall be no additional expenses and no
Qiminution of benefits and privileges as a
result of the ATM system of payment;
7. The employer shall assume Besponsibility in
case the wage protection provisbns of law and
regulations are not complied with under the
arrangement (DOLE's Explanatory Bulletin on
Wage Payment Through A TM Facility,
November 25, 1996)
PAGE 42 OF244
LABOR LAW
To Whom Wages are Paid
General Rule: Wages shall be paid directly to the
workers to whorn they are due (Labor Code, Art.
105)
Exceptions:
1. Payment through another person -
(a) In cases of force majeure rendering such
payment impossible or under other special
circumstances to be determined by the
Secretary - the worker may be paid
through another person under written
authority given by the worker for the
purpose (Labor Code, Art. 105[a]); or
(b) When authorized under existing law,
including:
i. Payments for the· insurance
premiums of the employee
ii. Union dues where the right to check-
off has been recognized by the
employer in accordance with a --'-">.
collective agreement
iii. Authorized in writing by the individual
employees concerned (/RR of Labor
Code, Sec. 5[b], Rule VIII)
2. Payment through heirs of the worker -
Where the worker has died - the employer may
pay the wages of the deceased worker to the heirs
of the latter without the necessity of intestate
proceedings. (Labor Code, Art. 105[b]) I .,
\..J
Procedure:
• The claimants, if they are all of age (or ln
()
case of a minor, by the natural guardians or .
next-of-kin), shall execute an affidavit
attesting to their relationship to the
deceased and the fact that they are his
heirs, to the exclusion of all other persons.
• If any of the heir~ is a minor, the affidavit 0
shall be executed on his behalf by his·
natural guardian or next-of-kin.
• The affidavit shall· be presented to the { 'i..
employer who shall make payment through .J
the Secretary or his representative. The
representative of the Secretary shall act as 0
referee in dividing the amount paid among ·
(Jl
the heirs.
• The payment of wages under this Article
shall absolve the employer of any further
liability with respect to the amount paid.
i
u
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

• Withholding tax
3. Payment through member of worker's family
NOiE: Persons earning minimum wage are
Where the employer is authorized in writing by the exempted from income tax.
employee to pay his wages to a member of his
family (/RR Labor Code, Sec. S[a], Rule VIII, Book 3. When Authorized by Law
.111) • Deposit for loss/breakage (Labor
Advisory, No. 11 [2014], Sec. 3)
Summary of Rules on Payment of Wages • In cases where the employee is indebted
Legal tender; Prohibited: to the employer, where such indebtedness
Promissory notes, vouchers, has become due and demandable (Civil
coupons, tokens, tickets, Code, Art. 1706)
chits, or any other object other • Court judgment, but only for debts ·
than legal tender incurred for food, shelter, clothing, and
Once every two weeks or medical attendance (Civil Code, Art. 1708)
twice a month at intervals not
,.( exceeding 16 days 4. Regulation Issued by tl!ie Secretary of Labor
At or near the place of
undertaking Deposits for Loss or Damage
Directly to the employee
entitled thereto General Rule: No employer shall require his
worker to make deposits for the reimbursement of
2. Prohibitions regarding wages loss of or damage to material, equipment, or tools ·
supplied by the employer.
(a) Deductions from Wages (Labar Code, Art.
113) Exception: When the trade, occupation or
business of the employer recognizes or considers
General Rule: Wage deduction is strictly the practice of making deductions or requiring
{ t
prohibited. deposits necessary or desirable. (Labor Code, Art.
114)
Exceptions:
,... '\ 1. With Employee's Consent in Writing Requisites for Valid Deduction for
lJ • SSS payments loss/Damage
• PHILHEAL TH payments 1. The employee concerned is clearly shown to
{j • Contributions to PAG-IBIG Fund be responsible for the loss or damage
• Value of meals and other facilities 2. The employee is given reasonable opportunity
(.J • Payments to third . persons with to show cause why deduction should not be
employee's consent and without made
0 pecuniary benefit 3. The amount of such deduction is fair and
reasonable and shall not exceed the actual
• Deduction for unpaid absences
0 loss or damage
2. Without Employee's Car.sent 4. The deduction from the wages of the
• Worker's insurance acquired by the employee does not exceed 20% of the
employer employee's wages in a week (/RR Labor
(J • Union dues, where the right to check-off Code, Sec. 11, Rule VIII, Book Ill)
has been recognized by the employer or ,
0 authorized in writing by the employee
Note: Art. 144 provides for the rule on deposits for
the loss or damage to tools, materials, or
o· • Cases where the employer is authorized
by law or regulations issued by the
equipment supplied by the employer. The same
does not apply to or permit deposits to defray any
u •
Secretary of Labor
Debts of the employee to the employer
deficiency, which the taxi driver may incur in the
that have become due and demandable
PAGE 43 OF 244

L
.... -- --·· .. ---------------------------~--------
 ATENEO CENTRAL
BAR OPERATIONS 2018
remittance of "boundary" (Five J Taxi v. NLRC,
G.R. No. 111474, 1994)
Prohibited I UnlaWful Acts
1. Withhold any amount from the wages of a
worker or induce him to give up any part of his
wages by force, stealth, intimidation, threat or
by any other means whatsoever without the
worker's consent. (Labor Code, An'. 116)
2. Deduction from the wages of ar.y employee
for the benefit of the employer or his
representative or intermediary as
consideration of a promise of employment or
· retention in employment. (Labor Code, Art.
117)
3. Refuse to pay or reduce the wages and
benefits, discharge or in any manner
discriminate against any employee who has
filed any complaint or instituted any
proceeding under this Title or has testified or
is about to testify in sucn proceedings. (Labor
Code, Art. 118)
4. Make any statement, report, or record filed or
kept pursuant to the provisions of this Code
. knowing such statement, report or record to be
false in any material respect. (Uibor Code, Art.
119)
Non-Interference in Disposal of Waoes (Civil
Code Provisions)
. 1. The laborer's wages shall be paid in legal
currency (Civil Code, Art. 1705)
2. Withholding of wages, except for a debt due,
shall not be made by the employer (Civil Code,
Art. 1706)
3. The laborer's wages shall be a lien on the
goods manufactured or the work done (Civil
Code, Art. 1707)
4. The laborer's wages shall not be subject to
execution or attachment, except for debts
incurred for food, shelter, clothing, and
medical attendance (Civil Code, Art. 1708)
5. The employer shall neither seize nor retain
any tool or other articles belonging to the
laborer (Civil Code, Art. 1709)
3. Wage Order; Wage Distortion, concept
Wage Order
An order issued by the Regional Board whenever Frequency
the conditions in the region so warrant after General Rule: A wage order issued by the Board
studying and investigating and studying all may not be disturbed for a period of 12 months
pertinent facts and based on the standards and
PAGE 44 OF 244
, _
LABOR LAW
criteria prescribed by the Labor Code. {Labor
Code, Art. 123)
A wage order adjusts the minimum level but not
the levels above the minimum. It does not
mandate across the board salary increase.
Employees NOT Covered .
·,
1. Household or domestic helpers, including
family drivers and workers in the personal
service of another
2. Workers and employees in retail/service
establishments regularly employing not more
than 1 o workers, when exempted . from
compliance, for a period fixed by · the ,
Commission/Boards
3. Workers arid employees in new business
enterprises outside the National Capital
Region and export processing zones for a
period of not more than two or three years, as
the case may be, from the start of operations
when exempted (R.A. No. 6727)
'
In addition to setting the minimum wage, the
RTVt'PB can provide additional exempticns since
it is vested with the competence to determine the
industries and sectors to exempt from the
coverage of their wage orders. (National Wages
and Productivity Commission (NWPC) and the
Regional Tripartite Wages and Productivity Board
(RTWPB) vs. Alliance of Progressive Labor (APL)
and the Tunay na Nagkakaisang Manggagawa sa
Royal (TNMR), G.R. No. 150326, 2014)
t .:.
Effectivity of Wage Orders \>
Takes effect after 15 days from its complete ';·)
publication in at least one newspaper of general \ t
circulation in the region. (NWPC Guidelines No.
001-95, Sec. 4, Rule IV) ·
Public Hearings and Consultations Mandatory
Notice must be given to employees' and ( .,_
employers' groups, provincial, city and municipal l...J
officials and other interested parties.
A wage order issued without the required public
consultation and newspaper publication is null and
void. . '\,_
( .;
(,_)
i · . ...
). .
 ATENEO CENTRAL
BAR OPERATIONS 2018
from its effectlvity and no petition for wage
increase shall be entertained durinfJ said period
(NWPC Guidelines No. 001-05, Sec. 3, Rule IV)
Exceptions:
1. When Congress itself issues a law increasing
wages; or
2. Supervening conditions, such as extraordinary
increases in prices of petroleum products and
basic goods I services
Standards/Criteria for Minimum Wage Fixing
Must be economically feasible to maintain the
minimum standards of living necessary · for the
· health, efficiency and general well-being of the
employees within the framework of the national
economic and social development program.
,,
( f
. in wage or salary rates between and among
Factors to Consider: (SNAPE CRIED)
3. Improvements in §tandards of living
. 4. The Needs of workers and their families
; - 5. Wage Adjustment vis-a-vis the consumer
'-.J price index
r: 6. The frevailing wage levels
1, .:
7. Jiffects on employment generation and family
~- . ·•: income
I c:·
8. The ~ost of living and changes or increases
9. Fair .Beturri of the capital invested and
~. . .. capacity to pay of employers
10. The need to induce Industries to invest in the
(; countryside
11. The gquitable distribution of income and
wealth along the imperatives of economic and
social development
12. The Qemand for living wages (Labor Code,
Art. 124)
(j
Appeal
'O A party aggrieved by a Wage Order may appeal to
the NWPC not later than 10 days from the date of
0 the publication ofthe order (f.JWPC Guidelines No.
001-95, Sec. 1, Rule V)
r.
I \)
Effect of Appeal
u General Rule: Appeal does not stay the effect of
the wage order
0 1. An existing hierarchy of positions with
Exception: Unless the party appealing such order
0 shall file with the NWPC an undertaking with a
surety/sureties (surety bond) satisfactory to the
o Commission for payment to employees affected by
the order for the corresponding increase, in the
PAGE 45 OF 244
LABOR LAW
even: that such order is affirmed (/RR of R.A. No.
6727, Sec. 5, Rule V)
Doctrine of Double Indemnity
Payment to a concerned employee of the
prescribed increase or adjustments in tne wage
rate which was not paid by an employer in an
amount equivalent to twice the unpaid benefits
owing to such employee (D.O. No. 10, Sec. 2(1]
[1998])
Wage Distortion
Definition of Wage Distortion
A situation where an increase In prescribed wage
rates results in the elimination or severe
contraction of intentional quantitative differences
employee groups in an establishment as to
effectively obliterate the distinctions embodied in
such wage structure based on skills, length of
service or other logical basis of differentiation.
(Labor Code, Art. 124)
. Simply, if the pay advantage of a position over
another is removed or significantly reduced by a
pay adjustment required by a wage order, such
pay advantage should be restored. Manila
Mandarin Employees Urion v. NLRC, (G.R. No.
108556, 1996)
For a distortion to exist, the law does not require
an elimination or total abrogation of quantitative
wage or salary difference; a severe contraction
thereof is enough. (MBTC Employees Union-Al.U:
TUCP v. NLRC, G.R. No. 102636, 1993)
Wage distortion involves comparison of jobs
located in the same region. Examination of alleged
salary distortion is limited to jobs or positions in the
same employer in the same region; thus, the
comparison of salaries has to be intra-region, not
inter-region. (Prubankers Association v. Prudential
Bank and Trust Co., G.R. No. 131247, 1fJ99) .
Elements of Wage Distortion:
corresponding salary rates.
2. A significant change in the salary rate of a
lower pay class without a concomitant
increase in the salary rate of a higher one.
.. - - -·--------------'---
ATENEO CENTRAL
BAR OPERATIONS 2018
3. The elimination of the distinction between the
two levels.
4. The existence of the distortion in the same
region of the country. (Alliance Trade unions
v. NLRC, G.R. No. 140689, 2004)
Correction of Wage Distortion
A. In ease of an ORGANIZED establishment
1. Employer and union shall negotiate to correct
· the distortion
2. Any dispute arising should be resolved
through grievance procedure under CSA
3. If dispute remains unresolved, through
voluntary arbitration (Labor Code, Art. 124)
B. In case of an UtJORGANIZED establishment
1. The employer and employees shall endeavor
to correct the distortion
2. Any dispute shall be settled through National
Conciliation and Mediation Board (NCMB)
3. If remains unresolved after ~ 0 days of
conciliation, It shall be referred to the NLRC
(Labor Code, Art. 124)
Note: Any issue involving waqe distortion is not a
valid ground for a strike or a lockout. (/law at
Buklod ng Manggagawa, G.R. No. 91980, 1991)
Amount of Distortion Adjustment
The restoration of the previous pay advantage is
the aim but not necessarily to the last pe.so.
Restoration of appreciable differential, a
significant pay gap, should suffice as correction.
Suggested Formula to correct a . Salary
Distortion
Minimum = % x Actual satary Prescribed
Wage Increase
The distortion that should be rectified refers to
distortion arising from compliance · with a
government wage order. It does not refer to
distortion caused by salary revisions voluntarily
initiated by the employer unless such a duty exists
because of a CBA stipulation er company practice.
(Bankard Employees Union - WATU v, NLRC,
G.R. No.140689, 2004)
CBA vis-a-vis Wage Orders - CBA Creditability .
The provisions of the CBA should be read in
harmony with the wage orders, whose benefits
PAGE 46 OF 244
LABOR LAW
should be given only to those employees covered
thereby. (P.I. Manufacturing, Inc., v. P.I.
Manufacturing Supervisors and Foreman Ass 'n
and the NLRC, G.R. No. 167217, 2008).
I
Summary of Principles Oh Wage Distorti.on
(NFL v. NLRC, G.R. No. 103586, 1994)
The concept of wage distortion assumes an
existing grouping or classification of employees
which establishes distinctions among such
· employees on some relevant or legitimate basis.:
This classlficatlon is reflected in a differing wage
rate for each of the existing classes of employees.
Wage distortions have often been the result of
government-decreed increases in rmrurnum
wages. There are, however, other causes of wage
distortions (such as merger).
Should a wage distortion exist, there is no legal
requirement that the gap which had been
previously existed be restored in precisely the
same amount. Correction of a wage distortion may
be done by re-establishing a substantial or
significant gap (as distinguished from the historical
gap) between the wage rages of the differing
classes of .ernployees.
The re-establishment of a significant wage
difference may be done through the grievance
procedure or collective bargaining negotiations.
.· "
4. Non-diminution of benefits l,J
·.,
There is diminution of benefits when:
1. The grant or benefit is founded on a policy or
{l
l1as ripened into a practice over a long period '-.. ~ff
of time
2. The practice is consistent and deliberate 0
3. The practice is not due to error in the
construction or application of a doubtful or 0
difficult question of law. and
[""
4. The diminution or discontinuance is done \..J
unilaterally by the employer. (TSPIC v. TSPIC
Employee Union, G.R. No. 163419, 2008). l__J
5. The "benefits" refer to monetary benefits or
privileges given to the employee with t..J
monetary equivalents. (Royal Plant Workers
Union vs. Coca-Cola Bottlers Philippines, tnc.« ()
Cebu Plant, G.R. 198783, 2013).
(J'
~- J'
 ATENEO·CENTRAL
BAR OPERATIONS 2018
Non-Diminution Rule
General Rule: Nothing in the Labor Code shall be
construed to eliminate or in any way diminish
supplements, or other employee benefits being
'' + r enjoyed at the time of promulgation of the Labor
Code. Benefits being given to employees shall not
be taken back or reduced unilaterally by the
employer because the benefit has become part of
the employment contract, written or unwritten.
(Labor Code, Art. 100)
Exception: To correct an error, otherwise, if the
error is left uncorrected for a reasonable period of
time, it ripens into a· company policy and
t '! employees can demand for it as a matter of right.
\ j:
When Non-Diminution Rule Applicable
The rule is applicable if it is shown that:
1. The practice is consistent and deliberate
(Metrobank v. NLRC, G.R. No. 152928, 2009)
2. The diminution or discontinuance is done
unilaterally by the employer (Stet~/ Corporation
v. Nagkakaisang Manggagawang Supreme
Independent Union, G.R. No. 185556, 2011);
3. The grant of the benefit is founded on a policy
or has ripened into a practice over a long
period (Phil. Appliance Corp. v. CA, G.R. No.
149434, 2004); and
4. The practice is not due to error in the
construction or application of a doubtful or
o 1
t
difficult question of law (Vergara, Jr., v. Coca
Cola, G.R. No. 176985, 2013)
When not applicable
At least one of the requisites is absent.
() 1. At least one of the requisites is absent
2. Mistake in the application of the law (Globe
0 Mackay v. NLRC, G.R. No. 82511, 1988)
3. Negotiated benefits (Azucena)
0 4. Reclassification of Positions '- e.g. loss of
some benefits by promotion.
5. Contlnqent or Conditional Benefits - the rule
does not apply to a benefit whose grant
0 depends on the existence of certain
conditions, so that the benefit is not
0 demandable if thane preconditions are absent.
0 Past Errors
If it is a past error that is being corrected, no vested
0 right may be said to have arisen nor any diminution
of benefit under Art. 100 may be said to have
PAGE 47 OF 244
LABOR LAW
resulted by virtue of the correction (TSPIC Corp. v.
TSPIC Employees Union, G.R. No. 163419, 2008)
Benefits initiated through negotiation between
Employee and Employer, e.g. CBA, can only be
eliminated or diminished bilaterally. A union is not
prohibited from offering and agreeing to reduce
wages and benefits of the employees during CBA ·
negotiations. (Insular Hotel Employees Union v.
Waterfront, G.R. 174040-41, 2010)
"
Bonus
A benefit which is contingent or conditional; Its
demandability depends on certain pre-conditions.
It is an amount granted voluntarily to an employee
for his/her industry and loyalty, which contributed
to the success and realization of profits of the
employer's business.
General Rule: Bonus is not demandable as a
matter of right. It is a management prerogative,
given in addition to what is ordinarily received by. ·
· or strictly due to the recipient (Produ;;ers Bank v.
NLRC, G.R. No. 100701, 2001)
Exceptions:
1. When it was promised to be given without
any conditions imposed for its payment in which
case it is deemed part of the wage; and
2. When it has ripened into practice (Marcos v.
NLRC, G.R. No. 111744, 1995)
C.LEAVES
1. Service Incentive leave (SIL) (supra)
2. Maternity Leave
Coverage:
SSS Law (R.A.1161, as.amended by RA 8282)
A female member who has paid at least 3 monthly
contributions in the 12-rnonth period immediately
preceding the semester of her
childbirth/miscarriage shall be paid a daily
maternity benefit equivalent to 100% of her
average daily salary credit for 60 days (in case of
normal delivery) or 78 days (in case of caesarian
delivery). (R.A. No. 9282, Sec. 14-A)
Conditions for entitlement: (NAB-4-RD)
1. Employee shall have Notified her employer of
her pregnancy and the probable date of her
ATENEO CENTRAL
BAR OPERATIONS 2018
childbirth, which notice shall be transmitted to
the SSS.
2. Full payment shall be Advanced by the
employer witr.in 30 days from the filing of the
maternity leave.
3. Payment of daily maternity benefits shall be a
Bar to the recovery of sickness benefits
provided by the SSS Law for the same period
for which daily maternity benefits have been
received.
4. · The maternity benefits provided under this
section shall be paid only for the first 4
deliveries/miscarriages.
5. The SSS shall immediately Reimburse the
employer of 100% of the amount of maternity
benefits advanced to the employee by the
employer upon receipt of satisfactory proof of
such payment and legality thereof;
6. If an employee member should give birth or
suffer miscarriage without the required
contributions having been remitted for her by
her employer to the SSS, or without the latter
having been previously notified by the ·
employer of the time of the pregnancy, the
employer shall pay to the SSS Damages
equivalent to the benefits which said
employee member would otherwise have
been entitled to (R.A. No. 9282, Sec. 14-A)
Notes:
Women in the military, police, and other services
shall be entitled to leave benefits such as
maternity leave, as provided for by existing laws
(Magna Carta of Wom€n, Sec. 15)
It is not necessary that the woman be impregnated
by her legitimate husband. It is immaterial who the
father is.
Every pregnant woman in the private sector,
whether married or unmarried, is entitled to the
maternity leave benefits.
Availment
The maternity benefits provided under this
sections shall be available only for the first four (4)
deliveries or miscarriages. (R.A. No. 8282, Sec.
14-A[d])
PAGE 48 OF 244
LABOR LAW
3. Paternity Leave (R.A. No. 8187)
Definition:
Paternity Leave refers to the benefits grnnted to a
married male employee allowing him not to report
for work for seven (7) days but continues to earn
the compensation therefor, on the condition that
\.
.
his spouse has delivered a child or suffered a
miscarriage for purposes of enabling him to
effectively lend support to his wife in her period of
recovery and/or in the nursing of the newly-born
child. (R.A. No. 8187, Sec. 3)
Coverage
Paternity Leave is granted to all married male
employees in the private sector, regardless of their
employment status (e.g., probationary, regular,
j
contractual, project basis] ..
;.
;
Government employees are also entitled to the
paternity leave benefit. They shall be governed by -i
' ,::
the Civil Service rules.
Conditions to entitlement:
1. A married male employee at the time of
delivery of his child;
2. Cohabiting with his spouse at the time she
·__;
gives birth or suffers a miscarriage;
3. Applied for paternity leave within a reasonable
period from the expected date ofdelivery by
the pregnant spouse, or within such period as '
may be provided by company rules or by CBA; :r
provided that prior application is not required f .,,,
in case of miscarriage; \.,}
4. Wife has given birth or suffered a miscarriage.
5. Where a male employee Is already enjoying ()
the paternity leave benefits by reason of
contract, company policy or CSA, the greater
t_)
benefit prevails. ·
(}
Appiication for Paternity Leave
The male employee applying for paternity leave 0
sha:I notify his employer of the pregnancy of his
legitimate spouse and the expected date of such
delivery by the pregnant spouse, or within such
period as may be provided by company rules and
-, regulations or by collective bargaining agreement,
provided that prior application for leave shall not u
be required in case of miscarriage (/RR of R.A. No.
818/ for the private sector, Sec. 4) ()
l)
;,,.,.,,;
 ATENEO CENTRAL
BAR OPERATIONS 2018
Non-conversion to Cash
In the event that the paternity leave is not availed
\ i
of, it shall not be convertible to cash and shall not
be cumulative. /RR of R.A. No. 8187, Sec. 7)
4. Solo Parent t.eave
Parental (Solo Parent Leave)
Benefits granted to a solo parent to enable him/her
to perform parental duties and responsibilities
where physical presence is required. The parental
leave, in addition to leave privileges under existing
laws, shall be for seven (7) work days every year,
with full pay, consisting of basic salary and
mandatory allowances fixed by the Regional Wage
Board, if any, provided that his/her pay shall not be
less than the mandated minimum wage. (/RR of
R.A. No. 8972, Sec. 6[g})
Coverage:
Who are considered Solo Parents:
a. A parent left alone with the responsibility of
( parenthood because of death of one's spouse.
t ;
b. A parent left alone with the responsibility of
parenthood because of any physical and/or
mental incapacity of one's spouse as certified
{ ;. by a public medical practitioner
c. A parent left alone with the responsibility of
f t.
parenthood because one has legally
\ J' separated from his spouse or because they
have been separated for at least one year and
the child is in solo parent's custody
d. A parent left alone with the responsibility of
0 parenthood because the marriage was
annulled by a court or a church decree, and
(1 the child is in solo parent's custody.
e. A parent left alone with the responsibility of
0 parenthood because his spouse abandoned
him for at least one year.
0 f. A · parent left solo or alone with the
responsibility of parenthood because his
~
v spouse is detained or is servinq sentence for
a crime for at least one year.
u g. An unmarried mother or father who has
preferred to keep and rear the child himself,
o· instead of having others care for them or give
up to a welfare institution.
0 h. Solely provides parental care and support to a
child or children.
0 i. Assumes responsibility of head of the family
as a result of the death, abandonment,
u special leave benefit of tvro (2) months with full pay
PAGE49 OF 244
Lr
LABOR LAW
disappearance or prolonged absence of the
children's parents or solo parent.
j. A victim of rape and/or other crimes against
chastity, have given birth to a child as a result
and have decided to keep and raise his child.
(R.A. No. 8972, Sec. 3[a])
Children
1. Those living with and dependent upon the solo
parent for support who are unmarried,
unemployed and not more than 18 years of
age; or
2. Those even over 18 years but are incapable of
self-support because of mental and/or physical
defect (R.A. No. 8972, Sec. 3[e])
Conditions to Entitlement
1. He/she has rendered at least 1 year of service,
whether continuous or broken;
2. He/she has notified his/her employer of the
availment thereof within a reasonable period
, 3. He/she has presented a Solo Parent
Identification Card to his/her employer which- .....
may be obtained from the DSWD office of the
~ity or municipality where he/she resides (!RR
of R.A. No. 8972, Sec. 19)
Avallment
A parental leave of not more than 7 working days
every year shall be granted to any solo parent
employee who has rendered service of at least 1
year
Non-Conversion to Cash
Unused parental leave is not convertible to cash
unless otherwise provided by the CB.A .. (!RR of
R.A. No. 8972, Sec. 20)
Termlnatlon of the benefit
A change in the status or circumstance of the
parent claiming benefits under this Act, such that
he/she is rio longer left alone with the responsibility
of parenthood, shall terminate his/her eligibility for
these benefits. (R.A. No. 8972, Sec. 3[a])
5. Leaves Benefits for Women Workers Under
RA 9710 and RA 9262
R.A. No. 9710 or the M.igna Carta for Women
A special leave benefit for women was granted
under R.A. No. 9710 (August 14, 2009). Women
who qualify under R.A. No. 9710 are entitled to a
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

based on her gross monthly compensation 3. :t shall be used for the days that she need to
following surgery caused by gynecological attend to medical and legal concerns. ;
disorders. 4. Leaves not availed of are non-cumulative and
not convertible to cash.
Conditions for Ehtitlement:
1. A woman employee must have rendered Avallment
continuous aggregate employment service of . Leave of up to ten (10) days in addition to other
at least six (6) months for the twelve (12) . paid leaves .under the Labor Code, or other laws.
months immediately prior to the surgery (Sec. 43, RA 9262)
2. She has filed an application for special leave
with her employer within a reasonable period
of time from the expected date of surgery or
within such period as may be provided by
company rules and regulations or collective
bargaining agreement; and
3. She has undergone surgery due to
gynecological disorders as certified by a
competent physician. _,

R.A. No. 9262 or the Anti-Violence Against

Women and their Children Act of 2004
,-____...._
Violence against women and their children refers
to any act or a series of acts committed by any·
person against a woman who is his wife, former
wife, or against a woman with Whom the person
has or had a sexual or dating relationship, or with
whom he has a common child, or against her child
whether legitimate or illegitimate, within or without
the family abode, which will result in or is likely to
result in physical, sexual, psychological harm or
suffering, or economic abuse including threats of
'·. ; .
such acts, battery, assault, coercion, harassment
or arbitrary deprivation of liberty. (R.A. 9262 "Anti-
()
Vio/ence Against Women and Their Children Act
of 2004'1
(.)

Coverage:
()
Allows the victim of violence, which may be
physical, sexual, or psychological, to apply for the 0
issuance of a protection order. If such victim is an
employee, she is entitled to a paid leave of up to 0
10 days in addition to other paid leaves under the
Labor Code, other laws and company policies.

Conditions to entitlement
1. The employee has to submit a certification
from the Punong Baranqay or Kagawad or u
prosecutor or Clerk of Court that an action
under RA 9262 has been filed and is pending. ()
2. The use of the 10-day leave is at the option of
the employee ()

PAGE 50 OF 244

'\._J
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

0. SPECIAL GROUPS OF EMPLOYEES Jurisprudence: Stipulations on Marriage

1. Women · 1. Philippine Telegraph and Telephone

Company v. NLRC (G.R, No. 118978, 1997)
a. Discrimination
It was declared here that the company policy
Unlawful for any employer to discriminate against of not accepting or considering as disqualified
any woman employee with respect to terms and from work any woman worker who contracts
conditions of employment solely on account of her marriage runs afoul of the test of, and the right
sex (Labor Code, Art. 135) against, discrimination afforded all women
workers by our labor laws and by no less than
Acts of Discrimination the Constitution.
1. Payment of a lesser compensation, including
wage, salary or other form of remuneration
2. Star Paper Corp. v. Sirnbol, {G.R. No.
and fringe benefits, to a female employees as
164774, 2006)
against a male employee, for work of equal
value
The following policies were struck c'own as
2. Favoring a male employee over a female
i"- i,, invalid for violating the standard of
employee with respect to promotion, training
reasonableness which is being followed in our
opportunities, study and scholarship grants
jurisdiction, otherwise called the "Reason a hie
solely on account of their sexes
Business Necessity Rule":
a. Person guilty of comm!tting these acts are
(; criminally liable under Arts. 288-289 of the
l) New applicants will not be allowed to be
Labor Code
hired if in case he/she has [a] relative, up to
b. That the Institution of any criminal action
[the) 3rd degree of relationship, already
under this provision shall not bar the
employed by the company.
aggrieved employee from filing an entirely
separate and distinct action· for money
claims, which may include claims for ii) In case of two of our employees (both
damages and other affirmative reliefs. The singles [sic], one male and another female)
actions hereby authorized shall proceed developed a friendly relationship during the
independently of each other. course of their employment and then decided.
3. Favoring a male applicant with respect to to get married, one of them should resign to
hiring where the particular Job can equally be preserve the policy stated above.

0 handled by a woman; and

3. Duncan Association of Detailman-PTGWO
4. Favoring a male employee over a female
·1 ~· Glaxo Welcome Philippines, Inc (G.R.
l ,J employee with respect to dismissal of
No. 162994, Sept. 17, 2004)
personnel
0 - In this case, the prohibition against marriage
b. Stipulation Against Marriage
embodied in the following stipulation in the
0 It shall be unlawful for the employer: employment contract was held as valid: "10.

u 1. To require as a condition of employment or

continuation of employment that a woman
You agree to disclose to management any
existing or future relationship you may have,
either by consanguinity or affinity with co-
0 employee shall not get married;
2. To stipulate expressly or tacitly that upon employees or employees of competing drug
getting married, a woman employee shall be companies. Should it pose a possible conflict
0 deemed resigned or separated of interest in management discretion, you
agree to resign voluntarily from the Company
0 3. To actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee as a matter of Company policy."
'';
"')
merely by reason of her marriage (Labor
- The Supreme Court ruled that the dismissal
Code, Art. 136)
based on this stlpulation in the employment
PAGE 51 OF 244

u
~-
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

contract is a valid exercise of management
prerogative. The prohibition against personal
or marital relationships with employees of
competitor companies upon its employees
was held reasonable under the circumstances
because relationships of that nature might
compromise the interests of the company. In
laying down the assailed company policy, the
employer only aims to protect its interests
against the possibility that a competitor
company will gain access to its secrets and
procedures.
Bona fide occupational qualification exception
When the employer can prove that the reasonable
demands of the business require a distinction
based on marital status and there is no better
available or acceptable policy which would better
accomplish the business purpose, an employer
may discriminate against an employee based in
the identity of the employee's spouse. (Star Paper
Corp. vs. Simbol, G.R. No. 16,1774, 2006)
!;njoying the maternity leave, facilities and
other benefits provided under the Code
c. To discharge such woman employee on
account of her fregnancy, or while on leave or
in confinement due to her pregnancy (Del
Monte v. Velasco, G.R. No. 153477 (March 6,
2007).
d. To discharge or refuse the admission of such
woman upon Returning to her work for fear
, that she may be pregnant
e. To discharge any woman or child or any other
employee for having filed a complaint or ,.
iiaving Testified or being about to testify under
the Code
f. To require as a Condition for a continuation of
employment that a woman employee shall not ·,.
get married or to stipulate expressly or tacitly
that upon getting married, a woman employee
shall be deemed resigned or separated, or to
actually dismiss, discharge, discriminate or
otherwise prejudice a woman employee
merely by reason of her marriage

The Court sustained the validity of employer policy d. Sexual Harassment (RA 7877)
prohibiting an employee from having a personal or
marital relationship with an employee of a Where Committed (WET)
competitor. The prohibition was reasonable under a. Working
the circumstances because relationships of such b. Education
nature might compromise the interests of the c. Training environment
company. (Duncan Association of Detailmen v. ,.-·-:...

Glaxo Wei/come, G.R. no. 162994, 2004) Who Commits (MEE-PATIS-COT) t:

1. Manager
Classification of Certain Women Workers 2. Employer
Any woman who is permitted or suffered to work, 3. Employee
with or without compensation, in any night club, 4. Professor
cocktail lounge, massage clinic, bar or similar 5. Agent of the employer
establishments under the effective control or 6. Teacher
supervision of the employer for a substantial 7. Instructor
period of time as determined by the Secretary of 8. Supervisor 0
Labor and Employment, shall be considered as an 9. Coach
employee of such establishment for purposes of 10. Trainer ()
labor and social legislation. (Labor Code, Art. 138) 11. Any Other person having authority, influence
or moral ascendancy over another (R.A. No.
c. Prohibited Acts 7877, Sec. 3)
()
Art. 137 Prohibited Acts (DEP·R-TeC) How Committed
It is unlawful for any employer: Person liable demands, requests, or otherwise ()
a. To Qeny any woman the benefits provided for requires any sexual favor from the other, ·
under the Code regardless of whether the demand, request or 0
b. To discharge any woman employed by him for requirement for submission is accepted by the
the purpose of preventing such woman from latter. l)

PAGE 52 OF 244
1 '
~J

(_)
 ATENEO CENTRAL
BAR OPERATIONS 2018
It is not necessary that a demand, request or
requirement of sexual favor be articulated in a
categorical oral or written statement. It may be
discerned, with equal certitude; from acts of the
offender. (Domingo v. Raya/a, G.R. No. 155831,
2008).
It is also not essentialthat the demand,request,or
requirementbe made as a condition for continued
employmentor for promotion to a hinher position.
It is enough that the offender's acts result in
creating an intimidating, hostile, or offensive
environment for the employee. (Domingo v.
Raya/a, G;R. No. 155831, 2008)
j
r \
;
Work-Related/Employment Environment,
t,.. ,·
Sexual Harassment Committed When
1. The sexualfavor is made as a condition:
a. In hfring or ln the employment,
I'
.:!
;
-
reemployment or continued employment
•.:
of said individual
b. In granting said individual favorable
compensation, terms, conditions,
.
t.'
~- r
.
promotionsor privileges
c. The refusal to grant the sexual favor
results in limiting, segregating or
classifyingthe employeewhich in any way
· would discriminate, deprive or diminish
employment opportunities or otherwise
adverselyaffect said employee
c:
'\..} 2. The above acts would impair the employee's
rights or privilegesunder existing labor laws.
(} ;3. The above acts would result in an intimidating,
hostile or offensive environment for the
0 . employee.(Sec. 3[a])
(J Education or Training Environment, Sexual
Harassment Committed When
0 1. The sexual favor is made as a condition:
2. The above acts would impair the employee's
0 rights or privilegesunder existing labor laws.
3. The above acts would result in an intimidating,
0 hostile or offensive environment for the
employee.(Sec: 3[a])
0 Art. 134)
()
0
(J
PAGE 53 OF 244
LABOR LAW
Duty of Employer
1. Promulgateappropriaterules and regulations
prescribingthe procedure for investiqation of
sexual harassment cases as well as
quidelines on proper decorum in the
workplace.
2. Create a committee on decorum and
investigationof cases on sexual harassment.
(Sec. 4)
Liability of Employer I Head of Office
Solidarilyliable for damages arising from the acts
of sexual harassment committed in the
employment,education or training environment if
the employer is informed of such acts by the
offendedparty and no immediateaction is taken.
Prescriptive period to file action: 3 years
(Sec. 7)
e) Facilities for Women
The DOLE Secretarymay require employersto:
• Provide seats proper for women and permit
them to use such seats when they are free
from work and during working hours, provided
they can perform their duties in this position
without detriment to efficiency
• Establish separatetoilet rooms and lavatories
for men and women and provide at least a
dressing roomfor women
• Establish a nursery in a workplace for the
benefit of the women employeestherein
• Determine appropriate minimum age and
otherstandardsfor retirementor terminationin
special occupations such as those of flight
attendantsand the like (Labor Code, Art .. 132)
Family Planning Services; Incentives for
Family Planning
Employers who habitually employ more than 200
workers in any locality shall provide free family:
planning services to their employees and their
spouseswhich shall include but not limited to, the
applicationor use of cdntraceptives(Labor Code,
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

2. Minors (R.A. No. 7610, as amended by R.A. No. 9231)

Atlowablework for mipors • ·' ' o -.··, J ._ , ' _

• • • • • - ' - J

Below 15 NOT employable,

EXCEPT:
1. When the child works directly under the sole responsibility of his/her parents/legal
guardian and where only members of his/her family are employed, under the ff.
conditions:
• omployment does not endanger the child's life, safety, health anC: morals
• employment does not impair the child's normal development; and
• the parent/legal guardian provides the child with primary/secondary
education
2. When the child's employment or participation in public entertainment or information
through cinema, theater, radio or television is essential, provided that:
• the employment contract Is concluded by the child's parents/legal guardian,
with the express agreement of the child concerned, If possible, and the
approval of the DOLE .
• the followln~1 requirements are complied with:
o employer shall ensure protection, health, morals, and normal
development of the child
. o employer shall. lnstltuts-, measures to prevent child's exploitation I
discrimination taking Into account the system and level of remuneration,
duration, and arrangement of working time '., .·.
:

o employer shall formulate and Implement a continuing program for ( . .,.

training and skills acqulsltlon of the child, subject to approval and ".. .. J; .
supervision of competent authorities (as amended by RA 9231)

In these two cases: employer must first secure a work permit from the OOLI:: before
en a ing the child

l)

f"J.
0

l)

\.J
PAGE 54 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW
'
Regulation ?f working hours of a child work {-lnly occasionally or sporadically and not on
an occupational basis. (RA. No. 10361, Sec. 2[d])
~ • AND
AGE BELOW15
BELOW18 b) Benefits accorded to househelpers
Not more Not more
DAY
than 4 hours than 8 hours Rights and privileges of domestic worker:
more more a. The domestic worker shall not be subjected to
WEEK 20 than 40 any kind of abuse or any form of physical
hours hours violence or harassment or any act tending to
Bprn to 6am 10pm to 6am degrade his or her dignity.
PPROHIBITION of the of the b. The employer shall provide for the basic
following day following day necessities of the domestic worker to include
at least three (3) adequate meals a day and
Employment of the child in public humane sleeping arrangements that ensure
· entertainment (please refer to the table above) safety.
c. Respect for the privacy of the domestic worker
Prohibition on the employment of children in shall be guaranteed at all times and shall
certain undertaking and certain extend to all forms of communication and
advertisements personal effects.
d. The employer shall grant the domestic worker
NO CHILD shall be employed as a model in any access to outside communication during free
advertisement directly/indirectly promoting time.
alcoholic beverage, intoxicating drinks, tobacco e. The employer shall afford the domestic worker v.c ..
and· its byproducts, gambling or any form of the opportunity to finish basic education and
violence or pornography. (Sec. 5) may allow access to alternative learning
systems and, as far as practicable, higher
Prohibition against worst forms of child labor education or technical and vocational training.
"Worst forms of child labor": f. All communication and information pertaining ·
1. All forms of slavery to the employer or mfmbers of the household
, ).
2. Prostitution shall be treated as privileged and confidential, · ·
~
'· ,f 3. Production and trafficking of dangerous and shall not be publicly disclosed by the
drugs and prohibited volatile substances domestic worker during and after employment.
() 4. Work which by its nature or the
circumstances in which it is carried out is Employment contract
0 hazardous or lil<ely to be harmful to the. · An employment contract shall be executed by and
health, safety, or morals of children (Sec. 3) between the domestic worker and the employer
('
.,_; before the commencement of the service in a
3. Kasambahay (R.A. No. 10361) language or dialect understood by both parties and
0 shall include the following:
Coverage 1. the kasambahay's duties and responsibilities
() This Act applies to all domestic workers employed 2. period of employment
and working within the country. 3. compensation
(_) 4. authorized deductions
a) Definition 5. working conditions
u 6. Termination of employment
Domestic worker or "Kasambahay" refers to any 7. any other lawful condition agreed upon by
0 person engaged In domestic work within an both parties. (Sec. 11)
employment relationship such as, but not limited
0 to, the following: general househelp, nursemaid or Note: A· kasambahay assigned to work in a
"yaya", cook, gardener, or laundry person, but commercial, industrial or agricultural enterprise,
() shall exclude any person who performs domestic· will be entitled to the applicable minimum wage for
agricultural or non-agricultural workers.

PAGE 55 OF 244
\. ..
ATENEO CENTRAL
BAR OPERATIONS 2018
Pre-employment requirements:
1. Medical certificate or a health certificate
issued by a local government health officer
2. Barangay and police clearance
3. NBI clearance
4. Duly authenticated birth certificate or if not
available, any other document showing the
age of the domestic worker such as voter's
identification card, baptismal record or
passport. (Sec. 12)
Terms and conditions of employment
1. Minimum Wage
• Those employed in the National Capital
Region -P2,500 a month
• Those employed in chartered cities and
first class municipalities - P2,000 a month
• Those employed in other municipalities -
P1 ,500 a month
2. Rest period
· • Daily rest period - aggregate of e hours per
day·
• · Weekly rest period • at least 24
consecutive hours of rest in a week
3. Thirteenth month pay
• The domestic worker is entitled to 131h
month pay as provided for by law
4. Leave benefits
· • A domestic worker who has rendered at
least 1 year of service shall be entitled to
an annual service incentive leave of 5 days
with pay. Any unusea portion of said annual
leave shall not be cumulative or carried
' 1.
over to the succeeding years. Unused
leaves shall not be convertible to cash.
5. Social and other benefits
• A domestic worker who has rendered at
least 1 month of service shall be covered
by the Social Security System (SSS), the
Philippine Health Insurance Corporation
(PhilHealth), and the Home Development
Mutual Fund or Pag-lBIG, and shall be
entitled to · all the benefits in accordance
with the pertinent provisions provided by
law.
• Premium payments or contributions shall
be shouldered by the employer. However,
if the domestic worker is receiving a wage
of P5,000.00 and above per month, the
domestic worker shall pay the
PAGE 56 OF 244
LABOR LAW
proportionate share in the premium
payments or contributions.
c] Termination of Employment
i
A. Initiated by the domestic worker
1. Verbal or emotional abuse of the domestic
worker by the employer or any member of the
household
2, Inhuman treatment including physical abuse
of the domestic worker by the employer or any
member of the household
3. Commission of a crime or offense against the
domestic worker by the employer or any
member of the household
4. Violation by the employer of the terms and
conditions of the employment contract and
other standards set forth under this law
5. Any disease prejudicial to the health of the
domestic worker.. the employer, or member/s
of the-household
· 6. Other causes analogous to the foregoing ,..,•
i
(Sec. 32)
Note: If the domestic worker leaves without
justifiable reason, any unpaid salary due not
exceeding the equivalent 15 days work shall be
forfeited. In addition, the employer may recover . -r·-1.
v . p
from the domestic worker costs incurred related to
the deployment expenses, provided that the
service has been terminated within 6 months from
the domestic worker's employment.
B. initiated by the employer
Misconduct or willful disobedience by the 0
domestic worker of the lawful order of the
employer In connection with the termer's work
2. Gross or habitual neglect or inefficiency by the
domestic worker in the performance of duties
(l
3. Fraud or willful breach of the trust reposed by
the employer on the domestic worker
(J
4. Commission of a crime or offense by the
domestic worker against the person of the u.·--..
employer or any immediate member of the
employer's family
5. Violation by the domestic worker of the terms
and conditions of the employment contract 0
and other standards set forth under this law
6. Any disease prejudicial to the health of the
domestic worker, the employer, or member/s
(J.
of the household .
,
v
 ATENEO CENTRAL
BAR OPERATIONS 201f>
7. Other causes analogous to the foregoing
(Sec. 34)
d) Reliefs for unjust termination
If the domestic worker is unjustly dismissed, the
domestic worker shall be paid the compensation
r r ....
already earned plus the equivalent of 15 days work
by way of indemnity.
e) Penalties
Any violation of R.A. No. 10391 declared unlawful
shall be punishable with a .fine of not less than Ten
thousand pesos (Pto;ooo.oo) but not more than
Forty thousand pesos (P40,001lOO) without
prejudice to the filing of appropriate civil or criminal
action by the aggrieved party.
4. Homeworkers
~~·
I
'l
. However, where payment is made to a contractor
a) Definition
,· Homeworker
v Applies to any person who performs industrial
homework for an employer, contractor or sub-
(, contractor
Industrial Homework
r, Industrial Homework is a system of production
r -,
under which work for an employer or contractor is
carried out by a homeworker at his/her home.
Materials may or may not be furnished by the
employer or contractor. It differs from regular
factory production principally in that it is a
· decentralized form of production where there is
0. ordinarily very little supervision or regulation or
methods of work. (D.O. No. 05-92, Sec. 2[a])
. (_J
Industrial Homeworker
c System of production under which work for
employer or contractor is carried out by
an
a
(J homeworker at his/her home. Materials may or
may not be furnished by the employer or
/ '
v contractor (Labor Code, Art. 154)
(J Employer of Homeworker
Includes any person, natural or artificial who, for
0 his account or benefit, or on behalf of any person
residing outside the country, directly or indirectly,
0 or through an employee, agent contractor, sub-
contractor or any other person:
• Delivers, or causes to be delivered, any
goods, articles or materials to be processed or
PAGE 57 OF 244
LABOR LAW
fabricated in or about a home and thereafter to
be returned or to be disposed of or distributed
in accordance with his directions
• Sells any goods, articles or materials to be
processed or fabricated in or about a home
and then re-buys them after such processing
or fabrication, either by himself or through
some other person (D.O. No. 05-92)
b) Rights and benefits accorded to
-, homeworkers
Immediately upon receipt of the finished goods or
articles, the employer shall pay the homeworker of
the contractor or subcontractor, as the case may
be, for, the work performed less corresponding
homeworkers' share of SSS, MEDICARE AND
ECC premium contributions which shall be
remitted by the contractor/subcontractor or
employer to the SSS with the employer's share.
or subcor.tractor, the homeworker shall likewise be
paid immediately after the goods or articles have
been collected from the workers. (D.O. No. 05-92,
Sec. 6)
c) Conditions for deductions from
homeworker's earnings
No employee, contractor, or sub-contractor shall
make any deduction from the homeworker's
earnings for the value of materials which have
been lost, destroyed, soiled or otherwise damaged
unless the following conditions are met:
• The homeworker concerned is clearly shown
to be responsible for the loss or damage:
• The employee is given reasonable opportunity
to show cause why deductions should not be
made;
• The amount of such deduction is fair and
reasonable and shall not exceed the actual
toss or damages; and
• The deduction is rnqde at such rate that the
amount deducted does not exceed 20% of the
homeworker's earnings in a week.
Liability of employer and contractor
Whenever an employer shall contract with another
for the performance of the employer's work, it shall
be the duty of such employer to. provide in such
contract that the employees or homeworkers of the
contractor and the latter's sub-contractor shall be
paid in accordance with the provisions of this Rule.
ATENEO CENTRAL
BAR OPERATIONS 2018
In the event that such contractor or sub-contractor
fails to pay the wages or earnings of his
employees or homeworkers, such employer shall
be jointly and severally llablewlth the contractor or
sub-contractor to the workers of the latter, to the
extent that such work Is performed under such
. contract, in (he same manner as if the employees
or homeworkers were directly enqaqed by the
employer.
Prohibitions for Homework
1. Explosives, fireworks and articles of like
character
2. Drugs and poisons
3. Other articles, the processing of which
requires exposure to toxic substance
5. Night Workers
R.A. No. 10151
An Act Allowing the Employment of Night Workers,
Thereby Repealing Articles 130 and 131 of
Presidential Decree Number Four Hundred Forty-
Two, as amended, otherwise known as the Labor
Code of the Philippines, 2011
This new Republic Act provides that women can
now work on night time.
Coverage
All persons, who shall be employed or permitted or
suffered to work at night, except those employed
in agriculture, stock raising, fishing, maritime
transport and inland navigation, during R period of
not less than seven (7) consecutive hours,
including the interval from midnight to five o'clock
in the morning, to be determined by the Secretary
of Labor and Employment, after consulting the
workers' representative/labor organizations and
employers.
Night Worker means any employed person
whose work requires performance of a substantial
number of hours of night work which exceeds a
specified limit. This limit shall be fixed by the
Secretary of Labor after consulting the workers'
representative/labor organizations and
employers."
Health Assessment
At their request, workers shall have the right to
undergo a health assessment without charge and
PAGE 58 OF244
LABOR LAW
to receive advice on how to reduce or avoid health
problems. associated with their work:
a. Before taking up an assignment as a night
worker;
b. At regular intervals during such an
assignment; and
c. If they experience health problems durinq
such an assignment which are not caused by
factors other than the performance of night
work.
With the exception of a finding of unfitness for
night work, the findings of such assessments shall
not be transmitted to others without the workers'
consent and shall not be used to their detriment.
Mandatory Facilities
Suitable first-aid facilities shall be made available
for workers performing night work, including
arrangements where such workers, where
necessary, can be taken immediately to a place for
appropriate treatment. The employers are likewise
required, to provide safe and healthful working
conditions and adequate or reasonable facilities
such as sleeping or resting quarters in the
establishment and transportation from the work
premises to the nearest point of their residence
subject to exceptions and guidelines to be
provided by the DOLE.
Transfer
Night workers who are certified as unfit for night
work, due to health reasons, shall be transferred,
0
whenever practicable, to a similar Job for which
they are fit to work. if such transfer to a similar job
()
is riot practicable, these workers shall be granted
. the same benefits as other workers who are
unable to work, or to secure employment during
such period. A night worker certified as temporarily ,
unfit. for night work shall be given the same
protection against dismissal or notice of dismissal
as other workers who are prevented from working
for reasons of health.
Compensation 0
' The compensation for night workers in the form of 0
working time, pay or similar benefits shall
reco-jnize the exceptional nature of night work.
u
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Social Services 2. For additional periods in respect of which a

Appropriate social services shall be provided for
night workers and, where necessary, for workers
performing night work.
Night Work Schedules
Before Introducing work schedules requiring the
services of night workers, the employer shall
consult the workers' representatives/labor
organi:zations concerned on the details of such
schedules and the forms of organization of night
work that are best adapted to the establishment
and Its personnel, as well as on the occupational
health measures and social services Which are
ir "'·
required. In establishments employing night
workers, consultation shall take place regularly.
CBA provision vis-a-vis overtime work
\ j
CSA may stipulate higher overtime pay rate.
The basis of computation of overtime pay beyond
· that required by Art. 87 of the Labor Code must be
the collective aqreement, It is not for the court to
impose upon· the parties anything beyond· what
they have agreed upon which is not tainted with
,, ~- illegality. On the other hand, where the parties fail
' .
\ r to come to an agreement, on a matter not legally
,,.
·" to
required, the court abuses its discretion when it
I
obliges any of them to do more than what is legally
obliged. (PNB v. PNB Employee's Assoc., G.R.
No~ L-30279, 1982)..
(J Pregnant Women
0 Measures shall be taken to ensure that an
alternative to night work is available to women
(.1't workers who would otherwise be called upon to
perform such work -
lJ 1. Before or after childbirth, for a period of at
least 16 weeks, which shall be divided
between the time before and after childbirth;
medical certificate is produced stating that
said additional periods are necessary for the
health of the mother or the child -
a. During pregnancy
b. Determined by DOLE after consultation
with employer and labor representatives
During the periods referred to in this article:
a. A . woman worker shall not be dismissed or
given notice of dismissal, except for just or
authorized causes provided for in this Code
that are not connected with pregnancy,
childbirth and childcare responsibilities.
b. A woman worker shall not lose the benefits
regarding her status, seniority, and access to
promotion which may attach to her regular
night work position.
Pregnant women are allowed to work at night only
if a competent physician other than the company
physician shall certify their fitness to render night
, work, and specify the period of the pregnancy that ... ,: ...
they can safely work.
The 'measures referred to In this article may
include transfer to day work where this is possible,
the provision of social security benefits or an
extension of maternity leave. The provisions of this
article shall not have the effect of reducino the
protection and benefits connected with maternity
leave under existing laws.
Migrant Workers (R.A. No. 8042 or the Migrant
Workers and Overseas Fl!lplnos Act of 1995, as
amended by R.A. No. 10022)
a) Claims for Compensablllty of Work-Related
Death, Sickness, or Disability
See Part II of reviewer.

0
0
0

l)
I -,

\..)
PAGE 59 OF 244
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW
'

1.
.-
6. Apprentices and Lr,arners

•
Persons hired as -trainees in seml-. skilled
and other industrial occupations
1.
._ . -, -
-APPRENTICES
Practical training on the job
2. Supplemented by related
2. Non· apprentlceable 3. theoretical
3. May be learned through practical training 4. instruction
on the job in a relatively short period of time 5. Covered by a
4. Shall not exceed 3 months 6. Written apprenticeship agreement with an
individual employer or entity
7. Needs DOLE approval
8. Shall not exceed 6 months
Training Agreement
Governed by Learnership Agreemeht Apprenticeship Agreement
Occupation
learn able occupations consisting of semi- Apprentlceable occupations or any trade, form of
skilled and other Industrial occupations which employment or occupation approved for
are non-apprentlceable apprenticeship by the DOLE Secretary
Theoretlcal Instructions
Learnershlp may or may not be supplemented Apprenticeship should always be supplemented by
by related theoretical Instructions related theoretical instructions
Ratio of theoretical instructions and on OJT
For both, the normal ratio is one hundred {100) hours .Ior every two thousand 2,000 hours of
practical or on-the-Job training
Competency-based system
It Is required that learnership be implemented Not required
on the TESDA~approved competency-based
system i
Duration of training
Not exceeding three (3) months of practical More than three (3) months, but not over six (6)
training months
Qualifications
Law does not mention any qualification Art. 59 of the Labor Code:
1. Be at least fifteen (15) years of age; (IRR and
0
R.A. 7610, as amended by R.A. 7658)
2. Possess vocational aptitude and capacity for
appropriate tests; and
3. Possess the ability to comprehend and follow
oral and written instructions.·
Circumstances justifying hiring of trainees
()
Art. 74: Pre-requisites before learners may be Law does not expressly mention any
validly employed:
1. When no experienced workers are
available;
0
2. The employment of learners is necessary to
prevent curtailment of employment
opportunities; and
3. The employment does not create unfair
competition in terms of labor costs or Impair
or lower working standards.
tJ
Limitation on the number of trainees . (,)
PAGE 60 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

In learnership, a participating enterprise is No similar cap is imposed in the case of

allowed to take In learners only up to a apprenticeship
maxirnum of twenty percent (20%} of Its total
regular workforce
Option to employ I
The enterprise is obliged to hire the learner The enterprise is given only an "option" to hire the
after the lapse ofthe learnershlp period; apprentice as an employee.
F >
Wage rate
The wage rate of a learner or an apprentice is set at seventy-five percent (75%) of the statutory
minimum wage.

Requisites for a Valid Apprenticeship 2. Occupation to be learned and the duration of .

1. Qualifications of apprentice are met
2. The apprentice earns not less than 75% of the
prescribed minimum salary
3. Apprenticeship agreement duly executed and
signed
4. Apprenticeship program approved by the sec.
Of labor; otherwise, the apprentice shall be
deemed as a regular employee
5. Period of apprenticeship not exceed 6 months
At the termination of the apprenticeship, the
employer is not required to continue the ·
employment.
the training period which shall not exceed 3
months
3. Wage of the learner which shall be at least
75% of the applicable minimum wage
4. Commitment to employ the learner, if he so
desires, as a regular employee upon
completion of training (Labor Code, Art. 75)
A learner who has worked during the first two
months shall be deemed a regular employee if
training is terminated by the employer before the .,. ;····-
end of the stipulated period through no fault of the
learner.

Employer may not pay waqeif the apprenticeship 7. Persons with Disabilities
f : is:
a. A requirement for graduation Handicapped Workers
b. Required by the School Those whose earning capacity is impaired by age
c. Required by the Training Program Curriculum or physical or mental deficiency or injury, disease
(j d. Requisite for Board examination or illness. (Art. 78, Labor Code)

,.,,._ Art -. 63, Labor Code. Venue of Apprenticeship
'- J
Programs
The plant, shop, premises of the employer or firm
concerned if the apprenticeship program is
{J organized by an individual employer or firm.
The premises of one or several firms designated
for the purpose by the organizer of the program If
such organizer is an association of employers,
civic groups and the like.
_ There must be a link between the deficiency and
' the work which entitles the employer to lessen the
worker's wage. If the disability of the person is not
in a,,y way related to the work for which he was
hired, he should not be so considered as a
handicapped worker.
PERSONS WITH DISABILITY
(R.A. No. 72?7, as Amended by R.A. ho. 9442)

u DOLE training center or other public training

Persons with Disability are those suffering from
restriction or different abilities, as a result of a

u institutions With which the Bureau has made

appropriate arrangements.
mental, physical or sensory impairment, to perform
an activity in the manner or within the range

0 a
· considered normal for human being.
Contents of Learnership Agreemunt

u 1. Names and addresses of employer and

learner
Impairment refers to any loss, diminution
aberration of psychological, physiological,
or
or
i,.__. anatomical structure or function.
PAGE 61 OF 244

~--------------------·-··--- --·--·-·-
ATENEO CENTRAL
BAR OPERATIONS 2018
Disability means:
a. A. physical or mental impairment that
substantially limits one or more psychological,
physiological or anatomical functions of an
individual or activities of such individual;
b. A record of such an impairment; or
· c. Being regarded as hc:vin~J such an
impairment.
Handicap refers to a disadvantage for a given
individual, resulting from an impairment or a
disability that limits or
prevents the function oractivity that is considered
normal given the age and sex of the individual.
When Employable
1. their employment is necessary to prevent
curtailment of employment opportunities;
2. does not create unfair competition in labor
costs; and
3. does not impair or lower worklnq standards.
Handicapped workers may · be hired as
apprentices or learners if their handicap is not
such as to effectively Impede the pnrformance of
job operation in the particular position for which
they are hired.
Handicapped Workers May Become Regular
Employees - if their handicap is not such as to
. effectively impede the performance of job
operations in the particular occupations for which
they were hired.
Rules on Handicapped Workers
Handicapped workers may be employed when:
1. Their employment is necessary to prevent
curtailment of employment opportunities
2. Does not create unfair competition in labor
costs
3. Does not impair or lower working standards.
(Labor Code, Art. 79)
Employment Agreement; Contents
1. Names and addresses of the employer and
the handicapped worker
2. Rate of pay of the handicapped worker which
shall not be less than 75% of the legal
minimum wage
3. Nature of work to be performed by the
handicapped worker
PAGE 62 (O,F 244
LABOR LAW
4. Duration of the employment {Labor Code, Art.
80)
a) Equal Opportunity for Employment
No disabled person shall be denied access to
opportunities for suitable employment. Qualified
disabled employees shall be subject to same
terms and conditions of employment and the same
compensation, privileges, benefits, fringe benefits,
-, incentives or allowances as a qualified able-
bodied person
Wh~t are the rights of PWDs?
Under the law, PWDs are entitled to equal
opportunity for employment. Consequently, no
PWD shall be denied access to opportunities for
suitable employment. A qualified employee with
disability shall be subject to the same terms and
conditions of employment and the same
compensation, privileges, benefits, fringe benefits,
incentives or allowances as a qualified able-
bodied person. x>
What is the wage rate of PWDs?
The wage rate of PWDs is 100% of the applicable
minimum wage. . '
What is the wage rate of PWD if hired as
apprentice or learner?
A PWD hired as an apprentice or learner shall be
paid not less than seventy-five percent (75%) of
the applicable minimum wage.
a. Discrimination
(}
. What is the rule on discrimination against
employment of PWDs?
No entity, whether public or private, shall
discriminate against a qualified PWD by reason of f "'\..
disability in regard to jot: application procedures, \.I
the hiring, promotion, or discharge of employees,
employee compensation, job training, and other
terms, conditions and privileges of employment.
(RA 7277, Sec. 32)
{J
The following constitute acts of 0
discrimination:
1. Uinifing; segregating or classifying a job
applicant with disability in such a manner that
adversely affects his work opportunities; L)
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

2. Using qualification standards, employment shall be provided to private entities which employ
tests or other selection criteria that screen out disabled· persons.
or tend to screen out a PWD unless such
standards, tests or other selection criteria are Private entities that employ disabled persons who
shown to be job-related for the position in met the required skills or qualifications, either as
question and are consistent with business regular employee, apprentice or learner, shall be
necessity; entitled to an additional deduction, from their gross
3. Utilizing standards, criteria, or methods of income, equivalent to 25% ofthe total amount paid
administration that: as salaries and wages to disabled persons.
4. Have the effect of discrimination on the basis
of disability; or Private entities that improve or modify their
5. Perpetuate the discrimination of others who physical facilities in order to provide reasonable
are subject to common administrative control. accommodation for disabled persons shall also be
6. Providing less compensation, such as salary, entitled to an additional deduction from their net
wage or other forms of remuneration and taxable income, equivalent to 50% of the direct
fringe benefits, to a qualified employee with costs of the improvements or rnoditlcatlons.
disability, by reason of his disability, than the J
amount to which a non-disabled person ---end of topic---
performing the same work is entitled;
7. Favoring a non-disabled employee over a
qualified employee with disabilitywlth respect
to promotion, training opportunities, study and
scholarship grants, solely on account of the
latter's disability;
''\ :
8. Re-assigning or transferring an employee with
a disability to a job or position he cannot
perform by reason of his disability;
9. Dismissing or terminating the services of an
'·,.,,.. -
J' -~

employee with disability by reason of his

.-
,_ -I
disability unless the employer can prove that
he impairs the satisfactory performance of the
work involved to the prejudice of the business
(l entity; provided, however, that the employer
first sought to provide reasonable
() accommodations for persons with disability;
10. Failing to select or administer in the most
effective manner· employment tests which
.accurately reflect the skills, aptitude or other
u factor of the applicant or employee with
(
,, .....
'-'
. disability that such tests purports to measure,
. rather than the impaired sensory, manual or
speaking skills of such applicant or employee,
if any; and
11. Excluding PWD from membership in labor
lJ unions or similar organizations.

0 b. Incentives for Employers (Sec. 8)

To encourage the active participation of the private

sector in promoting the welfare of disabled
persons and to ensure gainful employment for
qualified . disabled persons, adequate incentives

PAGE 63 OF 244
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

IV. SOCIAi.. WELFARE LEGISLATION

TOPIC OUTLINE UNDER THE SYLLABUS

A. SSS Law (R.A. No. 8262)

1. Coverage and Exclusions
2. Dependents; Beneficiaries
3. . Benefits

B. GSIS Law (R.A. No. 8291)

1. Coverage and Exclusions
2. Dependents; Beneficiaries
3. Benefits

C. Disability and death benefits

1. Labor Code
2. POEA-Standard Employment
Contract

Employer - any Empl\'Jyer Employer

person, natural or national government, person, natural or
judicial, domestic or its political juridical, employing
foreign who carries subdivisions, the services of the
on in the Philippines branches, agencies or
employee.
any trade, business, instrumentalities,
industry undertaking, including GOCCs,
or activity of any kind and financial 2. Employees -
and uses the institutions with belonging to either of
services of another original charters, the the following sectors:
person who is under constitutional
his orders as regards commissions and the Public sectors,
employment. judiciary comprised of the
following:
*EXCEPT: Government 2. Employee any (a) Employed
workers covered by r i ·
and any of its political person receiving ·.,,,,..i''

subdivisions, branches compensation while in the GSIS, including

and instrumentality, service of an members of toe AFP;
including GOCCs, i.e., employer as defined (b) Elective officials
those under GSIS. . herein, whether by who are receivmq
election or regular salary;
Employee - any appointment (c) Those employed
person who performs as Casual,
services for an Contractual,
employer who Emergency, 0
receives Temporary or
/-~-
compensation for Substitute Employees v
such services, where (Labor Code, Art.
there is an employer- 173[g]) (}
employee
relationshi .
PAGE 64 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2018 -, LABOR LAW

Private sector,
Self-Employed comprising all the
considered both employed workers
employer and who are covered . by
employee. the SSS;

Overseas Filipinos
(ECL Rules, Sec. 5,
Rule 1
Legal spouse entitled for support; 1. Legitimate spouse
Child, whether legitimate, legitimated, legally living with the
adopted or illegitimate; employee
Parents receiving regular support from the 2. Child, whether
member. · legitimate, legitimated
or legally adopted;
3. Parents of said
employee wholly
dependent upon him
for regular support.

2.
Not over age of 2. Not over 21 years of
majority; OR age provided that he is
••-:-----,-~~-:----,--........,_.__--,..,....~------,--,,--1f-·e~n..;.;.r-=-o.;.;.;llec..cdc.,i--'n school; OR ;,../~,,
Incapable of supporting himself either physically 3. Over twenty-one years
lr ,i or mentally prior to 21 years of age or age of of age provided that he is
majority, as the case may be congenitally incapacitated
and Incapable of self-
support physically or
mentall ·
Dependent Spouse, a. Legal Dependent a. 1 Dependent Spouse
until remarriage; AND Spouse until until he remarries; AND
Dependent Legitimate remarriage ;AND b. Dependent Children
(} or Legitimated or b. Dependent Children who are the primary
'-:.1' Legally Adopted and beneficiaries.
Illegitimate Children

Dependent Parents a. Dependent Parents a. Dependent Parents

Absent primary and AND b. Illegitimate Children
secondary b. Legitimate and Legitimate
beneficiaries, any descendants, subject Descendants, who are the
other person to restrictions on secondary beneficiaries
designated by dependent children
(} member as
secondary
(_; beneficia
As to DEATH
0 BENEFITS,
beneficiary
if no
qualifies
0 under the Act, benefits
shall be paid to. Legal
Heirs in accordance.with -.
Law of Succession ·
1. Monthly Pension 1. Monthly Pensions 1. Medical
2. Dependents Pension 2. Separation 2. Temporary Total
I. 3. Retirement Disabilit
\..J
PAGE 65 OF 244

'-----------------·--··-- --··--
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

4. Dea~ 3. Unemployment or 3. Permanent Total

5. Permanent Disability Involuntary Separation Disability
6. Funeral 4. Retirement 4. Permanent Partial
7. Sickness 5. Disability Disability
8. Maternity (ONLY 1 sr 6. Survivorship 5. ./Death
FOUR 01::LIVERIES 7. Funeral
OR 8. Life Insurance
MISCARRIAGES) 9. Loan Grants

*EXCEPT Judiciary and

Constitutional
Commissions who shall
have life insurance onl
a. All employees not All employees receiving a, All employers;
over 60 years of compensation who have b. Employees not over
age and their not reached compulsory 60 years old;
employers; retirement age, c. Employees over 60
(effective date: on irrespective of years old and paying
the first day of his employment status contributions;
operation and that of · d. Employee coverable
the employee on the by both the GSIS and
day of his SSS are compulsorily
employment) covered by both
b. Self-employed Systems; and
· -. · · persons, as may be e. Filipino employees
determined by the employed abroad .I :
Commission under subject to prescribed i. .~.

such rules and EC regulations

regulations as it may (Labor Code, Art. 175;
prescribe, including, Amended Rules on
but not limited to: Employees' . / ~
i. all self-employed Compensation, Rule · 1,
professionals; Sec. 2)
ii. partners and
single-proprietors Compulsory coverage of
of business; the employer shall take
iii. actors and effect on the first day of
actresses, ' his operation. ·
directors,
scriptwriters and Compulsory coverage of
news the employee shall take
correspondents effect on the first day of r ~
-..;;.
not employees: his employment. (ECL
iv. professional Rules, Sec. 6, Rule 1)
athletes, coaches,
trainers and
jockeys, and 0
individual farmers
and fishermen;
(effective date: on
registration with the (J
SqS)
c. Domestic helpers
60 years of age and
below, provided,
that their monthly
income is not less

PAGE 66 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

than P1 ,000;
(effective date: upon
rendering at least 1
month of service
Filipinos recruited
by foreign-based
employers for
J.•"'"""•\.
employment abroad;
Employee
separated from
employment to
maintain his right to
full benefits;
Self-employed who
realizes no Income
. for a certain month;
Spouses who
devote full time to
managing household
and family affairs,
unless specifically
mandatorily covered.

*BY AGREEMENT:
Any Ioreiqn government,
international
organization or wholly
owned Instrumentality
employing workers in the
Philippines or employing
Filipinos outside the
Philippines, may enter
agreement with
Philippines for inclusion
of such employees in
SSS EXCEPT those
already covered by their
() respective civil · service
retirement s stem .
. C: 1. Employment
purely casual and
1. Members of the AFP
and PNP, subject to
not for the purpose the condition that they
of occupation, or must settle first their
business of . the financial obligation
() employer with the GSIS;
2. Service performed 2. Contractual
on or in connection employees, who
with alien vessel, if have no employer-
0 employed
such vessel
when
is
employee relationship
with the agencies they
0 outside
f>hjllppines
of serve;
3. Uniformed personnel
3. Employees of of the Bureau of Fire
0 Philjppine Protection (BFP);
gov~rnment or 4. Uniformed personnel
c;, instrumentality or of the Bureau of Jail
a enc thereof

PAGE 67 OF 244

c__ --··
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

4.Service performed Management and

in the employ of a Penology (B.JMP);
foreign 5. Barangay and
government, or Sanggunian Officials
international who are not receiving
organizations, or. fixed monthly
wholly owned compensation;
instrumentality 6. Employees who do
employing workers not have monthly
in the Philippines or regular hours of work
employing Filipinos and are not receiving
outside of the fixed monthly
Philippines compensation
5. Services performed (/RR of R.A. No.
by temporary 8291, Rule 11, Sec 3,
employees and Par. 2)
other employees
excluded by SSS
regulation;
employees of bona
fide independent
contractors shall not
be deemed
employees of the
·,·· · employer engaging
e : •••

the services of an I l;
independent
contractor
All actual remuneration The basic pay or salary AU payments made for
for employment, received by an employee, income benefits, and
including the mandated pursuant to his medical or related '( l
cost-of-llvinq allowance, election/appointment, benefits.
the cash value of any excluding per diems, ...;,. .. ......
remuneration paid in any bonuses, overtime pay,
medium other than cash honoraria, allowances .
lJ
·~

EXCEPT that part of the and any other

remuneration in excess emoluments received in
of the maximum salary addition to the basic pay
credit
Non-work connected Work-connected exempt
disability, sickness, from liability where
maternity, death and old permanent disability due
age and other to hls grave misconduct,
contingencies resulting habitual intoxication, or
in loss of income or willful intention to kill
financial burden (Sec. 2) himself or another (Sec.
15-17
1. Employer's 1. Member shall Employer's obligation to
contribution on his continue to be a pay the monthly
account ceases at member; and contribution arising from
the end of the month 2. ~ember
of separation;
shall
entitled to whatever
be that employment shall
cease at the end of the
0
2. Employee's benefits he has month of contingency
obligation to qualified to in the and during such months
contribute also event of any that he is not receiving
ceases at the end of contin enc wa es or sala .

PAGE 68 OF 244

I.'Li
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

the month of compensable under

separation; this Act.
Employee shall be
credited with all
contributions paid on
his behalf and
entitled to benefits;
Employee may
j· l.
continue to pay the
total contributions to
maintain his right to
full benefits .
. A. Employer-: ----t--E-m_p__,1-o-ye_r_: -------,1-A-. __ A_n_y--p-t-,y-s-ic..,..ia-n----,
Report immediately to Report to GSIS the attending an injured or
SSS the names, c1ges, names, employment sick employee shall report
clvil status, occupations, status, positions, salaries concerning his condition
salaries and dependents of the employee and such or treatment, and
of 611 his covered other matter as thereafter; make available
employees. determined by the GSIS. to the employee or the
System such medical
B. Self-employed: information.
Report to SSS within 30
days from the first day of B. Within five days after
his operation, his name, entry in the logbook, the
c age, civil status, employer shall report to
!' occupation, average the System only those
\ ' monthly net income and contingencies it deems to
his de endents. be work-connected.
1. Employer's contributions 1. Employer's
2. Employee's/member's contributions contributions
( \ 2. Government
uarantee
c :. Property, assets, and revenues of SSS and GSIS are State Insurance Fund and
\ '}
all exempt from taxes; and all benefits paid by SSS or all Its assets shall be
GSIS shall likewise be exempt from taxes, exempt from any tax, fee,
assessments, fees, charges, and duties of all kind charge, levy, or customs
or import duty
() Dispute arising from: Any dispute arising under Dispute arising from: .
(' . . .:~·l,
1. Coverage this Act and other laws 1. Coverage
.
2. Benefits administered by GSIS 2. Benefits
{ :. 3. Contributions 3. Contributions
"rzr ' 4. Penalties Jurisdiction: GSIS 4. Penalties
5. Any matters related 5. Any matter related
' ·,
\) thereto When decision made: 30 thereto
days from receipt of the
Jurisdiction: Social hearing officer's findings Jurisdiction: SSS or GSIS,
Security Commission and recommendations or as the case may be.
30 days after submission
When decision made: for decision Appeal:
Mandatory period of 20 The Commission - decide
days from submission of Appeal; within twenty working
evidence CA - Rule 43, Section 31 days from the submission
SC-Rule45 of the evidence.
Appeal:
L CA - questions of law
and facts
SC - questions of law only

PAGE 69 OF 244

'-----------------· -- -- -- " .... ,_ -- -- -- .. ·--------'-'--------

ATENEO CENTRAL
BAR OPERATIONS 2018
SC - questions of law
onl
20 years from:
1. time delinquency is
known;
2. time the assessment
is made by the SSS;
or
3. time the benefit
accrues.
(as the casemay be)
EMPLOYEE'S COMPENSAtlON LAW [ECL]
{P.D. No. 626)
Definition of.Injury,. Accident, and Death
1. Injury: Any harmful change in the human
organism from any accident arising out of
and in the course of employment.(l=CC v.
Sanico, G.R. No. 134028, 1999)
2. "Arising out of' refers to the origin or
· cause of the accident. "In the course of
employment" refersto the injurythat takes
place within the period of employment, at
the place where the employee reasonably
may be, and while fulfilling his duties or is
engaged in doing something incidental
thereto (lloilo Dock & EnginMring Co. v.
wee, G.R. No. L-26341, 1968)
3. "Accident" is an unintentional and
unforeseeninjurious occurrencethat which
happens by chance or fortuitously without
intention and design and which is
unexpected, unusual, and unforeseen
(Sungf'I v. Virgen Shipping Corp., GR. No.
198640, 2014) . 1. For the injury and the resulting disability or
An "assault" although resulting from a
deliberateact of the slayer, is consideredan
"accident" under the law, since the word
"accident" is intended to indicate that "the
act causing the injury shall be casual or
unforeseen, an act for which the injured
party is not legally responsible."(Taller Vda.
de Nava v. Ynchausti Steamship, G.R. No.
35741, 1932)
PAGE 70 OF 244
LABOR LAW
4 years from date of Claim for compensation
contingency EXCEPT for • 1 year from notice to the
life and retirement employer
benefits
All money claims arising
from employer-employee
relations accruing during
the effectivity of this Code
- within 3 years from the
time the cause of action
accrued
4. "Death" is the · loss of life resulting from
injury or sickness (Labor Code, Art. 173{m})
5. "Sickness" is any illness defined accepted
as ·. occupational disease listed by the
Commission, or caused by employment,
subject to proof that the risk of contracting
the same is increased by work conditions
(Labor Code, Art. 173{i})
·,...•• Jii
6. "Disability" means loss or impairment of a
physical or mental function resulting from
injury or sickness (Labor Code, A1t. 173{n])
Abolishimmt of Presumption of
Compensability (doctri;ne under Workman's
Compensation Act, predecessor law. of ECL)
While the presumption of compensabllity and
theory of aggravation under the Workmen's
Compensation Ad may have been abandoned
under the New LaborCode, it is significantthat the
liberality of the law in general in favor of the
workingmanstill subsists. (Lazo v. ECG, G.R. No ..
(_)
78167, 1990)
Rules on Compensability
(l
deathto be compensable,the injury must be \I
the resultof accidentarisingout of and in the
course of the employment(ECG Resolution
No. 2799, 1984); and
2. For the sickness and the resulting disability
or death to be compensable,the sickness
must be the result of an occupational
disease listed under the Annex "A" of the
Rules dealing with occupational diseases
with the conditions set therein satisfied.
Otherwlse, proofmust be shown that the risk
of contracting the disease is increased by
 A TENEO CENTRAL
BAR OPERATIONS 2018
the working conditions (EGL Rules, Sec. 1,
Rule Ill)
3. Only injury or sickness that occurred on or
after January 1, 1975 and the resulting
disability or death shall be compensable
(EGL Rules, Sec. 1, Rule Ill)
Limitations - No compensation
No compensation shall be allowed to the
employee or his dependents when the injury,
sickness, disability, or death was occasioned by
any of the following:
1. His intoxication;
2. His willful intention to injure or kill himself or
another; or
3. His notorious negligence (Labor Code, Art.
178; EGL Rules, Sec. 1, Rule IV)
Sufficient proof of insanity or mental sickness may
be presented to negate the requirement of
willfulness as a matter of counter-defense (Agile
Maritime Resources v. Siador, G.R. No. 191034,
2014)
Intoxication alone is not sufficient to defeat the
recovery of compensation when intoxication does
·-
I ;
not Incapacitate the employee from performing his
functions and duties and from following his
( \
' ' occupation (De Yohanon v. Balena, G.R. No. L- ·
43641, 1977) .
Direct Premises Rule
The accident should have occurred at the place of
work to be compensable.
o General Rule: In the absence of special
o circumstances, an employee injured in, going to or
coming from, his place of work is excluded from
the benefits of workmen's compensation acts
f' ,.
(lloilo Dock and Engineering Co. v. wee, G.R. No.
v L-26341, 1978)
Exceptions:
1. Where the employee is proceeding to or
from his work on the premises of his
employer;
2. Where the employee is about to enter or
about to leave the premises of his employer
by way of the exclusive· or customary means
of ingress and egress;
lJ 3. Where the employee is charged, while on
his way to or from his place of employment
PAGE 71 OF 244
LABOR LAW
or at his home, or during his employment,
with some duty or special errand connected
with his employment; and
4. Where the employer, as an incident of the
employment, provides the means of
transportation to and from the place of
employment (1/oi/o Dock and Engineering
Co. v. WCC, G.R. No. L-26341, 1978)
Street Peril Principle
1. The act of the employee of going to, or
coming from, the workplace, must have
been a continuing act, that is, he had not
been diverted therefrom by any other
activity; and he had departed from his usual
route to, or from, his workplace; or
2. An employee on a special errand that must
have been official and in connection with his
work (ECG Resolution No. 3914-A, 1988)
Proximate Cause Doctrine
The proximate legal cause is that acting first and
production the injury either immediately or by
setting others in motion, they constitute a natural
and continuous chain of events, each having a
· close causal connection with its immediate
predecessor. (Azucena, The Labor Code with
Comments and Cases, Vol. 1, p. 529, 2016)
General Rule: Proximate cause resulting to injury
is an injury arising out of employment.
Exception: When independent intervening cause
ensues attributable to claimant's fault.
24-Hour Duty Doctrine
Members of the national police by the nature of
their' functions are technically on duty 24 hours a
day, except when they are on vacation leave.
The 24-hour duty doctrine should not be
sweepingly applied to all acts and circumstances
causing the death of a police officer but only to
those which; although not on official line of duty,
are nonetheless basically police service in
character. (Tencinco v. GSIS, G.R. No. 132916,
2001)
Incidents of Employment Doctrine
Acts which are reasonably incidental to the .
employment are deemed arising out of such
employment, thus compensable
ATENEO CENTRAL
BAR OPERATIONS 2018
1. Acts of personal ministration for the comfort
or convenience of the employee;
2. Slight deviation from work, from curiosity, or
otherwise;
3. Acts for the benefit of the employer;
4. Acts in emergencies; and
5. Acts done to further the Goodwill of the
business. (Horovitz, 3 NACCA L.J. 28·30)
Force majeure
General Rule: Employer is not responsible.
Exception: Positional and local risks doctrine
When one in the course of his employment is
reasonably required to be at a particular place at a
particular time and there meets an accident,
although one which any other person then and
there present would have meet irrespective of his
employment, that accident is one arising out of the
employment if the person is so injured. (Azucena, .
The Labor Code with Comments and Cases, Vol.
1,p. 552-553, 2016)
Assault of an Employee considered as an
Accident
An "assault" although resulting from a deliberate
act of the slayer, is considered an "accident" under
the law, since the word "accident" is intended to
indicate that "the act causing the injury shall be
casual or unforeseen, an act for which the injured
party is not legally responsible." (Taller Vda. de
· Nava v. Ynchausti Steamship, G.R. No . .15741,
1932)
The death of an employee due to a murderous
assault is compensable when the same occurred
in the course of performance of official functions.
The motive of assault need not be established if
the covered employee sustained the injury while:
1. The employee was at the
assigned/designated workplaces; or
2. The employee was executing orders of the
employer, regardless of the time and place
of the incident
Rule on Injury or Death in the Course of
Assault
1. When the in.iured was the unlawful
aggressor, not compensable (Mabuhay
Shipping Services v. NLRC, G.R. No.
94167, 1991)
PAGE 72 OF 244
LABOR LAW
2. When the injured was a victim of the assault
and it occurred in the course of performance
of official functions, compensable (Lentejas
v. ECC, G.R. No. 89168, 1991)
Bunkhouse Rule
Where the employee is required to stay in the
!---- ...
premises or in quarters furnished by the employer,
injuries sustained therein are in the course of
employment regardless of the time the same
' occurred. (Uy v. wee, G.R. No. L-43389, 1980)
SIC';<NESS AND OCCUPATIONAL 0151:ASE
Conditions for Compensability of
Occupational Disease and Resulting Disability
or Death
1. His sickness was the result of an
occupational disease listed under Annex A.
of the Rules of the Employees
. ...,,
Compensation; or
2. The risk of contracting the disease was
increased by his working conditions (Barrios
v. ECG, GR. No. 148089, 2006)
Theory oflncreased Risks
If the ailment is not included in the list or
occupational diseases, the claimant has the
burden of proving that the nature of the work
increased the risk of contracting the disease.
(Dabatian v. GSIS, G.R. No. 4721, 1987) i -·
Where the cause of the disease is unknown, the '
,.J
.
theory of increased risk is applicable (Pano/es v.
ECC, G.R. No. L-64802, 1985)
()
"Increased R.isk" Jobs
1. Keeping the peace or guarding property
2. Keeping or carrying of money or valuables
3. Expose employee to direct contact with
lawless and irresponsible people
4. Bus driver, taxi, driver, or street car
conductor. (Batangas Transportation Co. v.
Vda de Rivera, G.R. No. L-7658, 1956)
5. Expose employee to illness; and
6. Prolonged sitting down and putting off
urination. (Barrios v. ECG, GR No
148089 March 24, 2006)
Reasonable Proof of Connection
What the law requires is reasonable work
connection and not a direct causal relation. It is l)
sufficient that the hypothesis on which workmen's
 ATENEO CENTRAL
BAR OPERATIONS 2018
claim is based is probable since probability, not
;}
certainty, is the touchstone. (Cestro-Gerupe v.
ECG, G.R. No. 158268, 2006)
C. DISABILITY AND DEATH BENEFITS
.'
1. TEMPORARY TOT AL DISABILITY
As a result of injury or sickness, the employee is
· unable to perform any gainful occupation for a
'continuous period not exceeding 120 days. (Barko
International v. Alcayno, G.R. No. 188190, 2014)
Amount of Benefits
Income benefit equivalent to 90% of his average
daily salary credit subject to the following:
1. Benefit shall not be less than P10 or more
than P90; not paid lower than 120 days
unless injury or sickness requires more
extensive treatment that lasts beyond 120
. days not exceeding 240 days from the onset
of disability, in which case he shall be paid
G benefit for Temporary Total Disability during .
,· the extended period (P10 - P200 per day,
maximum 120 days).
2. Benefit shall be suspended if. employee
failed to submit monthly medical report
certified by attending physician. (Amended
Rules on Employees' Compensation, Rule
f. .... _
X, Sec. 3)
~. ·1
Period of Relapse
The period covered by any relapse he suffers, or
recurrence of the illness, which results in disability
() and is determined to be compensable,. shall be
considered Independent of, and separate from, the
period covered by the original disability. Such a
period shall not be added to the period covered by
his original disability (Amfjnded Rules on
Employees' Compensation, Rule X, Sec. 2[b])
r '
\l
2. PERMANENT TOT AL DISABILITY
In means incapacity to perform gainful work which
u is expected to be.permanent. This status does not
require a condition of complete helplessness. Nor
l} is it affected by the performance of occasional odd
jobs.
There is permanent total disability if as a result of
the injury or sickness, the employee is unable to
perform any gainful occupation for a continuous
t,., PAGE l3 OF 244
LABOR LAW
period exceeding 240 days. (Abaya v. ECG, G. R.
No. 64255, 1989)
Test of Permanent Total Disability
The test of whether an employee suffers from
"permanent total disability" is a
showing of the
capacity of the employee to continue performing
his work notwithstanding the disability he incurred.
(Vicente v. ECG, G.R. No. 85024, 1991)
Instances of Permanent Total Disability
1. Temporary total disability lasting
continuously for more than one hundred
twenty days, except as otherwise provided
for in the Rules; ·
2. Complete loss of sight of both eyes;
3. Loss of two limbs at or above the ankle or
!
wrist;
4. Permanent complete paralysis of two limbs;
5. Brain injury resulting in incurable imbecility or
insanity; and
6. Such cases as determined by the Medical
Director of the System and approved by the
Commission. (Labor Code, Art 198{c])
When temporary total disability becomes
permanent total disability
1. Declared by the company-designated
physician within 120 or 240 day treatment
period; or
2. In case of absence of such a declaration
either of fitness or permanent total disability,
upon the lapse of the 120 or 240 day
treatment period, while the employee's
disability continues and he is unable to
engage in g,iinful employment during such
period, and the company physician fails to
arrive at a definite assessment of the
employee's fitness or disability (Alpha Ship
Management v. Calo, G.R. No. 192034,
2014)
When the company-designated physician and
emplc,yee-designated physician disagree
If a · doctor appointed by the seafarer disagrees
with the assessment of the company-designated
, doctor, a 3rd doctor may be agreed jointly between
the employer and the seafarer, and the 3rd doctors'
decislon shall be final and binding on both parties.
(Bahia Shipping v. Constantino, G.R. No. 180343,
2014)
ATENEO CENTRAL
BAR OPERATIONS 2018
Suspension of Income Benefits
Monthly income benefits can be suspended under
any of the following conditions:
1. Failure of the employee to present himself
for examination at least once a year upon
notice by the System;
2. Failure to submit a quarterly Medical Report
certified by the attending physician;
3. Complete or full recovery from his
permanent disability; or
4. Upon being Gainfully employed. (Amended
Rules on Employees' Compensation, Rule
XI;. Sec. 2) .
3. PERMANENT PARTIAL DISABILITY
A disability is partial and permanent if as a result
of the injury or sickness, the employee suffers a
permanent partial loss of the use of any part of his
body. (Abaya v.1=.CC, G.R. No. 64255, 1989)
Distinguished from Permanent tcital Disability
The test of whether an employee suffers from
"permanent total disability" is a showinq of the
capacity of the employee to continue performing
his work notwithstanding the disability he incurred.
(Vicente v. ECG, G.R. No. 85024, 1991)
Receipt of Disability Benefit Precludes Claim
for Loss of Future Earnings
Once given disability compensation for loss of
· earning capacity, an additional award for loss of
earnings (future earnings) no longer. lies, ·
otherwise, It will result in double recovery.
(Magsaysay Maritime Corp. v. Chin, Jr., G.R. No.
199022, 2014)
NOTES: It must be shown that the injury or illness
was contracted during the term of employment.
The unqualified phrase "during the term" covers all ·
injuries or illnesses occurring during the lifetime of
the contract. (Wal/em Maritime Services v.
Tanawan, G.R. No. 160444, 2012)
Reimbursement for Medical Expenses are
separate and distinct from Disability Benefits.
(Javier v. PH, Inc., G.R. No. 204101, 2014)
DISABILITY BENEFITS (2010 AMENDED
POEA-SEC)
PAGE 74 OF 244
LABOR LAW
Liabilities of Employer (ER) for Work-related
Injury or Illness (IN/ILL~ of the Seafarer During
Term of Contract
1. ER will continue to pay the seafarer his
wages during the time he is on board the
ship. ·
2. If IN/ILL requires medical and/or dental
treatment in a foreign port, ER shall be
liable for full cost of such treatment as well
as board and lodging until the seafarer is
declared fit to work or to be repatriated.
NOTE: If after repatriation, seafarer still requires
medical attention, he shall be provided such
treatment until he is declared fit or the degree of ·
his disability had been established by company-
designated physician at the expense of the ER.
3. Seafarer shall also receive sickness
allowance from his employer. The amount
is equivalent to his basic wage computed
from the - time he signed off until he is
, · declared fit to work or the degree of
disability has been assessed by the
company-designated physician. The
period within which the seafarer shall be
entitled to his sickness allowance shall
not exceed 120 days. Payment shall be
made on a regular basis, but not less
than once a month.
NOTE: Under the 2000 POEA-SEC, the
assessment made by company-designated ..
physician for permanent disability shall in no case 0
exceed 120 days.
Elburg Shipmanagement Phils., Inc. v. Ouioguie, ·1,.
Jr. provided a summation of periods when the i.._j
company-designated physician must assess the
seafarer: ·
a. The . company-designated physician must
issue a final medical assessment on the
seafarer's disability grading within a period of
120 days from the time the seafarer reported
to him;
b. If the company-designated physician fails to
yive his assessment within the period of 120 0-
days,' without any justlflable reason, then the
seafarer's disability becomes permanent and
total;
c. If the company-designated physician fails to
give his assessment within the period of 120
a
days with a sufficient justification (e.g.,
seafarer required further medical treatment or
seafarer was uncooperative), then the period
 A TENEO CENTRAL
BAR OPERATIONS 2018
'
of diagnosis and treatment shall be extended
to 240 days, The employer has the burden to
prove that the cornpany-oeslqnated physician
has sufficient justification to extend the period;
and
. \ d. If the cornpany-deslqnated physician still fails
to give his assessment within the extended
period of 240 days, then the seafarer's
disability becomes permanent and total,
regardless of any justification.
Hence, the general rule is that the 120-day period
is an absolute rule. The company-designated
physician must provide a sufficient justification
to extend the original 120-day period of
assessment. (Career Philippines
Shipmanagement, Inc. v. Silvestre, G.R. No.
213465, 201ar
NOTE: Prior to Elburg ruling, the Court held in
Vergara v. Hammonia Maritime Services, Inc. that
seafarers could not.automatlcally claim permanent
and total disability even though the 120-day period
for medical evaluation was exceeded for it was
possible to extend the evaluation or treatment
period to 240 days. (Vergara v. Hammonia
Maritime Services, Inc., 588 Phil. 895, 2008).
·1 .
't.-
'i
,ft
4. Seafarer is entitled to reimbursement of
the cost of medicines prescribed by
company-designated physician.
If treatment is on an out-patient basis as
'\ :. determined by the company-designated
physician, the company shall approve the
(j appropriate mode of transportation and
accommodation.
o-·'. The reasonable cost of actual traveling
expenses and/or accommodation shall be
() paid subject to liquidatioh and
{ -~ submission of official receipts and/or
a, ::.:
'\..! proof of expenses.
() NOTE: To be entitled to the foregoing monetary
benefits, ssatarer shall submit himself to a post-
employment medical examination by a company-
designated physician within 3 working days
upon his return.
EXCEPT when he is physically incapacitated to do
(.) so. In such case, a written notice to the agency
within the same period (3 working days upon
0 return) is deemed as compliance.
The seafarer shall also report regularly to the
company-designated physician.
PAGE 75 OF 244
...
LABOR LAW
Failure of the seafarer to comply with the
mancatory reporting requirement shall result
in his forfeiture of the right to claim the above
benefits.
When the seafarer suffers work-related illness
durihg. the term of his contract, the emplcyer shall
be liable to pay for: (1) the seafarer's wages: (2)
costs of medical treatment both in a foreign port
and in the Philippines until the seafarer is declared
fit to work, or the disability rating is established by
the company-designated physician; (3) sickness
allowance which shall not exceed 120 days; and
(4) reimbursement of reasonable medicine,
traveling, and accommodation expenses.
However, to be qualified for the foregoing
monetary benefits, the same secticn of the POEA
Contract requires the seafarer to submit
himself/herself to a post-employment medical
examination by a company-designated physician
within three working days upon his return to the
Philippines, except when he is physically
incapacitated to do so. The seafarer is likewise
required · to report regularly to the company-
designated physician during the course of his
treatment. The three-day reporting requirement'"'·····"'
is MANDATORY. (Manila Shlpmanagement &
Manning, Inc. v. Aninang, G.R. No. 217135, 2018)
5. Illnesses NOT listed in Sec, 32 of POEA-
SEC are disputably presumed as work-
related.
6. In case seafarer is disembarked from ship
for medical reasons, ER shall bear full
cost of repatriation if seafarer is declared:
a. fit for repatriation; or
b. fit to work but the employer is
unable to find employment for the
seafarer on board his former ship
or another ship of the employer.
7. In case of permanent total or partial
disability of the seafarer, he shall be
compensated in accordance with the
schedule of benefits enumerated in
Section 32 of POEA-SEC. Computation of
his benefits shall be governed by the rates
and the rules of compensation
applicable at the time the illness or
disease was contracted.
NOTE: The disability shall be based solely on
the disability gradings provided under
Section 32. It shall NOT be measured or
determined by the number of days a seafarer
ATENEO. CENTRAL
BAR OPERATIONS 2018
is under treatment or the number of days in
which sickness allowance is paid.
8. The aforementioned benefits are separate
and distinct from other benefits the
seafarer is entitled to.
In determining the compensability of an illness, it
is not required that the employment be the sole
factor in the growth, development, or acceleration
of a claimants' illness to entitle him to the benefits
provided · for. It is enough that his employment
contributed, even If only in a small degree, to the
development of the disease.
Even assuming that the ailment of the worker was
contracted prior to his employment, this still would
not deprive him of compensation benefits. For
what matters is that his work had contributed, even
in a small degree, to the development of the
disease. Neither is it necessary, in order to recover
compensation, that the employee must have been
in perfect health at the time he contracted the
disease. A worker brings with him possible
infirmities in the course of his employment, and
while the employer is not the insurer of the health
of the employees, he takes them as he finds them
and assumes the risk of liability. (Skippers United
Pacific, Inc. v. Lagne, G.R. No. 217036, 2018)
For disability to be compensable, two elements
must concur: (1} the injury or illnei>s must be work-
related; and (2) the work-related Injury or illness
must have existed during the term of the seafarer's
employment·contract.
Work-related injury pertains to injuries resulting In , beneficiaries;
disability or death arising out of, and in the course
of, employment. Work-relatedness of an injury or
illness means that the seafarer's injury or illness
has a possible connection to one's work, and thus,
allows the seafarer to claim disability benefits.
Whoever claims entitlement to the benefits
provided by law should establish his or her right
thereto by substantial evidence. Petitioner foiled to
prove that the injury suffered is work-related. ·
Hence, he is not entitled to disability benefits.
( Guerrero v. Philippine Transmarine Carriers, Inc.,
G.R.No.222523,2018)
DEATH BENEFITS
The System shall pay to the primary beneficiaries,
upon the death of the covered employee, an
amount equivalent to his monthly income benefit,
plus 10% thereof, for each dependent child, but
PAGE 76 OF 244
LABOR LAW
not exceeding 5, beginning with the youngest and
without substitution. The income benefit shall be
guaranteed for 5 years. (Amended Rules on
Employees' Compensation, Rule XIII, Sec. 3)
)
Conditions to entitlement
1. The employee has been duly reported to the
System;
2. He died as a result of an injury or sickness;
and
3. The System has been duly notified of his
death, as well as the injury or sickness. which
caused his death. ·
NOTES: Employer shall be liable for the benefit if
such death occurred before the employee is duly
reported for coverage to the System.
If the employee has been receiving monthly
income benefit for permanent total disability at the
time of his death, the surviving spouse must snow
that the marriage has been validly subsisting at the
time of his disability.
The cause of death must be a complication or
natural consequence of the compensated [ .,
\.. . .i
Permanent Total Disability
(Amended Rules on Employees' Compensation, '
Rule XIII, Sec.1)
Amount of Benefits
1. For life to the primary beneficiaries, ..
L~
guaranteed for 5 years;
2. For not more than 60 months to secondary
()
3. Total benefits shall be at least P15,000
(Labor Code, Art. 200[a])
()
,,. ...
Persons Entitled to Funeral Benefits \ J..
A funeral benefit of P30,000 (ECC Board . ,....
(
Resolution No. 16-05-28, May 31, 2016) shall be u
paid to:
1. Surviving spouse; or
2. Legitimate child who spent for funeral
services;
(_j
3. Any other person who can show
incontrovertible proof of having borne the
funeral expenses. (Amended Rules on f ·,;, 1
Employees' Compensation, Rule XI)
Death Benefits (2010 AMENDED POEA-SEC)
Work-relati3d death of seafarer during the term of
his contract, the employer shall pay his
i
v .i
 ATENEO CENTRAL
BAR OPERATIONS 2012 LABOR LAW

beneficiaries $50,000 in Philippine currency and Disqualification due to Misrepresentation

an additional amount of $7,000 to each child under
the age of 21 but not exceeding 4. children, at the A seafarer who knowingly conceals a pre-existing
exchange rate prevailing during the time of illness or condition in the Pre- Employment
payment. (Sec. 20 (13) (1 ), POEA-SEC) Medical Examination (PEME) shall be liable for
misrepresentation and shall be disqualified from
. I
' Compensation payable shall be doubled where any compensation and benefits .
death is caused by warlike activity while sailing
within a declared war zone or war risk area, the
This is likewise a just cause for termination of
compensation payable shall be doubled. (Sec. 20
employment and imposition of appropriate
(8) (2), POEA-SEC)
administrative sanctions. (Sec. 20 (D) POEA-
' SEC)
The aforementioned benefits are separate · and
distinct from other benefits the seafarer is entitled
to. (Sec. 20 (B) (3), POEA-SEC)

The other liabilities of the employer when seafarer

dies as a result of work-related injury or illness
during the term of employment:
1. Pay the deceased's beneficiary all --- end of topic---
outstanding obligations due the seafarer
(.: under the Contract.
2. Transport the remains and personal
effects of the seafarer to the Philippines at
employer's expense EXCEPT:
a. If death occurred in a port where
local government laws or
regulations do not permit the
l_. ; ' transport of such remains .
b. 111 case death occurs at sea, the
! '·' disposition of the remains shall be
handled or dealt with in
I ·~ accordance with the master's best
\ ~I
judgment.
In all cases, the employer/master shall
communicate with the manning agency to
advise for disposition of seafarer's
remains.
· 3. Pay the beneficiaries of the seafarer
() $1,000 in Philippine currency for burial.
expenses at the exchange rate prevailing
J • during the time of payment. (Sec. 20 (B)
\., ;-
(4), POEA-SEC)·
0 Injury/Incapacity/Disability/Death Resulting
from Willful or Criminal Act or Intentional
Breach of Duties

u Compensation and benefits shall not be payable

in case of injury, incapacity, disability or death of
(J the seafarer resulting from his willful or criminal
act or intentional breach of his duties.

PROVIDED HOWEVER, that the employer can

prove that such injury, incapacity, disability or
death is directly attributable to the seafarer. (Sec.
20 (C) POEA·SEC)
PAGE 77 OF 244
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

V. LABOR RELATIONS

TOPIC OUTLINE UNDER THE SYLLABUS

A. RlGHT TO SELF-ORGANIZATION
1. Coverage
2. Ineligibility of managerial employees;
right of supervisory employees
3. Effect of Inclusion as employees outside
of the bargaining unit
4. Non-abridgement

B. BARGAINING UNIT

C. BARGAININ.G REPRESENTATIVE

D. RIGHTS OF LABOR ORGANIZATION

1. CHECK OFF, ASSESSMENT, AGENCY
FEES ,.
2. COLLECTIVE BARGAINING
a) Duty to Bargain Coller.tlvely
b) Collective Bargaining Agreement
(CBA)
.' .,,,,

E. UNFAIR LABOR PRACTICE

' ;.

r
1. NATURE, ASPECTS \ __j
2. BY EMPLOYERS
3. BY LABOR ORGANIZATIONS

F. PEACEFUL CONCERTED ACTIVITIES

1. Strike
2. Picketing
3. Lockout CJ
4. Assumption of Jurisdiction
5. Injunctions

()
'

' ")
l.J

. ..
PAGE 78 OF 244
>. )'

i \
li
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

LABOR RELATIONS POLICY 1. Forming, joining, or assisting labor

organizations for the purpose of collective
Labor Relations Policy under The Constitution bargaining through representatives of
The Constitution guarantees to ALL WORKERS their own choosing.
their right, among others, to: 2. To engage in lawful concerted activities
1. Self-organization; for the purpose of collective barqaininq or
2. Collective bargaining and negotiations; for their mutual aid and protection. (Labor
3. Peaceful and concerted activities Code, Art. 257)
including the right to strike in accordance
with law; The right to form, join, assist a union is specifically
4. Entitled to security of tenure, humane protected by Art. XIII, Section 3 of the Constitution
conditions of work, and a living wage; and and Art 257 of the Labor Code, and shall not be
5. Participate in policy and declslon-maklnq abridged. ( SS Ventures Intl. v, SS Ventures Labor
processes· affecting · their rights and Union, G.R. No. 161690, 2008)
benefits as may be provided by law (PHIL.
CONST. art. XIII, § 3) What the Constitution guarantees is the right to
6. Form unions, associations, or societies for form or join organizations. It is the employee who
purposes not contrary to law ((PHIL. should decide for himself whether he should join
CONST. art. Ill, § 8) or not in an association. The right to join a union
includes the right to abstain from joining any union.
Labor Relations Policy: Labor Code (Victoriano v. Elizalde Rope Workers' Union, G.R.
1. To promote and emphasize the primacy of L-25246, 1974)
free collective bargaining and
negotiations, including I • : WORKERS' I
2. Voluntary arbitration mediation and . · UNION - : ASSOCIATION
conciliation, as modes of settling labor or Organization of
industrial disputes; workers formed for
To promote free trade unionism as an the mutual aid and
instrument for the enhancement of protection of its
Any labor
democracy and the members or for any
organization in the
3. Promotion of social justice and legitimate purpose
private sector
development; other than collective
( 1. organized for
"· t
To foster the free and voluntary bargaining
collective bargaining
organization of a strong and united labor
and for other
movement; NOTE: Workers have
legitimate purpose
4. To promote the enlightenmnnt of workers the right to choose
concerning their rights and obligations as whether to rorrn or join
union members and as employees; a union or workers'
5. To provide an adequate administrative association.
machinery for the expeditious settlement
of labor or industrial disputes; The last sentence of Art. 253 broadens the
6. To ensure a stable but dynamic and Just coverage of workers who can form or join a
industrial peace; and workers' association and is not exclusive to
7. To ensure the participation of workers in ambulant, intermittent and itinerant workers.
decision and policy-making processes (Sarnahan ng mga Manggagawa sa Hanjin, G.R.
affecting their rights, duties and welfare. 211145, 2015).
o f (Labor Code, Art. 218)
r
...,..
L
i
• A. RIGHT TO SELF-ORGANIZATION

lJ Scope of Self-Organization Under the Labor

Code
i
i ..
PAGE 79 OF 244

~ ..
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW
'
1. COVERAGE -WHO MAY/MAY NOT EXERCISE ALlf::NS
THE RIGHT General Rule: All aliens, natural or juridical, [ ... l
are strictly prohibited from engaging directly or
GENERAL RULE indirectly in all forms of trade union activities.
(Labor Code, Art. 284)
ALL EMPLOYEES
1. ALL persons employed in: Commercial, Exceptions: Aliens may exercise the right to self-
industrial, agricultural enterprises, organization and Join or assist labor unions for .
religious, charitable, medical or purposes of collective bargaining, provided the
educational institutions, whether or not following requisites are fulfilled:
operated for profit. 1. With valid working permits issued by
DOLE; and
Purpose: Collective bargaining, engaging in 2. They are nationals of a country which
lawful concerted activities for collective grants the same or similar rights to Filipino ·
bargaining, and mutual aid and protection (Labor workers:
Code, Art. 253).. a. As certified by the DFA; or
b. Ratified either the ILO Convention
2. Ambulant, intermittent and itinerant and No. 8 or ILO Convention No. 98
rural workers, the self-employed and
those with no definite employers may form SECURITY GUARDS . '
labor organizations. The security guards and other personnel
employed by the security service contractor shall
· Purpose: Mutual aid and protection (Labor Code, have the right:
Art. 253) .. 1. To form, join, or assist in the formation of
a labor organization of their own choosing
NOTE: Employees of non-profit organizations are for purposes of collective bargaining and · ..
. !.
now permitted to form, organize, or join labor 2. To engage in concerned activities which
unions of their choice for purposes of collective am not contrary to law inr.luding the right
bargaining (Fl;U-Dr. Nicanor Reyes Medical to strike ·~

Foundation v. Trajano, G.R. No. 76273, 1992)

Note: The right to organize cannot be bargained
EMPLOYEES OF GOCCs CREATED UNDER away (Southern Philippines Federation of Labor v.
THE CORPORATION CODE Calleja, G.R. No. 80882, 1989)

See Discussion Below. EXCEPTIONS:

1. Managerial ancl Confidential employees ( ··~;
SUPERVISORY EMPLOYEES . .J

Supervisory employees shall not be eligible for Managerial vs. Supervisory vs. Confidential
membership in a labor organization of the rank- Employees
and-file employees but may join, assist or form ' "!.
· separate labor organizations of their own. (Labor MANAGERIAL EMPLOYEE: one who is vested \/
Code, Art. 255) with powers or prerogatives:
1. To lay down and execute management 0
Rationale: Supervisory employees, while in the policies and/or
performance of supervisory functions, become the 2. To hire, transfer, suspend, layoff, recall,
(} .J

alter ego of the management in the making and discharge, assign or discipline
the implementing of key decisions. It would be employees. (Labor Code, Art. 219[m}) 0
difficult to find unity or mutuality of interests in a
bargaining unit consisting of a mixture of rank-and- Managerial employees have the authority to 0
file and supervisory employees. (Toyota Motor devise, implement, and control strategic and
Phil. Corp. v. Toyota Motor Phil. Corp. Lebor operational policies (decision maker).
Union, G.R. No. 121084, 1997)

PAGE 80 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Managerial Functions refers to powers such as to: For an Employee to be Considered a Supervisor,
1. Effectively recommend managerial Recommendation Must Be;
actions; 1. Discretionary or judgmental (not clerical);
2. Formulate or execute management policy 2. Independent (not a dictation of someone
or decisions; or else); and
3. Hire, transfer, suspend, lay-off, recall, 3. Effective (given I particular weight in
dismiss, assign or dlsclpllne employees making the management decision).
(San Miguel Supervisors v. Laguesma, (Azucena, Everyone's Labor Code, 2015
G.R. No. 110399, 1997) ed.)

Managers cannot unionize (United Pepsi-Cola CONFIDENTIAL EMPLOYEES: those who

Supervisory Union v. Lequesme, G.R. No.
122226, 1998; Labor Code, Art. 255)
SUPERVISORS: are those employees, who in the
interest of the employer;
1. Effectively recommend such rnanaqerial
actions
2. If the exercise of such authority is not
merely routinary or clerical in nature but
. requires independent judgment. (Labor
Code, Art. 219)
(j
Supervisors have the task of simply ensuring that
such policies are carried out by the rank-and-file
1. By the nature of his functions, assist or act
in a confidential capacity, in regard to
persons who formulate, determine; and
2. Effectuate management policies,
specifically in the field of labor relations.
(Sugbuanon Rural Bank v. Laguesma,
GR. No. 116194, 2000)
Confidential employees, by reason of their position
or nature of work are required to assist or act in a
fiduciary manner to managerial employees, they
are likewise privy to sensitive and hiqhly, . , .
confidential records. ( Standard Chartered Bank
Union v. Standard Chartered Bank, GR. No.

-
{ -
employees, or who may merely recommend
strategic and operational policies (recommender).

Supervisors. can unionize. (Pagkakaisa ng mga .

161933, 2008)

Confidentiality Must be Related to Labor

Relations, and Not a Business Standpoint
Manggagawa sa Triumph International v. Pura An employee must assist or act in a confidential
Ferrer-Calleja, G.R. No. 85915, 1990) capacity and obtain confidential inforrnation
relating to labor relations policies. Exposure to
Note: Supervisors are allowed to form unions. internal business operations of the company is not
What is prohibited is the co-mingling of Rank-and- per sea ground for the exclusion in the bargaining
file employees and supervisors in one union. They , unit. (Tunay na Pagkakaisa ng Manggagawa sa
have to form separate unions. Asia Brewery v. Asia Brewery, G.R. No. 162025,
t). 2010)
Managerial Employee vs, Supervisor
MANAGERIAL - sup· RVISOR Doctrine of Necessary Implication
, EMPLOYEE • While Art. 255 of the Labor Code singles out
Has power to managerial employees as ineligible to join, assist
recommend those or form any labor organization, under the doctrine
Has power to decide
managerial acts, such of necessary implication, confidential employees
and do managerial
as laying down policy, are similarly disqualified. This doctrine states
u acts.
hiring; or dismissing
employees, and so on.
that what is implied in a statute is as much a part
thereof as that which is expressed. (NA TU v.
() Republic Planters Bank, G.R. No. 93468, 1994;
Note: The power of the position, not the title, make United Pepsi Cola v. Laguesma, G.R. No. 9663,
:{ \
v the position-holder a manager or a supervisor. 1999)

{ :
\._}

i
L
PAGE 81 OF 244
ATENEO CENTRAL
BAR OPERATIONS 2018
Note: Confidentiality may attach to a managerial
or non-managetiai position. Confidentiality is not
determined by rank, but by the nature of the job.
Note: Confidential employees are excluded from
joining labor organization under the doctrine of
necessary implication. If confidential employees
could unionize in order to bargain for advantages
for themselves, then they could be governed by
their own motives rather than the interest of the
employers. They may become the source of
undue advantage. Said employees may act as spy
or spies of either party to a collective bargaining
agreement. (Pepsi-Cola Products, Inc. v.
Secretary of Labor, GR. 96663, 1999)
2. Employee-Members of Cooperatives
An employee of a cooperative who is a member
and co-owner thereof cannot invoke the right to
collective bargaining, for certainly, an owner
cannot bargain with himself or his co-owners.
However, insofar as it involves cooperatives with
employers who are. not members or co-owners
thereof, such employees are entitled to exercise
the rights of all workers to organization, collective
bargaining negotiations and others. (San Jose
Electric Service Cooperative v. Ministry of Labor,
G.R. No. 77231, 1989)
Employee-Members · of cooperatives cannot
invoke the right to collective barqaininq due to the
. fact of ownership but they are allowed to form an
association for their mutual aid and protection as
employees. (Planters Products, GR. No. 78524,
1989; Benguet Electric, G.R. No. 79025, 1989)
3. Rellglous·Objectors
Under the Industrial Peace Act (1953), members
of religious sects cannot be compelled or coerced
to join labor unions even when said unions have
closed shop agreements with employers
(Victoriano v. Elizalde Rope Workers' Union, G.R.
no. L-25246, 1974)
Note: While the Victoriano decision was penned
citing the Industrial Peace Act, and while said act
was repealed by R.A. No. 3350, which doeo not
contain the same exception, subsequent decisions
still uphold the religious objector exception (see
Ebralinag v. Division Superintendent of Cebu,
G.R. No. 95770, 1993)
PAGE82 OF 244
LABOR LAW
However: The viciotieno decision does not bar
the members of the Iglesia ni Kristo from forming
their own union. (Kapatiran sa Meat and Canning
Division v. BLR Director, G.R. No. L-82914, 1988)
In fact, religious objectors can vote for "No-
UJnion" in a certification election in the exercise
of their right to self-organization (Reyes v. Trejeno,
G.R. No. 84433, 1992)
, 4. Employees of Foreign Embassies,
Consulates anci International Organizations
For . example, the employees of International
Catholic Migration Commission cannot unionize
nor conduct a certification election (International
Catholic Migration Commission v. Hon. Calleja,
G.R. No. 85750, 1990)
The International Rice Research Institute ("IRRI")
enjoys immunity from local jurisdiction; it has the
discretion W/N to waive its immunity (Callado v.
International Rice Research Institute, G.R. No.
106483, 1995)
Note: Aliens working in the country with valid work
permits issued by the DOLE, may exercise right to ,
'J
self-organization subject to rule on comity. (Labor
Code, Art. 284)
5. Government Employees
Note: The prohibition/s are not absolute .
Employees of government corporations
established under the Corporation Code shall
have the right to organize and to bargain
collectively with their respective employers.
All other employees of the civil service shall have · ·
the right to form associations for purposes not
contrary to law. (Art. 254, Labor Code)
E.O. 180: Guidelines for; the exercise of the right
to organize of government employees, creating a
Public Sector Labor-Management Council, and for
other purposes.
l'l ;;
Right to Self-Organization under EO 180 is For a
limited purpose ~ only for the furtherance and
protection of their interests not for purposes of
collective bargaining. a
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Coverage of EO 180 acts designed to place such orqanlzatlons under

Applies to all government employees the control of government authority. (§6)
Employees of all branches, subdivisions,
instrumentalities, and agencies of the government, Place of Reqlstratlon
including GOCCs with original charters. (§1) CSC and DOLE. (§7)

Excluded from Coverage Procedure for the Registration of Employees'

1. Members of the Armed Forces of the
Philippines
2. Including police officers
3. Policemen
4. Firemen and
5, Jail guards (§4)
Right to Organize
Ail government employees can form, join or assist
employees' organizations of their · own choosing
for the furtherance and protection of their interests.
They can also form, in conjunction with
appropriate government authorities, labor.
management committees, work councils, and
· other forms of workers' participation schemes for
the same objectives. (§2)
( Subject of Negotiation
Under RA 6715, security guards may freely join
a labor organization of the rank and file or that of
the supervisory union, depending on their rank
(Manila Electric Company v. The Hon. Secretary
of Labor and Employment, Staff and Technical
Organizations
1. File application with BLR or Regional
Office, which shall transmit the application
to the BLR within 3 days from receipt.
2. BLR shall process the application in
accordance with the Labor Code. (§7)
3. Upon approval, a registration certificate
will be issued, recognizing it as a
leqltlrnate employees' organization with
the right to represent its members and
undertake activities to further and defend
its interests.
4. The certificates of registration shall be
jointly approved by the Chairman of the
CSC and Secretary of DOLE, (§8)
Terms and conditions of employment or . ...
Improvements thereof, except those that are fixed
by law, may be the subject of negotiations
between duly recognized employees'
organizations and appropriate government

..
'' .'
Employees Association of Mera!co et al, G.R. No.
91902, 1991)
authorities. (§13)

Peaceful Concerted Activities and Strikes

Who are Ineligible to Join Organization of Rank The Civil Service laws and rules governing
.& File Government Employees concerted activities and strikes in the government
() High-level employees whose functions are service shall be observed, subject to any
normally considered els policy-making or legislation that may be enacted by Congress.
l_) managerial or whose duties are of a highly (§14)
confidential nature. (§3)
{ ·,
,L -·
Public Sector Labor-Management Council
Protection of Right to Organize (Council)
(J 1. They shall not be discriminated against in It is the body charged with implementing and
respect of their employment by reason of administering EO 180.
their membership or participation in
employees' organizations. The Council shall be composed of the following:
l} 2. Employment shall not be subject to the 1. Chairman; Civil Service Commission
condition that they shall not join or shall Chairman
l) relinquish their membership therein. (§5)
'
2. Secretary; Department of Labor and
Employment Vice Chairman
Non-Interference of Government Authorities 3. Secretary; Department of Finance
Government authorities shall not interfere in the Member
establishment, functioning or administration of 4. Secretary; Department of Justice Member
5. Secretary; Department of Budget and
government employees' organizations through
Management Member (§15).
PAGE 83 OF 244
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

association. (United Pepsi v. Laguesma, GR. No.

Settlement of Disputes
The Civil Service and labor laws and procedures,
whenever applicable, shall be followed in. the
resolution of complaints, grievances and cases
involving government employees. In case any
dispute remains unresolved after exhausting all
the available remedies under existing laws and
procedures, the parties may jointly refer the
dispute to the Council, for .appropriate action.
(§16)
The BLR has the jurisdiction to call for and
supervise the conduct of certification elections
in the public sector. There is no constitutional
objection to DOLE handling the certification
process considering its expertise; machinery and
experience in this particular activity. EO 180
requires organizations of 9over11ment employees
to register with both DOLE and CSC. This
ambivalence notwithstanding, the CSC has no
facilities, personnel and experience in the conduct
of certification elections. ,., BLR has to do the job.
(Bautista v. CA, G.R No. 123357, 2005)
DEFINITION OF A MANAGERIAL EMPLOYEE:
LABOR STANDARDS VS. LABOR RELATIONS
122226, 1998)
See above discussion on Confidential Employees.
2. INELIGIBILITY OF MANAGERIAL
EMPLOYEES; RIGHT OF SUPERVISORY
EMPLOYEES
COM!NGGLING/ MIXTURE OF MEMBERSHIP
R.A. No. 9481: AN ACT STRENGTHENING THE
WORKERS' CONSTITUTIONAL R'.IGHT TO
SELF-ORGANIZATION, amending the Labor
Code modified previous Supreme Court rulings
prohibiting supervisors' unions from joining with
the same federation as the rank and file.
New law now explicitly ALLOWS for the
commingling of the two.
Sec. 8 of new law provides: "Article 245 (now 255)
of the Labor Code is hereby amended to read as
, follows-
. ~.
Art .• 245 (how 255). Ineligibility of Managerial
Employees to Join any Labor Organization;
Right of Supervisory Employees. - Managerial
employees are not eligible to join, assist or form ' 1-,

LABOR I.' . any labor organization. Supervisory employees

STANDARDS LAijOR _ .~L~T_IONS shall not be eligible for membership in the
Includes the officers Does not include the collective bargaining unit of the rank-and-file
and members of the managerial staff since employees but may join, assist or form separate . .~
LJ
managerial staff they are classified as collective bargaining units and/or legitimate labor
(supervisory supervisory organizations of their own. The rank and file
(}
employees); such is employees; used in union and the supervisors' union operating
important to be able to order to determine an . within the same establishment may join the
determine if employee's eligibility same federatlon or national union. '
employees are in joining or forming a
covered by the Labor· union. Thus, GENERAL RULE: . Rank-and-file
Code on Conditions of employees' union and supervisors' union may join ' \
Employment. the same federation or national union. \j

Extent of Limitation on Right to Self· EXCEPTION: There is conflict of interest in a

Organization national federation affiliating with both the
I' ~,
Art. 255 only disallows managerial employees supervisor's union and the rank-and-file ..... :i

· from joining "labor organizations" (means any employees' union of the same company when the
union or association of employees which exists in following requisites occur:
whole or in part for the purpose of collective 1. The rank-and-flle employees are directly
bargaining or of dealing with the employer under the authority of supervisory
concerning terms and conditions of employment). employees AND
Art. 255 does not absolutely disqualify managerial 2. The · national federation is actively
employees from exercising their right of involved in union activities in the company
(DLSU Medical. Center and College of
PAGE 84 OF 244

• j
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW
'
Medicine v. Laguesma, G.R. 102084 , 5. REGISTRATION AND CANCELLATION OF
1998) LABOR ORGANIZATIONS

The inclusion as union members outside the Definition of Terms

bargaining unit shall render said employees
automaticaUy removed from the list of
membership of said union. (Labor Code, Art. 256)
. 4. NON-ABRIDGMENT OF THE RIGI-IT TO SELF·
ORGANIZATION
It shall be unlawful for any person to restrain,
coerce, discriminate against or unduly interfere
• I
with employees and workers in their exercise of
the right to self-organization (Lc1bor Code, Art. 25)
Labor Organization: any union or association of
employees in the private sector which exists in
whole or in part for the purpose of collective
bargaining, mutual aid, interest, cooperation,
protection, or other lawful purposes. (Labor Code,
Art. 219{g])
Union: Any labor organization in the private sector
organized for collective bargaining and for other .
legitimate purpose ( Sec. 1 {zz} Rule I of D. 0. 40-
0~. .

Legitimate Labor Organization: any labor

organization in the private sector registered or
reported with the DOLE, which includes a
local/chapter directly chartered by a legitimate
federation or national union which has been duly
,: . ~ reported to the Department (Labor Code, Art.
lJ 219{h]) ,·•V,•:'11'•:,•·:

Independent Union: A labor union at the

enterprise level is either "independent" if created ·
by independent registration.

··- .. Independent Labor Unions require the subrnission

of names of all its memeers comprising at least
20% of a!I the employees in the bargaining unit.
(Labor Code, Art. 240) This requirement does not
apply to local chapters.
' 1
() Limitation for Trade Unions: Although a trade
union center can be an LLO, it has no power to
!__) directly create a local or chapter. Such power is .
only granted to a federation or national union.
(SMCEU-PTGWO v. SMPPEU-PDMP, G.R. No.
171153, 2007)
()
Company Union: Any labor organization whose
formation, function, or administration has been
assisted by any act defined as ULP under the
u Labor Code (Labor Code, ArL 219[i])

u Types of Labor Organizations

1. National Union/Federation: group of
I ;
v legitimate labor unions organized for
collective bargaining or for dealing with
i~
, .,i.,.
__
employers or for participating in the
formulation of social and employment
i policies, standards and programs. It has
··-· PAGE 85 OF 244
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

at least 10 LLO's, whether independent

unions or chartered locals that are duly NOTE: Under Art. 240, the following organizations
certified bargaining agents. may register as labor organizations:
2. Industry Union: group of LLO operating 1. National Union;
within an identified industry for collective 2. Independent Uni'jln;
bargaining or for dealing with employers 3. Federation;
or for participating In the formulation of 4. Industry Union;
social and employment policies, 5. Trade Union Center
standards and programs
3. Trade Union Center: group of national Acquisition of Legal Personality
unions or federations organized for mutual 1. A federation, national union,
aid and protection of its members, for industry/trade union center or an
assisting such members in collective independent union acquires legal
bargaining, or for participating in the personality upon issuance of the
formulation of social and employment Certificate of Registration.
policles, standards and programs. 2. A Chapter, Local or Chartered Local
4. Independent Union: LO operating at the acquires tentative legal personality to file
enterprise level that acquired legal a Petition for Certificate Election (PCE)
personality through independent upon issuance of its Charter Certificate.
registration All other rights are vested upon the
5. Chartered Local/Local/Chapter: a union submission of:
created through chartering a. The names of the chapter's
6. Workers' Association: an association of officers, their addresses, and the
workers organized for the mutual aid and principal office;
i .
protection of its members or for any b. The chapter's constitution and by-
legitimate purpose other than collective laws; and
bargaining. (0.0. No. 40-03) c. Provided, that where the
7. Legitimate Workers' Association: an chapter's constitution and by-laws ·
·;,,:-
association of workers organized for are the same as that of the
mutual aid and protection of its members federation or the national union, i '.:..
I t
for any legitimate purpose other than this fact shall be indicated
collective bargaining registered with accordingly. (Labor Code, Arts.
DOLE. 240-241)

. LABOR .. WO ' NOlE: Such legal personality may be questioned

()
ORGANIZATION
It exists in whole or in
ASSO • only through an independent petition for
cancellation and not by way of collateral attack.
It is organized for
part for the purpose of (Sec. 8 Rule IV of 0.0. 40-03). The legal
the mutual aid and
collective bargaining personality of a legitimate labor organization
or of dealing with
protection of its cannot be collaterally attacked. The proceedings. ( ~
employers concerning members or for on a petition for cancellation of registration are \)
terms and conditions any legitimate independent of those of a petition for certification
of employment. purpose other than election (Samma-Likha v. Samma Corporation,
collective G.R.167141 ;2009).
(·-"}
bargaining.

Modes of Acquiring Legitimacy for Labor

Organizations ) l.}
1. Registration with the Bureau of Labor
Relations (Independent Union);
2. Chartering or Issuance of a Federation or
of Labor Relations or
the Regional Offices, upon by the Regional
Office where the
I t).
but shall be
National Union of a Charter Certificate : l.
•. JI

PAGE 86 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 201 f,
processed and acted applicant principally
upon by the Bureau operates.
which has national
jurisdiction.
(Sec. 1, Rule Ill«o.o.
40-03).
BLR's Duty to Review the Application is
Compellable by Mandamus
The ministerial duty involves only the review of the
application for registration and not the issuance of
the Certification of Registration.
After a labor organization has filed the necessary
papers and documents for registration, it becomes
mandatory for the Bureau of Labor Relations to
check if the requirements under Article 240 have
been sedulously complied with.
If its application for registration is vitiated by
falsification and serious irregularities, especially
those appearing on the face of the application and
the supporting documents, a labor organization
should be denied recognition as a legitimate labor
organization. (Progressive Development
t .·
Corporation - Pizza Hvt v. Laguesma, G.R. No.
f - 115077, 1997)
( .: Purpose of Registration
Registration with the BLR is the operative act that
gives rights to a labor organization.
1. It is the fact of being registered with the
{
\ }
. .
DOLE that makes a labor organization
legitimate in the sense that it is clothed
with legal personality to claim
representational and bargaining rights
enumerated in Art. 250 or to strike or
.l.) picket under Art. 278.
2. Registration is not a limitation to the right
of assembly or association, which may be
exercised with or without said registration.
It is merely a condition sine qua non for
the acquisition . of legal personality by
labor organizations, associations or
unions and the possession of the "rights
{J and privileges granted by law to legitimate
labor organizations".
() 3. It is a valid exercise of the police power,
because the activities in which labor
'v \
organizations, associations and union of
workers are engaged affect public
(;' interest, which should be protected. (PH
PAGE 87 OF 244
LABOR LAW
Association of Labor Unlors v. Secretary
ofLabor, G.R. No. L-22228, 1969)
Requirements for the Issuance of the
Certificate of Registration of Labor
Organizations
1. P50 registration fee;
2. Names of its officers, their addresses, the
principal address of the labor.
organization, the minutes of the·
organizational meetings and the list of the
, workers who participated in such
rneetinqs:
3. In case the applicant is an independent
union, the names of all Its members
comprising at least twenty percent (20%)
of all the employees in the bargaining unit
where It seeks to operate;
4. If the applicant union has been in
existence for one or more years, copies of
its annual financial reports; and
5. Four copies of the constitution and by-
laws of the applicant union, minutes of its
adoption or ratification, and the list of the ., .•
members who participated in it. (Labor
Code, Art. 240)
Note: To create a chapter, no minimum size of
membership is required. But the 20% minimum
membership is required to register an independent
union. The, 20% is not a requirement for the
organizational meeting or the ratification of the
independent union's constitution and by-laws. But
the 20% is required at the time the independent
union applies to register. (Takata Phil. Corp., v.
BLR and SALAMAT, G.R. No. 196276, 2014)
Additional Requirements for the Registration
of a Federation
1. Proof of the affiliation of at least ten (10)
locals or chapters, each of which must be
a duly recognized collective bargaining
agent in the establishment or industry in
which it operates, supporting the
registration of such applicant federation or
national union; and
2. The names and addresses of the
companies where the locals or chapters
operate and the list of an the members in
each company involved. (Labor Code, Art.
244)
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Independent Registration vs. Chartering d. The certificate of affiliation issued by the

INDEPENDENT ' • federation in favor of the independently
REGlST~ATtON CHA reqistered labor union; and
A duly registered e. Written notice to the employer concerned
federation I national if the affiliating union is the ·incumbent
Obtained by union union issues a charter bargaining agent
organizers in an to a union in an
enterprise through their enterprise and registers Action on Application
own accord the charter with the The BLR shall act on all applications for
regional office of the registration within 30 days from filing (Labor Code,
BLR Art. 242)
Result: Independent Result: Chapter I Local
union Denial of Application/Return of Notice
With legal personality, Where the documents supporting the application
but loses it once it for registration are incomplete or do not contain
Accorded legal disaffiliates with the
personality the required certification and attestation, the
legitimate labor
Regional Office or BLR ~1'1all, within one day from
federation
receipt ofapplication:
Application is filed with Charter certificate
1. Notify the applicant/labor organization
and will be acted upon !ssued by federation or
by the DOLE Regional national union is filed 2. In writing of the necessary requirements
Office where the with the RFJgional Office
3. Complete the same withing 30 days from
receipt of notice
applicant's principal or BLR within 30 days
office is located after the issuance of the
Failure to complete the requirements within the
charter certificate time prescribed, the application for registration
20% minimum No minimum size of shall be denied, without prejudice to filing a new
membership Is required membership is required application or notice (Sec. 5, Rule IV of D.O._ 40-
to register an 03) -
independent union
·, .,·
Appeal
Affiliate The decision of the Regional Office or the Bureau i ::
1. An independent union affiliated with a denying the application for registration shall be: i '

federation or national union(IRR Labor 1. In writing; f \

Code, Sec. 3, Book V, Rule//); or
2. A chartered local Which was subsequently
granted an independent registration but
did not · disaffiliate from its mother
federation or national union (Sec. 1[a],
Rule I ofD.O. 40-03)
Requirements of Affiliation (Sec. 5 and 6, Rule
Ill of D. 0. 40-03)
1. Report affiliation of independently registered
labor union filed with the Reqional Office that
issued its certificate ofregistration;
2. Attachments:
a. Registration of the labor union's board of
directors approvlnq the affiliation;
b. Minutes of the general membership
meeting approving the affiliation;
c. Total number of members comprising the
t- I
2. Stating in clear terms the reason for the
decision; and
3.. Application union must be furnished a
copy of said decision {Sec. 6, Rule IV of
D. 0. 40-03) -
()
Procedurn on Appeal
1. Memorandum of Appeal shall be filed with
the Regional office or the BLR that issued
the denial/return of notice.
2. This shall be transmitted by the Regional
Office to the Bureau or by the Bureau to
the Office of the Secretary within 24 hours
from the receipt of the Memo of Appeal,
' ()
()
f ·"I

labor union and the names of the !\_j "

members who approved the affiliation;

PAGE 88 OF 244

!
\ . .J

-----------------~---------- __
__ ,,
 ATENEO CENTRAL
BAR OPERATIONS 2018. LABOR LAW

. APPEAL ;' ii. Misrepresentation, false statements or fraud in

CASES FROM ' CASES FROM connection with the election of officers,
I
THE R~GIONAL TH~ BLR - minutes of the election of officers, and the list
. . .OFFICE • ';, - . - of voters.
Appealable to the Decisions of the BLR iii. Voluntary dissolution by the members (Labor
BLR in the exercise . of Code, Art. 247)
Decisions on the BLR his/her original
on cases appealed jurisdiction may be Note: Labor Code, Art. 250 provides an additional
from the Regional appealed to the ground - Any violation of the rights and ccnditions
of membership shall be a ground for the
Director are final and Secretary of Labor
cancellation of the union registration or expulsion
not appealable to the (Sec. 22, Rule XI,
ofan officer from office, whichever is appropriate.
Secretary of Labor 0.0. No. 40-03)
(Sec. 22, Rule. XI, Note: For fraud and misrepresentation to be
D. 0. No. 40-03) grounds for cancellation of union registration, the
MODES OF AP EA i , ' nature must be grave and compelling enough to
The Bureau of Labor The Bureau of Labor vitiate the consent of a majority of union members
Relations shall Relations shall (S.S. Ventures International v. S.S. Ventures
transmit the records transmit the records Labor Union, G.R. 161690, 2008)
within 24 hours from within 24 hours from
receipt of the Memo of receipt of the Memo of Note: Failure to submit reportorial requirements is
Appeal. Ar peal. no longer a ~round for cancellation but shall
/
l) subject the erring offlcers or members to
The Bureau of Labor The Secretary of ' suspension, expulsion from membership, or any
I
; Relations shall render . Labor Shall render a appropriate penalty (Labor Code, Art. 248)
a decision within 20 decision within 20
I
t-··,
r days from receipt of days from receipt of Requirements for Voluntary Cancellation of
records. records. Registration
( ' 1. 2/3 of its general membership votes in a
\ •• t
The decision of the The decision of the meeting duly called for the purpose
f : BLR may be Secretary of Labor 2. Application to cancel registration
' p
contested before the may be contested submitted by the board and attested by
CA via petition for before the CA via the president. (Labor Code, Art. 248)
Certiorari under Rule petition for Certiorari
65 of the Rules of under Rule 65 of the Note: Having held an illegal strike is not reason to
Court. Rules of Court. cancel a union's registration. Holding an illegal
( Sec. 7, Rul.e IV of o. 0. 40-03) · strike has adverse consequences to the strikers,
(_ )
particularly the officers, but cancellation of their
, ' Grounds for Appeal union registration is not one of those
t.i· Any applicant union may appeal within 10 consequences (ltogon-Suyoc Mines v. Sangilo-
calendar days from receipt of such decision on ltogon Workers Union, G.R. No. L-24189, 1986)
{..... i grounds of:
1. Grave abuse of discretion; and Any party-in-interest may commence a petition for
2. Gross incompetence cancellation. (D.O. No. 40-03, Sec. 2, Rule XIV)
{ t (/RR Labor Code, Sec. 6, Book V, Rule II) The employer is a "party-in-interest". (A:wcena
\. ... ..f
Vol. I, 9th ed., p. 217).
Grounds for Cancellation
0 i. Misrepresentation, false statement or fraud in
l} connection with the. adoption or ratification of
the constitution and by-laws or amendments
thereto, the minutes of ratification, and the list
(' of members who took part in the ratification.
i
\_
PAGE 89 OF 244 .,.

..... .
ATENEO CENTRAL
BAR OPERATIONS 2018 ' LABOR LAW

6. RIGHTS AND CONDITIONS OF

MEMBERSHIP However: When the violation directly afi'ects only
1 or 2 members, then only 1 or 2 members would
be enough to report such violation (Verceles v.
BLR-DOLE, G.R. No. 152322, 2005)

member's right to vote Visitoi'ial Power of DOLE Secretary

and be voted for, subject to The complaint to authorize the DOLE Secretary's
lawful provisions on or his duly authorized representative's power to
qualifications and inquire into the financial activities of any labor
disqualifications organization must be supported by at least 20% of
The member's right to the Labor Organization's membership (Labor
participate in detlberations on Code, Sec. 289).
major policy questions and
decide them by secret ballot Eligibility for Membership
The member's riqhts: Eligibility for membership depends on a union's
1. Against unauthorized constitution and by-laws. Nonetheless, employee
collection of is already qualified for union membership starting
contributions or on his first day of service. (Labor Code, Art. 292[c])
unauthorized
disbursements An employee's membership in the union does not
To require adequate mean coverage in the CSA. Neither does
' ·· records of income and coverage in the CBA mean membership in the
expenses; union.
To access to financial
records; WHpARE. WHOA E .
To vote on officers' PROHIBITEP FROM PROHIBITED FROM
compensation; ··BECPMING BEQ:OMING
i..J
To vote on proposed ·MEMB~RSOFA O OFFICERS OF A
special assessments . '--"BOR · ;LABOR
I
To be deducted a special ORGANIZATION ORGANIZATION I
assessment only with the 1. Non-Employees 1. Non-Employees
member's individual (Labor Code, Art. (Labor Code, Ari.
written authorization 250(c]); 250[c]);
The member's right to be 2. Subversives or 2. Subversives or
informed about: those engaged in those engaged in
1. The organization's subversive subversive
constitution and by-laws: activities (Labor activities (Labor
and Code, Art. Code, Art.
The CBA, and about 250[e]); 250[e]); f ....
labor laws
,}
3. Persons who
have been
Note: Any violation of the above rights and convicted of . a
conditions of membership shall be a ground for the crime involvinq
(J.
cancellation of the union registration or expulsion moral turpitude
of an officer from office. whichever is appropriate. (Labor Code, Art.
250[f])
L)·
Reporting Violations of Membership
At least 30% of all the members of the union or any Note: No qualification requirements for candidacy
member or members specifically concerned may to any position shall be imposed other than
report such violation to the Bureau (Labor Code, membership in good standing in the labor
Art. 250) organization. Union officer must be an employee.

PAGE 90 OF 244

(.;
 ATENEO CENTRAL
BAR OPERATIONS 2018
Who are entitled to Vote
Only members of the union can take part in the
election of union officers. (Labor Code, Art. 250{c])
The question however of eljgibility to vote may be
determined through the use of the applicable
payroll period and employee's status during the
applicable payroll period. The payroll of the month
next preceding the labor dispute in case of
regular employees and the payroll period at or
near the peak of operations in case of employees
in seasonal Industries. (Tancino v. Ferrer-
Calleja, G.R. No. 78131, 1988)
Limitations
1. The labor organization cannot compel
employees to become members of their
labor organization if they are already
members of a rival union:
2. The persons mentioned in Art. 250[e]) of
r+, the Labor Code are prohibited from
l_y becoming a member of a labor
organizat!on (Subversives); and
{
3. Religious objectors cannot be compelled
or coerced to join labor unions (victorteno
j
v. Elizalde Rope Worker's Union, G.R. No.
L-25246, 1974)
a) NATURE OF RELATIONSHIP
c ·_
...'.. ·~
i the terms of affiliation is an obligation.
(1) MEMBER-LABOR UNION
The relationship of the union and the member is
fiduciary In nature. The union may be considered
the agent of Its members for the purpose of
' .
'~J '
I ,i
securing for them fair and just wanes and good
working conditions and Is subject to the obligation
of giving the members as its principals all
information relevant to union and labor matters
f '
\J entrusted to it. (Heirs of Teodolo Cruz v. CIR, G.R.
No. L-23331-32, 1969)
Union
(2) LOCAL-UNION - FEDERATION
Affiliate: Independent union affiliated with a Freedom Period: The last 60 days of the 51" and ·
federation or national union (/RR Labor Code, last year of the CBA. (Labor Code, Art. 265)
Sec. 3, Book V, Rule II); OR a chartered local
which was subsequently granted independent
PAGE 91 OF244
LABOR LAW
registration but did not disaffiliate from its
federation, reported to the Regional Office and the
Bureau in accordance with Rule 111, Sections 6 and
7 of these Rules (Sec. 1[a], Rule I of D. 0. 40-03)
A local union does not dwe its existence to the
federation with which it is affiliated. It is a separate
and distinct voluntary association owing its
creation to the will of its members. Mere affiliation
does not divest the local union of its own
personality, neither does it give the mother
federation the license to act independently of the
local union. It only gives rise to a contract of
agency, where the former acts in representation
of the latter. (Insular Hotel Employees v.
Waterfront Insular Hotel, G.R. No. 17 4040-41,
2010)
(i) DISAFFILIATION
A right granted to affiliates to disassociate from the
mother union.
· .·.~ · :·1,:·--:·.
Local unions remain the basic units of association,
free to serve their own Interests subject to the
restraints imposed by the constitution and the by-
laws of the national federation, and they are also
free to renounce the affiliatlon upon the terms laid
down in the agreement which brought about
affiliation. To disaffiliate is a right, but to observe
Note: Disaffiliation is a right corollary to the right
of association granted by the Constitution. The
, right to associate necessarily entails the right not
to associate. (Volkschel Labor Union v. BLR, O.R.
No. L-45824, 1985)
Note: Chartered local can disaffiliate from the
federation, but it will lose its legal personality. In
practice, chartered locals file for independent
registration prior to disaffiliation in order for it to
gain new legal personality despite
disaffiliation. When to Disaffiliate
General Rule: A labor union may disaffiliate from
the mother union lo form a local or independent
union ONLY during the 60-day freedom period
immediately preceding expiration of CBA.
ATENEO CENTRAL
BAR OPERATIONS 2013 LABOR LAW

Exception: Shift of allegiance of majority. In such

a case, however, the CSA continues to bind · EFFECTSOF DISAFFILIATION
' I
members of the new or disaffiliated and 'As TO·U1NION DUES AS TO EXISTING
independent union up to the CBA's expiration , , CBA
date. (Tanduay Distillery Labor Union v. NLRC, The federation will no
G.R. No. 75037, 1987) longer receive the
dues from the
Distinction - Individual Member Disaffiliation employer because
versus Union's Disaffiliation without the said The CBA continues
Any individual member or any number of members affiliation, the employer to bind the members
may disaffiliate from the union during the "freedom -, has no link to the of the new or
period." But disaffiliating the union from its mother mother union. disaffiliated and
union must be supported by the majority of the . independent union
members. If done by a minority, even during the The employer's check- up to the CBA's
freedom period, the act may constitute disloyalty. off authorization, even expiration date.
(Villar, et al v. Inciong, G.R. Nos. L-50283~8, 1983) if declared irrevocable, (Associated Workers
is good only as long as Union-PTG WO v.
Manner of Disaffiliation they remain members NLRC, G.R. Nos.
An affiliate may disaffiliate from a labor federation of the union 87266-69, 1990)
or national union through the members' concerned. (Phil.
determination by secret ballotinq, after due Federation of
deliberation. (Labor Code, Art. 250[d]) Petroleum Workers v. ·'..._.J:i
CIR, G.R. No. L-
Local Union Disaffiliates to Join New 26346, 1971)
Federation - Allowed
When the local union withdraws from the old (ii) SUBSTITUTIONARY DOCTRINE
federation to join a new federation, it is merely
exercising its primary right to self-organization for The employees cannot revoke the validly
the effective enhancement and protection of executed collective bargaining contract with their
common interests. In the absence of enforceable employer by the simple expedient of changing
provisions in the federation's constitution their bargaining agent. The new agent must
preventing disaffiliation of a local union, a local respect the contract. The employees, through their
may sever its relationship with its parent. (Tropical new bargaining agent, cannot renege on the
· Hut Employees Union-CGW v. Tropical Hut, G.R. collective bargaining contract, except to negotiate
Nos. L-43495-99, 1990) with management for the shortening hereof.
(Azucena Vol. I, 7th ed., p. 209).
Note: A local union which has affiliated itself with
a federation is free to sever such affiliation anytime Effect of substitutionary doctrine on the
and such disaffiliation cannot be considered Deposed Union's Personal Undertakings
disloyalty; In the absence of specific provisions in In case of change of bargaining agent under the
the federation's constitution prohibiting substitutionary doctrine, the new bargaining agent
disaffiliation or the declaration of autonomy of a is not bound by the personal undertakings of the
local union, a local may dissociate with its parent deposed union like the "no strike, no lockout"
union (MSMG-UWP v. Ramos, G.R. 113907
clause in a CSA which is the personal undertaking
,2000)
of the bargaining agent which negotiated it. (J
Limitations to Disaffiliation
Disaffiliation should be in accordance with the l)
rules and procedures stated in the constitution and ....
by-laws of the federation. (see Cirtek Employees t)
Labor Union-FFW v. Cirtek Electronics, G.R. No.
190515, 2011) "'

-, j;
PAGE 92 OF 244
\. .i
 A TENEO CENTRAL
BAR OPERATIONS 2018
Summary of Principles: Affiliation
Disaffiliation
1. A local union may affiliate or disaffiliate
from federation
2. Affiliation and disaffiliation entails rights
and obligations
3. Affiliation or disaffiliation is .1 major issue
that can be decided only by a majority of
the members through secret balloting in a
formal meeting duly called for the purpose
. 4. Between the chapter and the federation,
affiliation or disaffiliation is a contractual
. relation.
5. Ah affiliation contract cannot absolutely
prohibit disaffiliation but may impose
limitations or restrictions. It may specify
the number or proportion of votes needed,
or the appropriate period to disaffiliate.
6. By affiliating or disaffiliating , the local
union does not dissolve itself nor does it
lose its standing as principal.
7. The local union, even a local chapter,
must be a legitimate labor organization -
. it must have been duly registered with
DOLE, otherwise it is not entitled to the
rights of an LLO
1 •
. B. BARGAINING UNIT
.{ ;
Bargaining Unit
A group of employees sharing mutual interests
within a given employer unit, comprised of all or
(\ .
~.., less than all of the entire body of employees In the
employer unit or any specific occupational or
geographical grouping within such employer unit.
(D. 0. No. 40-03, Sec. 1 [d], Ruta I, Book V)
(_ _;,
Appropriate Bargaining Unit (ABU)
{ 5 A group of employees of 8 given employer
·-·
comprised of all or less than all of the entire body
of employees, which the collective interests of the
employees, consistent with the equlty of the
employer, indicate to be best suited to serve
reciprocal rights and duties of the parties. (Belyea
() Corp. v. Calleja, G.R. No. 77395, 1988)
- ~
l ,. ;
' Out of these, the controlling test test of grouping is
PAGE 93 OF 244
\..
LABOR LAW
Role of Bargaining Unit
The labor organization designated or selected by
the majority of the employees in an appropriate
collective bargaining unit shall be the exclusive
representative of the employees of such unit for
the purpose of collective bargaining. (Labor Code,
Art. 267)
Right of Individual or Group to Present
Grievances Not Impaired
An individual employee or group of employees
shall have the right at any time to present
grievances to their employer .
Any provision of law to the contrary
notwithstanding, workers shall have the right, to
participate in the policy and decision-making
processes of the establishment where they are
employed insofar as said processes will directly
affect their rights, benefits and welfare.
For this · purpose, workers and employers may
form labor-management councils: Provided, that
the representatives of the workers in such labor-
management councils shall be elected by at least
the majority of all employees In said
establishment. (Labor Code, Art. 267)
Note: In establishments where no legitimate labor
organization· exists, the workers' representative
shall be elected directly by the employees at large.
(Azucena Vol. I, 7th ed., p.458).
Test to determine the constituency of an
appropriate bargaining unit
The law fixes no maximum or minimum number of
bargaining units. Union members come from the
CBU and several rival unions can come from the
CBU. The representative is the union, and the
group represented is the CBU.
Fundamental Factors in Determining the
Appropriate Collective Bargaining Unit:
1. Will of the Employees
2. Substantial Mutual Interests
3. Prior Collective Bargaining History
4. Similarity of Employment Status
mutuality or commonality of Interest ( San
Mig;,ef Corporation v. Laguesma, G.R. 100485,
1994).
ATENEO CENTRAL
BAR OPERATIONS 2018
Community of Interests Rule: States that the
employees within an appropriate bargaining unit
must have commonality of collective bargaining
interests in the terms of employment and working
conditions as evidenced by the type of work they
perform. (San Miguel Foods Inc. v. San Miguel
Corp. Supervisors and Exempt Union, G.R. No.
146206, 2011)
All or less than all ofthe entire
body ofemployees
Of employees, i.e. the
collective interest of
employees consistent with the
equity of the employer
To serve the reciprocal rights
and duties of the parties under
the CB provisions and with law
Factors in Determining Community of Interest
1. Similarity in the scale and manner of
determining earnings
2. Similarity In employment benefits, hours
of work and other terms and conditions of
employment
3. Similarity in the kinds of work performed
4. Similarity in the qualifications, skills and
training of the employees
5. Frequency of contact or interchange
among the employees
6. Geographic proximity
7. Continuity or integration of production
process
8. Common supervision and determination
of labor-relations policy
9. History of collective bargaining
10. Desires of the affected employees
11. Extent of union organization (Azucena
. Vol. I, 7th ed., p. 461).
Globe doctrine: If units in one industry cannot be
determined, the employees can decide how to
organize themselves into units. The best way to
. determine such preference is through referendum
or plebiscite. (Kaplsanan ng Mga Mc1nggagawasa
Manila Road Co. v. Yard Crew Union, G.R. Nos.
L-16292-94, 1960)
PAGE 94 OF 244
LABOR LAW
Geography and Location play a significant role
in determining community of interests if:
1. The separation between the camps and
the different kinds of work in each all
militate in favor of the system of separate
bargaining units;
2. When the problems and interests of the
workers are peculiar in each camp or
department;
3. The system of having one collective
bargaining unit in each camp has
operated satisfactorily in the past.
(B,~nguet Consolidated v, Bobok
Lumberjack Association, G.R. No. L-
11029, 1958)
Prior Collective Bargaining History
The existence of a prior collective bargaining
history is neither decisive nor conclusive in the
determination of what constitutes an appropriate
bargaining unit. (National Association of Free
Trade Unions v. Mainit Lumber Development
-, Company Workers Union, G.R. No. 79526, 1990)
Sinr,le or "Employer Unit" Preferred
General Rule: The proliferation of unions in an
employer unit is discouraged as a matter of policy
unless there are compelling reasons which would
deny a certain class ofemployees the right to self-
organization for purposes of collective bargaining.
(Phi/tranco v. BLR, G.R. No. 85343, 1989)
Exceptions:
1. Supervisory employees who are allowed .~
\;'
to form their own unions apart from the
rank-and-file employees;
2. Where the employees exercise their right
(_}
to form unions or associations for purpose
not contrary to law, to self-organizatibn,
and. to enter into collective bargaining
negotiations (Barbizon Phil. v.
Nagkakaisang Supervisor ng Barbizon,
G.R. Nos. 113204-05, 1996)
Two Companies with Related Business
General Rule: Two corporations cannot be
treated as a single bargaining unit even if their
businesses are related. (Dlatagon Labor
Federation Local v. Opie, G.R. No. L-44493-94, .
1980)
Exception: Application of Piercing Doctrine
 ATENEO CENTRAL
BAR OPERATIONS 2018
'
The cross-linking of the agencies command,
control, and communication systems indicate their
unitary corporate personality. Accordingly, the veil
of corporate fiction should be lifted fur the purpose
of allowing the employees of the three agencies to
form a single labor union. (Philippin& Scouts
Veterans v. Torres, G.R. No. 92357, 1993)
Spin-Off Corporations
In the case of subsidiaries or corporations formed
out of former divisions of a mother company
following a bona fide reorganization, it is best to
have separate bargaining units for the different
companies. (San Miguel v. Contesor, G.R. 11262,
1996)
Summary: Signification of Determining the
Bargaining Unit
1. In a Certification Election, the voters are
the whole bargaining unit, whether union
or non-union members (Labor Code, Arts.
267);
2. In a CSA Ratification, the voters are the
whole bargaining unit, and not just the
union members (Labor Code, Art 237);
and
3. In Strike Voting, the voters are the
(
members of the union, not the whole
bargaining unit. (Labor Code, Art. 278[f])
.
' ---
'- ' C. BARGAINING REPRESENTATIVE
LABOR LAW
management councils for the same
purpose. In such case, its representatives
shall be elected by a majority of all
employees in said establishment. (Labor
Cotie, Art. 267)
Note: A bargaining unit is 3 group of employees
sought to be represented by a petitioning union.
Such employees need not be members of a union
seeking the conduct of a certification election. A
union certified as an exclusive bargaining agent
represents not only its members but also other
employees who are not union members (Holy
Child Catholic School v. BHCCS-TELI-PIGLAS,
G.R. 179146 ,2013).
Creation of Labor Management and Other
Councils
The Department shall promote the formation of
labor-management councils in organized and
unorganized councils.
Purpose of the Labor-Management Councils
To enable the workers to participate in policy and ,,,;·'·
decision-making processes in the
establishment, insofar as said processes will ,
directly affect their rights, benefits and welfare.
Services to be rendered by the Department in
line with the said policy
I
1. Conduct awareness campaigns
..

2. Assist the parties in setting up labor-

r -._ management structures, functions and
\ ; Selection/Designation of an exclusive procedures
bargaining representative 3. Provide process facilitators upon request
("""'";-,.;.'
' General Rule: The labor organization _ of the parties
designated/selected by the majority of the 4. Monitor the activities of labor-
employees in an ABU shall be the exclusive management structures as may be
bargaining representative of t_he employees in necessary and conduct studies on best
such unit for the purpose of collective bargaining. practices aimed at promoting harmonious
labor-management relations.
(J Exceptions:
1. An Individual employee or group of S LECTION OF EMPLOYEE$''
employees shall have the right at any time ,REPR SENTATIVES TO THE COUNCIL
to present grievances to their exclusive t:JO LEGITIMATE
(J bargaining representative. ORGANIZED LABOR1 I I
2. Any provision of law to the contrary . E~TAB~ISHMENT ORGANIZATION .
e
0
I
notwithstanding, workers shall have the
Nominated by the
rightto participate in policy and decision- By the employees at
exclusive bargaining
making processes of the establishment large.
representatives
where they are employed insofar as said
(. _, processes will directly affect their rights,
benefits and welfare. Workers and
employees may also form labor
PAGE 95 OF 244

'>•
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

1. Determination of representation status 1. Determine whether the request is

a. SEBA (Sole and Exclusive compliant with the rules and whether the
Bargaining Agent) Certification bargaining unit sought to be represented
b. Cer'.ification Election is organized or not
c. Run-Off Election 2. Request a copy c;f the payroll for purposes
d. Re-run Elections of SEBA certification
e. Consent Election
If he/she finds it deficient, the Regional Director
a. SEBA CERTIFICATION shall advise the requesting union or local to
comply within 10 days from notice. Failure to
Voluntary recognition was repealed and replaced comply is deemed a withdrawal of the request.
by a Request for the Sole and Exclusive
Bargaining Agent Certification (D.O. No. 40-1-15 . REQUEST FOR CERTIFICATION
Series of 2015) . UNOiGANIZED ' -
E~TA USHMENT UNQRGANIZED
SEBA Certification may be issued if it is proved .. • WI H ONLY 1 E,STABLISHMENT I

..
that the following concur: LEGf!l~ATE LABOR WITH MORE
1. The bargainihg unit is ununionized; . . ORGANIZATION (LLO) THAN 11 'LLO
2. The requesting union is the only union in that - a
bargaining unit; and conference within 5 work
3. The CEM majority are members of the union days for the submission
of the following: L_;.
Requesting Union 1. The names of the
Any legitimate labor organization employees in the . '
covered bargaining
Where to Fiie unit who support the
Regional Office which issued the legitimate labor certification, provided
organization's certificate of registration or that said employees
certificate of creation of chartered local. comprise at least
majority of the The RD shall refer
Requirements for Request of SEBA number of employees the same to the
· Certification: The request shall indicate: in the covered
Election Officer for
1. The name and address of the requesting bargaining unit; and the conduct of a
legitimate labor organization 2. Certification under Certification ...
·C::,.
(
2. The name and address of the company . Y
' oath by the president Election.
where it operates of the requesting I ·~.

3. The bargaining unit sought to be • union or local that all

<s
represented documents submitted
4. The approximate number of employees in are true and correct
the bargaining unit; and based on his/her
5. The statement of the existence/non- personal knowledge,
()
existence of other labor organization/CSA
If the RD finds the
The certificate of registration or certification of requirements complete,
creation as duly certified by the president of the he/she shall issue during
requesting union or of the federation of the local, the conference a
respectively, shall be attached to the request. certification as SEBA.

Action on the Request Request for Certification In Organized

Within 1 day from the submission of the request, Establishment
the Regional Director shall: If the RD finds the establishment organized,
he/she shall refer the same to the Mediator-Arbiter

PAGE 96 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2010 LA.SOR LAW

for the determination of the propriety of conducting Association (PALEA) v. Ferrer-Ca!leja, G.R. No.
a certification election. 76673, 1988)

Effects of Certification Issues Involved in a Certification Election

1. Upon the issuance of the certification as 1. Proper composition and constituency of the
SEBA, the certified union or local shall bargaining unit; and
enjoy the rights and privileges of an 2. Veracity of membership claims of the
exclusive bargaining agent of all the competing unions so as to Identity the union
employees in the covered bargaining unit that will serve as the bargaining representative
2. The certification shall bar the filing of a of the entire bargaining unit
petition for certification by any labor
organization for a period of 1 year from the Note: The questions to be resolved in a
date of its issuance. Upon expiration of Certification Election:
this 1-year period, any legitimate labor 1. Whether the employees what to be
organization may file a petition for represented
certification election in the same 2. By whom should they be represented
bargaining unit represented by the
certified labor organization, unless a CBA Pending Petition for Cancellation of
between the employer and the certified Registration is not a Bar for a Certification
labor organization was executed and Election
registered with the Regiorial Officer in An order to hold a certification election is proper
despite the pendency of the petition for
.- '
;
accordance with Rule XVII of this rules.
cancellation of the registration certificate of the
i._y (D.O. 40-i-15)
respondent union because at that time the union
filed its petition, it still had the legal personality to
a. CERTIFICATION ELECTION perform such act absent an order directing the'
Process of determining through secret ballot the cancellation (Legend International Resorts Limited
t... _ sole and exclusive bargaining agent of the v. Kilusang Manggagawa ng l.egenda, G.R.
employees in an appropriate bargaining unit for 169754, 2006). ,
purposes of collective bargaining or negotiations.
Conducted by Med-Arbiter of the Bureau of Labor ·cerffication
El ction
• u mon
. El ec tiion _
Relations of the DOLE. (/RR Labor Code, Sec.
1 [x], Rule I, Book V) To determine the
exclusive bargaining To elect union officers
Purpose agent
The ascertainment of the wishes of the majority of All members of the
the employees in the appropriate bargaining unit: appropriate Only union members
to be or not to be represented by a labor bargaining unit may may vote
organization, and in the affirmative case, by which vote
particular labor organization. (Reyos v. Trajano,
G.R. No. 84433, 1992) Note: The process in certification elections
depends upon whether the establishment is
Whenever there is doubt as to whether a particular organized or unorqanized, The general · flow
union represents the majority of the rank-and-file remains the same, but there are some differences,
employees, in the absence of a legal impediment, as will be discussed below.
the holding of a eertlflcatlon election is the most
democratic method of determining tne employees' IN AN UNORGANIZED ESTABLISHMENT
choice of their bargaining representative. It is the
appropriate means whereby controversies and Unorganized establishment: an establishment
disputes on representation may be laid to rest, by without a bargaining representative.
the unequivocal vote of the employees
themselves. (Philippine Airlines Employees' Who May File
Any legitimate labor organization including
1
'\. '
PAGE 97 OF 244

\.

'---------------------
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

1. A national union or federation which has
already issued a charter certificate to its
local/chapter participating in the
certification election or a local/chapter
which has been issued a charter
certificate by the national union or
federation. (Labor Code, Art. 269)
2. An employer may file a Petition for
Certification Election when:
a. Requested to bargain collectively;
and
b. No bargaining agent nor a
registered CBA exists in the unit.
{Labor Code, Art. 270)
Requisites for holding a certification election
In an unorganized establishment (Labor Code,
Art. 269)
Once a petition is filed by a legitimate labor
organization, the· Med-Arbiter shall automatically
order the conduct of a certification election.
Requisites for holding a certification election
in an organized establishment (Labor Code,
Art. 268):
1. The Med-Arbiter shall automatically order
an election by secret ballotwhen
2. Verified petition supported by at least 25%
of all the employees in the bargaining unit,
questioning the majority status of the
incumbent bargaining agent.
3. Filed before the DOLE within the 60-day
period before the expiration of the five
year representation aspect of the CBA
Note: The requisite written consent of at least 20%
(now 25%) of the workers in the bargaining unit
applies to certification election only, and not to
motions for intervention. 1(PAFLU v. Calleja, G.R.
No. 79347, 1989)
When to file
The proper time to file a petition for C. E. depends
on whether the bargaining unit has a CBA or not.

When to File If it has no CBA, the petition may be filed anytime

Any time, except within 12 months of a previous
election (if any).
IN AN ORGANIZED ESTABLISHMENT
Organized establishment: an estabtishrnent with
a duly certified bargaining agent and/or an existing
CBA.
except within 12 months of a previous election (if.
any).
i._;-
If the bargaining unit has a CBA, the petition can
be filed only within the "freedom period" which is
the last 60 days of the 5ih yeat of the CBA.

Who May File

Any legitimate labor organization, including
1. A national union or federation which has
already issued a charter certificate to its
local chapter participating in the
certification election. (Labor Code, Art.
268) (National union or federation shall
not be required to disclose the names of
the local/chapter's officers and members,
but shall attach to the petition the charter
certificate it issued to its local/chapter
Sec. 1, Rule VIII of D. O. 40-1-15)
2. A local chapter which has been issued a
charter certificate by the national union or
federation before the DOLE within the 60- u
day freedom period. (Labor Code, Art.
268)

PAGE 98 OF 244

l ,
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Comparison of Organized v. Unorganized Regional Office, the same shall be

establishments automatically consolidated with the Med-
l i
Arbiter who first acquires jurisdiction.
2. Where the petitions are filed in different
Regional Offices, the Regional office in
which the petition was first filed shall
exclude all others; in which case, the latter
shall endorse the petition to the former for
Not applicable. Can consolidation.
No petition for
file petition anytime, 3. At the option of the petitioner, a PCE and
certification except
except within 12 its supporting document may also be filed
within the 60-day ·
montns of a previous ONLINE. (DO No. 40-1-15)
freedom period
election (if any). The Regional Director or his/her authorized
:,,.:; personnel shall be responsible for the posting of
Must be duly the Notice of Petition for Certification Election.
supported by 25% of
Substantial support Employer as bystander
all the members ofthe
rule not applicable IN ALL CASES (including when petition for
appropriate bargaining
unit certification is filed by employer), the employer's
GRANT OF PETITIONFOR CERT. participation shall be limited to:
ELECTION 1. Being notified or informed of petitions of
r Appealable Not Appealable such nature; and
l .,., , 2. Submitting the list of employees during
(Protest may be filed)
the pre-election conference should the
REQUIREMENTS FOR VALID CERTIFICATION Med-Arbiter act favorably on the petition.
ELECTION (Labor Code, Art. 271)
1. The union should be legitimate which
(• means that it is duly registered and listed However, manifestation of facts that would aid
in the registry of legitimate labor unions of the Med-Arbiter in expeditiously resolving the
the BLR or that its legal personality has petition may be considered (i.e. existence of bars).
not been revoked or cancelled with (D.O. No. 40-1-15)
finality.
2. In case of organized establishments, the Note:
petition for certification election is filed An employer has no legal standing in a certification
(1
... l election. He cannot oppose the petition or appeal
during (and not before or after) the 60-
day freedom period of a duly registered the Med-Arbiter's orders related thereto. (San
CBA. Miguel Foods lnc.-Cebu B-Meg Feed Plant v.
Lequesme, G.R. No. 116172, 1996)
t -' 3. In case of organized establishments, the
T
?,.J
petition complied with the 25% written
An employee has the right to intervene for the
support of the members of the
(j bargaining unit.
protection of his individual right. (D. 0. No. 40-F-
03)
4. The petition is filed not in violation of any
of the three (3) bar rules.
Probationary employees can vote in a
{J certification/consent election. All employees in the
COMMON REQUISITES appropriate bargaining unit, whether probationary
u Where to file the PCE
or permanent are entitled to vote. (National Union
of Workers In Hotels, Restaurant and Allied
[1 With the Regiohal Office which issued the
\J tndustnes-Meni!« Pavilion Hotel Chapter v.
petitioning union's certificate of registration or Secretary of Labor, 2009) ·
certificate of creation of chartered local.
{)
1. Where. two/more petitions involving the
same bargaining unit are filed in one
PAGE 99 OF 244

\
ATENEO CENTRAL
BAR OPERATIONS 2018
Grounds for Denying Petition (R.A. 9481; D.O.
No. 40-F·03) (ALCEC-YDS)
1. If the petitioner union does not Appear in
two successive conferences called by the
Med-Arbiter, upon showing that the
petitioner was duly notified.(Non-
Appearance)
2. The petitioner is not !:isted in the
Department's registry of leqitlrnate labor
unions or that its legal personality has
been revoked or cancelled with finality.
(Illegitimacy- Unregistered Union)
The filihg or pendency of any inter/intra-union
dispute and other related labor relations
dispute is not a prejudicial question to any
petition for certification and shall not be a
,i
ground for the dismissal of . petition for
certification election or suspension of
proceedings for certification election. (D.O.
No. 40-03, as amended by D. 0. No. 40-F-03,
Sec. 2, Rule XI)
Certification election may be ordered despite:
the pendency of a ULP charge against a union
filed by the employer (Barrera v. CIR, G.R. No.
L-32853, 1981) or the pendency of a petition
to cancel the union's reqistratlon certificate
based on an alleged illegal strike by the union.
(National Union of Bank Employees v. Minister
of Labor, G.R. No. L·53406, 1981)
3. Failure of a local/chapter or national union
or federation to submit a duly issued
~harter Certificate upon filing of the
petition for certification election.
(Illegitimacy- No Charter)
4. Absence of an ,!;,rnployment relationship
between all the members of the petitioning
union and the establishment where the
proposed barqslnlnq unit is sought to be
represented. (Absence of EER
Relationship)
5. The petition was filed before or after the
freedom period of a duly registered
collective bargaining agreement; provided
that the 60-day period based on the
original collective barqalninq agreement
shall not be affected by any amendment,
PAGE 100 OF 244
-, LABOR LAW
extension or renewal of the collective
bargaining agreement; (J;.ontract Bar)
6. The petition was filed within 1 year from
entry of voluntary recognition or a valid
certification, consent or run-of; election
and no appeal on the results of the
certification, consent or run-off election is
pending; (i-Yeer Bar/Certification Year
Bar)
7. A duly certified union has commenced
and sustained negotiations with the
employer or there exists a bargaining
deadlock which had been submitted to
conciliation or arbitration or had become
the subject of a valid notice of strike or
lockout to which an incumbent or certified
bargaining agent is a party; (Neqoiietion
Bar/Deadlock Bar)
8. In case of an organized establishment,
failure to submit the 25% .§.upport
requirement for the filing of the petition for
certification election. (Lack of Support)
A certification may be called by the Med-Arbiter
even through the 25% support requirement has
not been complied IA1ith. The requirement is
relevant only when it becomes mandatory to
conduct a certification election. In all other
instances, the discretion ought to be exercised
{.·. ~~.,,·
in favor of a petition for certification election.
(California Manufacturing Corp., v. Usec of
Labor, G.R. No. 97020, 1992)
()
In Summary, the Grounds for Denying Petition
for Certification Election:
1. Non-Appearance
2. Illegitimacy - Unregistered Union
3. Illegitimacy - No Charter
4. No Employee-Employer Relationship
5. Contract Bar
6. 1-Year Bar/Certification Year Bar
7. Negotiation/Deadlock Bar ' l
\__E .
8. Lack of Support
RULES PROHIBITING THE FILING OF
u
PCEIBARl5 TO CERTIFICATION ELECTION
1. Contract Bar Rule
2. Negotiation or Deadlock Bar Rule
3. One-year or Certification Year Bar Rule
 ATENEO CENTRAL
BAR OPERATIONS 2018
1. CONTRACT BAR RULE
General Rule: The representation status of the
incumbent exclusive bargaining agern which is a
party to a duly registered CBA shall be for a term
of five (5) years from the date of effectivity of of the
CBA. No petition questio_ning the majority status
of. the incumbent exclusive bargaining agent or
petition for certification election shall be filed (Sec.
7, Rule XVII of D. 0. 40-03).
Exception: (Freedom period) Arts. 264, 265, 268:
Within 60 days before expiration of the 5-yr term
of the representational aspect of the Ci3A.
Note: This freedom period is different from the
sixty day period within which to start negotiations
for a new CBA.
Requisites for Contract-Bar Rule
1. Agreement is existing;
2. Ratified by the union membership;
3. It is adequate for it contains substantial terms
and conditions for .employment;
4. It encompasses the employees in the
(
appropriate bargaining unit;
5. It was not prematurely extended; the C8A was
l .
not hastily entered into;
6. It is for a definite period;
!f '.
7. No schism or mass disaffiliation affects the .
contracting union during the lifetime of the
agreement;
8. The contracting union is not defunct; and
(\ \
; 9. The contracting union is not company-
dominated
()
Exceptions to the Application of the Contract-
(J Bar Rule
The existence of a CSA will not bar certification
c~ election in the following instances:
1. CBA is not registered
,_J
,, '
2. CBA deregistered
3. CSA is incomplete in itself
4. CBA where the identity of the representative is
in doubt (Associated Labor Unions v. Hon.
lJ Ferrer-Calleja, G.R. No. 85085, 1989)
5. CBA was hastily entered into, i.e. signed
l} before the freedom perioJ (Associated Trade
Unions-A TU v. Hon. Noriel, G.R. No. L-48367,
1979)
6. CBA entered into between the employer and
t \
\_j the union during the pendency for certification
PAGE 101 OF 244
v .
LABOR LAW
election (Vassar Industries EU v. Estrella,
G.R. No. L-46562, 1978)
7. CBA was concluded in violation of an order
enjoining the parties from entering into a CBA
until the issue of representation is resolved
8. Referendum to registJr an independent union
2. NEGOTIATION OR DEADLOCK BAR RULE
Deadlock arises when there is an impasse, which
presupposes reasonable effort at good faith
bargaining which, despite noble intentions, did not
conclude in an agreementbetween the parties.
Genuine Deadlock
1. The submission of the deadlock to a 3rd
party conciliator or arbitrator; or
2. The deadlock is the subject of a valid
notice of strike or lockout (National
Congress of Unions in the Sugar Industry
v. Trajano, G.R. No. 67485, 1992)
Petition, for certification election cannot be
entertained if:
1. A duly certified union has commenced
and sustained negotiations with the
employer in accordance with Art. 261
within the 1-year period referred to in Sec.
14.d of the IRR.
2. 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.
Requisites:
1. Parties must have negotiated in good faith
2. Deadlock must have been submitted to
voluntary conciliation or arbitration or is
subject of a valid notice of strike/ lock-out.
When Deadlock Bar Not Applicable: Artificial
Deadlock
A deadlock prearranged or preserved by collusion
of the employer and the majority union. (See
Kaisahan ng Manggagawang Pilipino (KAMPIL-
KA TIPUNAN) v. Trajano, G.R. No. 758110, 1991)
ATENEO CENTRAL
BAR OPERATIONS 2018
------------------------------------------------------------------------~
3. ONE-YEAR BAR RULE OR CERTIFICATION 2. A failure of election where less than
YEAR BAR RULE
No petition for a certification election may be filed
within 1 year ·from the date of a valid certification,
consent, or run-off election, or from the date of
entry of a voluntary recognition of the union by the
employer.
Certification year rule will apply even if the "No
union" choice won. Therefore, for one year, no
PCE will be entertained (Samahang Manggagawa
sa Permex v. Secretary; G.R. No. 107792, 1998)
Note: The 12 month. prohlbltion presupposes that
there was an actual conduct bf election, i.e, ballots
were cast and there was a counting of votes. In a
· case where there was no certification election
conducted precisely because the 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. (R Transport Corp. v,
Laguesma, G.R. No. 106830, 1993)
Date of election
Date to be considered is when the election was
conducted; if results are appealed, then the date
when appealts finally resolved.
Where less than maJority of CBU voted
There is a failure of election when less than
majority of the CBU members voted. A failure of
election shall not bar the filing of a motion for the
immediate holding of another certification or
consent election may be filed within B months from
date of declaration of the failure of election. (0.0.
No. 40-03, Sec. 18, Rule IX)
Note: The last· sentence pertains to the re-run
election as provided under D. 0. No. 40-1-15.
When Certification Year Bar Rule will NOT
APPLY
1. In a case where there was no certification
election conducted precisely because the
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. (R· Transport
Corp. v. Laguesma, G.R. No. 106830,
1993)
PAGE 102 OF 244
LABOR LAW
majority of the CBU members voted. A
failure of election shall not bar the filing of
a motion for the immediate holding of
another certification or consent election
may be filed within 6 months from date of
declaration of the failure of election. (D. 0.
No. 40-03, Sec. 18, Rule IX)
PROTESTS/APPEAL AND OTHER QUESTIONS
' ARISING FROM CONDUCT OF
CERTIFICATION ELECTION
The .order granting the conduct of a certification
election in an unorqani:ted establishment shall
not be subject to appeal. Any issue arising
therefrom may be raised by means of protest on
the conduct and results of the certification
election.
The order granting the conduct of a certification
election in an organized establishment and the
decision dismissing or denying the petition,
. ..... A
whether in an organized or unorganized
establishment, may be appealed to the Office of
the Secretary within 10 days from receipt thereof.
( Sec. 17, Rule VI/I of D. 0. 40-03).
"--'-:-
P~OTEST (Sec. 13, Rule IX; Book V)
Who may file: Any party-in-interest
Ground: On the conduct or mechanics of election
How to protest: - .
\_ . .j
1. Record the protest in the minutes of the
election proceedings; AND
(}
2. Formalize the protest with specific
grounds, arguments before the Med-
Arbiter within five (5) days after the dose
of the election proceedings
Protests deemed dropped
Protests which are:
1. Not recorded in the minutes; AND
2. Formalized within the prescribed period
General Reservation to file protest prohibited
Protesting party shall specify the grounds.
0
FaUure to formalize within 5-days cannot be ,-·'l
taken against the union. v
The union misrepresented that they were
independent which caused the members to t)
 ATENEO CENTRAL
BAR OPERATIONS 2018
disaffiliate and form a new union and their protest
was not filed within the 5-day period.
The failure to follow strictly the procedural
technicalities regarding the period for filing their
protest (within the 5-day period) should not be
taken against them. Mere technicalities should not
be allowed to prevail over the welfare of the
workers. What is essential is that they be accorded
an opportunity to determine freely and intelligently
which labor organization shall act On their behalf.
(DHL-URFA-FFWv. BMP, G.R. No. '152094 2004)
ELECTION PROCEEDINGS refer to the period
Included:
1. Starting from the opening to the closing of
the polls
2, Counting, tabulation and consolidation of
votes
Excluded:
1.
Period for the final determination of the
challenged votes
2. Canvass , the Med-Arbiter shall issue a formal order qrantinq
(Sec. 1{p], Rule I«o.o. 40-03).
ELECTION MECHANICS (Rule VIII of D. 0. 40-
03).
1. RAFFLE OF THE CASE
Upon the filing of the petition, the Regional
Director or any of his/her authorized
representative shall allow the party filing the
petition to personally determine the Med-
Arbiter assigned to the case by means of a
raffle (Sec. 5, Rule VIII ofD.O. 40~03).
2. PRELIMINARY CONFERENCE
(J The Med-Arbiter shall conduct a preliminary
conference and hearing within 10 days from the
r>. receipt of the petition to determine the following:
\..,,,
1. The bargaining unit to be represented;
0 2. Contending Labor Unions;
3. Possibility of labor unions consent
() elections;
, from participating in the certification
4. Existence of any of the bars to certification
election; and
5. Such other matters as may be relevant for
the final disposition of the case. (Sec. 9
Rule VIII of D.O. 40·03).
PAGE 103 OF 244
LABOR LAW
When parties fail to agree to a consent election
during the preliminary conference, hearing/s will
be conducted.
Number of Hearings
The Med-Arbiter may conduct as many hearings
as he/she may deem necessary, but in no case
shall the conduct thereof exceed 15 days from the
date of the scheduled preliminary
conference/hearing, after which time the petition
shall be considered submitted for decision (Sec.
11, Rule VIII ofD.O. 40-03)
Failure to Appear Despite Notice
Failure of any party to appear in the hearing/s
when notified or to file its pleadings shall be
deemed a waiver of its right to be hear. (Sec. 12
I
Rufe VIII of D.O. 40-03)
Note: See diagram in the suceeding pages.
2. ORDER/DECISION ON THE PETITION
Within 10 days from the date of the last hearing, ::s.·: ·'
or denying the petition.
In organized establishments, no order or
decision shall be issued during the freedom
period.
The order granting the petition shall , state the
following:
1. Name of the employer or establishrnent
2. Description of.the bargaining unit
3. Statement that none of the grounds for
dismissal exists
4. Names of contending labor unions
5. Directive to an unregistered local/chapter
or a federation/national union representing
an unregistered local/chapter to personally
submit to the Election Officer its certificate
of creation at least 5 working days before
the actual conduct of the certification
election. Non-submission of this
requirement as certified by the Election
Officer shall disqualify the local/chapter
election
?· Directive upon the employer and the
contending union(s) to submit within 10
days from receipt of the order, the certified
list of employees in the bargaining unit, or
ATENEO CENTRAL
BAR OPERATIONS 2018
where necessary, the payrolls covering
the members of the. bargaining unit of at
leas~ 3 months prior to the issuance of the
order (Sec. 13 Rule VIII of D.O. 40-03).
Grounds for Denial of the Petition for
Certification Election:
1. Petitioner Is not listed as a LLO or its legal
personality has been revoked
2. Petition was· filed outside of the freedom
period
· 3. Petition was filed within one (1) ear
from entry of valid
certification/consent or run off election
AND no appeal on the results of the
election is pending .
4. Petition was filed in violation of the
negotiation/deadlock bar rule or had
become the subject of a valid notice: of
strike or lockout to which an
incumbent or CB1\ is a party
5. In case of organized establishment,
failure to submit the twenty-five
percent (25%) support requirernent
(Sec. 14,Rule VII/of 0.0. 40-03)
Prohibited Grounds for Denial of Petit.ion
The following must be heard and resolved by the
Regional Director In an independen! petition for
cancellation of registration:
1 '. Validity of petitioning union's certificate of
registration or its legal personality as a
labor organization
2. Validity of registration and execution of
CBA
The following issues shall be ralsi id before the
Med-Arbiter during the hearing and in the
pleadings in the petition for certification election
and shall be resolved in the same order:
1. Existence of Employer-Employee
relationship
2. Eligibility or mixture in union membership
(Sec. 14 Rule VIII of 0.0. 40-03)
3. APPEAL
Order granting conduct of certification election in
unorganized establishments - NOT appealable
All others - appealable to the DOLE Sec. within 1 O
days from receipt.
PAGE 104 OF 244
LABOR LAW
4. PRE-ELECllON CONFERENCE
Within 24 hours from receipt of the assignment for
the conduct of a certification election, the Election
Officer shall cause the issuance of notice of pre-
election conference upon the contending unions
and the employer.
Must be scheduled within 10 days from receipt of
the assignment.
Must be completed within 30 days from the last
hearing.
The employer shall be required to submit the
certified list of employees in the bargaining unit, or
where necessary, the payrolls covering the
members of the bargaining unit at the time of the
filing of the petition.
Importance: The pre-election conference shall
set the mechanics for the election and determine
the following:
' 1. Date, time and place of the election
2. Not be later than 45 days from the date of
the first pre-election conference
3. On a regular working day
4. Within the employer's premises, unless
circumstances require otherwise
5. List of eligible and challenged voters
6. Number and location of polling places or
booths and the number of ballots to be
prepared with appropriate translations, if
necessary
7. Name of watchers or representatives and
their alternates for each of the. parties
during election
8. Mechanics and guidelines of the election
(Sec. 2, Rule IX of 0.0. 40-03)
Effect of failure to appear during the pre-
election conference
1. Considered as a waiver to be present and
to question or object to any of the
agreements reached in said pre-election
conference.
2. However, the non-appearing party or the
employer still has the right to be furnished
(.}
notices of subsequent pre-election
conferences and to attend the same (Sec. · ()
3, Rule IX of D.O. 40-03).
l)
;
l .i
 ATENEO CENTRAL
BAR OPERATIONS 2018
Qualification of Voters
1. All employees who are members of the
i '
appropriate bargaining unil 3 MONTHS
PRIOR to the filing of the petition/request
shall be eligible to vote.
2. An employee who has been dismissed
from work but has contested the legality of
the dismissal in a forum of appropriate
jurisdiction at the time of the issuance of
the order for the conduct of a certification
election shall be considered a qualified
voter UNLESS his/her dismissal was
declared valid in a final judqrnent at the
time of the conduct of the certification
election (Sec. 6, Rule IX of 0. 0. 40-1-
15).
Inclusion/Exclusion of Voters
In case of disagreement over the voters' list or
over the eligibility of voters, all contested voters
. shall be allowed to vote, but their votes shall be
segregated and sealed in individual envelopes
with their names.
,·
'
5. POSTING OF NOTICES OF ELECTION
At least 10 days before the actual date of the
election in 2 most conspicuous places in the
company premises
Contents of the Notice
1. Date and time of the election, which is
(; . preferablywithin the establishrner-t
2. Names of all contending unions
() 3. The description of the bargaining unit and
the list of eligible and challenged voters
(j
The posting of the list of employees comprising
the bargaining unit shall be done by the DOLE
personnel.
(J Note: The posting of the notice of election, the
information required to be included therein and the
duration of posting cannot be waived by the
contending unions or the employer (Sec. 11,
Rule IX «o.o. 40-/-15).
Secrecy and Sanctity of the Ballot
The Election Officer and the . authorized
representatives of the contending unions shall
{ before the start of the actual voting, inspect the
\j polling place, the ballot boxes and the polling
booths.
PAGE 105 OF 244
-------~----------------'--.
LABOR LAW
No device that could record or identify the voter or
otherwise undermine the secrecy and sanctity of
the ballot shall be allowed within the premises,
except those devices brought in by the election
officer.
Any other device found within the premises shall
be confiscated by the election officer and
returned to its owner after the conduct of the
certification election. (Sec. 12, Rule IX of Q,O.
40-1-15)
Preparation of Ballots
The Election Officer shall prepare the ballots in
English and Filipino or the local diaiect
The number of ballots should correspond to the
number of voters in the bargaining unit plus a
reasonable number of extra ballots for
contingencies.
All ballots shall be signed at the back by the
Election Officer and an authorized representative
each of the contending unions.
A party who refuses or fails to sign the ballots
waives its right to do so and the Election Officer
shall enter the fact of rqfusal or failure and the
reason therefore in the records of the case(Sec.
8, Rule IX of 0.0. 40-03).
Challenging of Votes
An authorized representative of any of the
contending unions and employer may challenge
the vote.
Challenge must be raised before vote is deposited
in the ballot box.
Grounds for Challenging Votes
1. No employer-employee relationship
between the voter and the company
2. Voter is not a member of the appropriate
bargaining unit which petitioner seeks to
represent (Sec. 10, Rule IX of 0.0. 40-
03)
Procedure in Challenging of Votes
1. The Election Officer shall place the ballot
of the voter who has been properly
-'-- --- --- -·-----
ATENEO CENTRAL
BAR OPERATIONS 2018
challenged during the pre-election
conferences in an envelope.
a. Sealed in the presence of the
voter and the representatives of
the contending unions and
employer.
b. Indicate on the envelope the
voter's name, the union or
employer challenging the voter,
and the ground for the challenge.
c. Envelope shall be signed by the
Election Officer and the
representatives of the contending
unions and employer.
2. The Election Officer shall note all
challenges in .the minutes of the election
proceedings and shall have custociy of all
envelopes containing the challenged
votes.·
3. The envelopes shall be opened and the
question of eligibility shall be passed upon
by the mediator-arbiter only if the number
of segregated voters will materially alter
the results ofthe election (Sec. 11, Rule
IX of 0.0. 40-03)
Protest
Any party-in-interest may file a protest based on .
the conduct or mechanics of the election.
Protests not so raised Immediately after the last
ballot cast are deemed waived.
General Reservation to file a protest shall be
prohibited. The protesting party shall specify the
grounds for protest.
Requirements in order that a protest may
prosper:
1. Filed with the representation officer and
made of record in the minutes of the
proceedings before the close of election
proceedings; and
2. Formalized before the Med-Arbiter. within
5 days after the close of the election
proceedings.
3. If not recorded in the minutes and
formalized within the prescribed period,
the protest shall be deemed dropped
(Sec. 14, Rule IX of D.O. 40-1-15).
PAGE 106 OF 244
LABOR LAW
Canvassing of Votes
1. Counted and tabulated by the Election
Officer in the presence of the
representatives of the contending unions.
2. Each representative is entitled to a copy
of the minutes of the election proceedings
and results of the election.
3. The ballots and the tally sheets shall be:
a. Sealed in an envelope
b. Signed by the Election Officer and
the · representatives of the
contending unions
c. Transmitted to the Med-Arbiter,
together with the minutes and
results of the election, within 24
hours from the completion of the
canvass
4. Where the election is conducted in more
than one region, consolidation of results
shall be made within 15 days from the
conduct thereof (Sec. 14, Rule IX of
D. 0. 40-03).
6. CONDUCT OF ELECTION AND CANVASS OF
VOTES
1. The election precincts shall open and
close on the date and time agreed upon .
during the pre-election conference.
2. The opening and canvass shall proceed
immediately after the precincts have
closed
3. Failure of any party or the employer or ()
his/her/their representative to appear
during the election proceedings shall be ()
considered a waiver to be present and to
question the conduct thereof (Sec. 15, ().
Rule IX of 0.0. 40-03).
Double Majority Rule
For there to be a valid certification election:
,· "'1.
i. .J
1. Majority of the bargaining unit must have
voted; AND
2. The winning union must have garnered
majority of the valid votes cast. (National
Union of Workers In Hotels, Restaurant
0
and Allied Industries-Manila Pavilion Hotel
Chapter v. Secretary of Labor, G.R. No.
l)
181531, 2009) ,-\
lJ
Note: Spoiled ballots are not reckoned to
determine majority (PAFLU v. BLR, G.R. No. L·
(J.
'·, . .j
l f
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

43760, 1976) Valid votes are those not

challenged, damaged, etc.

7. CERTIFICATION OF COLLECTIVE
BARGAINING AGENT
The union which obtained a majority of the valid
votes cast shall be certified as the sole and
exclusive bargaining agent of all the employees in
the appropriate bargaining unit.

Certification must be done within five days from

the day of election provided there was no protest.

When the winning choice is a local chapter

without a certificate of creation of chartered
local
The local chapter shall submit its DOLE issued
/i certificate of creation within five (5) clays from the
conclusion of election (Sec. 15, Rule IX of D. 0.
40~/-15)

,-..
\..)
r:
'\ .

-, .!

f ·~·

, ~
lr:

,· '
u

0
u

(J

PAGE 107 OF 244

'
L
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

FILING PETITION FOR CERTIFICATION ELECTION

RAFFLE :]·
·
D.ispensed with if there is only one
[ Med-Arbiter

Service of NOTICE of
preliminary conference

PRELIMINARY CONFERENCE
Must be within 10 days from receipt of
petition for certification election

Parties AGREE on a Parties FAIL TO AGREE

consent election on a consent election
().
(··~. 1
FORWARD RECORDS of HEARINGS
petition to RD I authorized No set #, but must not exceed 1 5 t)
days from date of preliminary
representative

()
DECISION
First PRE-ELECTION Must be within 10 days from last
CONFERENCE [ hearing
Must be within 10 days from date of
(J
entry of agreement
'
0
[)
u
(,)

PAGE 108 OF 244

' ;

\. ;
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

APPEAL OF DECISIONS RE: GRANTING I DENYING CONDUCT OF CERTIFICATION ELECTION

DECISION

UNORGANIZED ORGANIZED
Establishment Establishment

, Petition Petition Petition Petition

GRANTED DENIED GRANTED DENIED.
(
i

Unappealable

( :

{'.

t, .

.._. .;.
. .. J .
REGIONAL DiRECTOR to tra. nsmit entire record withinTI.
4• ·
.
hcurs from receipt of appeal to OFFICE OF THE
SECRET ARY OF LABOR

(j
REPLY
(J Any party may file a reply within 1 O days from receipt of the
Memorandum of Appeal

.
( ~
·-·· -------~--~--1-.------~--~
f ' Decision of the SECRETARY OF LABOR
\_J
Secretary shall have 15 days from receipt of the entire records
to decide the appeal

0 The decision shall be final and executory

within 10 days from receipt by the parties
u No motion for reconsideration shall be entertained

0 The entire recordsofthe case shall be remanded to the

Regional Office for implernentation
i. '
\..} within 48 hours from notice of receipt of the decision

PAGE 109 OF 244

ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW
'
CERTIFICATION ELECTION PROPER

I RECEIPT OF ENTRY OF FINAL JUDGMENT granting conduct of a Certification Election

'
Regional Director to cause the RAFFLE of the case to an ELECTION OFFICER
within 24 hours from receipt of notice

'
Election Officer to cause issuance of NOTICE OF PRE-ELECTION CONFERENCE. upon
contending unions and ernployerw/ln 24 hours from receipt of assignment
Posting of notices must be done at least 1 O days before election,
in 2 most conspicuous places in the company premises

PRE-ELECTION CONFERENCE
Must be within 10 days from receipt of assignment, and completed within 3 days of first hearing
Failure to appear in .pre-election conference is a waiver of the right to question any agreement in
pre-election conference. However, the non-appearinq party retains the right to be given notices of
subsequent pre-election conferences.

*
I
·-.. .,. .

CERTIFICATION ELECTION
Must not be later than 45 days
from date of first pre-election copference
-
ELECTION PRECINCTS CLOSE (j
On the date and time aqreed upon during the pre-election conference

CANVASS OF VOTES
*
Opening and canvassing of votes shall begin immediately after the precincts have closed

NOTE: FAILURE OF ELECTIONS

(J
tj

Existswhen the votes cast is !ess than the majority of eligible voters, and there are no material challengedvotes.
Another certification or consentelection may be held within 6 months. (~
'- . . .#

+
TRANSMIT RECORDS OF CASE to MED-ARBITER. MED-ARBITER to issue an order
(J
PROCLAIMING THE RESULTS of the Certlficatlon Election. 0
Any of the following conditions must have been present:
(1] No protest was filed, or protest filed but not perfected within the 5-day period for perfection of protest
[2] No challenge or eligibility issue raised, or even if raised, will not materially change results of elections

,· .
" . .,;;;
PAGE 110 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2019
c. RUN-OFF ELECTIONS
An election between the labor unions receiving
the two (2) highest number of votes in a
certification at consent election with three (3) or
more choices, where such results in none of the
choices (unions or "no union" choice) receiving a
majority of the valid votes cast.
Provided, that the total number of votes for all
contending union is at least fifty (50%) of the
number of votes cast (Sec. 1[ss], Rule tot 0.0.
40-03)
Procedure In Run-off Election&
The Election Officer shall motu propio conduct a
run-off election within 10 days from the close of
the election proceedings between the labor
unions receiving the two highest numbers of
votes.
Notice of run-off elections shall be posted by the
Election Officer at least 5 days before the actual
date of run-off election.
t·,,
Requirements for Run-Off election
1. A valid election took place because
majority of the CSU members voted
2. There are three or more choices in the
election (including no union)
3. Not one of the choices obtained majority
of the valid votes
4. Total number of votes for all contending
unions is at least 50% of the number of
votes cast.
0 5. There is no unresolved challenge of voter
' ,,
,.
=:»
\t
or election protest
Note: "No Union" shall not be a choice in the run-
off election (Sec. 1, Rule X of 0.0. 40-03)
Abstention refers to a blank or unfilled ballot
validly cast by an eligible voter. It is not
(j _ considered as a negative vote but is considered
a valid vote in determining a valid election. (Sec.
( . ,} 1[a], Rule/, D.O. No. 40-1-15) .
0 Spoiled Ballot refers to a ballot tha tis torn,
defaced, or contains marking which can lead
(J another to clearly identify the voter who casts
,[ . such vote (Sec. 1[ww], Rule/, D.O. No. 40-1-15).
t f
'---~
PAGE 111 OF 244
LABOR LAW
Example 1: 100 members in the appropriate
bargaining unit. All members cast their votes.
Election results:
Union A-24 Union C - ·10
Union B -15 No Union- 5
Total number of votes: 54 valid votes, with the
rest declared illegal or stray.
Q1: Is the election valid?
Yes, because everyone voted.
Q2: Who won?
None of the three unions won, because not one
received a majority of the valid votes cast.
(Majority is 28 votes)
Q3: 1$ run-off election a remedy here?
No. The total number of votes for all contending
unions is LESS than 50% of ALL of the number of
votes cast (Unions A, B and C garnered 49 votes,
or at least one vote short of the requirement,
since there are 100 members in the ABU).
Q4: Is a re-run election a remedy here?
No. There is no failure of election and none of the
choices obtained the same number of votes.
(D.O. No. 40-1-15)
Example 2: 200 members In the appropriate
bargaining unit. All members cast their votes.
Election results:
, Uniori A - 40
Union B-30
Union C - 20
No\Jnion - 80
Spoiled- 30
Total number of votes: 170 valid votes, with 30
spoiled votes.
Step 1: Check for first majority: WoN there was a
Valid Election '7 50% +1 of the Bargaining Unit
Step 2: Check for second majority: WoN a
union/no union won the majority of valid votes
cast ""7 50% + 1 of VVC
In example 2,
Step 1:
 ATENEO CENTRAL
BAR OPERATIONS 2019
First majority - 50_%+1 of the BU = (200*50% +1
)= ~01 votes
=
40+30+20+80+30 200; There is a valid election
since all 200 members voted, which satisfies the
first majority of 50% + 1 of the BU.
Step 2:
Second majority - 50%+1 of WC = When a Certification, Consent or Run-off Election
((40+30+20+80)*50%+1) 86 =
'
Q1 : Is the election valid?
Yes, because everyone voted.
Q2: Who won?
None of the three unions won, because not one
received a majority of the valid votes cast.
(Majority is 86 votes)
· Q3: Is run-off election a remedy here?
No. The total number of votes for all contending
unions is LESS than 50% of ALL of the number of
votes cast (Unions A, B and C garnered 90 votes,
or 10 votes short of the requirement, since there
are 200 members in the ABU}.
Q4: Is a re-run election a remedy here?
No. There is no failure of election and none of the
choices obtained the same number of votes.
(D.O. No. 40-1-15)
Note: The above given examples am for
illustration purposes only existing as it does in its
most basic and ideal form. Answers may vary
depending on the circumstances.
d. RE-RUN ELECTIONS
Re-Run Election Takes Place in Two
Instances
1. An election conducted to break a tie
between contending unions, including
· "no union" and one of the unions.
2. If a failure of election has been declared
by the election officer and/or affirmed by
the Med-Arbiter (Sec. 1[tt], Rule I, D.O.
No. 40-/-15)
A re-run election may be justified if certain
irregularities have been committed during the
conduct of the certification election such as, inter
alia, disenfranchisement of the voters, lack of.
PAGE 112 OF 244
--------------------------------------··--
LABOR LAW
secrecy in the voting, fraud or bribery, in which
case, the certification election should be
invalidated. Such invalidation would necessitate
the conduct of a re-run election among the
contending unions to determine the true will and
desire of the employee-electorates.
Situation contemplated
results to a tie between 2 choices.
Duty of Election Officer (EO)
• 1. Immediately notify the parties of a Re-run
Election.
2. Cause the posting of the NOTICE within
5 days from the Certification, Consent or
Run-off Election. The Re-run shall be
conducted within 10 days after the
posting. (Sec. 18, Rule IX, D. 0. No. 40-1-
15)
When will re-run be conducted
\.)
Within ten (10) days after the posting of the
notice.
Declared as winner and certified
Choice who receives the HIGHEST VOTES
CAST.
Note: 'No Union' is still included in the Re-run .: ,.
Elections, since' 0.0. No. 40-1-15 did not specify
otherwise.
Failure of Election fl
.. .... 'r
Where the number of votes cast in a certification
or consent election is less than the majority of the { \
\. .r
number of eligible voters and there are no
material challenged votes (Sec. 17, Rule IX of
0.0. 40-03).
A failure of election shall not bar the filing of a
()
motion for the immediate holding of another
certification or consent election within 6 months
from date of declaration of failure of election
(Sec. 18, Rule IX of D.O. 40-03).
(J
Action on motion for the immediate holding of
0
al)91Mr certification or consent election
Within24 hours from receiptofthe motion, the EO
shall immediately schedule the conduct of
(.)
another certification or consent election within 15
days from receipt of the motion and cause the
', ..• ,J
-- ----·
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

posting of the notice of certification election at parties agreed to- hold a consent election, the
least 10 days prior to the scheduled date of results shall constitute a bar to the holding of a
election in 2 most conspicuous places in the certification election for one year from the holding
establishment. The same guidelines and list of of such consent election. Where an appeal has
voters shall be used in the election. been filed from the results of the consent election,
the running of the one-year period shall be
e. CONSENT ELECTIONS suspended until the decision on appeal has
Definition become final and executory.
Election voluntarily agreed upon by the parties,
with or without the intervention of the Department Where no petition for certification election was
of Labor and Employment, to determine the issue filed but the parties themselves agreed to hold a
of majority representation of an the workers in the consent election with the intercession of the
appropriate collective bargaining unit. (/RR Labor Regional Office, the results thereof shall
Code, Sec. 1 [h], Rule I, Book V) constitute a bar to another petition for certification
election. (Sec. 23 Rule Vil/ of D. 0. 40-03).
Note: If done as part of a · certification election
case, l.e., with the intervention of the DOLE, a Summary of the Five Modes of
consent election shall have the same legal effect Determining the Exclusive Bargaining
as a certification election. Representative
1. SEBA There's only ONE LLO
Procedure In Consent Elections if Agreed in CERTIFICATION
· the Course of Proceeding of Petition for 2. CONSENT Election without the need
certification Election ELECTIONS for governmer,t ,i'"
f 1. . In case the contending unions agree to a Intervention
\ consent election, the Med-Arbiter shall Double Majority Rule
3.
not issue a · formal order calling for the CERTIFICATION - First Majority: Validity of
conduct of certification election, but shall ELECTIONS Election
enter the fact of the agreement in the - Second Majority:
minutes of the hearing. Majority of Vctlid Votes
1 ':
2. The minutes of the hearing shall be Cast
\ j signed by the parties and attested to by
the Med-Arbiter. Purpose
(} 3. The employer may be required to submit - WoN the employees
the certified list of employers in the want to be represented
{J bargaining unit or where necessary, the - If yes, be represented
payrolls at the time of filing of the petition. by whom
(Sec. 2, Rule IX) 4. RUN-OFF Part and parcel of
4. The Med-Arbiter shall, immediately ELECTIONS certification elections
thereafter, forward the records of the
{).
petition to the Regional Director or Requisites:
v his/her authorized representative for the 1. A valid election
determination of the Election Officer by took place
the contending unions through raffle. because majority
5. The first pre-election conference shall be of the CBU
(J scheduled within 1 O days from the date members voted
of entry consent election agreement. 2. There are three
u (See Annex G) (Sec. 10 Rule VIII of D. 0.
40-03). '
or more choices
in the election
(including no
Effects of Consent Election union)
Where a petition for certification election is filed, 3. Not one of the
and upon the intercession of the Med-Arbiter, the choices obtained

PAGE 113 OF 244

ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

majority of the D. RIGHTS OF LABOR ORGANIZATIONS

valid votes
4. Total number of Rights of Legitimate Labor Organizations
votes for all 1. To act as the representative of its
contending members for the purpose of collective
unions is at least bargaining;
50% of the 2. To be certified as the exclusive
number of votes representative of all the employees in an
cast. appropriate bargaining unit for purposes
5. There is no of collective bargaining;
unresolved 3. To be furnished by the employer, upon
challenge of voter written request, with its annual audited
or election financial statements, including the
protest. balance sheet and the profit and loss
statement, within 30 calendar days from
Note: "No Union" shall not the date of receipt of the request, after ·
'be a choice in the run-off the union has been duly recognized by
election. the employer or certified as the sole and
5. RE-RUN Part and parcel of exclusive bargaining representative of
ELECTIONS certification elections the employees in the bargaining unit, or
within 60 calendar days before the
Two Instances: expiration of the existing collective
1. Break a tie , bargaining agreement, or during the
2. Failure of Elections collective bargaining negotiation; ( '\,.

4. To own property, real or personal, for the

Note: "No Union" is still use and benefit of the labor organization
included as a choice and its members; To sue and be sued in
its registered name; and
5. To undertake all other activities designed
to benefit the organization and its
members, including cooperative,
housing, welfare and other projects not
contrary to law. (Labor Code, Art. 251)

Reportorial Requirements to be Submitted to 0

the BL~ by the Legitimate Labor Organization '-,

1. Its · constitution and by-laws, or '-}

amendments thereto, the minutes of
' ;_ j
ratification, and the list of members who
took part in the ratification of the
constitution and by-laws within thirty (30)
days from adoption or ratification of the
constitution and by-laws or amendments
thereto;
2. Its list of officers, minutes of the election
of officers, and list of voters within thirty
(30) days from election;
3. Its annual financial report within thirty
(30) days after the close of every fiscal
()
year; and
4. Its list of members at least once a year or
whenever required by the Bureau. '-,,
PAGE 114 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2019
----------------·~-- ......------------------'~--------------------------------~~
Failure to comply with the above
requirements shall not be a ground for
cancellation of union registration but shall subject
the erring officers or members to suspension,
expulsion from membership, or any appropriate
penalty. (Labor Code, Art. 252)
1. CHECK OFF,ASSESSMENTFEES, AGENCY
FEES
A method of deducting from an employee's pay at
prescribed period, the amounts due the union for
fees, fines or assessments.
Deductions for union service fee are authorized
by law and do not require individual check-off
authorizations.
. Nature and Purpose of Check-Off
All unions are authorized to collect reasonable
. membership fees, union dues, assessments, and
fines and other contributions for labor education
and research, mutual death and hospitalization
benefits, welfare fund, strike fund and credit and
cooperative undertakings. (Labor Code, Art. 250)
Requirements ~egarding Check-Offs
General Rule: No special assessment, attorney's
fees, registration fees, or other extraordinary fees
may be checked off from any amount due an
employee without an individual written
authorization duly signed by the employee
(Labor Code, Art. 250[0])
The authorization should specifically state the:
1. Beneficiary of the deduction;
2. Amount; and
3. Purpose
t •
v Note: There can be no valid check-off if the
majority of the union members had already
withdrawn their individual authorization. (Palacol
v. Ferrer-Calleja, G.R. No. 85333, 1990)
()
0 (Labor Code, Art. 259[e])
PAGE 115 OF 244
'~.-
LABOR LAW
Exceptions to Written Authorization
Requirement
1. For mandatory activities provided under
the Labor Code; and
2. When Non-members of the union avail of
the benefits of the OBA:
a. Said non-members may be
assessed union dues equivalent
to that paid by members; and
b. Only a board resolution
approved by majority of the
members in a general meeting
called for the purpose; and
3. Check-off for union service fees
authorized by law (Radio
Communications of the Philippines, Inc.
v. Sec. of Labor, G.R. No. 77959, 1989)
Note: If there exist a Check-off provision in the
CBA. individual written authorization requirement
may be dispensed with.
Requisites for a Valid Special Assessment
1. Authorization by a Written Resolution of
the majority of all the members at the
general membership meeting duly called
for that purpose.
2. Secretary's record of the Minutes of the
meeting including the list of members
present, votes J cast, purpose of the
special assessments and the recipient of
such assessments which must be
attested to by the President
3. [ndlvldual written authorization for check-
off duly signed by the employee
concerned to levy such assessments
Agency fees
Dues equivalent to union dues, charged from the
non-union members who are benefited by or
under the CBA.
Requisites for the Imposition of Agency Fees
1. Employee is part of the bargaining unit;
2. He is not a member of the unior,; and
3. He partook of the benefits of the CSA
NOTE: No written authorization is required from
the non-union employees in order to effect a valid
check-off. (Del Pilar Academy v. Del Pilar
Academy Employees, G.R. No. 170112, 2008)
. ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

Rule on Levy Free Workers Union v. Compania Maritima, GR.

Article 250, par. (n) of the Labor Code provides
that no special assessment or extraordinary fees
may be levied .upon the members of a labor
organization unless authorized by a written
resolution of a majority of all the members at a
general membership meeting duly called for the
purpose. The secretary of the organization shall
record the minutes bf the meeting including the
list of all members present, the votes cast, the
purpose of the special assessment or fees and
the recipient of such assessment or fees. The
record shall be attested to by the president
Rule on Collection
Article 250, par (o) of the Labor Code provides
that other than for mandatory activities uncer the
Code, no special assessments, attorney's fees,
negotiation fees or any other extraordinary fees
may be checked off from any amount due to an
employee without an individual written
authorization duly· signed by the employee. The
authorization should specifically state the
amount, purpose and beneficiary of the
Nos. L-122951-52, 1967)
Jurisdictional Pre-Conditions of Collective
Bargaining
J
1. Status of majority representation of the
employees' representative;
2. Proof of majority representation; and
3. Demand to bargain under Art. 261 (a)
(Kiok Loy v. NLRC, G.R. No. 54334,
1986).
Pending Petition for Cancellation of Union
Registration
Pendency of a petition for cancellation of union
registration does NOT preclude collective
bargaining. It shall not suspend the proceedings
for certification election nor shall it prevent the
filing of a petition for certification election (Sec. 3,
Rule XI of D.O. 40-03) ..
Purpose of Collective Bargaining
Purpose of collective bargaining is the reaching
of an agreement rl:isulting in a contract binding on I ~·

deduction. the parties; but the failure to reach an agreement

after negotiations have continued for a
2. COLLECTIVE BA~GAINING reasonable period does not establish a lack of
good faith. . ',.
l ::-.
. ~ }
a) DUTY TO BAR,GAIN COLLECTIVELY
The statutes invite and contemplate a collective
bargaining contract, but they do not compel one.
Meaning of the Duty to B.irgaln Collectively
1. The performance of a mutual (employer The duty to bargain does not include the ;-,,
l .; •
and the exclusive bargaining agent) obligation to reach an agreement (Union of Filipro
obligation to meet and convene, Employees v. Nestle Phils., GR 158930-31
2. Promptly and expeditiously in good faith , ,2008) 0
3. For the purpose of neqotlatinq an
agreement with respect to wages, hours b) COLLECTIVE BARGAINING AGREEMENT
of work and all other terms and conditions ··.
of employment, including proposals for Collective Bargaining Agreement (CBA)
adjusting any grievances or questions A contract executed upon request of either the
arising under such agreement, and employer or the exclusive bargaining
4. Executing a contract incorporating such representative of the employees, incorporating
(' l,111
agreements, if requested by either party. the agreement reached ofter negotiations with \ .. ....;

(Labor Code, Art. 263) respect to the followings:

1. Wages; (__}
Parties to Collective Bargaining 2. Hours of work; and
1. Employer 3. All other terms and conditions of 0
2. Employees, represented by the exclusive employment, including proposals for
bargaining agent adjusting any grievance or questions 0
under the agreement (Davao Integrated .
l,...;}.
The duty to bargain collectively arises only Port Stevedoring Services v. Aberquez,
between the employer and its employee. (Allied G.R. No. 102132, 1993)
.J
PAGE 116 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

Note: CBA constitutes the law between the to such meetings. It shall be the duty of the parties
parties when freely and voluntarily entered into. to participate fully and promptly in the conciliation
The goal of collective barqalninq is the making of meetings the NCM8 may call.
agreements that will stabilize business conditions
and fix fair standards of working conditions. (Pl 4. During the conciliation proceedings in the
Manufacturing Inc. v. Pl Manufacturing NCM8, the parties are prohibited from
Supervisors and Foremen Associations, G.R. No. doing any act which may disrupt or
167217, 2008) impede the early settlement of the
disputes; and
Coverage of CBA 5. The NCMB shall exert all efforts to settle
It is a well-settled doctrine that the benefits of a , disputes amicably and encourage the
CBA extend to the laborers and employees in the parties to submit their case to a voluntary
collective bargaining unit, including those who do arbitrator.
not belong to the chosen bargaining labor
organization. Otherwise, it would be a clear case When There Is No Collective Bargaining
of discrimination (PAL v. PAL€A, G.R. 142399
!
,2008). .. Agreement (Labor Code, Art. 262)
;
In absence of an agreement OR other voluntary
Commencement of Bargaining arrangement providing for a more expeditious
During Certification Year or within 12 months manner of collective bargaining, it shall be the
after the determination and certification of the duty of the employer AND the representatives of
employees' exclusive bargaining representative the employees to bargain collectively in
accordance with the provisions of this Code.
lJ Bargaining Procedure
The parties may agree on the barqalnlnq The duty to bargain collectively where no Cl3A
procedure. If there is a procedure agre~d upon, exists involves the performance of a mutual
the Labor Code Procedure applies obligation:
supplementary. 1. To · meet and convene · promptly and
expeditiously in good faith for the purpose
(} of negotiating an agreement with respect to
Labor Code Procedure in Collective
Bargaining (Labor Code, Art. 261) wages, hours of work, and all other terms
1 '-
t - ~I and conditions of employment including
. The following procedures shall be observed in
collective bargaining: proposals for adjusting any grievances or
(J questions arising under such agreement;
1. When a party desires to negotiate an
agreement it shall serve a written notice and
0 upon the other party with a statement of 2. To execute a contract incorporating such
its proposals the other party shall make agreements, if requested by either party.
(j reply thereto NOT later than 1 O (Labor Code, Art. 263) ·
calendar days from the receipt of such
0 notice; · Essentially, the duty to bargain in this situation
2. Should differences arise on the basis of still requires the performance of the obligation by
0 such notice and reply either party may the employer and the union to meet, convene and
request a CONFERENCE which shall confer for collective purposes,
begin NOT later than 10 calendar days
from the date of request. Limitations to the Duty to Bargain
(J 3. If the dispute is NOT settled, the NCMB The duty to bargain does not compel any party to
shall intervene upon the request of either agree to a proposal or to make any concession
0 or both parties or at its own initiative AND (Labor Code, Art. 263).
immediately call the parties to
0 CONCILIATION MEETINGS. Notes: The provisions of the Code are only
supplementary and not mandatory with regard to
() The NCM8 shall have the power to issue the process of collective bargaining. It is the
subpoenas requiring the attendance of the parties policy of the state to promote the primacy of

PAGE 117 OF 244

ATENEO CENTRAL
BAR OPERATIONS 2019
----------------------------------------------~-----~~------------~-----
FREE collective bargaining. (Labor Code, Art.
21B[a])
The Code authorizes parties to provide for their
own procedure in CB but it must be more
expeditious than that provided in Art. 261.
If they are unable to agree, they must follow the
Code procedure (i.e. in Art. 261 ).
Automatic Renewal Clause
At the expiration of the freedom period, the
employer shall continue to recognize the majority
status of the incumbent bargaining agent where
no petition for certification election is filled. It shall
be the duty of both parties to keep the status quo
and to continue in full force and effect the terms
and conditions .of the existing agreement· during
the 60-day period and/or until a new agreement
is reached by the parties. (Labor Code, Art. 264)
Duty to Bargain Collectively when there is a
Collective Bargaining Agreement (Labor Code,
Art. 264)
General Rule: When there is a CBA, the duty to
bargain also means that neither party shall
terminate nor modify such agreement during its
lifetime.
Exception: 60 days before the CBA expires,
either party. may notify the other in writing that it
wants to terminate or modify the agreement. The
CBA remains in full force and effect during the 60
day period and until a new agreement is reached.
Registration of Collective Bargaining
Agroements
Where to file
1. With the Regional Office which issued the
certificate of registration/certificate of
creation of chartered local.
2. If the certificate of creation of the chartered
local was issued by the Bureau, the
agreement shall be filed with the Regional
Office which has jurisdiction over the place
where it principally operates.
3. Multi-'3mployer collective bargaining
agreements shall be filed with the Bureau
(Sec. 1, Rule XVII of 0.0. 40-03).
PAGE 118 OF 244
LABOR LAW
When to file
Within 30 days from execution of the CBA.
(Sec. 1, Rule XVII of 0.0. 40-03)
Requirements for registration
The application for CBA registration shall be
accompanied by the original and 2 duplicate
\ ..
copies of the following documents:
1. CBA
2. A statement that the CBA was posted in
at least 2 conspicuous places in the
establishment concerned for at least 5
days before its ratification.
3. Statement that the CBA was ratified by
the majority of the employees in the
bargaining unit.
j
Note: The foregoing documents must be certified
under oath by the representative of the employer
~-
and the labor union. No other document shall be
required in the registration of the CBA (Sec, 2,
Rule XVII of D.O. 40-03).
Procedure for registration
1. The Regional Office or the Bureau shall
act on the applications within 5 days from
receipt of the application. '
. ··i,.
2. The Regional Office or Bureau may ~;
within 5 days from receipt · of the
application,
a. Approve the application and issue
the certificate of registration or
b. Deny the appllcatlon for failure to
..
,
u
comply with the requirements.
c. If the supporting documents are not
(_)'
cornp.ete, or are not verified under
oath, the Regional Office or the
()
Bureau shall notify the applicants in
writing of the requirements needed to
complete the registration. 1··-~
'"J
NOTE: If the applicant fails to complete the
requirements within 10 days from receipt of
notice, application is denied without prejudice.
Denial of Registration; Grounds of Appeal
1. The denial shall be in writing, stating in
l)
clear terms the reason therefore and
served upon the applicant union and
employer within 24 hours from issuance.
2. The denial by the Regional Office of the
registration of single enterprise collective
bargaining agreements may be appealed
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

to the Bureau while the denial by the

Bureau of the registration of multi-
employer collective bargaining
agreements may be appealed to the
Office of the Secretary, both within 10
days from receipt of tile notice of denial.
3. The memorandum of appeal is filed with
the Regional Office or the Bureau, as the
case may be.
4. The memorandum of appeal and the
entire records of the application shall be
transmitted to the Bureau or the Office of
the Secretary within 24 hours from
receipt of the memorandum of appeal.
5. Bureau or the Office of the Secretary
shall resolve within the same period and
in the same manner as that prescribed for
inter/intra-union · disputes (Sec. 5, Rule
XVII of D. 0. 40-03) .

.--,,..
( -

0
r
'
\ ;

,· '·
;I:'' "7"

0
(J
u
()
s">..
v
0
0
0
o
PAGE 119 OF 244
ATENEO CENTRAL
BAR OPERATIONS 2019 -, LABOR LAW

BARGAINING PROCEDURE UNDER THE LABOR CODE.

(Labor code, Art. 261)

The recognized or certified

labor union and its employer
may adopt such procedures
and processes they may deem
appropriate and necessary for Serve written notice with statement of
the early termination of their
negotiations. [ proposals upon the other party'.
They shall name their

C:ply
respective representatives to
the negotiation, schedule the NOTE: NOT
\.
number and frequency of MORE
meetings, and agree on wages, THAN
benefits and other terms and of other party 10DAYS
conditions of work for all FROM
employees covered in the RECEIPT
bargaining unit (Section 4, Rule NOTE:
XVI, Omnibus Rules
• Only if
Implementing the Labor Code)
differences arise
between the

i,,. Board shall have the

power to
subpoenas to require
issue [ CONFERENCE
proposals
reply
and the

• Shall begin not later

than 10 calnedar
attendance to such days from date of
request
meetings. (Labor code,
Art 261 (c)) NOTE:
J;>. Board shall exert all Board shall intervene, call parties to • Only if
efforts to settle disputes conciliation meetings differences
amicably, encourage are not settled (}
• It shall be the
parties to submit case to
voluntary arbitrator. (Art
duty of the ()
parties to
261 (e)) participate fully
~ Parties are prohibited and promptly in
from doing any act the conciliation ~ ¢.!
". ;
which may disrupt or meetings
impede the early
settlement of the u
t "

disputes. (Art. 261 (d))

(_)

(J
! .... "\

'~.J

PAGE 120 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 2019
(1) Mandatory Provlslons of the CBA
Matters considered as mandatory subjects of
bargaining
1. Grievance Machinery {Labor Code, Art.
271)
2. Voluntary Arbitration (Labor Code, Art.
I \
274-75)
3. No Strike-No Lockout Clause
4. Labor Management Council (Labor Gode,
Art. 267)
5. Union Security Arrangements
6. Economic I Working Conditions
a. Wages and other types of
compensation; including merit
increases;
b. Working hours and workinq days,
Including work shifts;
c. Vacations and holidays;
c d. Bonuses;
' e. Pensions and retirement plans;
· f. Seniority;
g. Transfer;
(' h. Lay-offs;
t .• I. Employee workloads;
j. Work rules and regulations;
k. Rent of company houses;
I. Family planning;
m. Hates of pay;
n. Mutual observance duties; and
o. Provision against Drug Use in
u Workplace (R.A. No. 9165, Sec.
49)
0 Where the subject of the dispute is a mandatory
bargaining subject, either party may bargain to
{j an impasse as long as he bargains in good faith.
Where the subject is non-mandatory, a party may
not Insist on bargaining to the point of Impasse. His
0 Insistence may be construed as evasion of the
duty to bargain.
Valid Stipulation - No Strike No Lockout
0 A "no strike, no lockout" provision in the CBAls a
valid stipulation, although the clause may be
0 Invoked by an employer only when the strike Is
economic in nature or one which is conducted to
0 force wage or other concessions from the
employer that are not mandated to be granted by
0
PAGE 121 OF 244
"'·'
LABOR LAW
the law itself. Such provision CANNOT be used
to assail the legality of a strike which is
grounded on ULP. In this situation, it is not
essential that the ULP act has, in fact, been
committed; it suffices that the striking workers are
shown to have acted honestly on an impression
that the company has· committed ULP and the
surrounding circumstances could warrant such
beliefin good faith (Panay Electric v. NLRC. G.R.
No. 102672, Oct. 4, 1995); (Malayang Samahan
ng mga Manggagawa sa Greenfield v. Ramos,
G.R. No. 113907, 2000).
In the case of (Nuwhrain-Dusit v. NLRC, G.R No.
163942, 2008; G.R. No. 166295), the Union's
concerted violation of the Hotel's Grooming
Standard by deliberately shaving their heads
which resulted in the disruption of the Hotel's
operations clearly violated the CBA's "No Strike,
No Lockout" provision which states that "The
Union agrees that there shall be no strikes,
walkouts, stoppage or slowdown of work, boycott,
or any other form of interference and/or
Interruptions with any of the normal operations of
the Hotel during the life of the Agreement". The
strike arose out of a bargaining deadlock in the
CBA negotiations with the Hotel. The concerted
action is an economic strike upon which the afore-
quoted "no strike/work stoppage and lockout"
prohibition is squarely applicable.
Duration of the CBA
CBA Duration for economic provisions (Labor
, Code, Art. 265)
Duration: 3 years
Refers to the rest of CBA, economic a5 well as
non-economic other than representational.
CBA Duration for non-economic provisions
(Labor Code, Art. 265)
Duration: 5 years for representational ur political
Issues.
Refers to the identity and majority status of the ,
union that negotiated the CBA as the exclusive
bargaining representative
Freedom PerlodThe 60-day period immediately
before the date of expiry of such 5 year-term of the
CBA (Art. 265)
ATENEO CENTRAL
BAR OPERATIONS 2019
No petition questioning the majority status of the
incumbent bargaining agent sl iall be entertained
and no certification electionshall be conducted by
the DOLE outside of the 60-day period
immediately before the date of the expiry of such
five year term of the Collective Bargaining
Agreement. (Labor code, Art. 265) (Contract-Bar
rule)
Rules on Effectivity and Retroactlvlty of New
CBA
New and First-ever CBA (No previous CBA):
effective on date agreed upon by the parties
With Previous CBA
1. Effectivity of new CSA entered into within
6 months after the expiration of the old
CBA: retroact to the date following the
expiry date. (Art. 265, Labor Code) · may be executed only prospectively unless there
2. Effectivity of new CSA entered into after 6
months following the expiration of the old
CBA: parties .shalt agree on the date of
effectlvitythereof (Art. 265, Labor Code)
Hold Over Principle
The CSA shall be in full force and effect until the
parties reach a new agreement. Until a new CBA ·
has been executed by and between .the parties,
they are duty-bound to keep the status quo and to
. continue in full force and effect the terms and
conditions of the existing agreement. (Labor Code,
Art. 253; FAMIT v. CA, G.R. No. 164060, 2007)
The law does not provide for any exception nor
qualification as to which of the economic
provisions of the existing agreement are to retain
force and effect, therefore, it must be understood
as encompassing all the terms and conditions in
the said agreement. (FAMIT v. CA, G.R. No.
164060, 2007)
To rule otherwise would be to create a gap during
which no agreement would govern, from the time
the old contract expired to the time a new
agreement shall have been entered into. (New
Pacific Timber & Supply Company Inc. v. NLRC,
G.R. No. 124224, 2000)
PAGE 122 OF 244
LABOR LAW
Hold over principle shall also govern during the
interregnum between the expiration of the
economic provisions of the CSA and the date of
effectivity of the Arbitral Award. [l]t shall be the
duty of both parties to keep the status quo and to
continue in full force and effect the terms and
conditions of the existing agreement during the 60-
day freedom period and/or until a new agreement
·,
is reached by the parties." Despite the lapse of the
formal effectivity of the CBA the law still considers
' the same as continuing in force and effect until a
new CBA shall have been validly executed.ll]
(Ma';)ila Electric Co. v, Quisumbing, G.R. No.
127598 (Resolution), 2000.
Arbitral Award
In the absence of an agreement between the
parties, an arbitrated CSA takes on the nature of
any judicial or quasi-judicial award. It operates and
are legal justifications for its retroactive
application. (Manila Electric Compeny vs.
Quisumbing, G.R. No. 127598, 1999)
It is true that an arbitral award cannot per se be
categorized as an agreement voluntarily entered
into by the parties because it requires the
._ _,:.:.
interference and imposing power of the State thru
the Secretary of Labor when he assumes
jurisdiction. However, the arbitral award can be f f.
I ••
considered as an approximation of a collective
bargaining agreement which would otherwise
have been entered into by the parties. The terms
or periods set forth in Article 253-A pertains
explicitly to a CBA. But there is nothing that would
{. .. ."',
prevent its application by analogy to an arbitral
award by the Secretary considering the absence
of an applicable law. Ill (Manila Electric Co. v.
Quisumbing, G.R. No. 127598 (Resolution),
[February 22, 20001) ·
j
Rules: (Manila Electric Co. v. Quisumbing,
February 2000)
1. CBA arbitral awards granted after 6
months from the expiration of the last CBA
{_)
- retroact to such time agreed upon by
both employer and the employees or their t)
union. i '\
2. Absent such agreement as to retroactivity v
- award shall retroact to the first day after
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

the 6-month period following the rights of the employees. The most · that the
expiration of the last day of CBA. transferee may do, for reasons of public policy and
3. In the absence of a CBA DOLE social justice, is to give preference to the qualified
Secretary's determination of th~ date of · separated employees in the filling of vacancies in
retroactivit.y as part of his discretionary the facilities of the purchaser. (Manlimos v. NLRC,
powers over·arbitral awards shall control.
G.R. No. 113337, 1995)
On the other hand, when the CBA is only part of
(2) GRIEVANCE MACHINERY
an arbitral award(,)( ... ) it may be made retroactive
to the date of expiration of the previous
Establishment of a grievance machinery
agreement. Therefore, in the absence of a soecitic
The parties to a CBA shall include therein
provision of law prohibiting retroactivity ~f the
provisions that Will ensure the mutual observance
effectivity of arbitral awards issued by the
of its terms and conditions.
Secretary ot Labor pursuant to Art. 263(!1) [now.
Art. 278 (g)J, the latter is deemed vested with
They shall establish a machinery for the
plenary and discretionary powers to determine the
adjustment and resolution of grievances arising
effectivity thereof. (Manila Central Line Corp. v.
from the interpretation or implementation of their
Manila Central Line Free Workers Union, G.R. No.
CBA AND those arising from the interpretation or
109383, 1998)
enforcement of company personnel policies
(Labor Code, Art. 273)
;( l. CBA and 3rd Party Applicability
The rule is that unless expressly assumed; labor
Establishment of Grievance Machinery
contracts such as employnient contracts and
(Omnibus Rule Implementing the Labor Code,
CBAs are not enforceable against a transferee of
Rule XIX, Sec. 1)
an ei:itE3rprise, labor contracts being in personam,
1. By provision in the CBA
is bmeing only between th~ parties. A labor
2. In the absence of applicable provision in the
contraet merely creates an action in personam and
Cl3A, a Grievance committee shall be created
does not create any real right which should be
within 10 days from the signing of the CBA.
{} respected by third parties.
Grievance committee shall be composed of at
As a general rule, there is no law requiring a bona
least 2 representatives each from the members of
fide purchaser of the assets of an on-going
the bargaining unit, designated by the union and
r ' concern to absorb in its employ the employees of
v the latter. However, although the purchaser of the
the employer, unless otherwise agreed upon by
the parties.
assets or enterprise is not legally bound to absorb
0. in its employ the employees of the seller of such
"Grievance" or "Grieveable Issue"
assets or enterprise, the parties are liable to the
0 employees if the transaction between the parties
1. Interpretation or implementation of the CBA
2. Interpretation or enforcement of company
is colored or clothed with bad faith. (Sundowner
personnel policies
Dev't. Corp. v. Drilon, G.R. No. 82341, 1989)
3. Any claim by either party that the other party
is violating any provisions of the CBA or
General Rule: An innocent transferee of a
company personnel policies.
business establishment has no. liability to the
employees of the transferor to continue employing
In order to be grieveable, the violations of the
u them. Nor is the transferee liable for past unfair
labor practices of the previous owner. CBA should be ordinary and not gross in
character; otherwise, they shall be considered as
0 Exception: When the liability therefore is , unfair labor practice (ULP).
assumed by the new employer under the contract
of sale, or when liability arises because of the new

c owner's participation in thwarting or defeating the

PAGE 123 OF 244

ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

Gross violation of the CBA is defined as flagrant 1. NATURE AND ASPECTS

and/or malicious refusal by c: party thereto to
comply with the economic provisions thereof.
Accordingly, violations of a CBA, except those
which are gross in character, shall no longer be
treated as ULP, and shall be resolved as
grievances. (Labor Code, Art. 274)
If what is violated, therefore, is a non-economic or
a political provision of the CBA, the same shall not
be considered as unfair labor practice and may
thus be processed as a grievable issue in
accordance with and following the grievance
machinery laid down inthe CBA.
Note: In the case of (Libera, Labor Union v. Phil
Can Co., 1952), the Court declared as illegal the
strike staged by the union for not complying with
the grievance procedure provided in the collective
bargaining agreement ruli11g that "xxx the main
purpose of the parties in adopting a procedure in
the settlement of their disputed is to prevent a
strike. This procedure must be followed in its
entirety if.it is to achieve its objective. xxx strikes
held in violation of the terms contained in the
collective bargaining agreement are illegal,
especially when they provide for conclusive
Nature ofUnfair Labor Practice
1. Inimical to the legitimate interests of both
labor and management, including their
right to bargain collectively and otherwise
deal With each other in an atmosphere of
freedom and mutual respect;
2. Disrupt industrial peace;
3. Criminal offenses against the State;
4. Violation of civil rights of both labor and
manaqernent;
5. Violate the constitutional right of workers
and employees to self-organization; and
6. Creates unstable labor-management
relations (Labor Code, Art. 258) ·
Elements of Unfair Labor Practice
1. There is an employer-employee
relationship.
2. The act done is expressly defined in the
Code as an unfair labor practice
, • Note: HSBC Employees Union v. NLRC
(1997)
}. Act complained of as ULP must have
proximate and causal connection with/ . r·""-

arbitration clauses." · violation of: ' i

a. Exercise the right to self- i l
' f
In abandoning the grievance proceedings and orqanizatlon
stubbornly refusing to avail of the remeaies under b. Exercise of the right to collective !.
the CBA, respondent Union violated the bargaining (Allied Banking
l
' .
· mandatory provisions of the collective bargaining Corporation v. CA, GR No.
144412, 2003)
agreement. (San Miguel Corporation v. NLRC,
Note: Employee refers to any person working for
G.R. No. 99266, 1999)
an employer. It includes one whose work has (}
ceased in connection with any current labor
E. UNFAIR LABOR PRACTICE
dispute or because of any unfair labor practice and.
one who has been dismissed from work but the
Unfair Labor Practice ( ·~
lega!ity of the dismissal is being contested in a ·
Any unfair labor practice expressly defined by the \.'
forum of appropriate jurisdiction. (/RR Book V Rule
Labor Code. (Labor Code, Art. 21~{k])
1 Sec.1 (r))
Both employers and labor organizations can
Prescription of actions for ULP
commit acts of unfair labor practices in collective
The offense prescribes in 1 year. (Labor Code,
bargaining. However, the iabor organization must
be the representative of the employees before any
Art. 305) (J
act it does may be considered as a violation of the
duty to bargain collectively. (Labor Code, Arts.
Not every.unfair act is an Unfair Labor Practice
The prohibited acts are all related to the workers'
0
259[g) and 260{c])
self - organizational right and to the observance of
a collective bargaining agreement. Because ULP
0
is and has to be related to the right to self- 0
, '
~J
PAGE 124 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2019
'
organization and to the observance of the CBA it
follows that not every unfair act is unfair labor
practice.
ULP therefore, refers only to acts opposed to
workers' right to organize. When committed by the
employer, it commonly connotes anti - unionism.
,· ''\.
May include liability for Can only be initiated
damages and may be after the finality of
passed upon by the judgment in the labor
Labor Arbiter (Labor case (Labor code, Art.
code, Art. 258) 258)
NOTE: But judgment in the labor case will not
sever as evidence of ULP in the criminal case.
; ( Jurisdiction of Criminal Charge of ULP
The criminal charge fall under the concurrent
c jurisdiction of the MTC or the RTC
1. Only substantial evidence is required In
the labor case while proof beyond
'
l...
reasonable doubt is need in the criminal
prosecution.
2. Recovery of civil liability in the
administrative proceedings shall bar
recovery under the Civil Code.
Who are Liable when ULP is Committed by
Other than a Natural Person
(J The penalty shall be imposed upon the guilty
o officers of a corporation, partnership, association
or entity. Art. 260 states that if the ULP is
committed by a labor organization, the parties
() liable are the officers, members of governing
u boards, representatives or agents or members of
labor associations or organizations who have
actually participated in, authorized or ratified such
0 acts. Art. 259 states that if ULP is committed by
c the employer corporation, partnership,
association, Its officers or agents who have
actually participated In, authorized or ratified ULP
() shall be held criminally liable.
0 80737, 1988)
0 The Court has held that rnanaqement is free to
PAGE 125 OF 244
LABOR LAW
2. ULP BY EMPLOYERS
The i..:ode enumerates the acts or categories of
acts considered as ULP. The enumeration does
not mean an exhaustive listing of ULP incidents.
(The Hongkong and Shanghai Banking Corp.
Employees Union v. NLRC, G.R. No. 125038,
1997)
When there is no ULP: Instance of Valid
Exercise of Management Rights
The law on unfair labor practices is not intended to
deprive the employer of his fundamental right to
prescribe and enforce such rules as he honestly
believes to be necessary to the proper, productive
and profitable operation of his business. (Bankard,
Inc. v. NLRC, G.R. No. 171664; 2013)
The only condition imposed upon this control is
that it must not be exercised so as to effect a
violation of the Act and its several prohibitions.
So long as a company's management
prerogatives are exercised in good faith for the
advancement of the employer's interest and not
for the purpose of defeating or circumventing the
rights of the employees under special laws or · ·
under valid agreements, the Court will uphold
them. (LVN Picture Workers v. LVN, G.R. No. L-
23495, 1970)
Even as the law is solicitous of the welfare of the
employees, it also recognizes employer's exercise
of management prerogatives. As long as the
company's exercise of judgment is in good faith to
advance its interest and not for the purpose of
defeating or circumventing the rights of employees
under the laws or valid aqreernents, such exercise
will be upbeld.f]] (Central Azucarera De Bais v.
Heirs of Apostol, G.R. No. 215314, [March 14,
2018])
Where the vacation leave is without pay, which the
employer requires employees to take in view of the
economic crisis, is neither malicious, oppressive
nor vindictive, ULP is not committed.{Phi/ippine
Graphic Arts, Inc. v. NLRC, et al., GR No. L-
regulate, according to its own discretion and
ATENEO CENTRAL
BAR OPERATIONS 2019
judgment, all aspects of employment, including
hiring, work assignments, working methods,
time, place, and manner of work, processes to
be followed, supervision of workers. working
regulations, transfer of employees, work
supervision, lay-off of workers, and discipline,
dismissal and recall of workers. The exercise of
management prerogative, however, Is not
absolute as it must be exercised in good faith
and with due regard to the rights of labor. (Royal
Plant Workers Union v. Coca-Cola Bottlers
Philippines, inc, G.R. No. 198783, 2013)
Jurisprudence recognizes the exercise of
management prerogatives. Labor Jaws also
discourage interference with an employer's
judgment in the conduct ofits business. For this
reason, the Court often declines to interfere in
legitimate business decisions of employers. The
law must protect not only the welfare of the
employees, but also the right of the employers.
(Royal Plant Workers Union v. Coca-Cola
Bottlers Philippines, inc, G.R. No. 198783,
2013)
Relevant Jurisprudence
As a rule, it is .the prerogative of the companyto
promote,transferor even demoteits employees to
other positionswhen the interestsof the company
reasonablydemand it. Unlessthere are instances
which directlypointto interferenceby the company
with the employees right's to self - organization,
the transfer of an employeeshould be considered
within the bounds allowed by law, e.g. where
despitehis transferto a lower position, his original
rank and salary remained undiminished.
(Rubberworld Phils. lnc., et al. v. NLRC, G.R. No.
75704, 1989)
Acceptanceof a mass voluntaryresignationis not
ULP. In a PhilippineAirlines case, the courts said
that the pilots' protest retirement/resignationwas
not a concerted· activity which was protected by
law. They did not assume the status of strikers.
They cannot, therefore, validly claim that the
company committed unfair labor practice. When
the pilots voluntarilyterminated their employment
relationshipwith the company, they cannot claim
PAGE 126 OF 244
LABOR LAW
that they were dismissed. (l=nriquez v. Zamora,
G.R. No. 5138~ 1986).
There can be no discriminationcommitted by the
employer as the situauor, of the union employees
is different from that of the nonunion employees.
Discriminationper se is not unlawful.There can be
\
no discriminationwherethe employeesconcerned
are not similarly situated. The grant by the
employer of profit-sharing benefits to the
employeesoutside the bargainingunit falls under
the ambitof its managerialprerogative. (Wise and
Co. v. Employees Union, G.R. No. 87672, 1989) ·
Determination of Validity of Employer's Acts
Involves an appraisal of his motives. Thus. there
must be a measure of reliance on the
administrative agency. It is for the CIR (NLRC
now), in the first instance, to weigh the employer's
expressedmotive in detetminingthe effect on the
employees of management'sotherwise equivocal
act (Republic Savings Bank v. CIR, G.R. No. L-
G
20303, 1967)
The Court has ruled that the prohibited acts
consideredas ULP relate to the workers' right to t_;,
self-organizationand to the observanceof a CSA.
It refers to "acts that violate the workers' right to
organize.II Without that element, the acts, even if
unfair, are not ULP. Thus, an employer may only
be held liable for unfair labor practice if it can be
shown that his acts affect in whatever manner the
right of his employeesto self-organize. (Bankard
v. NLRC, G.R. 171664, 2013).
()
Rundown of Acts Constituting Unfair Labor
Practice of Employers (YIP-C2-02-V2) (Art. 0
259)
{ j
1. [nterference
2. Yellow dog condition ! -~
3. Qontractingout \.I
4. Qompanyunionism
5. Qiscrimination for or against union
membership
6. Qiscriminationbecause of testimony ()
7. Yiolation of duty to bargain ' ..
8. E.aid negotiation lJ
9. Yiolation of CBA
(}
.s
 ATENEO CENTRAL
BAR OPERATIONS 201!)
FIRST ULP: INTERFERENCE (ART. 259 [A])
To interfere with, restrain or coerce employees
in the exercise of their right to self-organization
Example: Interference with employee
organizational rights were found where the
superintendent of the employer threatened the
employees with cutting their pay, increasing rent
of the company houses, or dosing the plant if they
supported the union and where the employer
encouraged the employees to siqn a petition
repudiating the union.
The questioned acts of petitioners, namely: 1)
sponsoring a field trip to Zambales for its
! employees, to the exclusion of union members,
\.
before the scheduled certification election; 2) the
active campaign by the sales officer of petitioners
against the union prevailing as a bargaining agent
( ' · during the field trip; 3) escorting its employees
'· after the field trip to the polling center; 4) the
c continuous hiring of subcontractors performing
respondents' functions; 5) assigning union
members to the Cabangan site to work as grass
cutters; and 6) the enforcement of work on a
,.
u
' rotational basis for union members, all reek of
interference on the part of petitioners.
Indubitably, the various acts of petitioners, taken
together, reasonably support an inference that,
indeed, such were all orchestrated to restrict
· respondents' free · exercise · of their right to self- ·
organization. (T&H Shopfitters Corporation v. T&H
Shopfitters Corporation Union, G.R. No. 191714,
2014).
(J Test
Whether· the employer has· engaged in conduct
v which, it may reasonably be said, tends to interfere
with the free exercise of the employees' right and
that it is not necessary that there be direct
evidence that any employee was in fact
intimidated or coerced by the statements or
threats of the employer if there is a reasonable
() interference that the anti-union conduct of the
employer does have an adverse effect 0'1 self-
0 organization and collective bargaining. (Insular
Life Assurance Co., Ltd. EU v,. Insular Life, G.R.
No. L-25291, 1971)
-
{
PAGE 127 OF 244
LABOR LAW
Totality of Conduct Doctrine: The culpability of
employer's remarks is to be evaluated on the basis
of their implication, against the background of and
in conjunction with collateral circumstances.
Under this doctrine, an expression which might be
permissibly uttered by one employer, might be
deemed improper when spoken by a more hostile
employer, 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, and consequently actionable as an
unfair labor practice. (Insular Life Assurance Co.,
Ltd., Employees Association-A TU, et al. v. Insular
Life Assurance Co., Ltd., G.R L-25291, 1971).
ULP Even Before Union is Reqistered
Under Art.259 (a) of the Labor Code of the
Philippines, "to interfere with, restrain, or coerce
employees in their exercise of their right to self -
organization" is an unfair labor practice on the part
of the employer. Paragraph (d) of said Article also
considers it an unfair labor practice for an
employer "to initiate, dominate, assist or otherwise
interfere the formation or administration of any
labor organization, including the giving of financial
"or other support to it." In this particular case, the
private respondents were dismissed, or their
services were terminated, because they were
soliciting signatures in order to form a union within
the plant. (Judrlc Canning Corporation v. Inciong,
G.R. No. L-51494, 1982)
In short, an employer who interfered with the right
to self - organization even before the union is
registered can be held guilty of ULP. (Samahan ng
mga Manggagawa se Bandolino - LMLC v. NLRC
and Bandolino Shoe Corp, G.R. No. 125195,
1997)
Prohibiting organizing activities
However, 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 for strike. The remedy
is an action for reinstatement with backwages and
damages. (AHS/ Philippine Employees Union v.
NLRC, G.R. No. 73721, 1987)
ATENEO CENTRAL
BAR OPERATIONS 2019
Examples of unlawful acts to discourage
membership in a labor organization, as held In
jurisprudence:
1. Refusal over a period of years to give
salary adjustments according to the
improved salary scales in the collective
bargaining agreements. (Benguet
Consolidated v. BCI Employees and
Workers Union, G.R. No. L-25471, 1968)
2. Dismissal of an old employee allegedly for
inefficiency, on account of her having
joined a union and engaiJing in union
acuvitles. (East Asiatic Co v. CIR, GR.
No. L-17037, 1966)
3. Dismissal . of teachers for fear by the
school that there would be strike the
following semester. (Rizal Memorial
Colleges Faculty Union v. NLRC, G.R.
Nos. 59012-13, 1989)
4. 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'especlally union members.
(Madrigal & Company Inc. v. Zamora,
G.R. No. L-48237, 1987)
Lockout or Closure Amounting to ULP
A lockout, actual or threatened, as a moans of
dissuading the employees from exercising their
rights under the Act is dearly an unfair labor
practice. (Azucena Vols. II-A and 11-8, 9th ed.,
2016, p. 323).
Note: To hold an employer who actually or who
threatens to lock out his employees guilty of a
violation of this Act, the evidence must establish
that the purpose thereof was to interfere with the
employee's exercise of their rights .. (Azucena Vols.
II-A and ll-B, 9th ed., 2016, p. 323).
Sale in Bad Faith
Where the sale of a business enterprise is
attended with bad faith, there is no need to
consider· the applicability of the rule that labor
contracts being in personam are not enforceable
against the transferee. The latter is in the position
of tort-feasor, having been a party likewise
responsible for the damage inflicted on the
PAGE 128 OF 244
LABOR LAW
members of the aggrieved union and therefore
cannot justly escape liability. (Cruz v, PAFLU, G.R.
No. L-26519, 1971)
Doctrine of Successor-Employer
A -new company will be treated as a continuation
or successor of the one that closed if the new or
take-over company is engaging in the same
business as the closed company or department, or
is owned by the same people, and the "closure!' is
calculated to defeat the worker's organizational
right in which case the closure may be declared a
subterfuge.
This doctrine is Just an enforcement of the piercing
the veil of corporate entity. (Azucena Vols. /I.A arid
11-B, 9th ed., 2016, p. 32li),
Factors to Determine Continuity:
1. Retention of control
2. Use of the same plant or factory
3. Use of the same or substantially the
same employees, workers, supervisors
or managers
4. Similar or substantially the same work or
production under similar or substantially ' '
lJ
the same working conditions
5. Use of the same machinery and
equipment
6. Manufacture of the same products or i "!:.
the performance of the same services
' ,.
(j
In the case of Sundowner Development
Corporation v, Drilon (G.R. No. 82341, 1989), (}
while it is true that Sundowner is using the leased
property for the same type of business as that of
l'vlabuhay, there can be no continuity of the
l)
business operations of the predecessor employer
()
by the successor employer as respondent
Mabuhay had not retained control of the business. ·
Petitioner Sundowner is corporation entirely
different from Mabuhay. It has no controlling
interest whatever in Mabuhay. The two have no
r-
v
1 "'
privily and are strangers to each other.
()
As earlier stated, it was mandated that Fiiport shall
-, absorb all labor force and necessary personnel 0
complement of the merging operators, thus,
clea~ly indicating the intention to continue the
employer - employee relationships of the
lJ
' ,.___ ,;,~:
 ATENEO CENTRAL
BAR OPERATIONS 2019
individual companies with its employees through
Filport. This is true where the transferee was found
to be merely an alter ego of the different merging
firms, as in this case. Thus, Filport has the
obligation not only to absorb the workers of the
dissolved companies but also to include the length
· of service earned by the absorbed employees with
r: \ their former employees as well. (Filipinas Port
,
Services v. NLRC, G.R. No.97237, 1%1)
SECOND ULP: YELLOW DOG (ART. 259 [81)
To require 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 attempt to foster, a union
[ during their period of employment (Azucena Vols.
\.
II-A and 11-B, 9th ed., 2016, p. 329).
r=.
v Usual Provisions under Yellow Dog Contract
1. A representation by the employee that he
' Resorting to runaway shop is ULP.
{ 9!t
' . is not a member. of a labor union;
2. A promise by the employee not to join a
labor unlon; and
3. A promise by the employee that, upon
joining a labor union, he will quit his
employment (Teller, Law Goverr,ing Labor
Disputes and Collective Bargaining, pp.
118-119)
()
(1
__ ., THIRD ULP: CONTRACTING OUT (ART. 259
[CJ)
To contract out services or functions being
(J performed by union members when such will
interfere with, restrain or coerce employees in the
l
v' exercise of their rights to self-organization
Contracting Out as ULP
Contracting out services or functions being
performed by union members when such act will
interfere with, restrain, or coerce employees in the
exercise of their right to self - organize.
· Note: an employer is not guilty of an unfair labor
practice in contracttnq work out for business
reasons such as decline In business, the
inadequacy of his equipment, or the need to
PAGE 129 OF 244
L
-------------------··~- --
LABOR LAW
reduce the cost, even if the employer's estimate of
his cost is based on a projected increase
attributable to unionization.
It is to be emphasized that contracting out of
servlcesis not illegal per se. It is an exorcise of
business judgment or management prerogative.
Absent proof that the management acted in
malicious or arbitrary manner, the Court will not
interefere with the exercise of judgment by an
employer. In this case, bad faith cannot be
attributed to BPI because its actions were
authorized by BSP Circular No. 1388, Series of
1993 issued by the Monetary Bank of BSP. (8PI
Employees Union-Davao City-FUBU v. BPI, G.R.
No. 174912, 2013)
Runaway shop: An industrial plant moved by its
owners from one location to another to escape
union labor regulations or state laws or to
discriminate against employees at the old plant
because of their union activities.
Whe're a plant removal is for business reasons but
the relocation is hastened by anti - union
motivation, the early removal is unfair labor
practice. It is immaterial that the relocation is
accompanied by a transfer of title to a new
employer who is an alter ego of the original
employer.
Mere ownership by a single stockholder or by
another corporation of all cir nearly all of the capital
stock of a corporation is not of itself sufficient
ground for disregarding the separate corporate
personality. (Sunio v. NLRC, G.R. No. L-57767, ,
1984)
Outsourcing is not per se ULP
Conditions for a valid outsourcing:
1. Motivated by good faith; and
2. Must not have been resorted · to
circumvent the law or must not have been
the result of malicious or arbitrary action
(Manila Electric v. Quisumbing, GR No.
127598, 1999; Bankard v.NLRC, G.R. No.
171664, 2013)
ATENEO CENTRAL
BAR OPERATIONS 2019
'
FOURTH ULP: COMPANY DOMINATION OF
l)NION (ART. 259 [DJ)
To initiate, dominate, assist or otherwise interfere
with the formation or administration of any labor
organization, including the giving of financial or
other support to it or its organizers or supporters
Manifestations of Domination of a Labor Union
1. Initiation of company union idea.
This may further occur in three styles:
a. outright formation by the employer or
his representatives
b. employee formation on outright
demand or influence by employer
c. managerially motivated formation by
employees
2. Financial support to the union.
By defraying the union expenses or paying the
attorney's fees of the lawyer who drafted the
constitution and by ..... laws of the union.
3. Employer encourngernent and
assistance,
Immediately granting the union exclusive
recognition as a bargaining agent without
determining whether the union represents the
majority of employees
4. Supervisory assistance.
This takes the form of soliciting membership,
permitting union activities durihg workinq time
or coercing employees to join the union by
threats of dismissal or demotion. (Philippine
American Cigar & Cigaretta Factory Workers
Union v. Philippine American Cigar &
Cigarette Mfg. Co., G.R. No. L-18364, 1963)
A labor union is company - dominated where it
appears that key officials of the company have
been forcing employees belonging to rival labor
union to join the former under pain of dismissal
should they refuse to do so; that key officials of the
company, as well as its legal counsel, have
attended the election of officers of· the former
union; that officers and members of the rival union
were dismissed · allegedly pursuant to a
retrenchment policy of the company, after they
PAGE 130 OF 244
LABOR LAW
had ,oresented demands for the improvement of
the working conditions despite its alleged
retrenchment policy; and that, after dismissal of
the aforesaid officers of the rival labor union, the
company engages the services of new laborers.
(Oceanic Air Products, Inc. v. CIR, GR No. L-
18704, 1963)
Prejudicial Question that Bars Holding of
Certificate Election
While generally, the pendency of ULP case filed
against a labor organization participating in the
certification election does not stay the holding
thereof (Barrera v. CIR, G.R. No. L-32853, 1981).
However, the pendency of a formal charge of
company domination against one of the unions
which is participating in the certification election is
a prejudicial question that bars the holding thereof
until its final resolution. (Standard Cigarette v. CIR,
G.R.No. L-9908, 1957).
Suspension of CBA
In the case of Rivera v. Espiritu, the CBA between 'l
the management (PAL) And the bargaining union,
PALEA, with the expiry date bf Sep. 30, 2000, was \_j.
mutually agreed by the parties to be suspended
until 2008, to prevent the closure of PAL because .( -~-
of severe financial losses. It was accordingly
stipulated in the agreement of suspension that
PAL shall continue to recopnlze PALEA as the
duly certified bargaining agent of the rank and file
ground employees of the company. The Supreme
Court here held that, contrary to the argument of
the petitioners that the suspension installed
PALEA as company union, the suspension
agreement is a valid exercise of the freedom to
contract and under the principle of inviolability of
f,_.,. ~
contracts under the Constitution, contract be
upheld. (GR. No. 135547, 2002).
0
FIFTH ULP: DISCRIMINATION (ART. 259 [E])
To discriminate in regard to wages, hours of work
and other terms and conditions of employment in
order to encourage or discourage membership in
any labor organization. (Labor Code, Art. 259[e])
()
There is discrimination only when one is denied
privU'eges which are granted to others under
similar conditions and circumstances (Caltex
 ATENEO CENTRAL
BAR OPERATIONS 2019
Philippines, Inc. v. Philippine Labor Organization,
G.R. No. L-5206, 1953). Thus, it must be
established that:
1. No reasonable distinction or classification
that can be obtained between persons
belonging to tne same class
2. Persons belonging to the same class have
not been treated alike (Wise and Co., Inc.
v. Wise and Co., Inc Employees Union,
G.R. No. 87672, 1989).
There can be no discrimination if the employees
\- are not similarly situated. (Great Pacific Life
Employees Union v. GreatPacific Life Assurance
Corporation, G.R. No. 126717, ·/999).
Note: To constitute an unfair labor practice, the
discrimination committed by the employer must be
in regard to the hire or tenure of employment or
any term or condition of employment to encourage
or discourage membership in any labor
organization. The exaction t.y the Company, from
strikers returning to work, of a promise not to
() destroy company property and not to commit acts
of reprisal against the Union members who did not
participate in the strike, cannot be considered as
intended to encourage or discourage Union
membership,. Taking the circumstances ·
surrounding the prescribing of that condition, the
requirement by the Company is actually an act of
self - preservation and designed to inure the
maintenance of peace and order in the Company
premises. (Pagkakaisang ltinataguyod ng mga
Manggagawasa Ang Tibay, et al., G.R. No. L·
22273, 1967)
()
Discrimination In Bonus Allocation or Salary
(J. Adjustments
There is unfair and unjust discrimination in
t
t._ s;- granting of salary adjustments where evidence
shows that:
() 1. The management paid the employees of
the unionized branch;
G 2. Where salary adjustments were granted
to employees of one of its non - unionized
u branches although it was losing in its
operations; and
0 3. The total salary adjustments given every
ten of its unionized employees would not
even equal tho salary adju stments given
one employee in the non - unionized
~-'
PAGE 131 OF 244
\ __ .
LABOR LAW
branch. (Manila Hotel Company v. Pines
Hotel Employees Association (CUGCO)
ahcl CIR, G.R. No. L-30818, 1972)
Discrimination in Layoff or Dismissal
Even where business conditions justified a layoff
of employees, unfair labor practices in the form of
discriminatory dismissal were found where only
unionists were permanently dismissed while non -
unionists were not.
Test of Discrimination
To determine whether or not a discharge is
discriminatory, it is necessary that the underlying
reason for the discharge be established.
The fact that a lawful cause for discharge is
available is not a defense where the employee is
actually discharged because of his union activities.
If the discharge is actually motivated by a lawful
reason, the fact that the employee is engaged in
union activities at the time will not lie against the
employer and prevent him from the exercise of his .¥,•• -.··
business judgmeht to discharge an employee for
cause. {NLRB v, Ace Comb Co. 342 F. 2 841, as
cited in Cainta Catholic School v. CCSEU, · G.R.
No. 151021, 2006).
An inference that the discharge of an employee
was motivated by his union activity must be based
upon evidence, direct or circumstantial, not upon
mere suspicion. (NLRB v. South Rambler Co., 324
F 2d 447).
, Discharge due to union activity, a question of
fact
The question of whether an employee was
discharged because of his union activities is
essentially a question of fact as to which the
findings of the court of Industrial Relations are
conclusive and binding if supported by substantial
evidence considering the record as a whole.
(Philippine Metal Foundries, Inc., v. CIR, G.R. No.
L-34948, 1979)
Valid Discrimination: Union Security Clause
Union Security
Union security is a generic term which is applied
to and comprehends dosed shop, union shop,
ATENEO CENTRAL
BAR OPERATIONS 2019
maintenance of membership or any other form of
agreement which imposes upon employees the
obligation to acquire or retain union membership
as a condition affecting employment. It is indeed
compulsory union membership whose objective is
to assure continued existence of the union. In a
sense, there is discrimination when certain
employees are obliged to joiri a particular union.
But it is discrimination favnring unionism; it is a
valid kind of discrimination. (Azucena, Everyone's
Labor Code, 2015 ed.)
The employer is not guilty of unfair labor practice
if he merely complies in good faith with the request
of the certified union for the dismissal of
employees expelled from the union pursuantto the
union security clause in the collective bargaining
agreement. (Sor;ano v, Atienza; G.R. No. 68619,
1989)
Union security is any form of agreement which
imposes upon employees the obligation to acquire
or retain union membership as a condition
affecting employment. (GMC v. Casio, G.R. No.
149552, 2010)
It is true that disaffiliation from a labor union is not
open to legal objection. It is implicit in the freedom
of association ordained by the Constitution. B1,1t a .
closed shop is a valid form of union security, and
such provision in a collective bargaining
agreement is not a restriction of the right of
freedom of association guaranteed by the
Constitution. xx x (Employees), although entitled
to disaffiliation from their union to form a new
organization of their own, must, however, suffer
the consequences of their separation from the
union under the security clause of the CBA. (Villar
v. Inciong, G.R. No. L-50283-84, 1983)
Statutory Basis and Rationale
Nothing in this Code or in any other law shall stop
the parties from requiring membership in a
recognized collective bargaining agent as a
condition for employment, except those
employees who are already members of another .
union at the time of the signing of the collective
bargaining agreement. (Labor Code, Art. 259[e])
PAGE 132 OF 244
LABOR LAW
The law has allowed stipulations for 'union shop'
and 'closed shop' as means of encouraging
workers to join and support the union of their
choice in the protection of their rights and interests
vis-a-vis the employer. (Del Monte Philippines v.
Salvidar, G.R. No. 158620, 2006)
TYPES OF UNIONS SECURITY CLAUSES
1. CLOSED SHOP
Only union members can be hired by the company
' and they must remain as union members to retain
employment in the company.
Employees not covered by the closed shop
provision
1. Any employee who at the time the closed
,.. shop agreement takes effect is a bona
fide member of a religious oryanization
which prohibits its members from joining
labor unions of religious grounds.
2. Employees already in service and already
members of.a labor union or unions other
than the majority union at the time the
closed - shop agreement took effect.
3. Confidential employees who are excluded
from the rank and file bargaining unit.
4. Employees excluded from the closed -
shop by express terms of the agreement.
(BPI v. BPI Employees Union-Deveo
Chapter, G.R. No 164301, 2010).
In the absence of a manifest intent to the contrary,
closed - shop provisions in a collective bargaining
agreement apply only to persons to be hired or to
employees who are not yet members of any labor
()
organization and that said provisions of the
agreement are not applicable to those already in
the service at the time of the execution.
To hold that the employees in a company who are
members of a minority union may be compelled to
disaffiliate from their union and join the majority or
contracting union, would render nugatory the right
of all employees to self- organization and to form,
join or assist labor organizations of their own 0
choosing, a right guaranteed by the Industrial
Peace Act as well as by the Constitution. 0
(Kapisanan ng mga Manggagawa ng Alak
(NAFLU) v. Hamilton Distellery Co., et. al., G.R. 0
No. L-18112, 1962)
(J
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

received as a consequence of the bargaining

2. UNION SHOP
Non-members may be hired, but to retain
employment, they must become union members
after a certain period. The requirement applies to
present and fUture employees. (Azucena Vol. II-A,
9th ed., p. 346).
An agreement where all new regular employees
· are required to join the union within a certain
period as a condition for their continued
employment.
There is union shop when all new regular
\ I
employees are required to join the union within a
certain period as a condition for their continued
employment. (GMC v. Casio, G.R. No. 149552 ,
2010)
3. MAINTENANCE OF MEMBERSHIP
SHOP
No employee is compelled to join the union, but all
() present or future members of the union must, as a
condition of employment, remain in good standing
(
in the union. (Azucena Vol. II-A, 9th ed., p. 346).
( "';.
1...:.
' ' An agreement where present and future union
( '
members must maintain their membership as a
\,. ; condition for continued.employment until they are
promoted or transferred out of the bargaining unit
or the agreement is terminated. · expulsion from the union and the consequent
There is maintenance of membership shop when
employees, who are union members as of the
effective date of the agreement, or who thereafter
n
" . become members, must maintain union
membership as a condition for {their) continued
employment until they are promoted or transferred
out . of the bargaining unit or the agreement is
terminated. (GMC v. Casio, G.R. No. 149552,
2010)
lJ
4. AGENCYSHOP
u An agreement whereby employees must either
join the union or pay to the union as exclusive
u bargaining agent a sum equal to that paid by the
members. (Azucena Vol. II-A, 9th ed., p. 346).
u It is an arrangement whereby non-members must
, In terminating the employment of an employee by
t) pay the union agency fees for the benefits they
(t
J
\J
PAGE 133 OF 244
efforts of the union.
Under the agency - shop clause of a CBA, an
employee is not required to join the union as a
condition of continued employment, but must pay
the union a service fee (usually equivalent to union
dues and initiation fees). Since a union is required
by statute to act as the bargaining representative
of all employees, both union and non - union,
within their bargaining unit, the justification for the
clause is that the nonmember should contribute
towards the cost of collective bargaining process
without supporting it financially.
5. MODIFIED UNION SHOP
Employees who are not union members at the lime
of signing the contract need not join the union' but
all workers hired thereafter must join. (Azucena
Vol. II-A, 9th ed., p. 346).
Enforcement of Union Security Clause
Termination Due to Union Security Provision
Termination of employment by virtue of a union ·
security clause embodied in a CBA is recognized
and accepted in our Jurisdiction. This practice
strengthens the union and prevents disunity in the
bargaining unit within the duration of the CBA. By
preventing member disaffiliation with the threat of
termination of employment, the authorized
bargaining representative gains more numbers
and. strengthens its position as against other
unions which may want to claim majority
representation. (Alabang Country Club v. NLRC,
G.R. No. 170287, 2008)
To validly dismiss an employee because of a union
shop or closed-shop provisions, there should be a
clear and unequivocal statement that loss of good ·
standing in the union would be a cause for
dismissal. (Confederated Sons of Labor v.
Anakan Lumber Co., G.R. No. L-12503, 1960)
Requisites for Enforcement of Union Security
Clauses
enforcing the ur.ion security clause, the employer
needs only to determine and prove that:
'1. The union security clause is applicable

------------------- - -- -- -- -- -- -- - - ·------------------
ATENEO CENTRAL
BAR OPERATIONS 2019
2. The union is requesting for the
enforcement of the union security
provision in the CBA
3. There is sufficient evidence to support the
union's decision to expel the employee
from the union; and
4. The employer must comply with due
process:
a. Notify the employees that their
dismissal is being requested by the
union;
b. The employees' explanations are
heard (Alabang Country Club v.
NLRC, G.R. No 170287, 2008)
Employer's Responsibillty: To conduct
separate investigation and hearing
While company may validly dismiss the
employees expelled under the union security upon
the recommendation by the union. this dismissal
should not be done hastily and summarily thereby
eroding the employees' right to due process, self-
organization and security of tenure. The
enforcement of union security clauses is
authorized by law provided such enforcement Is
not characterized by arbitrariness, and always with
due process. Even if there are valid grounds to
expel the union officers, due process requires that
these union officers be. accorded a separate .
hearing by respondent company. (Malayang
Samahan ng Manggagawa sa M. Greenfield v.
Ramos, G.R. No. 113907, 2000)
Requirement of Due Process
The requirements laid down by the law in
determining whether or not an employee was
validly terminated must still be followed even if it is
based on a (union security clause) of a CBA, i.e.
the substantive as well as the procedural due
process requirements. As applied to the
dismissals grounded on violations of the Cl3A,
observance of substantial due process is
indispensable in establishing the presence of the
cause or causes· for dismissal as provided for in
the CSA.
Substantive due process, as it applies to all forms
of dismissals, encompasses the proper
presentation and appreciation of evidence to
establish that cause under law exists for the
PAGE 134 OF 244
LABOR LAW
dismissal of an employee. This holds true even if
the dismissal is predicated oh particular causes for
dismissal established not by the Labor Code, but
by the CBA. Further, in order that any CBA-
mandated dismissal may receive the warrant of
the courts and labor tribunals, the causes for
dismissal as provided for in the CBA must satisfy
to the evidentiary threshold of the NLRC and the
courts. (Del Monte v. Saldivar, G.R. No. 158620,
2006)
Obligations and Liabilities
Where the employer dismissed his employees in
the belief in good faith that such dismissal was -
·'
required by the (union security provision) of the
collective bargaining agreementwith the union, he
may not be ordered to pay back compensations t1J
such employees although their dismissal is found
to be illegal. (Confederated Sons of Labor v.
Aneken Lumber Co., GR. No. L-12503, 1960)
As dictated by fairness, [ .. ) the union shall be
' liable to pay their backwages. This is because
management would not have taken the action it did
had :t not been for the insistence of the labor union
seeking to give effect to its interpretation of a
- .. 7
closed shop provision. (Guijarno v. CIR, GR Nos.
L-28791-93, 1973)
SIXTH ULP: DISCRIMINATION BECAUSE OF
TESTIMONY (ART. 259 [Fl)
.' ~
l ··.,
To dismiss, discharge Or otherwise prejudice or
discriminate against an employee for having given
or being about to give testimony under this Code.
o
Note: This is the only ULP not directly related to
the right to self - organization. The testimony or
proceedings might involve wages, employee's
benefits disciplinary rules, or orqanizational rights,
or anythinq covered by the Labor Code. What is
chargeable as ULP is the employer's retaliatory
act regardless of the subject of the employee's ' •• 1',
'\.,.,IJ..
complaint or testimony.
Unfair labor practice refers to acts that violate the
workers' right to organize. The prohibited acts are
related to workers' right to self-organization with
(J
the sole exception of Art. [259 (f)J. (Phi/com
Employees Union 'I. Philippine Global
Communication, G.R. 126717, 1999).
t)
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW
'
SEVENTH ULP: VIOLATION OF THE DUTY TO presented by the union. More than a month after
BARGAIN (ART. 259 [G]) the proposals were submitted by the union,
petitioner still had not made any counter-
To violate the duty to bargain collectively as proposals. This inaction on the part of petitioner
prescribed by this Code. prompted the union to file its second notice of
strike. Petitioner could only offer a feeble
Both employers and labor organizations can explanation that the Board of Trustees had not yet
commit acts of unfair labor practices in collective convened to discuss the matters as its excuse for
bargaining. However, the labor organization must failing to file its reply.
be the representative of the employees before any
act it does may be considered dS a violation of the A local union which is not independently registered
duty to bargain collectively. (Labor Code, Art. cannot exercise the rights and privileges granted
259[g} and 260[c]) by law to legitimate labor organizations. The
employer cannot be faulted for refusing to
., . Four Forms of Unfair Labor Practice in negotiate with the unregistered chapter. (Abaria;
Bargaining et al v. Metro Cebu Community Hospital, GR No.
1. Failure or Refusal to Meet and Convene 154113, 2011)
2. Evading the Mandatory Subjects of
Bargaining An employer is guilty of ULP when he directly
3. Bad Faith in Bargaining discharges his employees to forestall a demand
4. Gross Violation of the CBA for collective bargaining, and also indirectly
causes that discharge by selling to a company that
FIRST FORM: FAILUR!= OR Rl:FUSAL TO he knows is unwilling to accept his employees.
MEET AND CONVENE (Fernando . v. Angat Labor Union, G.R. No. L-
17896, 1962).
Employer cannot bargain directly with
employees Acts Not Deemed Refusal to Bargain
The employer cannot ignore the baqJaining agent 1. Adoption of an adamant bargaining

.
'' ,'.
and bargain directly with individual employees.

Refusal to make counter-proposals - Effect is

that CBA will be imposed on the union
refusal to meet and convene promptly and
· expeditiously in good faith for the purpose of
r=:
I:._{ negotiating an agreement for wages, hours of
work and other terms of employment. A company's
( ...-"I refusal to make counter-proposal if considered in
relation to the entire bargaining process, may
{J indicate bad faith and this is especially true where
the Union's request for a counter proposal is left
() unanswered. (Kiok Loy v. NLRC, G.R. No. L-
54334, 1986; Divine Word University of Tacloban
v. SecretaryofLabor, G.R. No. 91915, 1992)
o Failure to rep;y • ULP
Likewise, in Colegio de San Juan de Letran v.
Association of Employees and Faculty of Letran
(G.R. No. 141471, 2000), petitioner-school was
declared to have acted in bad faith because of its
failure to make a
timely reply to the proposals
position in qood faith, particularly when
the company is operating at a loss;
2. Refusal to bargain over demands for
commission of IJLP;
3. Refusal to bargain during period of illegal
strike;
4. Refusal to bargain where there is no
request for bargaining;
5. Union seeks recognition for an
inappropriately large unit
Note:·Holding meetings that result in deadlocks, if
done in good faith, does not result in ULP. The
purpose of collective bargaining is the reaching of
an agreement resulting in a contract binding on the
parties but the failure to reach an agreement after
negotiations have continued for a reasonable
period does not establish a lack of good faith.
(Union of Filipro Employees v. Nestle, GR Nos.
158930-31, 2008).

PAGE 135 OF 244

--------------·-- -- -· .. -
ATENEOCENTRAL
BAR OPERATIONS 2019
SECOND FORM: EVADING THE MANDATORY
SUBJECTS OF BARGAINING
Where the subject of the dispute is a mandatory
bargaining subject, either party may bargain to
an impasse as long as he bargains in good faith.
Where the subject is non-mandatory, a party may
not insist on bargaining to the point of impasse. His
insistence may be construed as evasion of the
duty to bargain.
THIRD FORM: BARGAINING IN BAD FAITH
Determination of Good Faith: Question ofFact
The question whether or not a party has met his
statutory duty to bargain in good faith typically
turns on the facts of the individual case. There is
no per se test of gooc faith in bargaining. Good
faith or bad faith is an inference to be drawn from
the facts. The question of good faith may be a
question of credibility. The effect of an employer's
or a union's actions individually is not the test of
good-faith bargaining, but the Impact of all such
occasions or actions, considered as a whole, and
the inferences fairly drawn therefrom collectively
may offer a basis for the finding of the NLRC (The
Hong Kong and Shanghai Bankin9 Corporation
Employees Union v. NLRC, G.R. 125038, 1997).
An employer's steadfast insistence to exclude a
particular substantive provision from the union's
proposal is no different from a bargaining
representatives perseverance to include one that
they deem of absolute necessity. (Union of Filipro
Employees v. Nestle-Philippines, G.R. Nos.
158930-31, 2008)
Bargaining In Bad Faith Must Occur While
Bargaining is in Process
The charge of bad faith should be raised while
the bargaining is in progress. With the execution
of the CBA, bad faith can no longer be imputed
upon any of the parties thereto. All provisions in
the CBA are supposed to have been jointly and
voluntarily incorporated therein by the parties. This
is not a case where private respondent exhibited
an indifferent attitude towards collective
bargaining because the negotiations were not the
unilateral activity of petitioner union. The CBA Is
good enough that private respondent exerted
PAGE 136 OF 244
LABOR LAW
"reasonable effort of good faith bargaining."
(Samahan Ng Manggagawa sa Top Form
Manufacturing-United Workers of the Philippines
v. NLRC, G.R. No. 13856, 1998)
A company's refusal to make counter-proposal, if
considered in relation to the entire bargaining
process, may indicate bad faith and this is
specially true where the Union's request for a
counter-proposal is left unanswered." Considering
the facts of that case, the Court concluded that the
company was "unwiilinq to negotiate and reach an
agreement with the Union." (Kiok Loy v. NLRC,
GR. 54334, 1986).
Inflexible Demands and Strike Amid
Negotiation - Bad Faith Bargaining
It is also evident from the records that the charge
of bargaining in bad faith imputed to the
.' ·'l:,
respondent companies, is hardly credible. In fact,
such charge is valid as oniy against the
complainant LAKAS. The parties had a total of 5
conferences for purposes of collective bargaining.
-
\.. ...
•.
It is worth considering that the first strike of Sept.
·.. i
4 1967 was staged less than a week after the 4th
CBA conference and without any benefit of any
previous strike notice. In this connection, it must
be stated that the notice of strike filed on June 13, ·~
1967 could not have been the strike notice for the
first strike because it was already withdrawn on
July 14, 1967. Thus, from these stated facts can
be seen that the first strike was held while the
parties were in the process of negotiating. The
company's refusal to accede to the demands of
' LAKAS appears to be justified since there is no
showing that these companies were in the same
stat» of financial and economic affairs. There is
reason to believe that the first strike was staged
only for the purpose of compelling the respondent
companies to accede to the inflexible demands of ·
the complainant LAKAS. (Lakas ng
Manggagawc:mg Makabayan v. Marcelo
Enterprises, G.R. Nos. L-38258 & 38260, 1982)
Other Examples of Bad Faith Bargaining
Surface Bargaining: A sophisticated pretense in
the form of apparent bargaining does not satisfy .r···!J:
the statutory duty to bargain. The duty is not v
discharged by merely meeting together or simply · / ~
'.J.
 ATENEO CENTRAL
BAR OPERATIONS 2010
manifesting a willingness to talk. An employer's
proposals which could not be offered with any
reasonable expectation that they would be
accepted by the union constitute surface
bargaining. (Standard Chartered Bank l=mployees
I ' Union (NUBE) v. Confessor, G.R. No 114974,
2004)
r· '
Blue Sky Bargaining: The making of
exaggerated or unreasonable proposals in
collective bargaining. (Standard Chartered Bank
Employees Umon. (NUBE) v. Confessor, G.R. No.
114974, 2004)
Boulwarism - occurs:
1. When the employer directly bargair,s with
the employee disregarding the union:
2. The aim was to deal With the union
through the employees, rather than with
( '. the employees through the union;
3. Employer submits its proposals and
· adopts a "take it or leave it" stand. (NLRB
v. General Election Co., 4·18 F. 2d 736
(1970)
FOURTH FORM: GROSS VIOLATION OF THE
'! •.
·- . .,,.- CBA
,· :.
{ .j ULP exists in this form when the complaint shows
{ ' prime facie the concurrence of two things:
\; 1. There !s a gross violation of the CSA;
and
(.} 2. The violation pertains to the economic
provisions of the CBA (Silva v. NLRC,
(} G.R. No. 110226, 1997)
(J Gross: Refers to a flagrant and/or malicious
refusal by a party to comply with the [economic
provisions] (FASAP v. PAL, G.R. No. 178083,
r": 2008).
v Total Disregard of CBA Constitut1~s ULP
Reference to the economic provisions of the CBA
is not a necessary element of ULP where the
employer in effect totally disregarded the CBA.
() (Employees' Union of Bayer v. Bayer Phil., G.R.
No. 162943, 2010)
(.)
An employer should not be allowed to rescind
unilaterally its CBA with the duly certified
bargaining agent it had previously contractedwith,
l}
PAGE 137 OF 244
LABOR LAW
and decide to bargain with a different group if there
is no legitimate reason for doing so and without
first following the proper procedure. (Employees'
Union of Bayer v. Bayer Phil., G.R. No. 162943,
2010)
EIGHTH ULP: PAID NEGOTIATION (ART. 259
[HJ)
To pay negotiation or attorney's fees to the union
or its officers or agents as part of the settlement of
, any issue in collective bargaining or any other
dispute
Note: Self - organization and collective bargaining
are treasured rights of the workers. The law
zealously shields them from corruption. It is a
punishable act of ULP for the employer to pay the
union or any of its officers or agents any
negotiation fee or attorney's fees as part of the
settlement in collective bargaining or any labor
dispute. To do so is not only unlawful. It is ethically
reprehensible. Correspondingly, Art. 260 prohibits
union officers or agents from asking for or
accepting such payments. Such act, furthermore,
is a ground for cancellation of union registration
under Art. 247(9). (Azucena Vols. II-A and 11-B, 9th
ed., 2016, p. 362).
NINTH ULP: VIOLATION OF THE CBA (ART.
259 [I])
See above discussion on Fourth Form of ULP in
Bargaining.
Note: Under Art. 259, simple violation of the
collective bargaining agreement is no longer
treated as unfair labor practice but as mere
grievance, which should be processed through the
grievance machinery in the CSA. It becomes an
unfair labor practice only when It is gross in nature,
which means that there is flagrant and/or
I
malicious refusal to comply with the economic
provisions of such agreement by either the
employer or the union.
In the case of Master Union Labor Union v. NLRC,
(GR. No. 92009, 1993), Master Iron Works
Construction Corporation's insistence that the
hiring of casual employees is a management
prerogative betrays its attempt to coat with legality
ATENEO CENTRAL
BAR OPERATIONS 2019
----------------·~------~---~------------------------------------~~
the illicit curtailment of its employees' rightto work
under the terms of the contract of employment and
to a fair implementation of the CBA.
Relief In ULP Cases
1. Cease and Desist Order
To support a cease and desist order, the
record must show that the restrained
misconduct was an issue in the case; that
there was a finding of fact of said
misconduct and such finding was
supported by evidence.
The Court is not authorized to issue blank
cease and desist orders, but must confine
its injunction orders to specific act or acts
which are related to past misconduct.
(Azucena Vols. ll~A and 11-B, 9th ed.,
2016, p. 363).
2. Affirmative Order
In addition to a cease and desist order, the
court may issue an affirmative order to
reinstate the said employee with back pay
from the date of the discrimination.
The order may usually direct the full
reinstatement of the discharged
employees to their substantially
equivalent position without prejudice to
their seniority and other rights and
privileges.
If other laborers have been hired, the
affirmative order shall direct the
respondent to dismiss these hired
laborers to make· room for the returning
employee.(Azucena Vols. II-A and 11-B,
9th ed., 2016, p. 363).
3. Court may impose the union's proposed
CBA on the employer. (Kiok Loy v. NLRC,
G.R. No. L-54334, 1986)
4. Strike by union members (l.etx»code, Art.
278)
' nature of an exaction, for services which
ULP is not subject to compromise
ULP cases are not, in view of the public interest
involved, subject to compromise. (CLLC 1=.G.
PAGE 138 OF 244
LABOR LAW
G.R.
Gochangco Workers Union v. NLRC, No. L-
67153, 1988)
However: In another decision the SC approved a
compromise .aqreernent finally settling an illegal
strike case. The aqreernent -in that case was
voluntarily entered into and represented a
reasonable settlement, thus binding. (see
Reformist Union of RB. Liner v. NLRC, G.R. No.
120482, 1£197)
ULP in a given period should be included in a
single charge
When a labor union accuses an employer of acts
of unfair labor practice allegedly committed during
a given period of time, the charges should include
all acts of unfair labor practice committed against
any and all members of the union during that
period. The union should not, upon the dismissal
of the charges first preferred, be allowed to split its
cause of action and harass the employer with
subsequent charges, based upon acts committed
during the same period of time. (Dione/a, et. al. v.
CIR et. el., G.R. No. L-'/8334, 1963)
3. ULP BY LABOR ORGANIZATIONS
Kinds of llLP by Labor Organizations (Labor (}
\_,_,.,
code, Art. 260) ·
1. To restrain or coerce employees in the· J ~
exercise of their right to self - i. r
organization.
2. To attempt to or cause an employer to
discriminate against an employee to
whom membership in the labor Cl
organization was denied or to terminate
an employee on any ground other than the
usual terms and conditions under which
I.._J''t
membership or continuation · of
membership is made available to other
members.
3. To refuse to bargain collectively with the
employer, if it is the representative of the
employee.
4. To attempt to or cause the employer to (J
pay money or other things of value, in the
()
are not performed or not to be performed.
This includes fees for union negotiations.
u.
 ATENEO CENTRAL
BAR OPERATIONS 2019
5. To ask or accept negotiations or
. attorney's fees from employers as part of
the settlement in any dispute.
6. Violation of CBA.
. ,' FIRST ULP: RESTRAINT OR COERCION BY
LABOR ORGANIZATION; INTERFERENCE BY
UNION IS NOT ULP (ART .. 260 [A])
A labor organization commits ULP when it
restrains or coerces employees in their right to self
- organization:
A labor organization may interfere in the
\ ' employees' right to self - organization as long as
the interference does not amount to restraint or
coercion.
Union cannot coerce employees to join a stri!<e
( \ Similarly, a violation is committed when a union
\ threatens the employees with bodily harm in order
to force them to strike.
A union violates the law when, in order to restrain
or coerce non-strikers from working during the
strike, it:
(J 1. Assaults or threatens to assault them
2. Threatens them with the loss of their jobs
3. Blocks their ingress to and egress from
the plant
'I\. '·
.
i 4. Damages non-strikers' automobiles or
forces them off the highway
Cl 5. Physically preventing them from working
6. Sabotages the employer's property in
their presence, thereby · creating an
atmosphere of fear or violence
() 7. Demonstrates loudly in front of a non-
strikers' residence wlth signs and shouts
accusing the non-striker of "scabbing"
8. Holding the nonstriker up to ridicule
(; 9. Seeking public condemnation of the non-
striker
u Note: Interference, which is ULP with employers,
u is not ULP when done by a labor organization
because it is part and parcel of the duties and
0 functions of a labor organization.
A labor organization may interfere in employees'
right to self organization as long as the
l \
'\../
PAGE 139 OF 244
x.:
----------------------------------------
LABOR LAW
interference does not amount to restraint or
coercion. (Azucena Vols. l/0A and 1/-B, 9th ed.,
2016, p. 368).
SECOND ULP: UNION-INDUCED
DISCRIMINATION (ART. 260[8])
Three (3) Kinds of Discrimination that the
Union may commit under Art. 260(b)
1. Act of the union to cause or attempt to
cause an employer to discriminate against
an employee, in general, irrespective of ·
whether he/she is a member or non-
member of the union
2. Discriminatory act of the union against an
employee "with respect to whom
membersgip in such organization has
been denied."
3. Discriminatory act of the union aqainst an
employee whose membership therein has
been terminated based "on any ground
other than usual terms and conditions
under which membership or continuation
of membership is made available to other
members."
Arbitrary use of union security clause ·
The broad rule is that the union has the right to
determine its membership and to prescribe the
conditions for the acquisition and retention thereof.
Consequently, admission to membership may not
be compelled.
This rule, however, is qualified in the case of labor
unions holding a monopoly in the supply of labor,
either in a given locality, or as regards a particular
employer by reason of a closed - shop or similar
agreements. In such case, qualified applicants
may not be barred by unreasonable rules.
Salunga v. CIR (G.R. No. L-22456, 1967)
An employee resigned from the union. The union
requested the company to enforce the closed,
shop provision of the CBA. Company deferred
action and informed the employee of the possible
effects of his resignation from the union. Employee
tried to revoke his resignation from the union but
this is denied by the union. Company finally
granted the request of the union and terminated
the employee. Employee complained of illegal
dismissal.
ATENEO CENTRAL
BAR OPERATIONS 2019
' LABOR LAW
The Court held that labor unions are not entitled
to arbitrarily exclude qualified appllcants for
membership. A closed-shop provision will not
justify the employer in discharging, as well as a
union insisting upon the discharge of an employee
. whom it refuses to admit, without any reasonable
ground thereof. Having been dismissed from
service owing to unfair labor practice on the part of
the union, petitioner is entitled to reinstatement as
member of the union and to his former or
substantially equivalent position in the company,
without prejudice to his seniority ano/or rights and
privileges, and with back pay. Union security
clauses are also governed by law and by principles
of justice, fair plRy, and legality. Union security
clauses cannot be used by union officials against
an employer, much less their own members,
except with a high sense of responsibility, fairness,
prudence and judiciousness. (Mani/a Mandarin
Employees Union v. NLRC, G.R. No. 76989, 1987)
THIRD ULP: REFUSAL TO BARGAIN (ART.
260(C))
A union violates its duty to bargain collectively by
entering negotiations with a fixed purpose of not
reaching an agreement or signing a contract.
Requisites
1. Union is the duly certified bargaining
agent (Lakas ng Manggagawang
Makabayan v. Marcelo E:nt(~rprises, G.R.
No. L-38258, 1982)
2. Commits any of the following:
a. Violation of the duty to bargain ·
collectively
. b. Refusal to bargain collectively
with the employer
See above discussion on Forms of ULP in
Collective Bargaining
FOURTH ULP: FEATHERBEDDING AND MAKE
- WORK ARRANGEMENTS (ART. 260 [D])
· Featherbedding: Employee practices which
create or spread employment by unnecessarily
maintaining or increasing the number of
employees used, or the amount oftirne consumed,
to work on a particular job.
PAGE 140 OF 244
·-·--·- --·------"---------------------------
In spite of employee assertions that these so-
called featherbedding [or make-work] practices
are directly related to job security, or health and
safety, most courts at common law found these
practices to be economicallywasteful and without
any legitimate: employee justiflcatio,n. (Cox, Cases
and Materials on labor Law, NY, 1977, p.919, cited
in Azucena Vols. fl-A and fl-B. 9th ed., 2016, p.
372).
Note: it may take the form of minimum crew
regulations on the railroad, make ·- work rules
such as the setting of and prompt destruction of
unneeded bogus type in the newspaper industry, ·
stand - by pay for musicians when a radio station
broadcasts music from phonograph records or
production ceilings for work on the assembly lines
or at the construction site.
Requisites for featherbedding:
1. Labor organization, its officers, agents or
representatives have caused or attempted
to cause an employer either:
r ,
a. To pay, or agree to pay any
money, including the demand for ·
fee for union negotiations
b. To deliver or agree to deliver any
things of value
2. Such demand for payment of money or
delivery of thing~ of value is in the nature
of an exaction
3. The services contemplated in exchcmge
for the exaction are not actually performed
or will not be performed (Labor code, Ari.
260 (d)).
r . \.
u
Ll
0
Q
{ i
\.J
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

UNFAIR LABOR PRACTICE:$ OF EMPLOYERS vs. UNFAIR LABOR PRACTICES

OF:. LABOR ORGANIZATIONS

· . Art. 259 I - • Art. 260 • '

. , (EMPLOYERS) l -. • • (L BOR ORGA.IZATIONS)
To interfere with, restrain or coerce (IRC) To restrain or coerce (RC) employees in the
employees in the exercise of their right to self- exercise of their right to self-organization
organization (However, a labor organization shall have the right
to prescribe its own rules with respect to the
acquisition or retention or membership)

To contract out services or functions being To cause or attempt to cause an employer to pay
performed by union members when such will or deliver or agree to pay or deliver ar.y money or
interfere with, restrain or coerce employees in the other things bf value, in the nature of an exaction,
'\. . exercise of their rights to self-organization for services which are not performed or not to be
performed including demand tor fee for union
:. .
t.J negotiations (Featherbedding)

.
!
.
c
•·
,;·

To discriminate in regard to wages, hours of work

and other terms and conditions of employment in
order to encourage or discourage members of any
0 labor organization

(_J
To pay negotiation or attorney's fees to the union
,. or its officers or agents as part of the settlement of
v any issue in collective bargaining or any other
dispute

· NOTE: Provided that only the officers, members of governing boards, representatives or agents or
o members of labor associations or orqanlzatlon who have actually participated in, authorized or ratified unfair
labor practices shall be held criminally liable.
o

PAGE 141 OF 244

·,..

·----------------------------------------
 ATENEO CENTRAL
BAR OPERATIONS 2018
F. PEACEFUL CONCERTED ACTIVITIES
Concerted Action: An activity undertaken by two
or more employees; by one on behalf of others.
It is the policy of the State to encourage free trade
unionism and free collective bargaining. Workers
shall have the right to engage in concerted
activities for purposes of collective bargaining or
for their mutual benefit and protection. (Labor
Code, Art. 278)
Forms of Concerted Activities (Labor Code,
Art. 278)
1. Strike;
2. Lockout; and
3. Picketing
1. BY LABOR ORGANIZATION
1. STRIKE
Any temporary stoppage of work by the concerted
action of the employees as a result of an industrial
or labor dispute. (Labor code, Art. 2-19 (o))
· Note: The term "strike" has been elucidated to
encompass not only concerted work stoppage,
but also slowdowns, mass leaves, sit downs,
attempts to damage, destroy or sabotage plant
equipment and facilities, and similar activities.
· (Toyota Motor Phils. Corp Workers Assoc. v.
NLRC, G.R. Nos. 158798-99, October 19, 2007)
Labor Dispute includes · any controversy or
matters concerning terms and conditions of
employment or the association or representation
of persons in negotiations, fixing,· maintaining,
changing, or arranging the terms and conditions
of employment, regardless of whether or not the
disputants stand in the proximate relation of
employers and employees (Labor code, Art.
219(/); Gold City Integrated Port Services v,
NLRC, G.R. No. 103560 & 103599, 1995)
Characteristics of a Strike
1. There must be an employer-employee
relationship ·
2. Existence of a dispute
3. Employment relation is deemed to
continue although in a state of belligerent
suspension
4. There is temporary v/ork stoppage
PAGE 142 OF 244
·-- -·------------------------------------
LABOR LAW
5. Work stoppage is done through
concerted action
6. The striking group is a legitimate labor
organization. In case of bargaining
deadlock, it must be the employee's sole
bargaining representative.
Internal union dispute: Includes all disputes or
grievances arising from any violation of or
disagreement over any provision of the
' constitution and by - laws of a union, including
any violation of the rights and conditions of union
membership provided for in this Code (/law at
Buklod ng Manggagawa (IBM) v. NLRC), G.R.
Nos. 81852-53, 1993).
Grounds for Strike or Lockout
1. Unfair Labor Practice (ULP J of the
Employer
2. Collective Bargaining Deadlock (CBD)
NOTE: Violations of CBA must be qross to be . .__,
considered as ULP
Conversion Doctrine: A strike may start as
economic and, as it progresses, becomes ULP,
or vice-versa. ·
Different Kinds of Strike
1. LEGAL STRIKE .... one called for a valid
purpose and conducted through means
allowed by law;
1
2. IL.LEGAL STRIKE - one staged for a ·- ~1;
purpose not recognized by law, or if for a
valid purpose, conducted through means
not sanctioned by law;
3. ECONOMIC STRIKE - one staged by.
workers to force wage or other economic
concessions from the employer which he
is not required by law to grant
(Consolidated Labor Association of the
Phil. vs. Marsnjan and Company, G.R.
No. L-17038, 1964);
4. ULP STRIKE - one called to prutest
against the employer's acts of unfair (j
labor practice enumerated in the Labor
Code;
5. SLOWDOWN STRIKE - one staged
u
without the workers quitting their work but
merely slackening or by reducing their
normal work output;
6. WILD-CAT STRIKE - one declared and
staged without filing the required notice
 ATENEO CENTRAL
BAR OPERATIONS 2018
of strike and without the majority
approval of the recognized bargaining
agent;
7. SIT DOWN STRIKE - one where the
workers stop working but do not leave
their place.
Strike-breaker: Any person who obstructs,
impedes, or interferes with by force, violence,
coercion, threats, or intimidation any peaceful
picketing affecting wages, hours or conditions of
work or in the exercise of the right of self·
organization or collective bargaining (Labor code,
Art. 219(r)) ·
Strike Area: · Establishments, warehouses,
depots, plants or offices, including the sites or
premises used as runaway shops, of the
employer struck against, as well as the immediate
vicinity actually used by picketing strikers in
moving to and fro before all points of entrance to
· and exit from said establishment (Labor code, Art.
219 (s))
[
' ' Boycott: A combination of many to cause a loss
to one person by causinq others, against their will,
to withdraw from him their beneficial business
intercourse through threats that unless others do
so, the many will cause sirnllar loss to him or
them. (31 Am Jur., Sec. 250, p. 956)
Slowdown: A method by which one's employees,
(J without seeking a complete · stoppage of work,
retard production and distribution in an effort to
() compel compliance by the employer with the
labor demands made upon him. (Rothenberg, p.
101)
Unlike other forms of strike, the: employees
involved In a slowdown do not walk out of their
jobs to hurt the company. They need only to stop
work or reduce the rate of their work while
generally remaining in their assiqned post.ll]
(Fadriquelan v. Monterey Foods Corp.. G.R. Nos.
t) 178409 & 178434, 2011)
l} Note: Such slowdown is generally condemned as
inherently illicit and unjustifiable, because while
the employees continue to work and remain at
their positions and accept the wages due them,
they at the same time select what part of their
allocated task they care to perform of their own
;
~ ,'. .
PAGE 143 OF 244
. --···---------------------------------------
LABOR LAW
volition or refuse openly or secretly to the
employer's damage, to do other work. They work
on their own terms. But whether or not the
workers' activity in questiorr--their concerted
adoption of a different work schedule 1ha11 that
prescribed by management and adhered to for
several years-constitutes a slowdown need not
be gone into. The activity is contrary to RA6727
and the parties' CBA (/law at Buklod v. NLRC,
G.R. No. 91980, June 27, 1991)
Non-Strikeable Issues (NCMB, Manual of
Procedures in Settlement and Disposition of
Conciliation and Preventive Mediation Cases,
Rule VI, Sec. 6(c)(i); see University of San
Agustin Employees' Union-FFW v, CA, G.R.
No. 169632, 2006). .
) .
1. Labor Standards Cases;
2. Wage Distortion;
3. Inter-Union or lntra-Union Disputes;
4. Physical Re-arrangement of the Office
(Reliance Surety and Insurance Co., v.
NLRC, G.R. Nos. 86917-18, 1991);
5. Execution and Enforcement of Final
. Orders, Decisions, Resolutions, or
Awards in the Cases Mentioned in # 6;
6. Cases pending at the DOLE Regional
Offices, BLR, NLRC, DOLE Secretary,
Voluntary and Compulsory Arbitrators,
CA, and SC;
7. Violations of CBA which are resolved via
Grievance Machinery; .
8. Company's Sales Evaluation Poiicy
(GTE Directories v. Hon. Sanchez, G.R.
No. 76219. 1991); and
9. Issues covered by a No-Strike
Commitment in the CBA
Who can declare a strike or lockout
1. Any certified or duly recognized
bargaining representative on the grounds
of bargaining deadlock and ULP;
2. Employer; or
3. In the absence of #1, any legitimate labor
organization in the establishment (/RR
Labor Code, Sec. 2, Rule XII, Book VJ
-,
1) VALID VEF!SUS ILLEGAL STRIKES
·,
An Illegal Strike is one which: PPP-MIA
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

1. Is contrary to a specific _Erohibition of law, 1. NOTICE OF STRIKE

such as strike by employees performing
governmental functions WHERE: FILED: Regional Branch of the National
2. Violates a specific requirement of law (as Conciliation and Mediation board, copy furnished
to frocedure) the employer or the union, as the case may be.
3. Is declared for an unlawful furpose, such
as inducing the employer. to commit an WHEN FILED: At least 30 days, in case of CBD,
and at least 15 days, in case of ULP, before the
unfair labor practice against nonunion
intended date of strike,
employees
4. Employs unlawful Means in the pursuit of · .•WHO FILES NOTICE OF STRIKE
its objective, such as widespread ---: ULP---r----f DEADLOCK
terrorism of non-strikers
Duly recognized· or
5. Violates an existing Injunction certified bargaining
6. Contrary to anexistlnq Agreement, such ONLY EXCLUSIVE
agent
as a no-strike clause · or conclusive
BARGAINING
arbitration clause (Toyota Motor Phil.
If none, unrecognized REPRESENTATIVE
Workers Association v. NU?C, G.R. No.
labor union, provided
158789, 2007)
union is duly registered.

FIRST FACTOR: STATUTORY PROHIBITION - · CONTENTS OF NOTICE '

Employees in the public service may not engage
in strikes. While the Constitution recognizes the
right of government employees to organize, they
are prohibited · from staging strikes,
demonstrations, mass leaves, walk-outs and
other forms of mass action which will result in
temporary stoppage or disruption of public
service. The right of government employees to
organize is limited only totthe formation of unions
or associations, without Including the right to
strike. (Bangalisan, et al. v. CA, GR. No. 124687,
1997)
SECOND FACTOR: PROCEDURAL
REQUIREMENTS
~A~
Notice shall, as far as Notice shall, as
' practicable, further state the far as
unresolved issues in the practicable,
btrgaining negotiations and state the acts
be accompanied by the complained of
written proposals of the and the efforts
union, the counter-proposals taken to
of the employer and the proof resolve the
of a request for conference to dispute
settle the differences. amicably.
NOTE: In case notice does not conform with
requirements of this and foregoing section/s, the
Regional branch of the Board shall inform the
concerned party of such fact. (Club Filipino, Inc.
v. Bautista, G.R. No, 168406, 2015)

PROCEDURAL REQUIREMENTS (Labor code,

Art. 278)
1. Notice of Strike
2. Cooling-off Period
3. Strike Vote
4. Strike Vote Report
5. 7-day strike/lockout ban

These requirements are mandatory, meaning,

· non-compliance therewith makes the strike
illegal. (Azucena Vol. II-A, 9th ed .. p. 594).

()
( 1
.J
PAGE 144 OF 244

·- -·----------------------
 ATENEO CENTRAL
BAR OPERATIONS 2018
'
2. COOLING-OFF PERIOD
NCMB, upon receipt of the notice of strike and
during the cooling-off period, mediates and
conciliates the parties. ihe Regional branch of
the Board may, upon agreement of the parties,
treat a notice as a preventive mediation case. It
shall also encourage the parties to submit the
dispute to voluntary arbitration.
In cases of ULP strike, the cooling-otr period need
· not be observed when union-bustlnq is present.
(Labor code, Arl. 278)
Elements of Union Busting: (Labor code, Art.
27B(c))
1. The union officers are being dismissed
2. .Those officers are duly elected in
c accordance with the union constitution
and by-laws
f' 3. The existence of the union is threatened
3. STRIKE VOTE. (Labor code, Art. 278{f))
A strike/lockout vote should be taken by secret
balloting, in m.eetings or referenda specially
f ';,
·, called for the purpose.
(
t. J'
,. The regional branch of the Board may, at its own
initiative or upon request of any affected party,
supervise the conduct of the secret balloting.
NOTE:
(J The requirement of giving notice of the conduct of
a strike vote to the NCfv113 at least 24 hours before
tJ the meeting for the said purpose is designed to
(a) inform the NCMA of the intent of the union to
conduct a strike vote;
(b) give the NCMB ample time to decide on
whether or not there is a need to supervise the
conduct of the strike vote to prevent any acts of
violence and/or irregularities attendant thereto;
and
l} (c) should the NCMB decide on its own initiative
or upon the request of an interested party
u including the employer, to supervise the strike
vote, to give it ample time to prepare for the
deployment of the requisite personnel, including
peace officers if need be.
Unless and until the NCMB is notified at least 24
hours of the union's decision to conduct a strike
PAGE 145 OF 244
'
LABOR LAW
vote, and the date, place, and ·time thereof, the
NCIVIB cannot determine for itself whether to
supervise a strike vote meeting or not and insure
its peaceful and regular conduct. The failure of a
union to comply with the requirement of the giving
of notice to the NCMB at least 24 hours prior to
the holding of a strike vote meeting will render the
subsequent strike staged by the union illegal.
(Capitol Medical Center Inc. v. National Labor
Relations Commission, G.R. No. 147080, 2005)
NUMBER OF VOTES REQUIRED for stike/
lockout: Majority of the . total UNION ,
MEMBERSHIP OR OF THE DIRECTORS OR
PARTNERS, as the case may be.
Strike or lockout vote
1. Approved by majority of total union
membership or by majority of the BOD or
partners
2. By a secret ballot
3. In a meeting called for that purpose
4. STRIKE VOTE REPORi
The result of the strike/lockout vote should be
reported to the NCMB at least 7 days before the ·
intended strike or lockout, subject to the cooling-
off period. Labor code, Art. 278 mJ
If the strike vote is filed within the cooling-off
period, the 7-day requiuernent shall be counted
from the day following the expiration of the
cooling-off period. (NCMB's Primer on Strike,
Picketing and Lockout)
If the union Is being busted, there is no need to
observe the cooling-off period but the unions
must still file a notice of strike, take a strike vote.
and submit the strike vote report. What is being
excused in case of union busting is only the
observance of the 15-day cooling-off period.)
(Sec. 7, o.o. 40-G-03, 2010)
No strike or lockout can be declared while a case
is pending involving the same grounds for strike
or lockout. (Bulletin v. Sanchez, G.R. No. 7 4425,
1986)
The submission of the report gives assurance
that a strike vote has been taken and that, if the
report concernlnq it is false, the majority of the
members can take appropriate remedy before it
is too late.' The seven (7)-day waiting period is
Intended to give the Department of Labor and
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Employment an opportunity to verify whether the resolution or awards in

projected strike really carries the imprimatur of No. 4. Above
the majority of the union members. The need for 6. Any issue covered by a
assurance that· majority of the union members no-strike commitment in
support the · strike cannot be gainsaidlll a duly executed CBA
(Lapanday Workers Union v. National · Labor (NCMB, Manual of Procedures in the Settlement
Relations Commission, G.R. Nos. 95494-97, and Disposition of Conciliation and Preventive
[September 7, 1995], 318 PHIL 114-127) Mediation Cases)

Legal and Enforceable Dismissal of ULP Strike in Good Faith

It is not even required that there be in fact .an
Employees during Conciliation
unfair practice committed by the employer. It
When the strike notice was filed by the union, the
suffices if such a belief in good faith is entertained
chain of events which culminated in the by labor as the inducing factor for staging a strike.
termination of the 14 salespersons' employment (Shell Oil Union v. Shell Oil Company, G.R. No.
was already taking place; the series of defiant L-28607, 1971)
refusals by said sales representatives to comply
with GTE's requirement to submit individual If the management performed acts which, under
reports was already in progress. At that time, no the circumstances, the strikers believed were
less than 3 ofthe ultimate 6 direct orders of the unfair labor practices on the part of the
employer for the submission of the reports had r ~-
management, although they were not, the court
already been disobeyed. The filing of the strike rules that the strike cannot be held illegal.
notice, and the commencement of conciliation However, the union's belief needs some rational
activities by the BLR did not operate to make basis. (Azucena Vol. II-A, 9th ed., p. 617)
GTE's orders Illegal and unenforceable so as to
excuse continued noncornpiiance therewith. NOTE: The good faith strike doctrine does not
(GTE Directories v. Sanchez, G.R. No. 76219, tolerate groundless strike. It does not excuse the
1991) union's presentation of substantial evidence to
support its allegation of ULP by the employer.
THIRD FACTOR: UNLAWFUL PURPOSE
Such requirements as the filing of a notice of
ST~IKEABLE NON·STRIKEAB strike, strike vote and notice given to DOLE are
. l~SUES I • mandatory in nature and apply even to ULP strike ()
1. CBA 1.lnter/lntra-union disputes in good faith. (Azucena Vol. II-A, 9th ed., p. 621)
deadlock 2. Violation of labor
{)
2. Employer's standards law, unless ' Strike to Compel Recognition of , and
ULP Article (258) particularly Bargaining with the Majority Union f\. _,"-P ;
clause (c), (f), or (i), is Th« legal way to secure union recognition is not
also violated through strike but through a certification process.
3. Any issue involving wage This is why Article 278 (b) prohibits strike due to
distortion inter-union or intra-union dispute.
4. Cases pending at DOLE
regional offices, BLR, But where the majority status of a union is not in
NLRC or its regional doubt, not in dispute, or is certainly established
branches, NWPC and its and, despite this, the employer still refuses to · ,,,
( [';
regional wane boards, bargain, then the situation is one of refusal to • •. ..;Iii

office of the Secretary, bargain which is ULP by employer. (Ca/lex

Voluntary Arbitrator, CA, Filipino v. CIR, G.R. Nos. L-30632-33, 1972) lJ
SC
5. Execution and Minority Union Cannot Strike
enforcement of final Defeated union cannot lawfully undertake a strike { .~ '

orders, decisions, against the employer; if one is being done, it must \ ;I,

PAGE 146 OF 244

 ATENEO CENTRAL
BAR OPERATIONS201&
come to a halt. (United Restauror's Employees &
Laber Union, G.R. No. L-24993, 1960).
Trivial, Unjust or Unreasonable Strike Illegal
The walkout was premature as it was declared
without giving the General Manater, or the Board
of Directors of the Company a reasonable tirns
within which to consider and act on the demands
submitted by the Union. The nature of the
demands was such that no possible action could
be taken thereon by the officials to whom they
were submitted. They could have only been acted
upon by the General Manager, or by the Board of
Directors. The former was then in Bacolod, and
the latter could not be convened because the
chairman and two of its members were also
absent. This fact was well known to the leaders of
the Union. The Court of Industrial Relations,
\ s
therefore, acted rightly in declarlnq said strike
unjustified and illegal. (Industrial Paper v. Insular
{ .,
Sugar, G.R. No. L-7394, 1954)
Acts Calculated to Force Disruption of
Operations, Thereby Violating the No-strike
( _;
Clause In the CBA, Constitute lllenal Strike
The Union officers and members' concerted
action to shave their heads and crop their hair not
only violated the Hotel's Grooming Standards but
('
also violated the Union's duty to bargain in good
faith. By shaving their heads and cropping their
hair, the Union officers and members violated
then Section 6, Rule XIII of the IRR of Book V of
ll the Labor Code. This rule prohibits the
. commission of any act which will disrupt or
0 impede the early settlement of the labor dispute
that are under conciliation. Since the bargaining
() deadlock is being conciliated by the NCMB, the
Union's action to have their officers and
members' heads shaved was manifestly
calculated to antagonize and embarrass the Hotel
(J management and in doing so effectively disrupted
the operations of the Hotel and violated their duty
to bargain collectively in good faith. (NUWHRAIN-
APL-IUF v. CA, G.R. No. 163942, ?.008)
(J
Strike motivated by an unreasonable demand of
0 the labor union for the dismissal of a factory
foreman is illegal and unjustified. (Luzon Marine
v. Roldan, G.R. No. L-2660; 1950)
l;
.. ,
{
PAGE 147 OF 244
........
LABOR LAW
Non-Strikeable Issues
1. Physical rearrangement of office
2. Company's sales evaluation policy
3. Salary distortion under the Wage
Rationalization Act
4. Inter-Union or Intra-union dispute
FOURTH FACTOR: UNLAWFUL MEANS
Strike may be illegal for commission of
-, prohibited acts. Despite the validity of the
purpose of a strike and compliance with the
procedural requirements, a strike may still be
hek- illegal where the means employed are
illegal.The means become illegal when they
Corne within the prohibitions under Article 279(e)
of the Labor Code. (Phimco Industries, Inc v.
Phimco Industries Labor Association (PILA),
G.R. No. 170830, 2010)The strike had been
attended by the widespread commission of
prohibited acts. Well-settled is the rule that even
if the strike were to be declared valid because its
objective or purpose is lawful, the strike rnay still
be declared invalid where the means employed
are illegal. Among such limits are the prohibited
activities under Article (279] of the Labor Code,
particularly paragraph (e), which states that no
person engaged in picketing shall:
a) commit any act of violence, coercion, or
intimidation or
b) obstruct the free ingress to or egress from the
employer's premises for lawful purposes, or
c) obstruct public thoroughfares. (Sukhothai
Cuisine v. CA, G.R. No. 150437; 2006)
NOTE: Whoever commits these acts - union
officers or members, employees or non-
employees - is answerable for the acts.
The use of violence, intimidation, restraint or
coercion in carrying out concerted activities,
which are injurious to the rights of property or to
particular individuals, makes a strike illegal. (Cf.
Liberal Labor Union v. Phil. Can Co, G.R. No. L-
4834, 1952) I
Acts of violence justify the dismissal of the guilty
strikers. (Shell Oil Workers' Union v. Shell
Company, G.R. No L-28607, · 1971)
The mere filing of charges against an employee
for alleged illegal acts during a strike does not by
itself justify dismissal. The charges must be
proved at an investigation duly called where the
employee shall be given an opportunity to defend
himself. This is true even if the alleged ground
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

constitutes a criminal offense. (Alinira v. B.F.

Goodrich Phil., Inc., G.R. No. L-34974, 1974)

Violence on Both Sides

Where violence was committed on both sides
during a strike, such violence cannot be a ground
for declaring the strike as illegal. (Malayang
Samahan ng mga Manggagawa v. Remos, G.R.
No. 113907, 2000)

Llabillty of Union Officers and Ordinary

Members
Declaration of c: strike does not amount to a
renunciation of the employment relation (Rex
Taxi Cab v. CIR, G.R, No. 47303, 1940).

a) UnionOfficer Mere participation of An ordinary striking ,.

a worker in a lawful I employee can not be
strike cannot
constitute sufficient
ground for termination
of his employment,
even if replacement
had been hired by the
employer during such
lawful strike (Labor
code, Art. 279 (a)
terminated for mere
participation in an
illegal strike. There
must be proof that he
committed illegal acts
during the strike and ·
the striker who
participated in the
\
commission of illegal
}'

(paragraph 3) act[s] must be

identified. But proof
beyond reasonable
doubt is not required.·
It is not required, for Substantial evidence
purposes of available under the
termination that the circumstances, which
officers should may justify the
commit an illegal act imposition of the
during the strike penalty of dismissal,
(Phimco Industries, may suffice. (Toyota 0
Inc. v. Phimco Motors Phils. Corp v.
Industries Labor NLRC, G.R. Nos. (J
Association, G.R. No. 158786 &158799,
170830, 2010 2007
, ·',,

Reason for distinction: The responsibility of l}

union officers, as main players in an illegal
strike, is greater than that of the members and, r:
v .i
therefore, limiting the penalty of dismissal only
for the former for participation in an illegal strike
is in order. (Solidbank Corporation v. Gamier, 0
, G.R. No. 159460, 2010)
0
Officials' Inability to Leave Premises Not , ..
llle::fal Detention
There was no kidnapping as the detention or
v
deprivation of liberty under the circumstance ()
while certainly not to be justified, was not done

PAGE 148 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

with criminal intent. (People v. Barba, 20SCRA
663, 1969)
Blockade or Obstruction
Illegal obstructions on public thoroughfares, such
as streets or sidewalks, are nuisances which local
government authorities can summarily remove.
Waiver of Illegality of Strikes
Where the ER voluntarily agrees to reinstate the
strikers, such agreement on the part - of the ER
constitutes a waiver of the defense that the strike
was illegal
FIFTH REQUIREMENT: INJUNCTION
(
See discussion under assumption of jurisdiction
SIXTH REQUIREMENi: EXISTINA3
(' AGREEMENT
•.
A no-strike clause in a· CBA is applicable only to
economic strikes, If the strike is founded on an
unfair labor practice of the employer, a strike
declared by the union cannot be considered a
violation of the no-strike clause. {Master Iron
I • Labor Union v. NLRC, G.R. No. 92009, 1993)
L;
Where the CBA stipulates that disputes between
·· .. ...' the parties should be resolved through a
c:». grievance machinery, including voluntary
t·.). ' arbitration, a notice of strike filed by the union
violates that agreement. The NCMB should
consider such notice as not duly filed and then
direct the union to avail itself of the grievance
machinery and voluntary arbitration. A similar
posture should be taken by the Secretary of Labor
. {_~. instead of assuming jurisdiction over the dispute.
(Azucena Vol. II-A, 9th ed., p. 670; See University
. . ."'
{
·..,
;.
of San Agustin Employees Union-FFW, et al. v.
CA, G.R. No. 169.632, 2006).
"No Strike" Clause of the CBA Applicable
Only to Economic Strikes
A strike declared due to unfair labor practice
u (ULP) of the employer is NOT a violation of the
'No Strike" clause of the CBA. Moreover, a "no
lJ strike" clause Is applicable cmly to economic
strikes. (Philippine Metal Foundries v. CIR, G.R.
Nos. L-34948, 1979).
f 7586, 1957)
-'--' No-Strike Clause Not Binding Upon Newly
Certified Bargaining Agent
t. PAGE 149 OF 244
The substitutionary doctrine onl~ provides that
the employees cannot revoke the validly-
executed collective bargaining contract with their
employer by the simple expedient of changing
their bargaining agent. It cannot be ir.voked to
support the contention that a newly certified
collective bargaining agent automatically
assumes all the personal undertakings - like the
no strike stipulation - in the CBA made by the
deposed Union. (Benguet Consolidated v. BC/
Employees, G.R. No. L-24711, 1968)
If Members Disregard No-Strike Clause, Union
May Become Liable
A union which agrees to an express no-strike
clause Impliedly agrees to undertake every
reasonable means to induce members
participating in an unauthorized strike to return to
work. The union is entitled to a reasonable period
of time after inception of the strike in which to take
required action, after which the union's damage
liability commences; where the union knows of
, the strike at about the time it commences, the
union is properly allowed about 48 hours in which
to t:ike action to end the strike, after which the
union's period of liability runs. (Azucena Voi. II-A,
9th ed., p. 673 citing 48-A Am. Jur. 2d 1899,
p.320).
2. PICKETING
Definition of Picketing
Picketing involves the presence of striking
workers who pace back and forth at the place of
business of the ER, in the hope of being able to
peacefully persuade other workers not to work in
the establishment, and customers not to do
business there. (Azucena Vol. II-A, 9th ed., p.
605).
Picketing as a concerted activity is subject to the
same limitations as strike, particularly as to lawful
purpose and lawful means employed to carry it
out. It should be done within the bounds of law.
Picketing peacefully carried out is not illegal even
in . the absence of employer-employee
relationship for peaceful picketing is a part of a
.fr@cl_p,r:ii of speech guaranteed by the
Constitution. (De Leon v. NLRC, G.R. No. L-
ATENEO CENTRAL
BAR OPERATIONS 2018
'
The right to picket is said to be part of the freedom
of speech and to peaceably assemble to air
grievances under Sec. 4: Arti. Ill, of the
Constitution . (De Leon v. NLRC, G.R. No. L-
7586, 1957)
Prohibition on those Engaged In Picketing
Article 279[e]) prohibits any person engaged in
picketing from obstructing the free ingress to and
egress from the employer's premises (Jackbilt
Industries v. Jackbilt Employees Workers Union,
G.R.Nos. 171618~9. 2009)
No person engaged in picketing shall:
1. Commit any act of violence. coercion or
· intimidation, or
2. Obstruct the free ingress to or egress
from the employer's premises for lawful
purposes, or
3. Obstruct public thoroughfares. (Art.
279(e), Labor Code)
Note: No person shall · obstruct, impede or
interfere with by force, violence, coercion, threats
or Intimidation, any peaceful picketing by workers
during any labor-controversy or in the exercise of
the right to self organization or collective
bargaining, or shall aid or abet such obstruction
or interference.
No employer shall use or employ any person to
commit such acts nor shall any person be
. employed for such purpose (Sec. 9, 0.0. 40-G-
03, 2010)
Moving Pickets may be megal
A picket, although "peaceful" and "moving," may
constitute illegal obstruction if it effectively blocks
the entry and exit points of the company
premises, thus violating the law and making the
strike itself illegal. (Phimco Industries, lac. V.
Phimco Industries Labor Association, G.R. No.
170830, 2010)
Picketing may be considered as a nuisance if it
constitutes an obstruction to the free use of
property, so as to substantially interfere with the
comfortable enjoyment of life or property of
another, or if !t constitutes an unlawful obstruction
to the free passage or use, in the customary
manner, of a street.
PAGE 150 OF 244
LABOR LAW
Pickets may not aggressively interfere with the
right of peaceful ingress to and egress from the
ER's establishment or obstruct the public
thoroughfares.
A picket, although peaceful and moving, may
constitute illegal obstruction if it effectively blocks
the entry and exit points of the ER's premises.
Picketing of Neutral Parties or "Innocent
Bystanders" Not Allowed
Although the right to peaceful picketing is entitled
to protection as an exercise of free speech, such
right may be regulated at the instance or third
parties or "innocent bystanders" if it appears that
the inevitable result of its exercise is to create an
impression that a labor dispute with which they
have no connection or interest exists between
them and the picketing union.
A picketing · union has no right to prevent
employees of another company (who is not their
employer) from getting in and out of its premises,
otherwise the picketing union may be held liable
for damages for its act against innocent
bystanders. :,_J.
2. BY EMPLOYER
i
3. LOCKOUTS
Temporary refusal of any employer to furnish
work as a result of an industrial or labor dispute
Procedural Requirements In Lockouts: (Same ()
as those required in Strikes) (Labor Code .. Art.
278)
1. Notice of Lockout { :.
2. Cooling-off Period .....~
i. . ...::..
3. Strike/Lockout Vote
4. Strike/Lockout Vote Report
5. · 7-day strike/lockout ban
Art. 279 prohibits the employer from doing the
following acts:
1. Declare a lockout without first having o
bargained collectively or without first
having filed the notice required or without
the necessary lockout vote first having
been obtained and reported to the DOLE
•• ,r 3
li
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

2. Declare a lockout after assumption of

jurisdiction by the President or the
\ j
Secretary 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
3. Obstruct, impede, or interfere with, by
force, violence, coercion, threats or
intimidation, any peaceful picketing by
employees during any labor controversy
or in the exercise of the right to self-
, I
organization or collective bargaining, or
shall aid or abet such obstruction or
interference.
4. Use or employ any strike-breaker, nor be
employed as a strike-breaker.
! ,. '. Lockouts have been , held valid in the ff.
situations:
,-, 1. In anticipation of a threatened strike,
\.J where motivated by economic
considerations
2. In response to unprotected strike or
walkout
3. In response to a whipsaw strike
Lockouts have been held unlawful in the ff.
Grounds for Lockout or Strike
1. Collective Bargaining Deadlock
2. Unfair Labor Practice
I
NOTE: Violations of CBA must be gross to be
considered as ULP
Conversion Doctrine: A strike may start as
economic and, as it progresses, becomes ULP,
or vice-versa.
When strike or lockout cannot be declared
1. Violations of CSA which are not gross.
2. Grounds involving inter/intra union
disputes.
3. When there is no notice of strike or
lockout or without the strike or lockout
vote.
4. After assumption of jurisdiction by the
Secretary.
5. After certification or submission of
dispute to compulsory or voluntary ""'·
arbitratior. or during the pendency of
cases involving the same grounds for
strike or lockout.
When Notice Must be Flied: Cooling - off ·
period

.-
l
••__ J·
'.i
circumstances:
1. To discourage and dissipate membership
in a labor organization
1. In case of bargaining deadlocks: at least
30 days before the intended date of strike
2. In case of unfair labor practice: at· 1east
2. To aid a particular union by preventing 15 days before the Intended date of strike
further work of its rival 3. In case of ULP involving the dismissal of
0 3. To avoid bargaining , duly elected union officer/s which may
constitute union-busting: union may
(.. J1, Procedure for Declaring a Strike or Lockout take action immediately after the strike
vote and the submission of the results of
WHO MAY D!;:CLARE? (Sec.~ .0.-40-G- the strike vote to the regional branch of
03, 2010) . • • • the Board
~STRIKE I.: CKou=r-
Any legitimate labor
Employer in Strike or lockout vote
organization or any certified
cases of 4. Approved by majority of total union
or duly recognized
l} bargaining representative in
bargaining
deadlocks and
membership or by majority of the BOD or
cases of bargaining partners
ULPs
deadlocks and ULPs 5. By a secret ballot·
6. In a meeting called for that purpose
Note: If there is no certified or duly recognized
bargaining representative, any legitimate labor
l: organization may declare a strike but only on
grounds of unfair labor practice.
L PAGE 151 OF 244

.,:"'---'
ATENEO CENTRAL
BAR OPERATIONS 2018
The regional branch may supervise the conduct
of the secret balloting at its own initiative or upon
request of any party.
Notice of the meeting must be given at least 24
hours before such meeting, and the results of the
voting must be given at least 7 days before the
intended strike or lockout to the regional branch
of the Board. This is subject to the cooling-off
period. (Labor code, Art. 278(())
Strike/LockoufVote Report
The result of the strike (or lockout voting) should
be reported to the NCMB at least 7 days before
the intended strike or lockout, subject to the
cooling off period. This means that after the strike
vote is taken and the result reported to NCMB,
seven days must pass before the union can
actually commence the strike," This seven-day
reporting period is intended to give the Dept. of
Labor and Employment an opportunity to verify
whether the projected strike really carries the
imprimatur of the majority of the union members.
(Lapanday Workers' Union, et. al. v. NLRC, G.R.
Nos. 95494-97, September 7, 1995)
A strike tagged without the submission of the
result of the strike vote Is illegal. (Samahan ng
Manggagawa in Moldex Products, et. al. v.
NLRC, et.al., G.R. No. 119467, February 1, 2000)
Contents of the notice of strike or lockout
1. Names and addresses of ernployer
2. Union involved
· 3. Nature of industry to which the employer
belongs
4. Number of union members
5. Workers in the bargaining unit
6. Other relevant data
7. In case of bargaining deadlocks: the
unresolved issues, written proposals of
the . union, counter-proposals of the
employer and proof of request for
conference to settle differences
8. In case of unfair labor practice: the acts
complained of, and the efforts taken to
resolve the dispute (Sec 8, 0.0. 40-G-03,
Series of 2010)
Note: Board shall inform the concerned party in
case notice does not conform with the
PAGE 152 OF 244
LABOR LAW
requirements. (Sec 8, D. 0. 40-G-03, Series of
2010)
Action on notice of strike or lockout (Sec 9,
0.0. 40-G-03, Series of 2010)
1. Upon receipt of the notice, the regional
branch of the Board shall exert all efforts
at mediation and conciliation to enable
the parties to settle the dispute amicably.
It shall also encourage the parties to
submit the dispute to voluntary
arbitration.
,2. The Regional Branch of the Board may,
upon agreement of the parties, treat a
notice as a preventive mediation case. It
shall also encourage the parties to
submit to submit the dispute to voluntary
arbitration.
3. During the proceedings, the parties shall
I '\.
not do any act which may disrupt or
impede the early settlement of the
dispute. They are obliged, as part of their
duty to bargain collectively in good faith
and to participate fully and promptly in the
conciliation · meetings called by the
regional branch of the Board.
4. A notice, upon agreemer,t of the parties,
may be referred to alternative modes of
dispute resolution, including voluntary
arbitration.
Procedural Requirements of a Valid Strike or
lockout
1. Notice of Strike or Lockout
2. Cooling Off Period
'.3. Notice of meeting for Strike or Lockout I
I
't.
•
' .Y
vote at least 24 hours before the conduct
of said meeting
4. Conduct AND results of Strike or Lockout
vote reported
5. 7-day strike bani observed
Preventive Mediation
The regional branch may treat the notice as a
preventive mediation case upon agreement of the
parties.
VVhen labor may strike or when the employer
niay lockout its workers
If the dispute remains unsettled after the lapse of
the requisite number of days from the filing of the ()
notice of strike or lockout and of the results of the
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

election but the regional branch of the- Board shall

\ j
continue mediating and conciliating.

Prohibited activities during strikes and

lockouts (Labor code, Art. 279)
1. Strike or lockout without first having
bargained collectively 1. Regional branch 1. The regional
2. Strike or lockout without the necessary of the Board shall, branch of the
vote first having been obtained and conduct a Board shall also
reported to the DOLE. referendum by conduct a
3. Strike or lockout after DOLE has secret balloting referendum by
assumed jurisdiction or the President or on the improved secret balloting
after certification or submission of offer of the on the reduced
dispute to the compulsory employer. offer of the union.
arbitration/Voluntary arbitration or during 2. Oil or before the 2. On or before the
the pendency of cases involving the · 30th day of strike. 30th day of the
same grounds for the strike or lockout. 3. At its own i lockout.
4. Knowingly participating in illegal strike or (regional board) 3. When at least a
knowingly participating in the initiative or upon majority of the
(! commission of illegal acts during a strike the request of any board of directors
(ground for termination of employment). affected party. or trustees or the

r. 5. Obstruct, impede, or interfere with by

force, violence, coercion, threats, or
4. When at least a
majority of the
partners holding
the controlling
intimidation any peaceful picketing by union members interest in the
employees during any labor controversy vote to accept the case of
or shall abeit or aid such obstruction or improved offer, partnership vote
interference. the striking to accept the
( '~
6. Employment or use of any strikebreaker/ workers shall reduced offer, the.
employed as a strike breaker. immediately workers shall
7. Bringing ln, introducing, or escorting by return to work and immediately
any public officer or employee, including the employer return to work and
officers and personnel of the AFP or shall thereupon the employer
PNP, or any armed person in any manner re-admit them shall thereupon
of any individual who seeks to replace upon the signing re-admit them
strikers in entering or leaving the of the agreement. upon the signing
premises of a strike area or work in place
u of strikers.
of the agreement.

8. Commit any act of violence, coercion or

intimidation while engaged in picketing or
obstruct the ingress or egress from the
employer's premises for lawful purposes
or obstruct public tK'oroughfares(must be
pervasive and widespread/consistently
and deliberately resorted to as a matter
0 of policy

(J -,

PAGE 153 OF 244

ATENEO CENTRAL
BAR OPERATIONS 2018
3. ASSUMPTION OF JURISDICTION BY THE
DOLE SECRETARY
a) Nature
Art. 278(g) is both an extraordinary and a
preemptive power to address an extraordinary
situation - a strike or lockout in an industry
indispensable to the national interest. The
secretary of Labor is empowered to:
1. Assume jurisdiction over the dispute and
decide it, or
2. Certify the dispute to the NLRC for
compulsory arbitration, in which case,
NLRC shall here and decide
The intent of the law is to give the Labor Secretary
full authority to resolve all matters within the
dispute that gave rlse to or which arose out of the
strike or lockout; it includes and extends to all
questions and controversies arisin!;J from or
related to the dispute, including cases over which
the labor arbiter has exclusive jurisdiction,
The authority of the Secretary to assume
jurisdiction over a labor dispute causing or likely
to cause a strike or lockout in an industry
indispensable to national interest includes and
extends to all questions and controversies arising
from such labor dispute. The power is plenary and
discretionary in nature to enable him to effectively
and efficiently dispose of the dispute. {Phi/com
Employees Union v. Philippine Global
Communications, G.R. No. 144315, 2006)
As held in International Pharmaceuticals, Inc. v.
Secretary of Labor, the Labor Secretary has
jurisdiction over all questions and controversies
arising from an assumed dispute, including cases
over which the labor arbiter has exclusive
jurisdiction. (G.R. Nos. 92981-83, 1992)
What Constitutes a National Interest Case
The Labor Code vests upon the Secretary of
Labor the discretion to determine what industries
are indispensable to national interest. Thus, upon
· the determination of the Secretary of Labor that
such Industry is indispensable· to the national
interest, it will assume jurisdiction over the labor
dispute of said Industry. {Phi/tread Workers Union
v. Confesor, G.R. No. 117169, 1997').
PAGE 154 OF 244
LABOR LAW
A Police Power Measure
The assumption of jurisdiction is in the nature of
police power measure. This is done for the
promotion of the common good considering that
a prolonged strike or lockout can be inimical to
the national economy. The Secretary of Labor
acts to maintain industrial peace. Thus, his
certification for compulsory arbitration is not
intended to impede the workers' tight to strike but
to obtain a speedy settlement of the dispute.
(Phi/tread Workers Union v. Coniesor, G.R. No.
117169, 1997).
b) EFFECTS OF ASSUMPTION OF
JURISDICTION
1. on intended or impending strike or
lockout - Automatically enjoined (Labor
code, Art. 27B(g))
2. On actual strike orlockout (already taken
place) - all striking or· locked-out
employees shall immediately return to
work and the employer shall immediately
, resume operations and readmit all
workers under the same terms and
conditions prevailing before the strike or
lockout(Labor code, Art. 278(9)) 1 • ..,
3. On cases already filed and may be filed l ~··
- considered subsumed or absorbed by
assumed or certified case, except where ! \
certification or assumption order states-
otherwise (Guagua National Colleges v.
Guagua National Colleges Faculty Labor
Union, G.R. No. 204693, 2016)
4. On other pending cases - Parties are
required to inform their counsels and the
DOLE Secretary/ NLRC Division
concerned of all pending cases that are
related or incident to the (_Jl:
assumed/certified case.(Par 2, Sec. 3(b),
Rule VIII, 2011 NLRC Rules of { '...
r.. . . . ~.!
Procedure)
Such assumption or certlflcation has the effect of
automatically enjoining the intended or impending (-~
strike or lockout as specified in the assumption or v
certification order.
{.J'l
If one has already taken place at the time of the
assumption or certification, all striking or locked l)
out employees shall immediately return to work
and the employer shall immediately resume·
operations and readmit all workers under the
same terms and conditions prevailing before the
strike or lockout. In such case, the
'.J
 ATENEO CENTRAL
BAR OPERATIONS 2018
'
assumption/certification results to a return-to-
work of all striking workers even if the Secretary
has not issued a Return to Work Order (RTWO).
(Labor code, Art. 278 (g))
This is an example of an automatic injunction. But
this is strictly limited to "national Interest" cases,
and even in these cases, the parties retain the
option to submit the dispute to voluntary
arbitration.
Upon assumption or certification, the parties
should revert to the status quo ante litem which
refers to the state of things as it was before the
· labor dispute or the state affairs existing at the
time of the filing of the case. (Overseas Workers'
Welfare Administration v. Chavez, G.R. No.
169802, 2007).
· The assumption or certification also has the effect
of regulating the management prerogative of
determining the assignment or movement of EEs.
Thus, in one case, the Court held the layoff of 94
EEs pending the resolution of the dispute illegal
as it was violative of the assumption order.
(Metro/ab v. Roldan~Confesor, G.R. No. 108855,
1996)
c !.
t· ~
• •• J
u water supply such as bottlihg and refilling
(}
,f • 1. Nestle Philippines, Inc. is engaged in an
\.i
i.n "--'
{J
u No. 80648, 1988)
PAGE 155 OF 244
"- .·
'
LABOR LAW
WhP,n May the Secretary Assume Jurisdiction
Over a Case or Certify it to the NLRC
Umler the law, when in his opinion there exists a
labor disQute causing or likely to cause a strike or
lockout in an industry indispensable to the
national inter':lst, the Secretary [of Labor] may:
1. Assume jurisdiction over the dispute and
decide it, or
2. Certify the same to the NLRC for
compulsory arbitration
Note: Power of DOLE Secretary to assume
jurisdiction over a labor dispute is limited to ·
strikes . or lockouts adversely affecting the
national interest. (Free Telephone Workers Union
v. Hon. Minister of Labor and Employment, GR.
L-58184, 1981) .
What am Considered "National Interest"
Cases
The NLRC vests the President of the Philippines
and the Secretary of Labor almost unlimited
discretion to determine what industries may be
considered as indispensable to the national
interest.
Industries Indispensable to the National
Interest
1. Hospital Sector i
· 2. Electric Power Industry
3. Water Supply Services, to exclude small
stations
4. Air traffic control
5. Such other industries as maybe
recommended by the National Tripartite
Peace Council (TIPC) (DO No.40-H-13)
Examples of "National Interest" disputes:
undertaking affected with public interest
being one of the largest manufacturers of
food products. (Union of Filipro v.
NLRC,G.R. No. 9102.5, 1990)
2. Academic institutions (Philippine Sc/100/
of Business Administration v. Nori el, G. R.
3. A company supplying the sulfate
requirements of MWSS
4. Banking is expressly classified by the
General Banking Law as an industry
indispensable to the national interest.
ATENEO CENTRAL
BAR OPERATIONS 2018
5. However, the Court ruled that the
production of telephone directories is not
an industry affecting the national interest.
(GTE Directories Corp v. Sanchez, G.R.
No. 76219, 1991)
Rule on Strikes and Lockouts in Hospitals,
Clinics and Medical Institutions (Labor code,
Article 278 (g) (par.2))GR: Strikes and lockouts in
these insttitutions must be avoided
But in case a strike or lockout is staged:
1. It shall be the duty of the striking union or
locking-out employer to provide and
maintain an effective skeletal workforce
of medical/ other health personnel whose
services shall be unhampered and
unrestricted to insure the proper and
adequate protection of life and health of
its patients for the duration of the
strike/lockout
2. DOLE Secretary shall immediately
assume, within 24 hrs from l<tiowledge of
the occurrence of the strike/lockout,
jurisdiction over the same or certiy · it to
NLRC.for compulsory arbitration ·
' "Certified labor disputes" are cases certified [or
PAGE 156 ®F 244
LABOR LAW
Assumption of Jurisdiction: Prior Notice Not
Required
The· discretion to assume jurisdiction may be
exercise by the Secretary without the necessity of
prior notice or hearing g'1Jen to any of the parties.
The rationale for his primary assumption of
jurisdiction can justifiably rest on his own
consideration of the exigency of the situation in
relation to the national interests. {Capitol Medical
Center v. Trajano, G.R. No. 155690, 2005).
Return-to-Work•Order (RTWO)
The moment the Secretary of Labor assumes
jurisdiction over a labor dispute in an industry
indispensable to national interest, such
assumption shall have the effect of automatically
enjoining the intended or impending strike. It was
not even necessary for the Secretary of Labor to
issue another order directing a return to work. The
mere issuance of an assumption order by the
Secretary of Labor automatically carries with it a
return-to-work order, even if the directive to return
to work is not expressly stated in the assumption
order. (Steel Corporation of the Philippines v.
SCP Employees Union, G.R. 169829-30, 2008)
Note:
• It is always part of · the
assumption/certification order even if not l
'''\,,
JC
i. 1
expressly stated.
• RTWO is compulsory in character
Certification to NLRC
referred] to the NLRC for compulsory arbitration
A "national interest" dispute may be certified to
the NLRC even before a strike is declared since
the Labor Code does not require the existence of r '\t,.
l.)
a strike, but only of an industrial dispute.
When sitting in a compulsory arbitration certified
to by the DOLE Secretary, the NLRC is notsitting
as a judicial court but as an administrative body
charged with the duty to implement the order of
the Secretary. In such a case, the NLRC does not lJ
haveJhe power to amend the Seeretary's order.
(J
(GStSEAv. CIR, G.R. No. L-18734, 1961)
Effects of Defiance of Assumption or
(. J,
.
CertificationNon-compliance with the
. ._ .i
,,____,;.
 ATENEO CENTRAL
BAR OPERATIONS 201s
certification order of the Secretary shall be
cons'dered an illegal act committed in the course
of the strike or lockout, and shall authorize the
NLRC to enforce the same under pain of
immediate disciplinary action, including loss of
employment status or payment by the locklnq-out
ER of backwages or damages, even criminal
prosecution against the liable parties.
Defiant Strikers, Whether Officer or Ordinary
Members of the Striking Union, are Deemed
Dismissed
Once DOLE See assumes jurlsdlction over a
labor dispute or certifies it to NLRC for
' f compulsory arbitration, such jurisdiction should
not be interfered with by the apptication of the
application of coercive processes of a strike or
lockout.
Any defiance thereof is a valid ground for the loss
of employment status regardless of whether the
defiant worker is an officer or an ordinary member
of the union Defiance ot the assumption order or
a return-to work order by a striking employee,
whether a union officer or a member. is an illegal
act and, therefore, a valid ground for loss of
employment status. (Manila Hotel Employees
Association . v. Manila Hotel Corp., G.R. No.
', '.
154591, 2007)
Certification to the NLRC makes the continuation
f •. . of the strike illegal, provided that the parties are
l- l .., duly notified of the certification order. Notice is a
prerequisite even if the order states that it is
"immediately executory."
. (_)
{J
()
PAGE 157 OF 244
.r
l'
LABOR LAW
Refusal to Receive the Assumption of
Jurisdiction Order Amounts to Defiance
Refusal to receive the Assumption of Jurisdiction
Order (AJO) amounts to defiance of the order,
which makes the continuation of the strike an
illegal act, thus subjecting the strikers to possible
termination of employment.
The strikers should resume work immediately
upon receipt or constructive receipt of the order.
, A grace period may be given but that is not
required by the law. (Azucena Vol. fl·A, 9th ed.,
201f:i, p. 646)
Effects of Defying the RTWO
The mere issuance of an assumption· order
automatically carries with it a return-to-work
order. (Steel Corporation of the Philippines v.
SCP Employees Union, G.R. Nos. 169829-30,
2008)
From the moment a worker defies a RTWO, he is
deemed to have abandoned his job. (St.
Scholastica's College v. Torres, G.R. No. ·100158,
1992)
Those workers who refuse to obey the RTWO are
not entitled to be paid for work not done or to
reinstatement to the positions they have
abandoned by their refusal to return thereto as
ordered. (Asian Transmission Corporation v .
NLRC, G.R. No. 88725, 1989)
Where the RTWO is issued pending the
determination of the legality of the strike, it is not
correct to say that it may be enforced only if the
strike is legal and may be disregarded if the strike.
is illegal. Precisely, the purpose of the RTWO is
to maintain the status quo while the determination
is being made. (Union of Filipro Emplees v. Nestle
Philippines, G.R. No. 88,710-13, 1990)
Not only union officers but also union members
· who defy an RTWO are subject to dismissal.
But to justify the dismissal, the defiance of the
RTWO must be clearly proven. (Batangas
Laguna Tayabas Bus Company v. NLRC, G.R.
No. 101858, 1992)
Thus, the alleged or perceived defiance of the
RTWO does not mean automatic dismissal of the
ATENEO CENTRAL.
BAR OPERATIONS 2018
defying employees. Due proces.s must be
observed. The employees must be given the
chance to explain and prove that there was no
defiance at all. (Azucena Vol. II-A, 9th ed., 2016,
p. 652)
. Actual, Not Payroll, Reinstatement
Under the law, "the striking or locked out
employees shall return to work and the employer
shall readmit them." The Court has interpreted
this to mean, as a general rule, actual, not payroll;
readmission to the EEs' positions. (Azucena Vol.
II-A, 9th ed., 2016, p. 655)
With respect to the Secretary's Order allowing
payroll reinstatement instead of actual
reinstatement for the individual respondents
herein, an amendment to the previous Orders
issued by her office, the same is usually not
allowed. Article 263(9) of the Labor Code
aforementioned states that all workers must
immediately return to work and all employers
must readmit all of them under the same terms
and conditions prevailing before the strike or
lockout. Thi=, phrase "under the same terms and
conditions" makes it dear that the norm is actual
reinstatement. This is consistent with the idea
that any work stoppage or slowdown in that
particular industry can be detrimental to the
national interest. (U.1iversity of Immaculate
Concepcion, Inc. v. Secretary of Labor, G.R. No.
151379, 2005)
Thus, placing the striking employees to
substantially equivalent positions could not be
considered reinstatement "under the same terms
and conditions. prevailing before the
strike." (University of Sto. Tomas v. NLRC;
G.R. No. 89920, 1990)
Appeal of Secretary's Order
In "national interest" cases, the Secretary's Order
may be appealed to the Office of the President.
In "non-national interest" cases, the Order may be
appealed via a Petition for Certiorari (Rule 65).
The parties may at any stage withdraw the case
from compulsory arbitration to bring it Instead to
a voluntary arbitrator. {Labor code, Art. 278(h).
Arrest and Detention (Labor code, Art. 281)
PAGE 158 OF 244
LABOR LAW
GR: No Union members or union organizers may
be arrested or detained for union activities without
previous consultation with the Secretary of Labor.
Exception: On grounds of national security and
public peace .
·,
4.CONSEQUENCES
Generally, the effects of employment are merely
suspended while on strike, the workers do not
work and do not get paid.
Mere participation of a worker in a lawful strike
shall not be a sufficient ground for termination of
his employment, even if a replacement had been
hired during the strike. (Art.279 (a), Labor Code)
Art. 279 sets out the consequences to union
officers and member for (1) participation in a
strike and (2) commission of illegal acts.
The penalty imposable is not always be
termination but maybe suspension. The Court
used its judicial prerogative in the case of PAL v.
Bril/antes, G.R. 119360, 1990, where it found that
both employers and employees contributed to the
volatile atmosphere.
· .. ,--
Forfeiture of Reinstatement
The Court has ruled that a striker who failed to
report for work when one had the opportunity to
do so waived his right to reinstatement. (East
Asiatic v. CIR, G.R. L-29068, 1971)
What are Illegal Acts?
1. Violation of Art. 279(e) of the Labor Code
2. Commission of crimes and other unlawful
acts in carrying out the strike
3. Violation of any order, prohibition, or
injunction issued by the DOLE Secretary
()
or NLRC in connection with the
assumption of jurisdiction/certification
order under Art. 278(9) of the Labor Code
(J
., This enumeration is not exclusive and may cover
other breaches of existing laws. 0
a) l·IABILITY OF UNION OFFICERS ()
Any union officer who knowingly participates in u
an illegal strike and any union officer who
i '
\.ci
\ ,
• v., P
 ATENEO CENTRAL
BAR OPERATIONS 2018
knowingly participates in the commission of
illegal acts during a strike may be declared to
have lost hls employment. (Labor Code, Art.
279[e])
Illegal Acts are:
1. Violation of Art. 279( e) of the Labor Code
2. Commission of crimes and other unlawful
acts In carrying out the strike
3. Violation of any order, prohibition, or
injunction issued by the DOLE Secretary or
NLRC In connection with the assumption of
jurisdiction/certification order under Art.
278(g) of the Labor Code {Toyota Motor Phil.
Workers Association v. NLRC, GR. No.
158789, 2007)
Union officer may notbe vicariously held liable for
illegal acts of strikers. The rule is, for an LO
and/or its officer and members to be liable, there
must be proof of actual participation in,
authorization or ratification of, the illegal acts.
, entitled to backwaqes provided the ff. requisites
t' Labor Organizations (LOs) are not liable for
\' r unauthorized or unratified acts of its officers. Nor
{ .!.
is it liable for the unlawful acts of its members
L.....,.
which neither its officer nor committees have
directed, aided; or approved.
i.. •• _ •• -
Shop stewards appointed by the Union, in a shop,
department or plant serves as representative of
the Union, charged with negotiating and
adjustment of grievances of employees with the
supervisor of the employer, is considered an
officer. Hence, shop stewards were similarly
dismissed from employment in the conduct of an
illegal strike. (Santa Rosa Coca-Co/a v. Coca-
Co/a, G.R. 164302-03, 200 7)
b) LIABILITY OF ORDINARY WORKERS
Any worker who knowingly participates in the
commission of illegal acts during a strike may
be declared to have lost his employment status.
(} (Art. 279(a), Labor Cede)
() The individual strikers committing the illegal acts
must be identified. Proof beyond reasonable
doubt is not required, only Substantial evidence.
~
.\_ .. •
.
'
\ .i
PAGE 159 OF 244
t_
LABOR LAW
Declaration of Loss of Employment Status
The law grants the employer the option of
declaring a union officer who participated in an
illegal strikes as having lost his employment.
Filing a petition to declare a strike illegcil is not a
pre-requisite for the ER to terminate the
employment of EEs who commit illegal acts in the
course of the strike. In terminating the employee,
the ER must observe due process.
Entitlement to Backwages
In an economic strike, the strikers are not entitled
to backwages on the principle that a "fair's day
wage" accrues only for a "fair day's labor."
(Heilbronn v. NLU, G.R. L-6454, 1954)
In a ULP strike; if the strike was voluntary, strikers
are not sntitied to backwaqes. In the case of
involuntary strike, strikers are entitled to
backwages.
Exception: Voluntary strikers who subsequently
applied for reinstatement but were denied are
concur:
,1. The strike was legal
2. There was an unconditional offer to
return to work
3. The strikers were refused reinstatement
However, hackwages are not grnnted to
employees participating in an illegal strike they do
not render work for the employer during the
period of the illegal strike. The principle of a "fair
day's wage for a fair day's labor" is applicable. If
there is no work performed by the employee there
can be no wage or pay unless, of course. the
laborer wan able, willing and ready to work but
was illegally locked out, suspended or dismissed
or otherwise illegally prevented from working. For
this exception to apply, it is required that the strike
be legal, a situation that does not obtain in the
case at bar (Escario v. NLRC, G.R. No. 160302,
2010)
Summary: Consequences of Actions in Strike
Participation in Strike
~r.Tmr.fflll"l!I
 ATENEO CENTRAL
BAR OPERATIONS 2018
'
c) LIABILITY OF EMPLOYERS
Any worker whose employment has been
terminated as a consequence of an unlawful
lockout shall be entitled to reinstatement with full
· backwages. (Labor Code, Art. 279[a])
e) In Pari Delicto
If the employer committed illegal lockout and the
. employees staged illegal strike, they are both at
fault. The court will restore their respective
positions before the strike. The dismisse strikers
will be reinstated without backwaqes (Automative
Engine Rebuilders v. Progresibong Unyon ng
mga Manggagawa sa AER, G.R. No. 16138
2011) . . . '
f) Criminal Liability
The regular courts shall have jurisdiction over any
criminal action under Art. 272 of the Labor Code
but subject to the required clearance from DOLE
on cases arising out of or related to a labor
dispute pursuant to DOJ Circular No. 15 (1982),
and Circular Nb. 9 (1986) .
5. INJUNCTIONS
General Rule: No temporary or permanent
injunction or restraining ardor in any case
involving or growing out of labor disputes shall be
issued by any court or other entity (Labor Code,
Art. 225 (e) paragraph 1)
Exceptions:
1. Art. 225 ( e)- NLRC can enjoin or restrain
an actual or threatoned commission of
any or all prohibited or unlawful acts or to
require the performance. of· a • particular
act in any labor dispute which, if not
restrained or performed . forthwith, may
cause grave or irreparable damage to
any party or render ineffectual any
decision in favor of such party
PAGE 160 OF 244
'
LABOR LAW
,2. Art. 279 - NLRC can enjoin or restrain
the commission of the prohibited acts
under Art. 279.
3. Innocent Bystander Rule - The no-
injunction rule does not apply in cases
where the interests of an · innocent
bystander are concerned. Thus, the right
may be regulated at the instance of third
parties or "innocent. bystanders" if it
appears that the inevitable result of its
exercise is tb create an impression that a
labor dispute with which they have no
connection or interest exists between
them and the picketing union or
constitute an invasion of their rights. In
one case decided by this Court, we
upheld a trial court's injunction prohibiting
the union from blocking the entrance to a
feed mill located within the compound of
a flour mill with which the union had a
dispute (Liwayway Publications v.
Permeneni, G.R. No. L-25003, 1981)
Thus, in a case where the Union declared a strike
against its ER and picketed the premises, ' '
preventing the peaceful passing of other persons
not connected with the ER, the Court upheld the
injunction granted by a regular court (not by the
NLRC).
Injunctions by the NLRC
Under Art. 225 (e), the NLRC has the power to
enjoin or restrain any actual or threatened
commission of any or all prohibited or unlawful
acts or to require the performance of a particular
act in any labor dispute which, if not restrained or
performed forthwith, may cause grave or (.J
' -.
irreparable damage to any party or render
ineffectual any decision in favor of such party.
Requirements for Injunction to Issue: (Labor ., "
lj
Code, Art. 225 (e))
1. Hearing of testimony of witnesses, with
opportunity for cross-examination, in
support of verified complaint,
testimony in opposition thereto
and {J
2. A finding of fact by the NLRC that: (see
Philippine Association of Free Labor
CJ
Unions· v. Hon. Tan, G.R. 9115, 1956) { l
a. Prohibited/unlawful acts will be
v
committed or have been I t
\_J
committed and will be continued
unless restrained
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

b. Substantial and irreparableinjury

will follow
c. Greater injury will be inflicted
f. VI. POST-EMPLOYMENT

upon complainant by the denial TOPIC OUTLINE UNDER THE SYLLABUS

of relief than will be inflictedupon i
defendantsby the granting of the A. Employer-employee relationship
relief 1. Tests to determine existence
d. Complainant has no adequate 2. Klnds of employment
remedyat law a. Regular
e. The public officers charged with b. Casual
the duty to protectcomplainant's c. Probationary
property are unable or unwilling d, Project
to, furnish adequateprotection e. Seasonal
f. Fixed-term
3. Notice of hearinghas been servedto
g. Security guards
a. All persons against whom relief
h. Floating status
is sought 3. Legitimate Subcontracting versus
b. Local Chief Executiveand other Labor-Only Contracting
public officers of the a. Elet11ents
province/city charged with the b. Trilateral Relationship
duty to protect complainant's c. Solidary Liability
property
4. Bond in an in an amount to be fixed by B. Termination by Employer
(j the NLRC 1. Just Causes
2. Authorized Causes
Conditions for Ex-Parte TRO: (Sec. 14, D.O. 3. Due Process
40-G003, 2010) a. Twin-Notice Requirement
b. Hearing
A 20-dayTRO may be issued ex-parteunderthe
fl '
ff. conditions:· C. Termination by Employee
1. Complainantalso alleges that, unless a 1. Resignation versus Constructive"
t~~ J'•. Disinissal
TRO shall be issued without notice, a
substantial and irreparableinjury to his
D. Preventive Suspension
propertywlll be unavoidable
2. Testimony under oath, sufficient, if
E. Reliefs from Illegal Dismissal
sustained, to justify the issuance of a '
TRO after notice and hearing F. Money claims arising from employer-
3. Bond in an amount to be fixed by the • employee relationship
MLRC sufficient to recompense the
improvidenUerroneousissuance of such G. Retirement
injunction/TRO
4. TRO shall be effective for no longerthan
20 days and shall become void at its
expiration

--- end of topic----

\,1
PAGE 161 OF 244
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

A. EMPLOYER -EMPLOYEE RELATIONSHIP of a suspensive condition, and hence, renders

"Employer" includes any person acting in the
interest of an employer, directly or indirectly. The
term shall not include any labor organization or
any of its officers or agents except when acting
as employer. (Labor Code, Art. 219[e])
"Employee" includes any person in the employ of
an employer. The term shall not be limited to the
employees of a particular employer, unless the
Code so explicitly states. It shall include any
individual whose work has ceased as a result of
or in connection with any current labor dispute or
because of any unfair labor practice if ho has not
obtained any other substantially equivalent and
regular employment. (Labor Code, Ari. 219[f])
It is axiomatic that the existence of an employer-
employee relationship cannot be negated by
expressly repudiating it in the management
contract and providing therein that the
"employee" is an independent contractor when
the terms of agreement clearly show otherwise.
For, the employment status of a person is defined
and prescribed by law and not by what the parties
say it should be. (Insurance Life Assurance Co. v.
. NLRC, GR No. 11930, 1998)
the obligation of the would-be employer, i.e., ANZ
in this case, conditional. Jurisprudence states
that when a contract is subject to a suspensive
condition, its effectivity shall take place only if
anti when the event which constitutes the
condition happens or is fulfilled. Considering,
however, that Sagun failed to comply with his
obligations, ANZ's obligations as a would-be
employer were held in suspense and thus, had
' yet to acquire any obligatory force. (Sagun v. ANZ
Global Servicee, GR No. 220399, 2016)
Authority of DOLE Secretary to determine
Employer-Employee Relationship (EER)
The DOLE Secretary has the authority to
determine the existence of an employer-
employee reiattonship. Under Article 128(b) of the
Labor Code, as amended by RA 7330, the DOLE
is fully empowered to make a determination as to
the exercise of an employer- employee
relationship in the exercise of its visitorial and
enforcement power, subject to judicial review, not
review by the NLRC. (People's Broadcasting
Service v. Secretary of Labor, GR 179652, 2012)

Contractual In nature
. The relationship of employer and employee is
contractual in nature. It may be an oral or written
contract. A written contract is not necessary for
. the creation and validity of the relationship.
(Compania Maritima v. Ernesta Cebeqno! Vda.
De Hio, GR No. L-10675, 1960)

Conditional Employment
PERLAS-BERNABE; J. : An employment
contract, like any other contract, is perfected at
the moment the parties come to agree upon its
terms and conditions, and thereafter, concur in
the essential elements thereof. In Sagun v. ANZ
Global Services, the Court ruled that there was
already a perfected contract of employment (J
when Sagun signed ANZ's employment offer
and agreed to the terms and .conditions that {J
were embodied therein. Nonetheless, the offer'
of employment extended to Sagun contalned
several conditions before he may be deemed
. an employee of ANZ. Accordingly, Sagun's (J
employment depended on the outcome of his
background check, which partakes of the nature
PAGE 162 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2018
1. TESTS TO DETERMINE EMPLOYER~
EMPLOYEE RELATIONSHIP
FOUR-FOLD TEST
The existence of an employer-employee
relationship (EER) is ultimately a question of fact.
To ascertain the existence of an employer-
employee relationship, jurisprudence
invariably adhered to the four-fold test, to wit:
1. Selection and engagemen~ of the
employee (Hiring);
a. Who has the power · to select the
employee?
b. Employment 'relation arises from
contract of hire, express or implied.
(Ruga v. NLRC, G.R. No. L-72654-61,
1990).
c. Selection and engagement of the
workers rests with the employers.
2. Payment of wages or salaries
r; a. Who pays the employee's wages?
b. The mode of paying the salary or
compensation of a worker does not
preclude existence of employer-
employee relationship.
c. Not a conclusive test since it can be
avoided by the use of subcontracting
agreements or other contracts other
· than employment contracts.
d. Payment of compensation by way of
(1 commission does not militate against
the conclusion that EER exists. Under
(J Art. 97 of the Labor Code, "wage" shall
mean "however designated, capable of
l..) being expressed in terms of money,
whether fixed or ascertained on a time,
task, price or commisslon basis ... "
(Insular Life Assurance Co., Ltd. v
NLRC, G.R. No. 119930, 1998)
e. EER not determined by basis of
employee's compensation. (Labor
Congress v. NLRC, G.R. No. 123938,
{J 1998).
l) 3. Power of dismissal (Firing)
a. Who has the power to dismiss the
employee?
b. Disciplinary power exercised by
employer over the worker and the
corresponding sanction imposed In case
PAGE 163 OF 244
LABOR LAW
of violation of any of its rules and
regulations
4. Power to control employee's conduct
(Control Test)
a. Who exercises control over the methods
and results by which the work of the
has employee is accomplished?
b. The most important factor is the control
test. This test is premised on whether
the person for whom the services are
performed reserves the right to control
both the end achieved and the manner
and means used to achieve that end.
(Reyes v. Glaucoma Research
Foundation, lnc.,GR No. 189255, 2015)
c. The control test falls for the existence of
the right to control the manner of doing
the work, not the actual exercise of the
right. (Dy Keh Beng v. Int'/ Labor &
Marine Union of the Phil, G.R. No. L-
32245, 1979)
d. There could be no EER where "the
element of control is absent; where a
person who works for another does so
more or less at his own pleasure ancJ is
not subject to definite hours or conditions
of· work; and in turn is compensated
according to the result of his efforts and
not the amount thereof, we should not
find that the relationship of employer-
employee exists." (Filipinas Broadcasting
Network, Inc. v. NLRC, G.R. No. ~ 18892,
1998)
Concept of Control over Insurance Agents -
NOT Control In Labor Law
a. The fact that private respondent was
required to solicit business exclusively for
e,
petitioner could hardly be considered as ·
control in labor jurisprudence. Under
Memo Circulars No. 2-81 and 2-85
issued by the Insurance Commissioner,
insurance agents are barred from serving
more than one insurance company, in
order to protect the public and to enable
, insurance companies to exercise
exclusi ve supervision over their agents in
their solicitation work. Thus, the
exclusivity restriction springs from a
regulation issued by the Insurance
Commission, and not from an intention
ATENEO CENTRAL
BAR OPERATIONS 2018
by petitioner to establish control over the
method and manner by which private
respondent shall accomplish his work.
This is not meant to change the nature of
the relationship between the parties, nor
does it necessarily imbue such
relationship with the quality of control
envisioned by the law. (AFP Mutual
Benefit Association v. NLRC, G.R. No.
102199, 1997)
b. That private respondent was bour.d by
company policies, memo/circulars, rules
and requlations issued from time to time
is also not indicative of control. With
regard to the territorial assignments
given to sales agents, this too cannot be
held as indicative of the exercise of
control over an employee. Not every form
of control that a party reserves to himself
over the conduct of the other party in
relation to the services being rendered
may be accorded the effect of
establishing an employer-employee
relationship. (AFP Mutual Benefit
Association v. NLRC, G.R. No. 102199,
1997)
EER between crew members and owners of
fishing vessels
The employer-employee relationship between the
. crew members and the owners of the fishing
vessels engaged in deep-sea fishing is merely
suspended during the time the vessels are dry-
docked or undergoing repairs or being loaded
with the necessary provisions for the next fishing
trip. This is premised on the principle that all these
activities i.e., dry-dock, repairs, loading of
necessary provisions, form part of the regular
operation of the company fishing business. (Ruga
v. NLRC, G.R. No.L-72654-61, 1990)
Not every form of control will have the effect
of establishing EER. The line should be drawn
between:
1. Rules that merely serve as guidelines
towards the achievement of mutually desired
results without dictating the means or ·
methods to tie employed in attaining it.
These aim only to promote the result. NO
EER exists.
2. Rules that control or fix the methodology
and bind or restrict the party hired to the use
PAGE 164 OF 244
LABOR LAW
of such means. These address both the
result and the means used to achieve it and
hence, EER exists (Insular Lite Assurance
Co, Ltd. v. NLRC, G.R. No. 84484, 1989)
TWO-TIERED TEST (Francisco Doctrine)
(Francisco v. NLRC, G.R. No. 170087, 2006)
In cases where the control test is insufficient to
determine the relationship between the parties,
the Francisco doctrine adds another test, applied
in conjunction with the control test, called the
economic dependence test.
(I) FIRST TIER: CONTROL TEST
rhe putative employer's power to control the
employee with respect to the means and methods
by which the work is to be accomplished.
r· ,.
(11) SECOND TIER: ECONOMIC REALITY TEST ;
(ALSO, ECONOMIC DEPENDENCE TEST)
Under this test, the econcmic realities prevailing
·, within the activity or between the parties are
-.. .. '
i--.. ,
examined, taking into consideration the totality of
clro.imstances surrounding the true nature of the
relationship between the parties. This is resorted
to when there is serious doubt or genuine
confusion as to the relationship of the employee
with the employer.
The proper standard of "economic dependence"
of the employee is whether the worker is
dependent on the alleged employer for his
continued employment in that line of business.
(Orozco v. CA, G. R. No. 155207, 2008)
.· ·,..
The 2-tiered test provides. a framework of .»
analysis which would take into consideration the
totality of circumstances surrounding the true
nature of the relationship between the parties. It
is appropriate in a case where there is:
.
CJ
.
1. No written agreement or terms of reference
to base the relationship on; and
2. There exists a complexity in the relationship
based on the various positions and
responsibilities given to the worker over the
period of the latter's employment. (J
Thus, the determination of the relationship ,
between employer and employee depends upon
i •
the circumstances of the whole economic activity, lj
such as:
I
'f
'',
 ATENEO CENTRAL
BAR OPERATIONS 2018
1. The extent to which the services performed are
an integral part of the employer's business;
2. The extent of the worker's investment in
equipment and facilities;
3. The nature and degree of control exercised by
the employer;
4. The worker's opportunity for profit and loss;
5. The amount of initiative, skill, judqment or
foresight required for the success of the
claimed independent enterprise;
6. The permanency and duration of the
relationship between the worker and the
employer; and
7. The degree of dependency of the worker upon
the employer for his continued employment in
that line of business. (Francisco v. NLRC,
G.R. No. 170087, 2006)
Cases Where EER Exists:
r " a. Jeepney drivers cin boundary basis
(Villamaria v. CA, G.R. No. 165881, 2006)
.b. Drivers or helpers of salesmen are
employees of the company (Alhambra
!'' Industries v. CIR, G.R. No. L-25984, 1970)
\. " c. Employees of an unregistered association
(Orlando Farm Growers v. NLRC, G.R. No.
129076, 1998)
d. Street-hired kargador (Caurdanetaan Piece
Workers Union v. Laguesman, G.R. No.
113542, 1998)
e. Workers In movie projects (Mataguinot and
Enero v. NLRC and Viva Fils, G.R. No.
() 113542, 1998)
f. "Talents" (Begino v. ABS-CBN, G.R. No.
() 199166, 2015)
g. Salaried insurance agent, as distinguished
(j from registered agents on commission basis
(Great Pacific Life Assurance Corp., v.
u Judico, G.R. No. 73887, 1989)
h. Tailors, seamstresses, servers, basters,
ll plantsadoras paid on piece-rate basis
(Makati Haberdashery v. NLRC, G.R. Nos.
83380-83, 1989)
i. In-house counsel (Hydro Resources
u Contractors v. Pagalilai,an, G.R. No. 62909,
1989)
u j. Security guards, with respect to the security
agency (Agro Commercial Services v.
NLRC, G.R. No. 82823-24, 1989)
PAGE 165 OF 244
··----=
LABOR LAW
casss where no EER exists:
a. Farm Workers are not employees of the
sugar central (Pondoc v, NLRC, G.R. No.
116347, 1996)
b. Once in the playing court, the referees
exercise their own independent judgment,
based on the rules of the game, as to when
and how a call or decision is to be made.
The very nature of officiating a professional
basketball game undoubtedly calls for
freedom of control (Bernante v. PBA, G.R.
No. 190842, 2011)
c. Healthcare associate - The manner in which
Consulta was to pursue these activities was
not subject to the control of Pamana.
Consulta failed to show that she had to
report for work at definite hours. The amount
of time she devoted to soliciting clients was
left entirely to her discretion. The means and
methods of recruiting and training her sales
associates, as well as the development,
management and maintenance of her sales
division, were left to her sound judgment
(Consulta v. CA, G.R. No 145443, 2005)
d. TV personality- The specific selection and
hiring of Sonza, because of his unique skills,
talent and celebrity status not possessed by
ordinary employees, is a circumstance
indicative, but not conclusive, of an
independent contractual relationship (Sonza
v. ABS-CBN, G.R. No. 138051, 2004)
e. Where the contractor PSI was the one that
selected, engaged, and hired the security
guards, the latter cannot claim that PLOT,
the entity to which they were detailed to, is
their employer (Abella v. PLDT, G.R. No.
159469, 2005)
Importance of determining existence · of
employer-employee relationship
Generally, labor standards and conditions apply
only if there is an EER. However, in some
instances, even if tehre is no EER, the· Labor
Code may still be invoked (e.g. indirect
employer's liability, Illegal recruitment, and
misuse of POEA license).
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

EER is determined by law and not by contract a. REGULAR EMPLOYMENT

between the parties (Paguio v. NLRC, G.R. No.
147816, 2003) Regular employment is ah arrangement where
the employee:
2. KINDS OF EMPLOYMENT 1. Has been engaged lo perform tasks usually
necessary or desirable to the usual trade or
Rundown of Kinds of Employment business of the employer (by nature of
a. Regular work);
b. Casual 2. Has rendered at least 1 year of service,
c. Probationary whether such service is continuous or
d. Project broken, with respect to the activity in which
e. Seasonal he is employed (by length of service); or
f. Fixed-term 3. When an employee is allowed to work after
g. Security guards a probationary period (by probationary
h. Floating employment) (Labor Code, Art. 295, 296)

Despite the distinction between · regular and
casual employment, nvery employee shall be
entitled to the same riqhts and privileges, and
shall be subject to the same duties as may be
granted by law to regular employees during the
period of their actual employment.
Test to determine regular employment
The primary standard of determining regular
employment is the reasonable connection
between the particular activity performed by
the employee to the usual trade or business of
the employer. The connection can be .. ---
....
(_)
determined by considering the nature of work
performed and its relation to the scheme of the
particular business or trade In its entirety, The
repeated and continuing need for the
performance of the job has been deemed .
sufficient evidence of the necessity, if not
indispensability of the activity to the business.
(Lopez v. MWSS, G.R. No. 154472, 2005)

The performance of a job for at least a year is

(j
sufficient evidence of the job's necessity if not
Indispensability to the business. This is the rule
-, even if its· performance is not continuous and
()
merely intermittent. The employment is
cor.sidered regular, but only with respect to such
activity and while such activity exists. ( URC v.
Ceiepenc, G.R. No. 164736, 2005),

()

PAGE 166 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 201b
Ways of attaining regular employment
1. Ely nature of work
The employment Is deemed regular when the
employee has been engaged to perform
activities which are usually necessary or
desirable in the usual business or trade of the
. employer. (Labor Code, Art. 295; Paguio v.
NLRC G.R. No. 147816, 2003)
2. By length of service
The casual employee is reckoned as regular
when the employee has rendered at least one
(1) year of service, whether such service is
continuous or broken, with respect to the
activity In which he is employed and his
employment shall continue while such activity
exists. (Labor Code, Art. 295; Conti v. NLRC,
G.R. No. 119253, 1997)
3. Work beyond the probationary
employment
The employment is considered regular when
the employee is allowed to work after a
I ~-.. probationary period. (Labor Code, Art. 296)
. ~.
;
:
4. Repeated Hiring
When the "seasonal" workers are
continuously and repeatedly hired to perform
the. same tasks or activities for several
seasons or even after the cessation of the
season, this length of time may likewise serve
as badge of regular employment. (Universal
Robina Sugar Milling Corporation v. Acibo,
G.R. No. 186439, 2014)
0 Enterprises, Inc. v. CA, GR No. 192881, 2011)
. Note: Regular employment does not mean
{J permanent employment. A regular employee may
be terminated for just and authorized causes.
,,., b. CASUAL EMPLOYMENT
u NLRC, G.R. No. 1973841 2013)
General Rule: Activity performed is not usually
necessary or desirable in the usual business or
trade of the employer, not project and not
0 seasonal. Otherwise stated, casual employees
perform activities which are incidental to the
0 business of the employer.
c Exception: If he has rendered at least 1 year of
service, whether such service is continuous or
(j broken, he is considered a REGULAR employee
with respect to the activity in which he is
PAGE 167 OF 244
i.:_
LABOR LAW
employed and his employment shal' continue
while such activity exists. (Labor Code, Art. 295)
c. PROBATIONARY EMPLOYMENT
Probationary employment exists where the
employee, upon his engagement, is made to
underyo a trial period during which the employer
determines his fitness to qualify for regular
employment based on reasonable standards
, made known to him at the time of his engagement
(Labor Code, Art. 296)
·,
Period of Probationary Employment
Probationary employment shall not exceed six (6)
months from the date the employee started
working, unless it is covered by an apprenticeship
agreement stipuiatinq a longer perioc1• (Labor
Code, Art. 296)
Probationary employee is one who is on trial by
an employer during which the employer
determines whether or not he is qualified for
permanent employment. (International Catholic
Migration Comm. v. NLRC, G. R. No. 72222,
1989)
While the employer observes the fitness,
propriety, and efficiency of a probationer to
ascertain whether he is qualified for permanent
employment, the probationer, on the other hand,
seeks to prove to the employer that he has the
qualifications to meet the reasonable standards
for permanent employment. (Temson's
Probationary employment must have been .
expressly agreed upon. If there is · no such
agreement, the employment is considered
regular (Sampaguita Auto Transport Corp. v.
Duration of Probationary Employment
General Rule: Probationary employment shall
not exceed 6 months from the date the employee
started working (Labor Code, Art. 296)
Probation ends 180 days from the starting date.
(Mitsubishi Motors Corporation v. Chrysler Phils., ·
G.R. No. 148738, 2004)
ATENEO CENTRAL
BAR OPERATIONS 2018
When an employer renews a contract of
employment after the lapse of the six-month
probationary period, the employee thereby
becomes .a regular employee. No employer is
allowed to determine indefinitely the fitness ofits
employees. (Labor Code, Art. 291, Malicdem v.
. Marulas Industrial Corp., GR No. 204406, 2014)
Exceptions:
1. Covered by an apprenticeship agreement
stipulating a longer period (l.ebor Code; Art.
296)
2. Voluntary agreement of parties (especially
when nature of work requires a lcnger
period) (Mariwasa Manufacturing v.
Leogardo, G.R. No. 74246, 1989)
3. The employer gives the employee a second
chance to pass the standards set (Mariwasa
Manufacturing v. Leogardo, G.R. No. 74246,
1989)
4. When a longer period is required and
established by company policy
If not one of the exceptional circumstances above
is proven, the employee whose employment
exceeds 6 months is undoubtedly a regular
employee (San Miguel v. Del Rosario, G.R. No.
168194 & ·/68693, 2005)
Example: The probationary period set for
professors; Instructors and teachers is 3
consecutive years of satisfactory service
pursuant to DOLE Manual of Requlations for
Private Schools.
Extension of Probation; Double/Successive
Probation Not Allowed
The employer and employee may extend by
agreement the probationary period of
employment beyond 6 months, but it cannot be
ad infinitum. (Mariwasa Manufacturing · v.
Leogardo, G.R. No. 74246,. 1989)
The evil sought to be prevented is to discourage
scheming employers from using the system of
double or successive probation to circumvent the
mandate of the law on regularization and make it
easier for them to dismiss their employees
(Holiday Inn Manila v. NLRC, G.R. No. 109114,
1993)
PAGE 168 OF 244
LABOR LAW
Standards Must Be Made Known to Employee
In all cases of probationary employment, the ' .
employer shall make known to the employee the
standards under which he will qualify as a regular
employee at the time of his engagement. Where
no standards are made known to the employee at
that time, he shall be deemed a regular
.. --,.
employee. (Aberdeen Court, Inc. v. Agustin, G.R.
No. 149371, 2005; /RR Labor Code, Sec. 6[d],
Rule I, Book V)
PERLAS·BERNABE. When dealing with a
probationary employee, the employer is made to
comply with two requisites:
a. The employer must communicate the
regularization standards to the probationary
employee (perforn!ance standard); and
b. The employer must make such
communication at the time of probationary
employee's engagement.
If the employee fails to comply with either, the ·,
employee is deemed as a regular and not a u
probationary employee.
GR: An employer is deemed to have made
known the standards that would qualify a
probationary employee to be a regular employee
when it has exerted reasonable efforts to apprise
...._ . .../
the employee of what he is expected to do or
accomplish. .
f . 'l
~
EXCEPTIONS:
a. When the job is self-descriptive in nature
such as in the case of maids, cooks, drivers,
or messengers. (Abbott Laboratories, ()
Philippines v. Alcaraz, GR No. 192571,
2013) (J
'l
b. Probationary managerial employee. A
managerial role essentially connotes an
exercise of discretion, the quality of effective
management can only be determined
through subsequent assessment.
c. The case of probationary employees whose
tasks involve the application of discretion
and intellect, such as - to narne a few -
lawyers, artists, and journalists (Abbott
Laboratories, Philippines v. Alcaraz, GR No.
u
192571 MR, 2014)
' ()
Termination of Probationary Employment ,-,.
PE·tLAS-BERNABE. A probationary employee, v
like a regular employee, enjoys security of tenure.
Thus, services of an employee who has been
 ATENEO CENTRAL
BAR OPERATIONS 2018
engaged on probationary basis may be
terminated for any of the followir.q:
1. Just causes
2. Authorized causes
3. When he fails to qualify as a regular
employee in accordance with reasonable
standards made known by tha employer to
employee at the time of his engagement.
(Abbott Laboraties, Philippines v. Alcaraz,
GR No. 192571, 2013))
Note: If the termination is for cause, it may be
done anytime during the probation. The employer
need not wait untii the probation period is over.
(Carvajal v. Luzon Development Bank, GR No.
186169, 2012)
'
\
Limitations to Termination of Probation
6. Must be exercised in accordance with the
specific requirements of the contract;
7. The dissatisfaction on the employer's part
must be real and in gooo faith, not feigned so
r=.
u as to circumvent the contract or the law; and
8. There must be no unlawful discrimination In
-, c. The employee was assigned to carry out a
r->.
t. . the dismissal (Davao Contractors
Development v. Pasawa, G.R. No. 172174,
2009) .
Probationary employee may be dismissed before
end of the probationary period. Termination, to be
valid, must be done before the lapse of the
probationary period. (Pasamba v. NLRC, G.R.
{J No. 168421, June 8, 2007; Manila Electric
Company v. NLRC, G.R. No. 83751, 1989).
()
Conversely, once the employer finds the
( ...,.l, employee qualified, the employer may extend to
him regular employment even before the end of
. the probation (Canagian Oppc,rtunities v.
Dalangin, Jr., G.R. No. 172223, 2012)
Due Process Prior to Termination
Probationary employees is entitled to procedural
due process prior to dismissal from service.
c Unlike the first and second grounds (see above
enumeration), the third ground does not require
,o notice and hearing. Due process for the third
ground consists of making the reasonable
standards excepted of the employee during his
probationary period known to him at the time of
his probationary employment. (PD/ v. Magtibay,
Jr., G.R. No. 164532, 2007)
,.-··
i
""' PAGE 169 OF 244
"'"···
LABOR LAW
Acquisition of Permanent Employment for
Private School Teachers
The legal requirements for acquisition of
permanent employment, are as follows:
9. The teacher is a full-time teacher;
10. The teacher must have rendered three
consecutive years of service; and
11. Such service must have been satisfactory.
(USTv. NLRC G.R. No. 8551.9, 1990)
d. PROJECT EMPLOYMENT
One whose employment has been fixed for a
specific project or undertaking, the completion of
which has been determined at the time of
engagement of the employee. (Labor Code, Art.
295)
PERLAS-BERNABE. For an employee to be
considered project-based, the employer must
show compliance with two (2) requisites, namely
that:
specific project or undertaking; and
d. The duration and scope of which were
specified at the time they were enqaged for
such project. (Gadia v. Sykes Asia, lnc., GR
No. 209499, 2015)
Project Employees are NOT Regular
Employees; Exception
General Rule: Project employees are not regular
employees, as their services are needed only
when there are projects to be undertaken.
Exception: Where the employment or project
employees is extended long after the supposed
project has been finished, the employees are
removed from the scope of project employees ·
and are considered regular employees. (Lao
Construction v. NLRC, G.R No. 116781, 1997)
When a Project Employee Becomes a Regular
Employee
a. There is continuous re-hiring of project
employees even after the cessation of a
project for the same tasks or nature of tasks
(the employee must be continuously rehired
<without gaps and intervals); and
b. The tasks performed by the alleged project ·
employee are vital, necessary, and
indispensable to the usual business or trade
ATENEO CENTRAL
BAR OPERATIONS 2018 ' LABOR LAW

of the employer (Maraguinot v. NLRC, GR. particular construction project or phase

No. 120969, 1998) of a project. Said employees are
considered regular employees; or
Duration of Work b, Project employees are those employed
One year · duration on the job is pertinent in in connection with a particular
deciding whether a casual employee has become construction project or phase thereof
regular or not, but it is not pertinent to a seasonal and such employment is coterminous
or project employee. with each project or phase of the project
to which they are assigned. (Exodus
"Day Certain" Rule International Construction v. Biscocho,
Project employment does not end on an exact GR No. 166109, 2011))
date, but on the completion of the project.
Mere membership in the work pool does not result
Termination in the workers' becoming regular employees by
As project employees, their termination is reason of that fact alone. (Abesso Construction
governed by Rule XXIII, Book V of the Omnibus and Dev't Corp., v. Ramirez, G.R. Ne. 141168,
Rules Implementing the Labor Code which 2006), However, a project employee who is a
provides that: If the termination is brought about member of a work pool may attain regular status
. by the completion of the contract or phase as a project employee.
thereof, no prior notice is required.
Project Employment vs. Regular Employment
This is because completion of work or project P~OJE~T ! REGULAR
1
automatically terminates employment, in which EM~LO MENT • EMP[OYMENT
case, the employer Is, under the law, only obliged The services of Regular employees
to render a report to the DOLE on the termination project employees are enjoy security of
of employment. (Cioco, Jr. v. C.£. Construction coterminus with tenure and are legally . ; ..
Corp., GR No. 156748 & 156896, 2015) ·--:"·

project or any phase entitled to remain in

thereof any may be the service of . their
Length of time not applicable to the
terminated upon the ; employer and to hold
construction Industry
end or completion of on their work or
Generally, length of service provides a fair
the project or phase position until their
yardstick for determining when an employee
thereof for which they services are ( i
initially hired on a temporary basis becomes a .... #
were hired terminated by any of
permanent one, entitled to the security and
the modes of ( _)
benefits of regularization. But this standard will
termination of service
not be fair, if applied to the construction industry,
under the Labor Code
simply because construction firms cannot
As to termination, due If termination is for
guarantee work and funding for its payrolls .· ~
· process complied with just cause, due f t'!

beyond the life of each project. And getting '.J

even if no prior notice process applicable to
projects is not a matter of course. (Uy
of termination is Art. 297 appiies. If I ~
Construction v. Trinidad, G.R. No. 183250, 20'/0)
served due to authorized
v
causes, Art. 298 . & {'\
Work Pool Principle
299 followed.
v
Generally, employees may or may not be '--~~~~·~~~---'~
members of a work pool. A work poo/refers to a ()
Note: A regular employee cannot be at the same
·group of works from which an employer like a
time a project employee (Magca/as v. NLRC, l
construction company deploys or assigns to its {.-:»
G.R. No. 100333, 1997)
various projects or any phase/s thereof.

Types of Employees in the Ccnstructlon

Industry: ()
a. Non-project employees are those
employed without reference to any
PAGE 170 OF 244
/

'
 ATENEO CENTRAL
BAR OPERATIONS 2018
e. SEASONAL EMPLOYMENT
Work or services to be performed is seasonal in
nature and the employment is for the duration of
the season. (Labor Code, Art. 295)
Farm workers generally fall under the definition of
seasonal employees. Seasonal employees may
be considered as regular employees.
Regular seasonal employees are those called to
work from time to time. The nature of their
relationship with the employer is such that during
the off season, they are temporarily laid off; but
re-employed during the summer season or when
their services may be needed. They are in regular
employment because of the nature of their job,
and not because of th€ length of time they have
worked. (Gapayao v. Fulo, GR No. 19343, 2013)
( .
Employment Relatlohship During Off-Season
During off-season, the EER is not severed; the
seasonal employee is merely considered on
leave of absence without pay. Workers who have
performed the same tasks every season for
several years are considered regular employees
j :-
-e-=r for their respective tasks. (Haciencfa Fatima v.
National Federation of Sugarcane Workers-Food
and General Trade, G.R. No. 149440, 2003)
When Seasonal Employees Considered as
Regular Employees
1. Where there is a reasonable connection
between the particular activity performed by
the employee in relation to the usual trade or
business of the employer; and
2. When seasonal workers are repeatedly
engaged to perform the same tasks for more
than one season (Zamudio v. NLRC, G.R.
No. 76723, 1990)
One year duration on the job is pertinent in
deciding whether a casual employee has become
regular or not, but it is not pertinent to a seasonal
or project employee. Passage of time does not
make a seasonal worker regular or permanent.
(Mercado v. NLRC, G.R. No. 79869, 1991)
. L~
v When Seasonal Employees NOT Considered
as Regular Employees
("<~· a. Seasonal workers who have worked for
one season only (Hacienda Fatima v.
PAGE 171 OF 244
LABOR LAW
National Federation of Sugarcane
Workers-Food and General Trade, GR.
No. 149440, 2003);
b. When seasonal employees are free to
contract their scrvlces with other farm
owners (Mercado, Sr. v. NLRC, 2013).
f. FIXED-TERM EMPLOYMENT
Fixed-term employment was repealed by Labor
Code. But the Civil Code, a general law, allows
fixed-term employment. (Brent School, Inc. v.
Zamora, G.R. No. 48494, 1990)
Elements of valid fixed-term employment
1. The fixed period of employment was
knowingly and voluntarily agreed upon by . ·
the parties without any force, duress, or
improper pressure being brought to bear
upon the employee and absent any other
circumstances vitiating his consent; ·
2. It satisfactorily appears that the employer
and the employee dealt with each other on
more or less equal terms with no moral
dominance exercised by the former or the
latter.
These indications, Which must be read together,
make the Brent doctrine applicable only in a few
special cases wherein the employer and
employee are on more or less In equal fobting in
entering into the contract.
The reason for this is: when a prospective
, employee, on account of special skills or market
forces, is in a position to make demands upon the
pro~pective employer, such prospective
employee needs less protection than the ordinary
worker. Lesser limitations on the parties' freedom
of contract are thus required for the protection of
the employee. (Fuji Television Network v.
Espiritu, G.R. Nos. 204944-45, 2014)
General Rule: Fixed-Period Employment is valid
so long as the criteria is complied with.
Exception: Fixed-term employment will not be
considered valid where, from the circumstances,
it is apparent that periods have been imposed to
preclude acquisition of tenurial security by the
employee. (Dumpit-Murillo v. CA, G.R. No.
164652, 2007)
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Rules:
1. Notice of termination is not necessary in
fixed-term employment (Pcingilinan v.
General Milling Corporation, supra)
2. Employee is deemed regular if the contract
failed to state the specific period of
employment (Poseidon Fisi1ing v. NLRC,
G.R. No. 168052, 2006);
3. Termination prior to lapse of fixed-term
contract should be for a just or authorized
cause (Anderson v. NLRC, GI-.?. No. '
111212, 1996);
4. Liability for illegal dismissal of fixed-term
employees is only for the salary for
unexpired portion (New Sutuise Metal v.
Pia, G.R. No. 171131, 2007)

Probationary Employment vs. Fixed-Term

Employment
PROBATIONARY I FIXED-TE!~ IYI • -•
EMPLOY!YIENT - EMPLOVfi/lENT · ·
The parties intend to No such intention
make their relationship exists and the '-)
regular after the lapse relationship
of the period. automatically
terminates at the
expiration of the
period.

g. SECURITY GUARDS. ·,
-, _.;

Employment Status
The Security Service Contractor (SSC) or Private
Security Agency (PSA) is the employer of its
security guards and other private security
(. ",
!'
personnel on duty detail to a principal or client
under a Service Agreement. (Sec. 3. 1, DO 150-
16) .
r ~
' • .. / ~
Note: Similar · to a situation of legitimate
subcontracting.

The three parties involved:

a. SSC/PSA as Contractor I Subcontractor
b. Security Guards as emoloyees of
SSC/PSA
c. Principal or client of SSCIPSA - puts out or 0
farms out a security and/or detective job,
service, or work to a private SSC/PSA. u
[ \
.J

PAGE 172 OF 244

 A TENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Probationary Employment
Probationary period of newly-hired security guard
and other private security personnel in the private
security industry shall not exceed six (6) months.
While on probationary status, their services may
be terminated.
for failure to0 meet reasonable
standards or criteria made known by the
' i. SSC/PSA at the time of their engagement or for
any just case contained in the probationary
· contract. (Sec. 3.2, DO 150-16)

Regular Employment
Any security guard or other private security
)
personnel who is allowed to work after the
probationary period or in the absence of a valid
probationary contract shall be considered a
regular employee. Security guards affected by
repeated hiring-firing-rehiring scheme for short
)
periods of time, the aggregate duration of which
l/ . ' is at least 6 months, shall be considered a regular
employee. (Sec. 3.3, DO 15016)

Employment Contracts
Notwithstanding and oral or written stipulations to
the contrary, the contract between SSC/PPA and
its security guards shall be governed by
provisions of Art. 294 and 295 of the Labor Code.
(
\.,J
~, The SSC/PSA shall provide his/her security
guards a copy of the employment contract duly
1· ,. signed by the parties, which shall contain terms
t _.,~
and conditions of employment. (Sec. 5. 1, DO
150-16)
()
Reserved Status
0 A security guard and other private security
personnel may be placed in a work pool or on
0 reserved status due to lack of service assignment
after the expiration or termination of the Service ·
Agreement with the principal where he/she is
assigned, or due to the temporary suspension of
0 security service operations, or due to valid relief
from the current place of work and there is no
work assignment available.

() No security guard and other private security

personnel can be placed in a work pool or on
(Ji reserved status in any of the following situations: '
a. after expiration of a service contract, If
there are other principals where he/she can be
assigned;

PAGE 173 OF 244

-~ .. -'
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

b. as a measure to constructively dismiss

the security guard; and
c. as an act of retaliation for filing any
complaint against the employer for violation of
labor laws, among others.

If after a period of six (6) months, the SSC/PSA

., """\
cannot provide work or give an assignment to the
reserved security guard, the latter can be
separated from service and shall be entitled to
separation pay as described ln Subsection 7.5
(m) hereof. An assignment of the security guard
and other private cecurity personnel as a reliever
for less than one-month shall not be considered
as an interruption of the six (6) months period.
(Sec. 10.3, DO 150-16)

PERLAS-BERNABE. Spedflcally with respect to

cases involving security guards, a relief and
transfer order in itself does not sever employment
,.
relationship between a security guard and his
agency. Temporary "off-detail" or the period of
time security guards are made to wait until they ' 0
are transferred or assigned to a new post or client
does not constitute constructive dismissal, so
long as such status does not continue beyond six
(6) months. (Tatel v. JLFP Investigation and
Security Agency, Inc., GR No. 206942, 2015)

PERLAS-BERNABE. The concept of temporary

"off-detail" or "floatir.g status" of security guards
employed by private security agencies - a form of ( \ "-.;,;""'
temporary retrenchment or lay-off - relates to the
period of time when security guards are in
between assignments or when they ate made to
wait after being relieved from a previous post until l . . J'!,
they are transferred to a new 011e. When a
security guard is placed on a floating status, he or
she does not receive any salary or financial
benefit provided by law. (Qui/Iopa v. Qual!ty
Guerds Services, GR No. 213814, 2015)

Burden of Proof
The onus of provinq that there is no post available
to which the security guard can be assigned rests t)
on the employer. (Nationwide Security and Allied ( ...
Services, Inc. v. Valderama, 659 Phil. 362, 2011) ,.)

PAGE 174 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW
'
Due to the grim economic consequences to the subiect to the control of the employer, except only
security guard in which he does not receive any as to the results of the work. (SMC v. Abal/a, · G. R.
salary while in temporary off-detail or floating No. 149011, 2005)
status, the employer-security agency should bear
the burden of proving that there are no posts An individual can be an independent contractor
available to which the security guard temporarily for himself. (Sonza v. ABS-CBN, G.R. No.
out of work can be assigned. (Pidci v. NL.RC. 545 138051, 2004)
Phil 507, 516, 2007)
Factors to consider in determining whether
Management Prerogative Contractor is carrying on an Independent
PERLAS-BERNABE. Placing a security guard in Business:
temporary off-detail or floating status is part of It is not enough to show substantial capitalization
management prerogative of the employer- or investment in the form of tools, equipment,
security agency .and does not, per se, constitute machineries, and work premises, among others,
a severance of the employer-employee to be considered as an independent contractor. in
relationship. However, such exercise of determining the existence of an independent
management prerogative must be made in good contractor relationship, several factors might. be
faith. (Qui/Iopa v. Quality Guards Services, GR considered:
No. 213814, 2015) a. Nature and extent of work
( ' . b. Sl<ill required
3. LEGITIMATE SUBCONTRACTING vs. c. Term and duration of the relationship
LABOR·ONL Y CONTRACTING d. Right to assign the performance of
specified pieces of work
,'\ Contracting or Subcontracting refers to an e. Control and supervision of the
\ ~-
arrangement whereby a principal aqrees to farm workers
out to a contractor the performance or completion f. Power of the employer with respect to
of a specific Job or work within a definite or the hiring, firing, and payment of
predetermined period, regardless of whether workers of the contractor
such work is to be performed or completed within g. Control of the prernlses
( ': or outside the premises of the principal. (DO 174- h . Duty to supply premises, tools,
;-_ r
17, Sec . .3{c)) appliances, materials, and labor
i. Mode, manner, and terms of
Labor-Only Contracting ~ An arrangement payment. (Vinoya v. NLRC, GR No.
where the contractor or subcontractor recruits, 126586, 2000)
0 supplies, or places workers to perform a job or
work for a principal, and the elements hereunder:
{J A. The contractor does not have substantial
f '. capital or the contractor or subcontractor
!.:-, ; does not have investments in the form of
,r·, tools, equipment, machineries; and the
v contractor's or subcontractor's employees
recruited and placed are performinq activities
which are directly related to the main
business operation of the principal; or
B. The contractor or subcontractor does not
0 exercise the right of control over the work of
the employee (D.C. No. 174-17, Sec 5)
(J
Test to determine the existence of an
independent contractor
Whether one claiming to be an independent
0 contractor has contracted to do the work
according to his own methods and without being
PAGE 175 OF 244

'
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Job Contracting v. Labor-Only a. ELEMENTS

Contracting
JOB . LABOR·O LY Legitimate contracting or subcontracting
CONTRACTING. • • 'CONTRA iTING • Contracting or subcontracting shall be legitimate
if 311 the following circumstances occur:
Has sufficient
a. The contractor is engaged in a distinct
substantial capital Has NO substantial
and independent business and
OR investment in capital OR investment
undertakes to perform the job or work on
machinery, tools · or in the form of
equipment directly or machinery, tools or its own responsibility according to its
own method;
intended to be related equipment
to the job contracted
c. The contractor or subcontractor has
substantial capital and/or investment;
d. The contractor undertakes to perform the
job, · work or service on its own
responsibility, according to its own
manner and method, and free from
Undertakes to .
control and direction of the principal in all
perform the job under Performs activities
matters connected with the performance
its own account and directly related to the
of the work except as to the results
responsibility, FREE main business of the
from the prlncipal's thereof; and "€:
principal
control e. The Service Agreement ensures
compliance with all the rights and (_j,
benefits for all of the employees of the
( '"">t.
contractor or subcontractor under Labor
laws. (D.O. No. 174-17, Sec. 8)
.>
Labor-Only Contracting
II ability Labor only contracting shall refer to an
(principal solidarily arrangement where the. contractor or
subcontractor recruits, supplies, or places . '=
liable with contractor Principal's liability s. ~
or subcontractor only extends to all rights, workers to perform a job or work for a principal,
when latter falls to duties and liabilities and the elements hereunder:
comply . with under labor standard a. The contractor does not have substantial
requirements as to laws including the right capital; or the contractor or
unpaid wages and to self-organization
' subcontractor does not have
other labor standards investments in the form of tools, ()
violations. equipment, machineries; and the
contractor's or subcontractor's
employees recruited and placed are
performing activities which are directly
l}
related to the main business operation of
the principal; or
b. The contractor or subcontractor does not
exercise the right of control over the '
\.)
..
work of the employee (D. 0. No. 114-17,
Sec. 5)

Right to Control
Right reserved to the person for whom the
services of the contractual workers are i-._J.},
performed, to determine not only the end to be
achieved, but also the manner and m€ans to be
__ _,
PAGE 176 OF 244

. .,,
 ATENEO CENTRAL
BAR OPERATIONS 2018
used in reaching that end. (D.O. No. 18°A, Seo.
3{i])
Only one of either (i) substantial capital or (ii)
performing activities related to the main
business - is required for Labor-Only
Contracting to exist
Performing activities directly related to the
principal business of the employer is only one of
the two indicators that "labor-only" contracting.
exists; the other is lack of substantial capital or
investment. Labor-only contracting exists
when any of the two elements is present.
(Quintanar, eta/. v. Coca-Co/a, G.R. No. 210565,
2016)
Posting ofBond
An employer or indirect employer may require the
contractor or subcontractor to . furnish a bond
{ equal to the cost of labor under contract, oil
condition that the bond will answer for the wages
due the employees should the contractor or
subcontractor, as the case may be, fail to pay the
[ same. (0.0. No. 174-17, Sec. 3[a), Labor Code,
. \
Art. 108)
Note: Labor-Only Contracting is legally wrong
{ ~. and prohibited because it is an attempt to evade
the obligations of an employer. If proven, it
..
{ :. amounts to employment avoidance (Convoy
Marketing v. Albia, G.R. No. 194969, 2015)
Substantial Capital
It refers to capital stocks and subscribed
0 capitalization in the case of corporations, tools,
equipment, implements, machineries, and work
() premises, actually and directly used by the
contractor or subcontractor in the performance or
completion of the job, work or service contracted
out (D. 0. No. 18-02, Sec. 5)
It also refers to paid-up capital stocks/shares of at
least Five Million Pesos (P5,000,000.00) in the
case of corporations, partnerships and
{) cooperatives; in the case of single proprietorship,
a net worth of at least Five Million Pesos
0 (P5,000,000.00). (D.O. No. 174-17, Sec. 3, 1J(i))
() Capital stocks and subscribed capitalization in
the case of corporations, tools, equipment,
implements, machineries and work premises,
actually and directly used by the contractor or
PAGE 177 OF 244
LABOR LAW
subcontractor in the performance or completion
of the job, work or service contracted out.
The law does not require both substantial capital
and investment in the form of tools, equipment
and machineries. This. ls clear from the use of the
conjunction "or." If the intention was to require the
contractor to prove that he has both capital and
the requisite Investment, then the conjunction
"and" should have been used. (New Golden
' Builders & Dev't Corp v. CA, et al., G.R.. No.
154715, 2003)
Net. Financial Contracting Capacity (NFCC)
refers to the formula to determine the financial
capacity of the contractor to carry out the job,
work or services sought to be undertaken under
a Service A9reement. NFCC is current assets
minus current liabilities multiplied by K, which
stands for contract duration equivalent to: 1 O for
one yea, or less; 15 for more than one (1) year up
to two (2) years; and 20 for more than two (2)
years, minus the value of all outstanding or
ongoing projects including contracts to be started.
(D: 0. 18-A, Seo. 3[g])
Illicit Forrns of Employment Arrangements
The following are declared prohibited for being
contrary to law or public poJicy:
c. When the principal farms out work to a
"Cabo".
"Cabo" refers to a person or group of persons
or to a labor group which, under the guise of
labor organization, cooperative, or any entity,
supplies workers to an employer, with or
without any monetary or other consideration,
whether in the capacity of agent of the
employer or as ostensible independent
contractor. (D.O. No. 174-17, Sec. 3[b])
d. Contracting out of job or work through an in-
house agency.
e. Contracting out of job or work through an iii-
house cooperative which merely supplies
workers to the principal.
f. Contracting out of a job or work by reason of
a strike or lockout whether actual or
imminent.
g. Contracting out of a job or work being
performed by union members and such will
interfere with, restrain or coerce employees
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

in the exercise of their rigl its to self- b. TRILATERAL RELATIONSHIP

organization as provided in Article 259 of the
Labor Code, as amended
h. Requiring the contractor's/subcontractor's
employees to perform functions which are
currently being performed by the regular
employees of the principal.
i. Requiring the contractor's/subcontractor's
employees to sign, as a precondition to
employment or continued employment, an
· antedated resignation IE;itter; a blank payroll;
a waiver of labor standards including· Contractor's
Contractor
minimum wages and social or welfare Employees
benefits; or a quitclaim releasing the principal
or contractor from liability as to payment of
future claims; or require the employee to The three parties involved:
become member of a cooperative. a. Contractor I Subcolltractor
j. Repeated hiring by the Any person or entity, including a cooperative,
contractor/subcontractor of employees under engaged in a legitimate contracting or
an employment contract of short duration. subcontracting arrangement.
k. Requiring employees under a
contracting/subcontracting arrangernent to b. Contractor's Employee \ ..J
sign a contract fixing the period of One employed by a contractor or subcontractor to
employment to a tern, shorter than the term ,' ...,.
perform or complete a job, work or service
of the 8':lrvice Agreement, unless the contract pursuant to an arrangement between the latter
is divisible into phases for which substantially and a principal
different skills are required and this is made
known to the employee at the time of c. Principal
engagement. Any employer who puts out or farms out a job,
I. Such other practices, schemes or service or work to a contractor or subcontractor
employment arrangements designed to (0.0. No. 174-17, Sec. 3)
circumvent the right of workers to security of
l_J
tenure. (D.O. No. 174-11, Sec. 6)
Relationships that exist in legitimate
contracting or subcontracting: ()
a. Ah employer-employee relationship between
, ..
the contractor and the employees it engaged
to perform the specific job, work or service
.»
being contracted; and
b. A contractual relationship between the ·
principal and the contractor as governed by
the provisions of the Civil Code. (D. 0. No. 18-
A-11, Sec. 5, 1J 1)

0
' u
''I,.
(
J

PAGE 178 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Governing l.aws Required Contracts

c. Between the principal and the contractor the
major laws applicable to · their work
relationship are the Civil Code and pertinent
commercial laws.
d. Between the contractor and his employees
the major laws applicable to their work
relationship. are the Civil Code and special
labor laws.
e. Between the principal and the contractor's
employees, no employer-employee
relationship exists, because the contractor
himself is the employer. (Azucena, The Labor
( ), Code with Comments and Cases Volume /,
306, 2013)
The law recognizes and resolves this situation in
favor of employees in order to protect their rights
and interests from the coercive acts of the
1'
,.. '
• employer. In fact, the employee Who is
constructively dismissed may be allowed to keep
on coming to work. (McMer Cotp., Inc. v. NLRC,
G.R. No. 193421, 2014)
( specific phase of work for which the
\'_,
Rights of contractor's employees
All contractor's/subcontractor's employees, shall
be entitled to security of tenure and all the rights
and privileges as provided for in the Labor Code,
as amended, to include the followlnq:
f. Safe and healthful working conditions;
;f '-...,
d. Labor standards such as but not limited to
service incentive leave, rest days, overtime
pay, holiday pay, 13th month pay, and
separation pay as may he provided in the
(; Service Agreement or under the Labor Code;
1. Employment contract between the
contractor and its employee.
a. Notwithstanding any oral or written
stipulations to the contrary, the contract
between the contractor arid its employee
shall be governed by the previsions of
Articles 279 and 280 of the Labor Code,
as amended.
It shall include the following terms and
conditions:
i. The specific description .)f the job,
work or service to be performed by
the employee;
ii. The place of work and terms and
conditions of employment, including
a statement of the wage rate
applicable to the individual employee;
and
iii. The term or duration of employment
that must be co-extensive with
' the Service Agreement or with the
employee is engaged.
b. The contractor shall inform the employee
of the foregoing terms and conditions of
employment in writing on or before the first
day of his/her employment.
Service Agreement between the principal and
the contractor v. security guards
Required Provisions:

CJ e. Retirement benefits under the SSS or DO 174-17: Service DO 150~16: The I

retirement plans of the contractor, if there is Agreement between SSC/PSA and/or - the
any; the principlal and the principle shall produce
f. Social security and welfare benefits: and contractor. or submit the original
copy of the Service
u g. Self-organization, collective bargaining and
peaceful concerted activities, includlng the Agreement when
directed to do so by the
right to strike. (D.O. No. 174-17, Sec. 10)
Regional Director or
his/her duly authorized
(}' representative.
The Service The Service
u Agreement shall
include the following:
Agreement
stipulate,
shall
among
others:
a. The specific a. Specific--
description description of
of the job or ths kind or

PAGE 179 OF 244

,:
l __.·
''-'· · ·•. ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW
'
work being nature of deemed
subcontract security job, amended
ed, including work, or accordingly;
its term or service being e. Provisions
duration; subcontracted; which shall
b. The place b. Place of work ensure that
or work and and terms the principle
terms and and and the
.-."
conditions conditions SSC/PS A
governing governing the shall uphold
the contracting the rights and
contracting arrangement provide all
arrange me which shall benefits of
nt, to include the security 'c
include the aqreed guards;
agreed amount Of f. Provision on
amount bf security the NFCC of
the services to SSC/PSA;
contracted be rendered g. Undertaking
job or work and the that the
as well as standard SSC/PS A
the administrativ shall directly :--"-?
\.._)
standard e fee of not remit monthly
administrat less than employers'
ive fee of 20% of the share and
not less total contract - ·~
employees' l .»
than 10% cost; contribution
of the total c. Basic to SSS, ECC, ..
contract equipment to
\J
PhilHealth,
cost.
c. A provision
be provided
by the
Pag-lBIG;
h. Undertaking
. -
on the SSC/PSA th eat l_)
issuance of (handgun, expenses for
bon/s as handheld any training
defined in radio);
f)
required by
Sec. 3(a) d. Automatic the principal . .
\j
renewable crediting or . other
every year. provision government
(Sec. 11, which shall instrumental it
t J
DO 174- immediately ies shall be
17) give effect to shouldered vI '

the common
provision in
by
principal.
the ("',.
:.....__ ,.,
waqe orders (Sec. 4, DO
that 150-16) 0
prescribed
wage Note: Administrative fee is different for 0
increases security guards which must not be less t'-t
and the than 20% of thetotal contract cost. v
Service i ~
Agreements I ... -.?•

shall be r '
\_i
PAGE 180 OF 244
! -'·

i....__j

'
 ATENEO CENTRAL
BAR OPERATIONS 2018
Registration of Contractors and
Subcontractors
Mandatory Registration and Reqistry of
Legitimate Contractors. Consistent with the
authority of the Secretary of Labor and
Employment to restrict or prohibit the contracting
out of labor to protect the rights of workers, it shall
\
•,
be mandatory for all persons or entities, including
cooperatives, acting as contractors to register
with the Regional Office of the Department of
Labor and Employment (DOLE) where it
principally operates. (D.0. No. 174-17, Sec; 14)
Validity of Certificate of Registration of
Contractors
The contractor shall be deemed registered only
on the date of issuance of its Certificate of
Registration. The Certificate of Registration shall
be effective for 2 years, unless cancelled after
due process. The same shall be valid in the
region where it Is registered.
In case the contractor has Service Agreement or
operates outside the jurisdiction of the RTC
where it is registered, it shall request a duly
authenticated copy of its certificate of registration
'-' --~ from the DO.LE Reqlonal Office where it seeks to
operate, together with a copy of its Service
Agreement/s in the area, for purposes of
{ : monitoring compliance with the rules (D. 0. No
t . . .:- 174-17, Sec. 20)
l) Note: Failure to register shall give rise to the
presumption that the contractor is engaged In
0 labor-only contracting. (Aklan v. San Miguel
Corporation, G.R. No. 168537, 2008)
l)
c. SOLIDARY LIABILITY
-, subcontractor, pursuant to Art. 109 of the Labor
Labor Code Provisions on Liability
f'
v. In the event that the contractor or sub-contractor
fails to pay the wages of his employees in
accordance with this Code, the employer shall be
jointly and severally liable with his contractor or
(j sub-contractor to such employees to the extent of
the work performed under the contract, in the
0 same manner and extent that he is liable to
,,
· employees directly employed by hlm, (Labor
{ '
"J Code, Art. 106)
-
f '
PAGE 181 OF 244
LABOR LAW
Principal as Direct Employer: Finding of
Labor-Only Contracting
There is "labor-only" contracting where the
person supplying workers to an employer does
not have substantial capital or investment in the
form of tools, equipment, machineries, work
premises, among others, and the workers
recruited and placed by such person are
performing activities which are directly related to
the principal business oi' such employer. In such
cases, the person or intermediary shall be
considered merely as an agent of the employer
who shall be responsible to the . workers · in the
same manner and extent as if the latter. were
directly employed by him. (Labor Code, AH. 106j;
In the event that there is a finding that the
contractor or subcontractor is engaged in labor-
only contracting under Section 5 and other illicit
forms of employment arrangements under
Section 6 of these Rules, the principal shall be
deemed the direct employer of the contractor's or
subcontractor's employees. (D. 0. No. 17 4-17,
Sec. 7)
Therefore: The principal shall be deemed an
employer of the contractual employee and shall
be directly liable, in the following cases:
a. Labor-only contracting; and
b. Prohibited contracting arrangements
(Broadway Motors v. NLRC, G.R. No. 78382,
1987)
Principal as Direct Employer: Violations of
Rights of Employees or Required Contracts · ·
. A finding of violation of either Sections 10 (Rights
of Contractor's Employees) or 11 (Required
Contracts) shall render the principal the direct
employer of the employees of the contractor or
Code (D.O. No. 147-17, Sec. 12)
Soiidary Liability in legitimate Contracting:
Vi".)lations of the Labor Code and Social
Legislation
In the event of violation of any provision of the
Labor Code, including the failure to pay wages,
there exists a solidary liability on the part of the
principal and the contractor for purposes of
enforcing the provisions of the Labor Code and
other social legislations, to the extent of the work
performed under the employment contract. (0. 0.
No. 174-17, Sec. 9)
ATENEO CENTRAL
BAR OPERATIONS 2018
Every employer or indirect employer shall be held
responsible with his contractor or subcontractor
for any violation of any provision of this Code. For
purposes of determining .the extent of their civil
liability under this Chapter, they shall be
considered as direct employers. (Labor Code,
1
Art. 109) . Solidary Liability of Principal and EmplQyer in ·
Note: Principal's Liability under Art. 109
If the liability is for failure to pay the minimum
wage, or the service incentive leave or other
benefits derived from or provided for by law, the
principal is equally liable with the contracto~
, employee performed the work under the principal
If the liability is invested with punitive character,
such as an award for backwages and separation
pay because of an illegal dismissal, the liability
should be solely with the contractor in the
absence of proof that the principal conspired with
the contractor in the commission of the illegal
dismissal (see Mera/co v. NLRC, G.R. No.
145402, 2008)
Solldary Llabillty for Wages and Money
Claims for Performed Under The Contract
In the event that the contractor or subcontractor
fails to pay the wages of his employees in
accordance with this Code, the employer shall be
jointly and severally liable with his contractor or
subcontractor to such employees to the extent of
the work performed under the contract, in the
same manner and extent that he is liable to
employees directly employed by him (Labor
Code, Art. 106)
Should the Indirect employer be constrained to
pay the workers, it can recover whatever amount
it paid, in accordance with the terms of the service
contract between itself and the contractor
(Rosewood Processing v. NLRC, G. R. Nos.
116476-84, 1998).
The joint and several liability of the contractor and
the principal is mandated by the Labor Code to
assure compliance with the provisions therein
including the minimum wage. The contractor is
made liable by virtue of his status as direct
employer. The principal, on the other hand, is
made the indirect employer of the contractor's
employees to secure payment of their wages
should the contractor be unable to pay them.
PAGE 182 OF 244
LABOR LAW
Even in the absence of an EER, the law itself
establishes orie between the principal and the
employees of the agency for a limited purpose i.e.
in order to ensure that the employees are paid the
wages due them. (Lapanday Agricultural Oev't
Corp. v. CA, G.R. No. 112139, 2000)
cases oflllegal Dismissal
Joint and several with the employer, but with the
right to reimbursement from the employer-
contractor
Wage differentials only to the extent where the
Ge~cral Rule: Principal and contractor are
solidarily liable:
Exception: When the contractor has already
received from the Principal the correct amount of
wages and benefits, but failed to turn them over
to the workers, the contractor should solely bear
the liability for the underpayment of wages and
non-payment of overtime pay. (Mera/co v. NLRC,
G.R. No. 145402, 2008) '· .f
Effect of Termination of Employment '-~
'\. j
The termination of employment of the
contractor's/subcontractor's employee prior to the
expiration of the Service Agreement shall be
governed by Articles 297, 298 and 299 of the i_J
Labor Code. ·
()
In case the termination of employment is caused
by the pre-termination of the Service Agreement
not due to authorized causes under Article 298,
the right of the contractor's/subcontractor's ' "
t;,
employee to unpaid wages and other unpaid
benefits including unremitted legal mandatory
contributions, e.g., SSS, PhilHealth, Pag-lBIG, · ·
ECC, shall be borne by the party at fault, without
prejudice to the solidary liability of the parties to
the Service Agreement. ()
j
Where the termination results from the expiration
of the Service Agreement, or from the completion
()
of the phase of the job or work for which the
employee is engaged, the latter may opt to wait
for re-employment within three (3) months to
resign and transfer to another contractor-
employer.
! -..
 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

emoluments, including retirement benelts

Failure of the contractor to provide new whenever applicable. The mere expiration of the
employment for the employee shall entitle the Service Agreement shall not be deemed as a
latter to payment of separation bene ts as may termination of employment of the
be provided by law or the Service Agreement, contractor's/subcontractor's employees who are
whichever is higher, witnout prejudice to his/her regular employees of the latter.
entitlement to completion bonuses or other

'
l •

(}
()
()

()

u
u

'
PAGE 183 OF 2,:1,4

---·--·-----------------------------
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

:.,. Distinct and independent business; own

manner and method of performance of job
or work
>- Substantial capital AND investment (in the
form of tools, equipment, machinery and
supervision)
,.. [new] Free from control and/or direction of
the principal
,.. Service Agreement (SA) complies with
labor law rights and benefits

i. __J,
"

Mere expiration of SA shall not be deerr.ed as a 0

termination of employment of the· contractor's
employees who are regular employees of the ( ;,
, . .r
latter.
(_J

Labor-only Contracting: 2nd kind {)

The contractor does not have substantial capital

The contractor does not have investments in the lJ

form of tools, equipment, machineries,
supervision, work premises among others,

PAGE 184 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

- and -

contractor's or subcontractor's employees

recruited and placed are performing activities
which are directly related to the main business
operation of the principal.

Labor-only Contracting; 2"d kind

The contractor does not exercise the right to

control over the performance of the work of the
em lo ee.

(Good faith and legitimate business reason no

Ion er a defense
1. [new] Contracting through an in-house
cooperative which merely supplies workers to
the principal

(new] Practices, schemed or employment

arrangements designed to circumvent
Security of Teriure

[new] Contracting out of a job or work by

reason of a strike or lockout whether actual or
imminent

Not listed

l)
u 7. Not listed

PAGE 185 OF 244

~-.·

----------------------
ATENEO CENTRAL
BAR OPERATIONS 2018 LABOR LAW

Principal deemed direct employer when there is

evidence of:

1. Labor-only contracting;
2. Other illicit forms of employment
arrangements;
3. Violation of employee's rights
4. Violation of required contracts

Employee may opt to wait for re-employment

within 3 months to resign and transfer to another
employer.
Failure to provide new employment, employee
shall be entitled to separation benefits as may be
provided by law or the SA, whichever is higher,
without prejudice to entitlement completion of
bonuses or other emoluments, including
retirement benefits whenever a _ licable. ·

' ..
\ _y
"

Mandatory Enrollment to DOLE Programs:

o
Principal and Contractors/Subcontractors •

()
'

f'\
, . .>

. ~.__ ::;

PAGE 186 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 201~ LABOR LAW

DepartmentCircular No. 01-17 Non-Appllcablllty of DO 174-"17 to

0.0. 174, Series of 2017, applies only to trilateral
relationship which characterizes contractinq or
subcontracting arrangement. It does not
contemplate to cover information technology-
enabled services involving entire or specific
business process.
NOTE: Construction industry NOT covered by
mandatory registration provision of 0.0. 174-17
The DOLE, through its regional offices, shall not
require contrac;tors licensed by PCAB in the
Construction Industry to register under D.O. 18-
A, Series of 2011. Findings of violation/s on labor
standards and occupational health and safety
standards shall be coordinated with PCAB for its
appropriate action, including the possible
cancellation/suspension of the contractor's
license.
BPO/LPO/KPO
1. Business Process Outsourcing
2. Knowledge Process Outsourcing
3. Legal Process Outsourcing
4. IT Infrastructure Outsourcing
5. Application Development
6. Hardware and/or Software Support
7. Medical Transcription
8. Animation Services
9. Back Office Operations/Support
Applicability/Non·Applicability of DO 17 4-17
to Constructioh Industry; Coordination with
PCAB·CIAP
' Pursuant to PD No. 1746, Series of 1980,
licensing and the exercise of regulatory powers
over the construction industry is lodged with the
Philippine Contractors Accreditation Board
(PCAB) of the Construction Industry Authority of
the Philippines (CiAP)

Contractors' licensed by PCAB which are

ApplicabilityiNon-Applicability of DO 17 4-17
engaged in other contracting or subcontracting
to · Private Security Agencies
. arrangement in addition to, or other than Except for. the registration requirements as
construction activities shall be required to register provided for in DO 174-17, contracting or
under D.O. No. 174-17 subcontracting arrangements in the private
security industry shall be governed by GO 15-16 ·
Except for the registration requirements of D.O.
'' ,'
;
174-17, contracting or subcontracting Non-Applicability of DO 174-17 to Other
arrangements in the private security industry shall Contractual Relationships
~ •..
i
DO 174-17 applies only to trilateral relationship
be governed by D.0; No. 150, Series of 2016 ..
which characterizes contracting or subcontracting
arranqernent. It does not cover: (governed by CC)
D.O. No. 174-17 applies only to trilateral
1 . Contract of Sale or Purchase
relationship which characterizes contracting or 2. Contract of Lease
0 subcontracting arrangement. it does not 3. Contract of Carriage
,, .. . contemplate to cover contractual relationships 4. Contract of Growing/Growership
(_ )- . such as in contract of sale or purchase, contract Agreement
. of lease, contract of carriage, contract 5. . Toll Manufacturing
0 growing/growership agreement, toll 6. Contract of Management, Operation, and
manufacturing, contract of management, Maintenance
operation and maintenance and other contracts
DO 174-17 does not cover the contracting out of
governed by the Civil Code and other special
job or work to a professional, or individual with
laws.
unique skills and talents who himself performs the
job or work for the principal.
li 0.0. No. 174~17 does not also cover the
contracting out of job or work to a professional, or
u individual with unique skills and talents who
himself or herself performs the job or work for the
principal. ·

4 ,,
'\.... ,

PAGE 187 OF 244

ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

SPECIAL CASES TERMINATION OF EMPLOYMENT

1. Working scholars
No EER between students on one hand,
and schools, colleges or universities on the
other, where:
a. There is written agreement between
them under which the former agree to
work for the latter in exchange for the
privilege to study free of charge
b. Provided, the students are given real
opportunities, including such facilities
as may be reasonable and necessary
to finish their chosen courses under
such· agreement
2. Resident physicians in training
There is EER between resident physicians
and the training hospital UNLESS:
a. There is a training agreement between
them
b. The training program is duly accredited
or approved by the appropriate
government aqency.
Effects of Labor-Only Contracting
· A finding by a competent authority of labor-only
contracting shall render the principal jointly and
severally liable with the contractor to the iatter's
employees in the same manner and extent that
the principal is liable to employees directly ntred
by him/her as provided in Art. 106 of the Labor
Code, as amended. {D.O. 18-A, Sec. 27, 2011)
A finding of commission of any of the prohibited
activities in Sec. 7 or violation of either Sections
8 or 9 hereof, shall render the principal the direct
employer of the employees of the contractor or
subcontractor, (D.O. 18-A, Sec. 7, 2011)
The terms and conditions of employment of all
government employees, including employees of
GOCCs, shall be governed by the Civil Service
Law, rules and regulations (Labor Code. Art. 291)
Coverage
General Rule: All establishments and
undertakings, whether for profit or not (Labor
Code, Art. 293}
Exception: Government, its political
subdivisions, including GOCCs without original
charter (/RR Labor Code, Sec. 1, Rule 1, Book VI)
Security of Tenure
It is a constitutionally protected right and applies
to all workers (PHIL CONST. art. XIII, Sec. 3)
In cases of regular employment; the employer
shall not terminate the services of an employee
except for a just cause or when authorized by the
provisions of the Labor Code. (Labor Code, Art.
294)
Security of tenure is the constitutional right
granted to the employee, that the employer shall
not terminate the services of the employee except
for just cause or when authorized by Jaw. It
extends to regular (permanent) as well as non-
,· ··, ...
regular (temporary) employment. (Kiamco v. ,J
NLRC, GR. No. 129449, 1999)
B. TERMINATION BY EMPLOYER
Note: In September 2015, DOLE issued D.O.
147-15, Amending the IRR of Book VI of lhe .. ._
f ...
Labor Code. t. " .

v"
f ~.

1. JUST CAUSES

Grounds: (SMWD-GHN-FWB-CO-A)
1. Serious misconduct or Willful
Disobedience by the employee of the lawful
orders of his employer or representative in
connection with his work (work-related)
2. Gross and Habitual neglect by the
employee of his duties
3. Fraud or Willful breach by employee of the
Trust reposed in him by his employer or

PAGE 188 OF 24'1

 ATENEO CENTRAL
BAR OPERATIONS 2019
duly authorized representative (not mere
suspicion)
4. Commission of a crime or offense by the
employee against the person of his
employer or any immediate member of his
family or duly authorized representative
5. Other analogous cases
SERIOUS MISCONDUCT OR WILLFUL
DISOBEDIENCE (Labor csa« Article 297[a])
Serious Misconduct
Improper or wrong conduct; 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. To be serious within the
meaning and intendment of the law, the
misconduct must be of such grave and
aggravated character and not merely trivial or
unimportant. (Villamar Golf Club v. Pehid, G.R.
No. 166152, 2005)
The charge of drug abuse inside the company's
: .. • premises and during work hours against the
petitioner constitutes serious misconduct.
(Bughaw Jr. v. Treasure Industrial Corporation,
G.R. No. 173151, 2008)
Elements of Serious Misconduct
j .
' ' 1. There must be misconduct;
2. The misconduct must be of such grave and
aggravated character;
3. Relates to the performance of the
e employee's duties; and
4. A showing that the employee becomes unfit
to continue working for the employer. (D. 0.
No. 147-15, Sec. 5.2[a])
Examples
1. Sexual harassment:
2. Fighting within company prernlsr.s:
3. Accusatory and inflammatory language used
by an employee to an employer or superior
\_) (Nissan Motors Phils. v. Angelo, G.R. No.
164181, 2011)
(; 4. Falsification of time records;
5. Gross immorality: and
{ ~
\j. 6. Sexual intercourse inside company premises
and during work hours (lmasen Philippine
!
\ ... .,·' Manufacturing Corp v. Alcon, G.R. No.
194884, 2014)
PAGE 189 OF 244
-...·
LABOR LAW
7. Theft of company property
Habitual Infractions
A series of irregularities when put together may
constitute serious misconduct (Gusti/a v. Wyeth
Phil., G.R. No. 149629, 2004)
Totality of infractions doctrine
The totality of infractions or the number of
violations committed during the period of
employment shall be considered in determining
the penalty to be imposed upon an erring
employee. Fitness for continued employment
cannot be compartmentalized into tight little
cubicles of aspects of character, conduct and
ability separate and independent of each other.
While it may be true that petitioner was penalized
for his previous infractions, this does not and
should not mean that his employment record
would be wiped clean of his infractions. After all,
the record of an employee is a relevant
consideration in determining the penalty· that
should be meted out since an employee's past
misconduct arid present behavior must be taken
together in determining the proper imposable
penalty: (Merin v. NLRC, G.R. Ne.. 171790)
-, Elements of Willful Disobedience
1 . There must be disobedience or
, insubordination;
2. The disobedience or insubordination must
be willful or intentional characterized by a
wrongful and perverse attitude;
3. The order violated must be reasonable,
lawful, and made known to the employee;
and
4. The order must pertain to the duties which
he has been engaged to discharge. (0.0.
No. 147-15) .
GROSS AND HABITUAL NEGLECT (Labor
Code, Article 297[b])
Elements of Gross and Habitual Neglect:
1. There must be neglect of duty; and
2. The negligence must be both gross and
habitual in character. (D.O. No. 147-1.5)
Gross Neglect .
An absence of that diligence that an ordinarily
prudent man would use in his own affairs (DOLE
Manual, Sec. 4343.01[27])
ATENEO CENTRAL
BAR OPERATIONS 2019
Habitual Neglect
Implies repeated failure to perform one's duties
over a period of time (JGB and Associates, Inc. v.
NLRC, G.R. no. 109390, March 7, 1996)
Elements of Gross and Habitual Neglect:
1. There must be neglect of duty; and
2. The negligence must be both gross and
habitual in character. (0.0. No. ·/47-15, Sec.
5.2[c])
Exception: Where the negligence was gross,
but not habitual, the SC still dismissed the
erring employee. The SC aqreed that the
resultant damage caused by the employee's
negligence shoutd be constdered in the
dismissal of the employee. In this case, the
damage went as far as claiming the life of a
child. (School of Holy Spirit v. Taguim, G.R.
No. 165565, 2008)
Note: Actual damage, loss, or injury is not an
essential requisite (DOLE Manual, Sec.
4343.01 [2])
Forms of neglect of duty
1. Habitual tardiness and absenteeism;
2. Abandonment of work
(a) Failure to report for work or absence
without valid or justifiable reason; and
(b) Clear intention to sever EER is manifested
by some overt acts (Tamblot S(1Curity and
General Services v. Item, G.R. No. 199314,
2015)
Due Process in Abandonment
Twin-Notice Requirement
(a) First Notice directing the employee to
explain why he should not be declared as
having abandoned his job;
(b) Second Notice to inform him of the
employer's decision to dismiss him on the
ground of abandonment (Kingsize
Manufacturing Corp v. NLRC, G.R. Nos.
110452,54, 19!:J4)
Notices in abandonment cases must be sent to
the employee's last known address per record of
the company. The employer need not look for the
PAGE 190 OF 244
LABOR LAW
employee's current whereabouts (Agabon v.
NLRC, G.R. No. 158693, 2004)
No hearing is required to validly dismiss an
employee for abandonment {lntertranz Container
tines v. Bautista, G.R. No. 187693, 2010)
Mere absence or failure to report for work, even
after notice to return, does not necessarily
amount to abandonment. Abandonment is a
matter of intention and cannot lightly be
presumed from certain equivocal acts. The
operative act is still the employee's ultimate act of
putting an end to his employment (Jordan v.
Grandeur Security and Services, GR No.
206716, 2014)
Abandonment vis-a-vis Illegal Dismissal
General Rule: Abandonment inconsistent with
the immediate filing of a complaint for illegal
dismissal Tamblot Security v. Item, G.R. No.
199314, 2015)
Exception: The above rule has no application
where the complainant does not pray for
reinstatement and asks for separation pay
instead (Jo v. NLRC, G.R. No. 121605, 2000)
Poor performance
Previous infractions by the employee should have
been acted upon appropriately by the employer
before terminating the former.
As a general concept,' "poor performance" is
equivalent to inefficiency and incompetence in
the performance of official duties. An
unsatisfactory rating can be just cause for
dismissal only if it amounts to gross and habitual
neglect of duties. Thus, the fact that an
()
employee's performance is found to be poor and
unsatisfactory does not necessarily mean that the
employee is grossly and habitually negligent of
his duties. (Universal Staffing Inc. v. NLRC, G.R.
No. 177576, 2008)
'lj
Gross negligence includes gross inefficiency
{ Ii
Article 290 of the Labor Code provides that one \..J'
of the just causes for terminating an employment
is the employee's gross and habitual neglect of
his duties. This cause includes gross inefficiency,
negligence and carelessness (Century Iron
Works, Inc. v. Banas, G.R. No. 184116, 2013)
 ATENEO CENTRAL
BAR OPERATIONS 2019
'
FRAUD OR WILLFUL BREACH OF TRUST
(Labor Code, Article 297[b])
Elements of Fraud or Willful Breach of Trust
1. There must be an act, omission, or
concealment;
2. The act, omission or concealment involves
a breach of legal duty, trust, or confidence
justly reposed;
3. It must be committed against the employer
or his/her representative; and
4. It must be in connection with the
employees' work. (D.O. No. 147-15, Sec.
5.2[d])
Elements of Loss of Confidence
1. There must be an act, omission or
concealment;
2. The act, omission or concealment justifies
the loss of trust and confidence of the
employer to the employee;
3. The employee concerned must be holding
a position of trust and confidence;
4. The loss of trust and confidence should not
· be simulated;
5. It should not be used as a subterfuge for
causes which are improper, illegal, or
;, ' unjustified; and
6. It must be genuine and not a mere
afterthought to justify an earlier action
taken in bad faith. (D.O. No. 147-15, Sec.
5.2[e])
Loss of trust and confidence to be a valid cause
for dismissal must be based on a willful breach of
trust ahd founded on clearly established facts.
() The basis for the dismissal must be clearly and
convincingly established but proof beyond
() reasonable doubt is not necessary. (Prudential
Guarantee and Assurance Employee Labor
(J Union v. NLRC, G.R. No. 185335, 2012)
u
()
! I
\. .,
PAGE 191 OF 244
'
LABOR LAW
GuLlelines for the application of the doctrine
of loss of confidence
1. Loss of confidence should not be simulated;
2. It should not be used as a subterfuge for
causes which are improper, illegal or
unjustified;
3. It may not be arbitrarily asserted in the face
of overwhelming evidence to the contrary;
ahd
4. It must be genuine, not a mere afterthought
to justify earlier action taken in bad faith
(Coca-Co/a Bottlers, Phils. Inc. 11. Kapisanan
ng Malayang Manggagawa sa Coce-Cote,
G.R. No. 148205, 2005)
The breach must be related to the performance of
the employee's function. (E11riquez v. BPI, G.R.
No. 172812, 2008)
When an employee accepts a promotion to a
managerial position or to an office requiring full
trust and confidence, she gives up some of the
rigid guarantees available to ordinary workers
infractions which is committed by others would be
overlooked or condoned or penalties . mitigated
may be visited with more sever disciplinary
action. (Tirazona v. CA, G.R. No. 169712,.2008)
Positions of trust and •1:onfidence
Managerial employees: Those vested with the
powers or prerogatives to lay down management
policies and to hire, transfer, suspend, lay-off,
recall, discharge, assign or discipline employees
or effectively recommend such managerial
actions.
Fiduciary Rank and file: Those who in the
normal and routine exercise of their functions,
regularly handle significant amounts of money or
property. Examples are cashiers, auditors,
property custodians, etc. (Prudential Guarantee
and Assurance Employee Labor Union v. NLRC,
G.R. No. 18533~ 2012)
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

Immediate Members of the Family

MANAGERIAL FIDUCIA .. 1. Between husband and wife;
· . · ' : AND-FIL 2. Between parents and children;
Mere existence of a Proof of involvement 3. Among other ascendants and
basis for the belief of in the alleged events descendants;
employee's guilt in question required; 4. Among brothers and sisters, whether of
(Grand Asian mere uncorroborated the full or half-blood (see Family Gode,
Shipping Lines v. assertions and Art. 150)
Galvez, G.R. No. accusations are not
178184, 2014) enough (Etcuban v. Acquittal in criminal case arising from
Sulpicio Lines, G.R. misconduct
No. 148410, 2005) Notwithstanding petitioner's acquittal in the
Employment for a criminal case for qualified theft, the company had
long time is counted adequately established the basis for the
against the employee company's loss of confidence as a just cause to
(Salvador v. terminate. As opposed to the "proof beyond
Philippine Mif"ing reasonable doubt" standard of evidence required
Service Corp., G.R. in criminal cases, labor suits require only
No. 148766, 2003) substantial evidence to prove the validity of the
dismissal (Paulino v. NLRC, G.R. No. 176.184,
Confidential· employees are those c:harged with 2012)
custody and protection :)f employer's property like -, .._:-·
a cashier (this is different from the "confidential Past Infractions Rule
employees" In labor relations) Previous offenses may be used as justification for
dismissal from work only if the past infractions are
COMMISSION OF A CRIME. OR OFFENSE: related to the subsequent offense upon which the
(Labor Code, Article 297[d)) basis of termination is decreed. (Sa/as v. Af)oitiz .
. One Inc., G.R. No. 178236, 2008)
Commission of a crime or offense
Refers to an offense by the employee against the ANALOGOUS CASES (Labor Code, Article
person of his employer or any immediate member 297[e])
of his family or his duly authorized representative.
Requisites
Elements 1. There must be an act or omission similar
1. There must be an act or ormssion ' to those specified just causes; 0
punishable/ prohibited by law; and 2. The act or omission must be voluntary ;'\ 'f'"'-.
2. The act or omission must be voluntary and/or willful on the part of the employees
and/or willful on the part of the employees. (0.0. No. 147-15, Sec. 5.2[g]) ·
(D.O. No. 147-15, Sec. 5.2[f])
Analogous Cases must be due to the voluntary
Conviction or prosecution of the employee is not and/or willful act or omission of the employee.
necessary. A criminal case need not be actually (Cosmos Bottling Corp. v. Fermin, G. R. No.
filed. Commission of acts constituting a crime is 193676, 2012)
sufficient. (Nicolas v, NLRC, G.R. No. 113948,
1996) 0.0. No. 147~15
(new qualification)
No act or omission shall be considered as
analogous cause unless expressly specified in lJ.
he company rules and regulations or policies.

PAGE 192 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

Analogous Cases must be due to the voluntary Immorality

and/or willful act or omission of the employee. Disgraceful or immoral conduct can be used as a
(Cosmos Bottling Corp. v. Fermin, G. R. No. basis for termination of employment (Santos, Jr.
193676, 2012) v. NLRC, G.R. No. 115795, 1998)

Examples The act of engaging in extramarital affairs was

1.Abandonment
2. Violation of safety rules
3. Gross Inefficiency
4. Wrongful acts of employee against the
company
5. Violation of code of discipline
6. Failure to heed an order not to join an illegal
picket
?.Immorality
a.sexual harassment
Change of Ownership
. A mere change in the equity composition of a
corporation is neither a just nor an authorized
cause that would legally permit the dismissal of
the corporation's employees en messe. (SME
Bank, Inc. v. De Guzman, G.R. No. 134517,
t . 2013)
Other Just Causes under other Labor Code
provisions
1. Union officers who, with knowledge,
participate in an illegal strike.
specifically provided for by the cooperative's
Personnel Policy as one of the grounds for.
termination of employment and said act raised
concerns to the cooperative as the Board
' received.numerous complaints and petitions from
the cooperative members themselves asking for
the removal of Bandiola because of his .immoral
conduct, hence, immorality (extramarital affair)
justified terminating the employment by the
employer (Ali/em Credit Cooperative v. Bandiola,
Jr., G.R. No. 173489, 2013)
Pregnancy out of wedlock
When the law speaks of immoral or, necessarilv,
disgraceful conduct, it pertains to public and
secular morality; it refers to those conducts which
are proscribed because they are detrimental to
conditions upon which depend the existence and
progress of human society.
To stress, pre-marital sexual relations between
two consenting adults who have no impediment
to marry each other, and, consequently,

.
l -
;
2. Any employee who. commits an illegal act
during a strike
conceivinq a child out of wedlock, gauged from a
purely public and secular view of morality, does
.
\. . .r
3. Strikers who violate orders, prohibitions or
injunctions issued by the NLRC, the
not amount to a disgraceful or immoral conduct,
(Leus v. St. Scho/astica, G.R. No. 187226, ~015)
Secretary of Labor and Employment or the
() President Valid Dismissal Because of Application of
4. Violation of union security clause in the Union Security Clause
{ j
. ~··· CBA Union security clauses In the collective . ·
bargaining agreements, if freely and voluntarily
Doctrine of Incompatibility entered into, are valid and binding. Thus, the
Where the employee has done something that is dismissal of an employee by the company
(J contrary or Incompatible with the faithful pursuant to a labor; union's demand in
performance of his duties, his employer has a just accordance with a union security agreement
cause for terminating his employment. (Manila does not constitute unfair labor practice.
Chauffer's League v. Bachrach Motor, G.R. No. (Ma/ayang Samahan ng mga Manggagawa sa M.
l) L-47138, 1940) Greenfield v. Ramos, G.R. No. 113907, 2000;
Villar v. Inciong, G.R. No. L-50283-84, 1983
u

PAGE 193 OF 244

ATENEO CENTRAL
BAR OPERATIONS 2019
Although a union security clause in a CBA may
be validly enforced and dismissal pursuant
thereto may likewise be valid, this does not erode
the fundamental requirement of due process. The
reason behind the enforcement of union security
clauses which is the sanctity and inviolability of
. contracts cannot override one's right to due
process. (MSMG-UWP v. Ramos, G.R. No.
113907, 2000)
Where the employer compelled the employee to
go on forced leave upon recommendation of the·
union for alleged violation by the employee of the
closed-shop agreement, the NLF~C correctly
ordered the reinstatement of the employee and
directed the union to pay the wages and fringe
benefits which employees failed to receive as a
result of her forced leave and to pay attorney's
fees. (Manila Mandarin Employees Union v.
NLRC, G.R. No. 76989,, 1987)
Where the employer dismissed his employees in
the belief in good faith that such dismissal was
required by the closed - shop provisions of the
collective bargaining contract with the union, he
may not be ordered to pay back compensation to
such employees although their dismissal is found
to be illegal. (Confederated Sons of Labor v.
Anakan Lumber, GR. No. L-12503, 1960)
Bona Fide Occupational Qualification (BFOQ)
General Rule: Where the job itself r.ecessarily
requires a particular qualification, then the job
applicant or worker who does riot possess it may
be disqualified on that basis and such will not be
considered unlawful discrimination.
Exception: To justify a BFOQ, the employer
must prove that:
1. The employment qualification is reasonably
related to the essential operation of the job
involved; and
2. There is factual basis for believing that all
or substantially all persons meeting the
qualification would be unable to properly
perform the duties of the job ( Star Paper
Corporation, et. al. vs. Simbol. et. al., G.R.
No. 164774, 2006).
PAGE 194 OF 244
LABOR LAW
The Supreme Court had upheld the disrnissal of
a cabin crew member for being unable to trim
down his weight. The Court classified such weiqht
standards as a BFOQ, which is defined as the
employment qualifications imposed by an
employer such as sex, religion, or national origin
as a limiting factor in performing a certain job. In
the instant case, PAL is a common carrier and
from the nature of its business and for reasons of
public policy, it is bound to observe extraordinary
diligence for the safety of the passengers it
transports. A BFOQ on weight standards in this
case was deemed to be necessary and justified
given the normal operations of PAL. (Armando
Yragsuegi v. PAL, GR 168081, 2008)
2 .. AUTHORl.tED CAUSES
Grounds: (RRLCD)
1. Redundancy
2. Retrenchment
3. Introduction of Labor-saving devices
4. Cessation or Closure of Operation of the
l
Establishment or Undertaking .e
5. Disease
REDUNDANCY
Redundancy exists where the services of an
employee are in excess of what is reasonably
demanded by the actual requirements of the
enterprise. (Wiltshire File Co. Inc. v. NLRC, G. R. . -,
\ __)
No. 82249, 1991)
A · position has become superfluous as an
outcome of a number of factors such as over
hiring of workers, decreased volume of business,
dropping of a particular product line or service
· activity previously manufactured or undertaken
by the enterprise (thus it only requires superfluity
not duplication of work (Asian Alcohol Corp. v. (,,.!'
( "
NLRC, G. R. No. 131108, 1999)
-,
 ATENEO CENTRAL
BAR OPERATIONS 2019
Elements of Redundancy
1. There must be superfluous positions or
services of employees;
2. The positions or services are in excess of
what is reasonably demanded by the actual
requirements of the enterprise to operate in
an economical and efficient manner;
3. There must be good faith in abolishinq
redundant positions;
4. There must be fair and reasonable criteria
in selecting the employees to be
terminated; and
5. There must be an adequate proof of
redundancy such as but not limited to the
new stc:1ffing pattern, feasibility studies/
proposal, on the viability of the newly
created positions, job description and the
approval by the management of the
restructuring. (DO 147-15)
Requisites for Implementation of a Valid
Redundancy Program
-,
1. A written notice served on both the
f .. employees and the DOLE at least one
month prior to the intended date of
retrenchment
2. Payment of separation pay equivalent to at
least one month pay or at least one month
pay for every year of service, whichever is
,higher
3. Good faith in abolishing the redundant
,/ positions
'l:.... .J
4. Fair and reasonable criteria in ascertaining
what positions are to be declared
() redundant and accordingly abolished.
(Lopez Sugar Corporation v. Franco, G.R.
No. 148195, 2006) .
Proof of good faith and fair and reasonable
criteria to substantiate redundancy
1. New staffing pattern;
2. , Feasibility studies I proposal on the
viability of the newly created positions;
3. Job description; and
4. Approval by the management of the
restructuring (General Milling Corporation
v. Violeta L Viajar, G.R. No. ·/81738,
2013)
i,_ \ 2014)
....
PAGE 195 OF 244
LABOR LAW
RETRENCHMENT
Retrenchment is one of the economic grounds
resorted to by an employer to terminate
employment primarily to avoid or minimize
business losses. (Azucena, The Labor Code with
Comments and Cases Volume 11-8, 884, 2016)
Elements of Retrenchment or Downsizing
1. The retrenchment must be reasonably
necessary and likely to prevent business
losses;
2. The losses, if already incurred, are not
merely de minimis, but substantial, serious,
actual and real, or if only expected, are
reasonably imminent.
3. The expected or actual losses must be
proved sufficient and convincing evidence
such as financial statements (audited by an
independent firm) over a span of several
years OR a some reasonable period of
time, and not merely the actual year of
business loss;
4. The retrenchment must be in good faith for
the advancement of its interest and not to
defeat or circumvent the employees' right
to security of tenure; and
5. Th€re must be fair and reasonable criteria
in ascertaining who would be dismissed
and who would be retained among the
employees, such as status, efficiency,
seniority, physical fitness, age, and
financial hardship for certain workers. (0. 0.
No. 147-15, Sec. 5.4[c])
"To Prevent Losses"; Proof Required
The phrase "to prevent losses" means that
retrenchment or termination from the 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 VII v. TPI Phil. Cement
Corp., G.R. No. 149090, 2005)
The employer bears the burden of proving the
existence of the imminence of substantial losses
with clear and satisfactory evidence that there are
legitimate business reasons justifying a
retrenchment. (Mount Carmel Employees Union
v. Mount Carmel College, G.R. No. 187261,
ATENEO CENTRAL
BAR OPERATIONS 2019
Two kinds of losses to justify retrenchment
1. Incurred losses which are substantial,
serious. actual and real; and
2. Expected losses - which are reasonably
imminent. (SanohFulton Phiis. Inc. v.
Bernardo & Tagohoy, GR. No. 187214,
2013)
Due Process Requirements of the
Retrenchment Program:
1. The retrenchment is necessary to prevent or
minimize losses and such losses are
proven;
2. Written notice is given to the employees and
the Department of Labor and Employment at
least one month before the intended date of
retrenchment;
3. Payment of separation pay equivalent to at
least one month pay or at least ·Yl month pay
for every year of service; whichever is
higher;
4. The employer exercise its preroqative to
retrench employees in good faith for the
advancement of its interest; and
5. Fair arid reasonable criteria in ascertaining
who will be dismissed or retained. (Azucena,
The Labor Code with Comments and Cases
Volume 11-8, 886-887, 2016)
Difference between redundancy and
retrenchment
Redundancy7 the position of the employee has
become superfluous even if the business does
not suffer from financial problems.
Retrenchment7 always linked with losses; a
cost-cutting measure made necessary by
business reverses.
(Azucena, 1he Labor Code with Comments and
Cases Volume 11-8, 893, 2016)
PAGE 196 OF 244
' LABOR LAW
"L.;.;t In, First Out" Rule (LIFO)
When there are two or more employees
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 v. NLRC,
G.R. No. 106256, 1994)
However: No law mandates LIFO. A host of
relevant factors come into play in determining
cost-efficient measures in choosing the
employees who will be retained or separated to
save the company from closing chop. In
determining these issues, management has to
enjoy a pre-eminent role. (Asian Alcohol Corp. v.
NLRC, G.R. No. 131108, 1999)
In case of installation of labor-saving devices,
redundancy and retrenchment, the LIFO rule
sha!I apply, except when an employee volunteers
to be separated from employment (0.0. No. 147-
15, Sec. 5.4)
Hobson's Choice
No choice at all; a choice between accepted what
is offered or having nothing at all.
In Asufrin, Jr. v. San Miguel Corp. (G.R. No.
156658, 2004), the enlployees were given the
choice either to voluntarily retire, be retrenched
witout benefits, or be dismissed without receiving
any benefit at all.
f. l-"
'.J
'
 ATENEO CENTRAL
BAR OPERATIONS 2019
INSTALLATIONOF LABOH·SAVINGDEVICE
This refers to the installation of machinery to
effect economy and efficiency in the employer's
method of production (Edge Apparel, Inc. v.
NLRC, G.R. No. 121314, 1998)
Elements of a valid termination based on
installation of labor-saving devices
1. There must be introduction of machinery,
equipment or other devices;
2. The introduction must be done in good
faith;
3. The purpose for such introduction must be
valid such as to save on cost, enhance
efficler,cy and other justifiable economic
reasons;
4. There is no other option available to the
employer than the introduction of
machinery, equipment or device and the
consequent termination of employment of
those affected thereby; and
5. There must be fair and reasonable criteria
in selecting employees to be terminated.
(DO 147-15)
Due Process Requirements for Termination
Due to Installation of Labor-Saving Device
1. The employer served a written notice both
to the employees and to the DOLE at least
30 days prior to the intended date Of
termination; and
{ :
'-- •'
2. The employer pays the employees
separation pay equivalent to one month
pay or at least one month pay for every
year of service, whichever is higher, a
fraction of at least six months being
considered as one whole year. (Labor
Code, Art. 298)
(J
t;
PAGE 197 OF 244
LABOR LAW
CLOSURE OR CESSATION OF OPERATION
OF THE ESTABLISHMENT OR
UNDERTAKINGS
Closure of business is the reversal of fortune of
the employer whereby I there is a complete
cessation bf business Operations and/or an actual
locking-up of the doors ot establishment, usually
due to financial losses. Closure of business as an
authorized cause for termination of employment
alms to prevent further financial drain upon an
employer who cannot pay anymore his
employees since business has already stopped.
(J.A. T. General Services v. NLRC, G.R. No.
148340, 2004)
Elements of Closure or Cessation of
Operation .
1. There must be a decision to close or cease
operation of the enterprise by the
management;
2. The decision was made in good faith; and
3. There is no other opinion available to the
employer except to close or cease
operations. (DO 147-15)
Due Process Requirements for Termination
Due to Closure or Cessation of Operation
1 . Service of written notice to the employees
and to the DOLE at least one month before
the intended date thereof;
2. The cessation of or withdrawal from
business operations must be bona fide in
character; and
3. Payment to the employees of termination
' pay amounting to at least one-half (1/2)
month pay for each year of service, or one
• month pay, whichever is higher. (Azucena,
The Labor Code with Comments and
Cases Volume 11-B, 903, 2016)
Closure Not Due to Losses
In cases of closure not due to losses. it must NOT
be in BAD FAITH. (Azucena, The Labor Code
with Comments and Cases Volume 11,B, 902,
2016)
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

Guidelines In Clcsure Closure of Department

1. Closure or cessation of operations of The closure of a department or division of a
establishment or undertaking may either be company constitutes retrenchment by, and not
partial or total. closure of, the company itse!f. (Waterfront Cebu
City Hotel v. Jimenez, G.R. No. 174214, 2012)
2. Closure or cessation of operations of
establishment or undertaking may or may not Retrenchment vs. Redundancy vs. Closure
be due to serious business losses or financial Retrenchment . Redundancy ' Closure
reverses. However, in both instances, proof Reduction of The service The reversal
must be shown that: personnel of an of the fortune
' usually due to Employee is of the
(a) It was done in good faith to advance poor financial in excess of employer
the employer's interest and not for the returns so as what is whereby there
purpose of defeating or circumventinq to cut down required by is a complete
the rights of employees under the law on costs of an cessation of
or a valid agreement; and operations in enterprise business
(b) A written notice on the affected terms of operations
employees and the DOLE is served at salaries and and/or actual
least one month before the intended wages locking-up of
date of termination of employment. the doors of
the
3. The employer can lawfully close shop even If establishment,
not due to serious business losses or financial usually due to
flnancial l ·,
reverses but separation pay, which is
equivalent to at least one month pay as losses
provided for by the Labor Code as amended, Resorted to To save Aims to
must be given to all the affected employees. primarily to production prevent further
avoid· or costs financial drain
4. If the closure or cessation of operations of minimize upon the
establishment or undertaking is due to serious business Employer
.. r
business losses or financial reverses, the losses
employer must prove such allegation in order Employee is Employee is In case of
to avoid the payment of separation pay. entitled to entitled to closure of
separation separation business not
Otherwise, the affected employees are
entitled to separation pay. pay of 1 pay of 1 due to serious
(J
month pay or month pay business
5. The burden of proving compliance with all the 1/2 month or 1 month losses, the
above-stated falls upon the employer. (Manila pay per year pay per year employer pays
Polo Club Employees' Union v. Manila Polo of service, of service, the employees
whichever is whichever is terminated
Club, Inc., G.R. No. 172846, 2013)
higher higher! separation . ..., .
t \.
: ',

pay of 1 month ·( \
·•,..... Ji
pay or 1/2
month pay per
year of
service,
whichever is
higher

PAGE 198 OF 244

. . .. ,
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

Computation of Separation Pay Floating Status

Computation of Separation Pay . It is legal, such as in the case of security guards
Installation Of labor- 1 month pay or 1 who have no assignment.
saving devices month pay for every
Redundancy year of service In security agency parlance, being placed "off
whichever is higher. duty" or on 'floating" status means "waiting to be
posted."

Such a status should not exceed six months; if it

does, it amounts to a dismissal. (Agro
Commercial Services v. NLRC, G.R. No. 828230
24, 1989)

AILMENT OR DISEASE
Substantive Elements of Due Process for
Termination Due to Aliment or Disease
1. An employee has b<i en found to be suffering
from any disease, whether contagious or i'
Closures or cessation No separation pay not;
of operations due to 2. His continued employment is prohibited by
serious business law or prejudicial to his health, or to the
losses or financial · health of his co-employees;
reverses 3. A competent public health authority certifies
that the disease is of such nature or at such
Note: A fraction of at least 6 months is considered a stage that it cannot be cured Within a
1 year period of six months even with proper
,_ medical treatment; and
TEMPORARY CLOSURE I BONA FIOE 4. Payment of separation pay equivalent to at
SUSPENSION OF OPERATIONS (Labor Code, least one month salary or to one-half month
. ·, Art. 301) salary for every year of service, whichever is
A bon« fide suspension of business operations greater, a fraction of at least six months
for not more than 6 months does not terminate being considered as one whole year.
employment.
Prior Certification From Competent Public
After 6 months, the employee may be recalled to Authority
The burden falls upon the employer to establish
'\. r. work or be permanently laid off. (SKM Art Craft
Corp v. Bauca, G.H. No. 171282, 183484, 2013) these requisites, and in the absence of such
certification, the dismissal must necessarily be
() An employer may validly suspend operations for declared illegal.
at most 6 months. Not accepting the workers back
(J to work after the €-month period is equivalent to It is only where there is a prior certification from a
termination, which should oe for cause and with competent public authority that the disease
r >
i.. proper procedure. (Manila Mining Corp. v. Amor, afflicting the employee sought to be dismissed is
G.R. No. 182800, 2015) of such nature or at such stage that it cannot be
cured within 6 months even with proper medical
treatment that the latter could be validly
-, terminated from his job (Crayons Processinq,
Inc., v. Pu/a, G.R. No. 167727, 2007)

c-,
PAGE 199 OF 244

;.,....-
ATENEO CENTRAL
BAR OPERATIONS 2019
3. DUE PROCESS
Subject to the constitutional right of workers to
security of tenure and their right to be protected
against dismissal except for a just and authorized
cause and without prejudice to the requirement of
notice under Art. 283 of this Code,
The emplcyer shall furnish the worker whose
employment is sought to be terminated:
1. A written notice containing a statement of
the causes for termination,
2. And shall aff':>rd the latter ample oppcrtunity
to be heard and to defend himself with the
assistance of his representative if he so
desires, In accordance with company rules
and regulations promulgated pursuant to
guidelines set by the Department of Labor
and Employment. (Labor Code, Art. 292[b])
Note: Employee may have d counsel but it is not
indispensable.
Requisites for Valid Dismissal
1. Substantive Due Process: The dismissal
must be for cause; and
2. Procedural Due Process: The employee
must be afforded an opportunity to be heard
and defend himself (Fujitsu Computer
Products v.CA, G.R. No. 158232, 2005)
Employer may not substitute the required prior
notice & opportunity to be heard with the mere
payment of 30 days' salary. (PNB v. Cabansag,
G.R. No. 157010, 2005)
Right to counsel
Guaranteed by the 1987 Constitution to any
person under Investigation, be the proceeding
administrative, civil, and criminal. (Sa/aw v.
NLRC, G.R. No. 90786, 1991)
Burden of Proof
In Illegal dismissal cases, the onus of proving that
the employee was not dismissed or, if dismissed,
that the dismissal was not illegal, rests on the
employer, failure to discharge which would mean
that the dismissal is not justified and, therefore,
illegal. (Macasero v. Southern Industrial Gases
Philippines, G.R. No. 178524, 2009)
PAGE 200 OF 244
LABOR LAW
Degree of proof
In labor cases, substantial evidence is required
and it is such relevant evidence as a reasonable
mind might accept as adequate to support a
conclusion. (Andrada v. Agemar Manning
Agency, G.R. No. 194758, 2012)
Guiding Principles on Notice and Hearing in
Termination/Dismissal cases
Any decision taken by the employer shall be
without prejudice to the right of the worker to
contest the validity or legality of his dismissal by
filing a complaint with the regional branch of the
NLRC.
The burden of proving that the termination was for
a valid or authorized cause shall rest with the
employer.
The Secretary of the Department of Labor and
Employment may suspend the effects of the
, termination pending resolution of the dispute in
the event of a prima facie finding by the
appropriate official of the DOLE before whom
sud, dispute is pending that the termination may
cause .a serious labor dispute or is in
implementation of a mass lay-off.
In cases of dismissal, employer has the burden of
proof to show that the dismissal falls under the
just and authorized causes. (Tolentino v. PLOT,
G.R. No. 160404, 2005)
a. TWIN-NOTICE REQUIREMENT
The employer has the burden of proving that a '
•. J
dismissed worker has been served two notices:
1. First written notice: served on the ().'
employee specifying the ground or grounds
for termination, and giving said employee ' \
. t
reasonable opportunity within which to
explain.his side.
2. Second written notice: served upon the
employee, indicating that upon due
consideration of all the circumstances,
grounds have been established to justify
his termination.
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW
'
b.. HEARING; AMPLE OPPORTUNITY TO BE
1. Contain specific causes or HEARD
grounds for termination as
provided under Art. 297 and After serving the first notice, the employer should
company policies, if any; schedule and conduct a hearing or conference
2. Contain a detailed narration of wherein the employee will be gi·,en the
the facts and circumstances that opportunity to:
will serve as basis for the charge 1. Explain and clarify his defenses to the
against the employee. (general charge/s against him;
description of the charge will not 2. Present evidence in support of his
suffice); and defenses; and
3. Contain a directive that the 3. Rebut the evidence presented aqainst him
employee is given the by the management.
opportunity to submit his written
explanation within the Guiding principles in hearing requirement
reasonable period· of FIVE (5) 3. "Ample opportunity to be heard" means
CALENDAR DAYS from receipt any meaningful opportunity (verbal or written)
t >
of the notice: given to the employee to answer the charges
a. to enable him to prepare against him and submit evidence in support of
adequately for his defense; his defense, whether in a hearing, conference
or some other fair, just and reasonable way.
b. to study the accusation 5. · A formal hearing or conference becomes
x.. mandatory only when requested by the
against him;
c. to consult a union official or employee in writing or substantial evidentiary
lawyer; disputes exist or a company rule or practice
requires it; or when similar circumstances
d. to gather data and
justify it.
evidence; and
6. The "ample opportunity to be heard"
e. to decide on the defenses
standard in the Labor Code prevails over the
he will raise against the
'. complaint. (DO 147-15)
"hearing or conference" requirement in the
implementing rules and regulations (Perez v.
After determining that termination of
PT&T, G.R. No. 152048, 2009)
employment is justified, the
employer shall serve the emp!oyees
Use of position paper
f- ~ a written notice of termination
... -"' indicating that:
It is the labor arbiter who is authorized to
determine whether or not there is a necessity for.
,. .P. 1. all circumstances involving the
conducting formal hearings in cases brought
charge/s against the employee
before them for adjudication even after the
have been considered; and
submission of the parties of their position papers
2. grounds have been established or memoranda. A formal trial-type hearing is not
(J to justify the severance of his at all times and in all instances essential to due
employment. process. It is enough that the parties are given a
fair and reasonable opportunity to explain their
An employee may be dismissed only if the respective sides of the controversy and to present
l) grounds mentioned in the pre-dismissal notice supporting evidence on which a fair decision can
were the ones cited for the termination of be based. (Seastar Marine v. Bui-an. Jr., G.R. No.
lJ employment. (Erector Advertising Sign Group, 142609, 2004)
Inc. v. Cloma, G.R. No. 167218, zoto;
,-
l

.. ·
PAGE 201 OF 244

..._.

'
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

Decision/Award Consequences for Non-Compliance of

It is a requirement of due process that the parties Procedural Due Process
to a litigation be informed of how it was decided, 1. Just or Authorized Cause Exists + Due
with an explanation of the factual and legal Process
reasons that led to the conclusions of the court. (a) Valid Dismissal
(b) Employer is not liable; but pays
The court cannot simply say that judgment is separation pay only in authorized
rendered in favor of X and against Y and just causes.
leave it at that without any justification
whatsoever for its action. The losing party is 2. Just or Authorized Cause + No Due
entitled to know why he lost, so he may appeal to Process
a higher court, if permitted, should he believe that (a) Valid Dismissal
the decision should be reversed. {ABO Overseas (b) Employer is liable for damages due to
Manpower Corporation v. NLRC, G.R. No. procedural infirmities. ·
.117056, 1998) (c) Employer pays separation pay if for
authorized causes.
Procedural Requirements in Termination
Cases (Just Cause arid Authorized cause] 3. No Just or Authorized Cause + Due
JUST CAUSES ',_A\JT~ORI. ED · • Process
. . C USES 1
• .. · . (a) Illegal Dismissal
First · Notice Notice to the following: (b) Employer is liable to reinstate
specifying the employee or pay separation pay.
grounds for which Employee; and (c) If reinstatement Is not possible, pay full
dismissal is sought backwages.
DOLE
Hearing or 4. No Just or Authorized Cause + No Due
opportunity to be At least 1 month prior Process
heard to effectivity of the (a) Illegal Dismissal
., j
separation (b) Employer is liable to reinstate
Second Notice of the employee or pay separation pay.
decision to dismiss (c) If reinstatement is not possible, pay full
backwages. 4 "",
IJ
Requisites for Notice in Authorized Causes
4. Notice is not needed when Employee
consented to the retrenchment or voluntarily '
applied for one (Int'/ Hardware v. NLRC, G.R. 1. .~\
No. 80770, 1989)
7. Notice must be individual, and riot collective
(Shoppers Gain Supermart v. NLRC, G R.
No. 110731, 1996) l \
8. Voluntary Arbitration satisfies notice li
requirement for authorized causes (Revidad -~ ~.

v. NLRC, G.R. No. 111105, 1995) t. . . :.~ !

{_;

PAGE 202 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 2019
D. TERMINATION BY EMPLOYEE
Termination by employee may be split into
(Labor Code, Art. 300):
Termination without Just Cause
1. At least 1 month prior notice
2. Acceptance by the employer is necessary
3. Employee may be held liable for damages
for failure to give notice
" at will, it cannot not act purposely to injure the
Termination with Just Cause
1. Grounds
a. Serious insult on the honor and person
of employee by the employer or his
representative
b. Inhumane and unbearable treatment
accorded to the employee
c. Commission of a crime against person
of the employee or any of the
immediate members of his family
d. Other causes analogous to the
foregoing
2. Notice not necessary when resignation is
with just cause.
1. RESIGNATION VERSUS CONSTRUCTIVE
DISMISSAL
Resignation
Resignation is the voluntary act of an employee
who finds himself in a situation where he believes
t. • . that personal reasons cannot be sacrificed in
. favor of the exigency of the service, such. that he
has no other choice but to disassociate himself
from his employment. (Cervantes v. PAL
Maritime Corp., G.R. No. 175209, 2013)
To constitute a resignation, it must be
unconditional and with the intent to operate as
such. There must be an intention to relinquish a
portion of the term of office accompanied by an
act of relinquishment. (Azcor Manufacturing Inc.
v. NLRC, G.R. No. 117963, 1999)
Resignation is inconsistent with the filing of a
complaint for illegal dismissal. (Blue Angel
Manpower and Security Services Inc. v Court of
Appeals, GR. No. 161196 2008)
( ' The rule raquiring an employee to stay or
complete the 30-day period prior to the effectivity
of his resignation becomes discretionary on the
PAGE 203 OF 244
LABOR LAW
part of management as an employee who intends
to resign may be allowed a shorter period before
his resignation becomes effective. (Hechanova
Bugay Vilchez Lawyers v. Matorre, G.R. No.
198261 2013)
Stipulations providing that either party may
terminate a contract even without cause are
legitimate if exercised in good faith. Thus, while
either party has the right to terminate the contract
other. The monetary award provided in Section
10 of RA. 8042 applies only to an illegally
dismissed overseas contract worker or a worker
dismissed from overseas employment without
just, valid or authorized cause as defined by law
or contract It finds no application to cases in
which the OFW was not illegally dismissed.
(GBML T Manpower Services vs Malinao, G.R.
No. 189262, 2015)
Constructive Dismissal
1. No formal dismissal
2. The employee is placed in a situation by the
employer such that his continued
employment has become UNBEARABLE
~ Forced resignation.
Conatructive dismissal exists when an act of
clear discrimination, insensibility or disdain on the
part of the employer has become so unbearable
as to leave an employee with no choice but to
forego continued employment.
Constructive dismissal occurs when:
1. Continued employment is rendered
impossible or unroasonable, resulting in an ·
involuntary resignation
2. Demotion in rank or diminution in pay
3. Forced resignation to make it appear that
no termination byi the employer was done
(Leonardo v. NLRC, G.R. No. 125303,
June 16, 2000)
Test of Constructive dismissal: whether or not
a reasonable person in the employee's position
would feel the need to give up his position
Note: Abandonment is incompatible with
constructive dismissal.
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

It is the inherent prerogative of an employer to (Mandap&t v. AddForce Personnel Services, Inc.,

transfer and reassign its employees to meet the
requirements of its business. Be that as it may,
the prerogative of the management to transfer its
employees must be exercised without grave
abuse of discretion. The exercise of the
prerogative should not defeat an employee's right
to security of tenure. The employer's privilege to
transfer its employees to different workstations
cannot be used as a subterfuge to rid itself of an
undesirable worker. (Veterans Security Agency v..
Vargas, G.R. No. 159293, 2005)
Instances of Constructive Dismissal
5. There may. be constructive dismissal if an
act of an employer becomes so unbearable
on the part of the employee that it could
foreclose any choice by him except to forego
his continued employment (Hyatt Taxi
Servicesv. Catinoy, G.R. No. 143204, 2001)
· 9. Continued employment is rendered
impossible or unreasonable, resulting in an
involuntary resignation;
10. Demotion in rank or diminution in pay;
11. Forced resignation to make it appear that no
termination by the employer was done;
(Leonardo v. NLRC, G.R. No. 125303, 2000)
12. After the 30-day period of preventive
suspension, the employee must be
reinstated to his former position because
suspension beyond this maximum period
amounts to constructive dlsrnissal (Hyatt
Taxi Services v, Catinoy, supra);
13. Floating status of a security guard if it lasts
for more than 6 months (Emeritus Security
and Maintenance Systems v, Dailig, G.R.
No. 204761, 2014)
G.R. No. 180285, 2010)
A threat to sue the employee will not amount to
forced resignation, as this is a legal act which
Will be decided by a competent authority.
(Callanta v. NLRC, G.R. No. 105083, 1993)
A choice between investigation and resignation is
not illegal. (Belaunzaran v. NLRC, G.R. 120038,
1996)
An employee who tenders her voluntary
resignation, accepts separation pay and benefits
cannot claim constructive dismissal. (Concrete
Aggregates v. NLRC, G.R. No. 82458, 1989)
J
An employee may be considered constructively
dismissed and at the same time legally
dismissed, as when a complaint for sexual abuse
is proven in the NLRC. This will amount to a
termination with just cause but without due
<. ..,1
process (see the Agabon doctrine above).
(Formantes v. Duncan Pharmaceuticals lnc.,
G.R. No. 170661, 2009)
(j'
l ,.

Note: It is manifestly· unfair and

{J
unacceptable to declare the mere lapse of
the six-month period of floating status as a
case of constructivo dismissal without
looking into the peculiar circumstances that
resulted in the security guard's failure to
assume another post (Exocet Security and
Allies Services Corp v. Serrano, G.R. no.
198538, 2014) '
\.
I !:.
Jurisprudence: Resignation \J
Forced resignation must be substantiated by
more than mere threats and alleqations.

PAGE 204 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

F. PREVENTIVE SUSPENSION These do not give the employee ample warning

that he may be terminated for his infractions, only
Preventive suspension is a disciplinary that he is being suspended for them. The notice
measure for the protection of the company's must sufficiently apprise the employee of the
property pending investigation of any alleqed instances or for which he is to be terminated, and
malfeasance or misfeasance committed by the he must not have already been punished for
employee. The employer may place the worker these (ex. with suspension) (Erector v. NLRC,
concerned under preventive suspension if his G.R. No. 167218, 2010)
continued employment poses a serious and
imminent threat to the life or property of the
employer or of his co- workers. However, when it
is determined that there is no sufficient basis to
justify an employee's preventive suspension, the
latter is entitled to the payment 9f salaries during
the time of preventive suspension. (Gatbonton v.
NLRC, G.R. No. 146779, 2009)

Duration of preventive suspension

No preventive suspension shall last longer than
thirty (30) days.

Upon the expiry of such period, the employer

x• shall thereafter '
6. Reinstate the worker in his former or in a
substantially equivalent position or
( ·_
14. The employer may extend the period of
suspension provided that during the period
of extension, he pays the wages and other
benefits due to the worker (/RR Labor Code,
Sec. 9, Rule XX/II, Book VJ

Preventive Suspension as a Protective

Measure vs. Suspension as a Penalty
Preventive suspension is not a penalty in itself. It
is merely a measure of precaution so that the
employee who is charged may be separated, for
obvious reasons, from the scene of his alleged
misfeasance while the same is being
investigated.

ll ''·'
-;» While [preventive suspension] may be imposed
on a respondent during the investiqation of the
charges against him. [suspension] is the penalty
which may only be meted upon him at the
termination of the investigation or the final
disposition of the case. (PAL 11. NLRC, G.R. No.
lJ 114307, 1998)

Notice requirement not complied with by mere

,· Issuance of suspension order
\ Suspension orders are not enough to meet the
notice requirement necessary in termination.

PAGE 205 OF 244

ATENEO CENTRAL
BAR OPERATIONS 20'19
E. RELIEFS FROM ILLEGAL DISMISSAL
An employee who is unjustly dismissed from work
shall be entitled to reinstatement without .loss of
seniority rights and other privileges and to his full
backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent
computed from the time his compensation was
withheld from him up to the time of his actual
reinstatement. (Labor Code, kt. 294)
1.Backwages + Reinstatement without loss of
seniority rights, OR
2.Backwages + Separation Pay, if
reinstatement impossible, or not ordered, in
view of the application of the strained
relations doctrine.
NOTE: Where reinstatement. is ordered, but the
position is already filled up, the dismissed
employee must still be reinstated if it is still
possible.
REINSTATEMENT
Reinstatement means the restoration to a state
or condition from which one had been removed or
separated. The _person reinstated assumes the
position he had occupied prior to his dismissal. It
presupposes that the previous position from
which one had been removed still exists, or that
there is an urifilled position which is substantially
equivalent or of similar nature as the one
previously occupied by the emplcyee. (Pfizer,
Inc., et al. v. Velasco, G.R. No. 177467, 2011)
General Rule: Reinstatement and backwages
are awarded
Exceptions:
1. Separation pay
2. Closure of business (Retuy« v. Hon.
Dumarpa, G.R. No. 148848, 2003)
3. Economic Business Conditions (Union of
Supervisors v. Secretary of Labor, G.R. No. L-
39889, 1981)
4. Employee's unsuitability (Divine Word High
School v. NLRC, G.R. No 72207, 1986)
5. Employee's retirement I overage (New Phil.
Sky/anders v. Deki/a, G.R. No. 199547, 2012) ~
6. Antipathy and antagonism (Wensha Spa
Center v. Yung, G.R. No. 185122, 2010)
PAGE 206 OF 2i!4
' LABOR LAW
7. ~ob with a totally different nature (OUP Sound
Phils. v. CA, G.R. No. 168317, 2011)
8. Long passage of time
9. Inimical to the employer's interest
10.Superveriing facts have transpired which
make execution unjust or inequitable, to an
increasing extent (Emeritus Security v. Dailig,
G.R. No. 204761, 2014)
Prescriptive Period
Bring action for reinstatement within 4 years from
the time of dismissal. (Civil Code, Art. 1146) ·
I. Reinstatement pending appeal
Note: The decision of the Labor Arbiter reinstating
a dismissed or separated employee shall
immediately be executory, even pending appeal.
The employee shall either be admitted back to
work under the same terms and conditions
prevailing prior to his dismissal or separation or,
at the option of the employer, merely reinstated in
the payroll. The posting of a bond by the employer
shall not stay the execution for reinstatement .
provided herein. (Labor Code, Art. 223)
Two options given to employers
1. Actual Reinstatement
Restoration of an illegally dismissed employee to
the position s/he had occupied prior to the illegal
dismissal.
•. '
le_, ..
2. Payroll Reinstatement
t . ..
The employer, instead of physically reinstating \..~
the employee to his former or substantially
equivalent position, chooses to reinstate the
employee in the payroll only by paying him
wages and other benefits without however . \
t"'.;1·
allowing or requiring him to actually report for
work.
Obligation to Reinstate Order of
Reinstatement
If the order of reinstatement of the Labor Arbiter
l, f .
is reversed on appeal, it is obligatory on the part
of the employer to reinstate and pay the wages of
()
the dismissed employee during the period of
appeal until reversal by the higher · court. The
Labor Arbiter's order of reinstatement is
immediately executory and the employer has to .
either re-admit them to work under the same
terms and conditions prevailing prior to their
'
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

dismissal, or to reinstate them in the payroll, and Retrenchment or Separation pay of 1

that failing to exercise the options in the closure or cessation month pay or 1h
alternative, employer must pay the employee's of operations NOT month pay per year of
salaries. (Magana v. Medicard Philipppines, G.R. due to serious service, whichever is
No: 174833) business losses; ihigher
Disease
No obligation to refund salaries and wages Retrenchment or None
during pendency of the appeal closure or cessation
An employee cannot be compelled to reimburse · of operations due to
the salaries and wages he received during the serious business
pendency of his appeal, notwithstanding the losses
reversal by the NLRC of the LA's order of Note: A fraction of at least 6 months rs considered
reinstatement. (College of Immaculate 1 year
Conception v. NLRC, G.R. No. 167563, 2010)
Second Kind: Separation pay as financial
Note: Rule XI, Sec. 14 of th« 2011 NLRC Rules assistance
of Procedure provide for restitution of amounts Separation pay may be awarded, in the name of
paid pursuant to execution of awards during compassionate justice, to an employee dismissed
pendency of the appeal. However, it expressly for a "just cause", except in the following:
disallows restitution of wages paid due to 1. Serious misconduct; or
reinstatement pending appeal. 2. Other offenses reflecting on his moral
s
character (PLOT v. NLRC, G.R. No. 80609,
· .... ., SEPARATION PAY 1988)
Reinstatement and separation pay - exclusive
remedies However: In the Toyota case, the Supreme Court
Payment of separation pay and reinstatement are ruled that if the dismissal is based on any of the
exclusive remedies. The payment of separation just causes in Art. 297 of the Labor Code ~ No
pay replaces the legal consequences of financial assistance can be granted, except
reinstatement to an employee who was illegally perhaps under "analogous causes." (Toyota
dismissed. (Bank Rural Bank v. De Guzman, Mctor Phil. Corp. Workers Ass'n. v. NLRC; G.R.
G.R. No. 170940, 2013) No. 158786, 2007)

Kinds of separation pay But note: In the International School case, the
1. Statutory separation pay, in authorized Supreme Court granted "separation pay" of 1h
-,
causes (Labor Code, Arts. 288-299) month per year of service while upholding the
2. Separation pay as financial assistance (found teacher's dismissal on the ground of "gross
in the next section) inei.'iciency" resulting from the lack of skills,
3. Separation pay in lieu of reinstatement where thereby failing to meet the standards of the
(J reinstatement is not feasible; and employer of the school. (International School v.
( }
4. Separation pay as a benefit in the CBA or International School Alliance, 2014)
v company policy
No financial assistance to dismissed strikers.
First Kind: Statutory separation pay
The employer has a statutory obligation in cases Third Kind: Separation Pay in Lieu of
{\_ ,. ' of legal termination due to authorized causes. Reinstatement
This happens only in cases where:
lJ CAUSE 'SEPARA • 1. Doctrine of Strained Relations applies, but
I • Introduction of labor- Separation pay of only applicable to confidential and rnanaqeriat
'~ . .!": saving . devices, month pay or 1 month employees only; or
,· redundancy pay per year of 2. When reinstatement would only exacerbate ·
t service, whichever is the tension and strained relations between the
higher
PAGE 207 OF 244

-·-----
--- - --· -· - -·-·--------------------------------
 ATENEO CENTRAL
BAR OPERATIONS2019
parties. (Quij,mo v. Mercury, G.R. No.
126561, 1998)
3. The position has been abolished (applies to
both managerial and rank and file)
Note: Moral and exemplary damages may also
be awarded.
Computation of separation pay
SP as a statutory requirement is computed by
integrating the basic salary with regular
allowances employee has been receiving
(Planters Products v. NLRC, G.R. No. 78524,
1989); allowances include transportation and
emergency living allowances (Santos v. NLRC,
G.R. No. 76721, 1987)
Commissions Included in separation pay;
· exception to inclusion
Inasmuch as the words "waqes", "pay" and
"salary" have the same meanlnq, and
commission is included in the definition of "wage",
the logical conclusion, therefore, is, in the
computation of the separation pay of petitioners,
their salary base should include also their earned
sales commissions. (Songco v. NLRC, G.R. Nos.
50999-51000, 1990)
Commissions given to a managerial employee
who did not perform actual business transactions
to earn the commission shall not be included in
the salary for purposes of computing separation
· pay. (Phil. Duplicators v. NLRC, G.P. No. 11068,
1995)
BACKWAGES
Backwages are earnings lost by a worker due to
his illegal dismissal; a form of relief that restores
the income lost by reason of such unlawful
dismissal; it is not private compensation or
damages; nor is it a redress of a private right but,
rather, in the nature of a command to the
employer to make a public reparation for illegally
dismissing an employee. (St. Theresa's School of
Novaliches Foundation v. NLRC, G.R. No.
122955, 1998)
Backwages and reinstatement are two reliefs that
should be given to an illAgally dismissed
employee. They are separate and distinct from
each other. (Aurora Land Projects v. NLRC, G.R.
No. 114733, 1997)
PAGE 208 OF 244
LABOR LAW
Failure to order backwages
A "plain error" which may be rectified, even if
· employee did not bring an appeal regarding the
matter (Aurora Land Projects v. NLRC, G.R. No.
114733, 1997)
Full backwaqes
Full backwages means exactly tnat, i.e., without
, deducting from backwages the earnings derived
elsewhere by the concerned employee during the
period of his illegal dismissal. (Bustamante v.
NLRC, G.R. No. 111651, 1996)
Awards including· salary differentials are not
allowed (Insular Life Assurance Co., v. NLRC,
G.R. No. L-74191, 1987)
Emergency cost of living allowances (ECOLA},
transportation allowances, and 13th month pay
should be included. (Paramount Vinyl Product
Corp. v. NLRC, G.R No. 81200, 1990)
The effects of extraordinary inflation are not to be
applied witho.ut an official declaration by .
competent authorities (Lantion v. NLRC, G.R. No.
82028, 1990)
Limited Backwages
General Rule: Illegally dismissed employee is
entitled to full backwages
.
I
'-
'
Exceptions:
1. The Court awarded limited backwages
where the employee was illegally dismissed
but the employer was found to be in good
faith. (San Miguel Corporation v. Jevete, Jr.,
G.R. No. L-54244, 1992)
2. Delay of the employee in filing the case for
illegal dismissal (Mercury Drug Co., v. CIR, . t
G.R. No. L-23357, 11974) u
Deduction of earnings elsewhere rule
There is no deduction from backwages the ,.
t :,•
earnings which the employee has derived from
-;,
'· .,t:
another employment during the time of his illegal
dismissal (Bustamante v. NLRC, G.R. No.
{_)
111651, 1996)
Note: The Bustamante doctrine must be read in
light of R.A. No. 6715 (21 March 1989). Prior to
that date, backwages are limited to three years
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

without deduction or qualification (A!ucena, The

Labor Code with Comments and Cases Volume Computation of backwages
II, 918, 2013) Backwages is computed from the time of illegal
dismissal up to time of actual reinstatement.
Components of the amount of backwages
(Azucena, The Labor Code with Comments and If reinstatement is no longer possible, backwages
Cases Volume 11-B, 976, 2016) should be computed from the time the employee
1. Salaries at the wage rate level at the time of was terminated until the finality of the decision,
dismissal, notcurrent wage level. finding the dismissal unlawful. (Bustamante v.
2. Allowances or other benefits regularly granted NLRC, G.R. No. 111651, 1996)
Example: ECOLA, 131h month pay, fringe
benefits, transportation allowances, holiday pay,
SIL, VL, just share in service charges, and any
other regular allowances or benefits or their
monetary equivalents

Reinstatement; payment of backwages

An order of reinstatement by the labor arbiter is
not the same as actual reinstatement of a
dismissed or separated employee. Thus, until
employer actually reinstates, their obligation to
the illegally dismissed employee, insofar as
accrued backwages and other benefits are
concerned, continues to accumulate.

It is only when the illegally dismissed employee

•. receives the separation pay (in case of strained
relations) that it could be claimed with certainty
that the EER has formally ceased thereby
precluding the possibility of reinstatement. In the
meantime, the illegally dismissed employee's
entitlement to backwages, 13i11 month pay, and
other benefits subsists. Until the payment of
separation pay is cerrled out, the employer
should not be allowed to remain unpunished for
.f ;,
the delay, if not outright refusal, to immediately
\ ) execute the reinstatement aspect of the labor
QUITCLAIMS
After a vaiid compromise has been entered into,
a quitclaim usually follows. In this document, the
employee waives or releases the employer from
any claims he may have against him by reason of
his employment. These are normally frowned
upon because the employer and employee stand
on unequal footing. Hence, If the or.e signing the
quitclaim does not need protection, it is usually
held to be valid .

,, .)
{
arbiter's decision. Requisites for a valid quitclaim (L-FEN)
1. Lack of fraud or deceit
Further, the employer cannot refuse to reinstate 2. Entered into Freely and voluntarily
(J the illegally dismissed employee by claiming that 3. Trade-off is Equitable and credible
the latter had already found a job elsewhere. '1. Not contrary to law, public order, public
() Minimum wage earners are letl with no choice policy, morals, good customs, nor prejudicial
after they are illegally dismissed from their to a third person with a right recognized by
(; employment, but to seek new employment in law (Goodrich Manufacturing Corp. v. Ativo,
order to earn a decent living. Surely, we could not G. R. No. 188002, 2010)
li fault them for their perseverance in looking for '
and eventually securing new employment
I •
\_J opportunities instead of remaining idle and
awaiting the outcome of the case. (Triad Security
f
l.~ & Allied Services, Inc, et al. v Ortega, G.R. No.
160871, 2006)

PAGE 209 OF 244

... _
ATENEO CENTRAL
BAR OPERATIONS 2019
Requisites for a valid quitclaim of an OFW
(FB-TESS)
1. Fixed amount as full and final
compensation
2. The Benefits of the OFW and
corresponding monetary amounts which he
is giving up for the compromised amount
3. A statement that the quitclair n and its
nature and consequences have been
Explained to him .n a language or dialect he
understands
4. A statement that the quitclaim has been
signed knowingly and voluntarily and
consent was without Threat or other undue
influence
5. Signed by two (2)witnesses who can attest
to the execution
6. Subscribed and sworn to
(£0/'-Staffbuilders International, Inc. vs.
National Labor Relations Commission, 537
SCRA 409, 2007)
, Jek« Food v. Pacot, G.R. No. 151378, 2005
No Separation Pay in resignation; Exceptions;
Waivers and Quitclaims, when valid
General Rule: Separation pay need not be paid
to an employee who voluntarily reslqns.
However: An employer who agrees to expend
such benefit as an incident of the resignation
should not be allowed to renege in the
performance of such commitment.
Not all waivers and quitclaims are invalid as
against public policy. If tho agreement was
voluntarily entered into and represented a
reasonable settlement, it is binding on the parties
and may not later be disowned, simply because
of a change of mind. ( Candido Alfaro v. CA, et al.,
. G.R. No. 140812, 2001)
PAGE 210 OF 244
LABOR LAW
EMPLOYER'S INDEMNITY
Prior to 1989 (Pre-Wenphil)
• Dismissal is Illegal
• Employer's liability: Reinstatement plus
Backwages
February 1989 - 1999 (Wenphll Doctrine)
.. Dismissal is Valid
• Employer's liability: Pay indemnity
January 2000 - October 2004 (Serrano
Doctrine)
.. Dismissal is Ineffectual
• Employer's liability: Full backwages up to
reinstatement I finality of decision
November 2004 - Present (Agabon Doctrine)
• Dismissal is valid
• Employer's liability: Nominal damages '"
If the dismissal is based on a just cause but the
emnloyer failed to comply with the notice
requirement, the sanction to be imposed upon
him should be tempered because the dismissal
process was, in effect, initiated by an act
imputable to the employee.
If the dismissal is based on an authorized cause
but the employer failed to comply with the notice
I --~
requirement, the sanction should be stiffer \__-
because the dismissal was tnltlated by the
employer's exercise of management prerogative.
Industrial Timber v. Ababan, G.R. No. 164518,
2006 (Distinction of Authorized Causes)
If the authorized cause that terminates
employment arises from losses, the penalty to the
employer who disregarded due process may be
lighter than if the authorized cause has no relation
to losses. r··"'"~-
HSBC Employees Union v. NLRC, G.R. No.
'. T
156635, 2016
A dismissal lacking in valid cause or valid
procedure is "illegal." In a dismissal based on just
or authorized cause, hut effected without due
process, the employee remains dismissed, but
the employer must pay nominal damages.
 ATENEO CENTRAL
BAR OPERATIONS 2019
G. RETIREMENT
Retirement
The. result of a bilateral act of the parties, a
voluntary agreement between the employer and
the employee whereby the latter, after reaching a
certain age agrees to sever his or her
employment with the former. (Jaculbe v. Siliman
University, G.R. No. 156934, 2007)
Retroactive Effect of Retirement Laws
4. The claimant for retirement benefits was still
in the employ of the employer at th.e time the
statute took effect; and
5. The claimant had complied with the
requirements for eligibility for such retirement
benefits under the statute (URC v. Cabal/eda,
G.R. No. 156644, 2008)
Eligibility
General Rule: All employees in the private
sector, regardless of their position, designation,
; ..
' ' or status, and irrespective of the method by which
their wages are paid (/RR R.A. No. 7641, Sec. 1)
Exceptions:
6. Employees covered by the Civil Service Law;
7. Domestic Helpers and Persons in the
Personal Service of Another; and
8. Employees in Retail, Service, and Agricultural
.
t: ,- Establishments or Operations Regularly
.r ; Employing Not More Than 10 Employees
\._f (/RR R.A. No. 7641, Sec. 2)
Exclusions from coverage
R.A. No. 7641, "The Retirement Pay Law," only
" ;,
\ ;' applies in a situation where:
1. There is no collective bargaining agreement
I ·,
{._- ... . . '.t or other applicable employment contract
providing for retirement benefits for an
employee; or
2. There is a collective bargaining agreement or
r ·~ other applicable employment contract
providing for retirement benefits for an
employee, but it is below the requirements
set for by law.
l1
The reason for the first situation is to prevent the
absurd situation where an employee, who is
otherwise deserving, is deniecl retirement
f
l_ benefits by the nefarious scheme of employers in
not providing for retirement benefits for their
~ _ ..
PAGE 211 OF 244
',
-, LABOR LAW
employees. The reason for the second situation
is expressed in the Latin maxim pacta private juri
public oercqere non possunt. Private contracts
cannot derogate from the public law. (Oxales vs
Uni/ab, GR. No. 152991, 2008)
Age of retirement
Optional retirement: In the absence of a
retirement plan cir other applicable agreement
providing for retirement benefits of employees in
an establishment, an employee may retire upon
reaching the age of 60 or more if he has served
for at least 5 years tn said establishment.
Cornpulsory retirement: In the absence of a
retirement plan or other applicable agreement
providing for retirement benefits of EEs in an
establishment, an EE shall be retired at the age
of 65 years. (/RR R.A. No. 7641, Sec. 4)
May the optional and compulsory retirement
ages be lowered?
1. Written policy '" such as in the CBA
(Pantranco North Express v. NLRC & U.
Suniga, G.R. No. 95940, 1996); or
2. Assented to by the employees (Jaculbe v.
Silliman University, G.R. No. 156934, 2007)
Nature of employees' assent
The employees' assent may be evidenced by
silence. (Obusan v. PNB, G.R. No. 181178, 2010)
However, in another case, the Supreme Court
ruled that acceptance by the employees of an
early retirement age option must be explicit,
voluntary, free, and uncompelled. (Cercado v.
Uniprom, Inc., G.R. No. 188154, 2010)
Note: Obusan was decided by the Supreme
Court in dlvlslon on July 26, 2010, while Cercado
was decided also in division on October 13, 2010.
Extension of Service of Retiree
The matter of extension of service of such
employee or officlal is addressed to the sound
discretion of the employer. (UST Far;ufty Union v.
NLRC, G.R. No. 89885, 1990)
Retirement Age for Underground and Surface
Mine Workers
For underground and surface mine workers, the
optional retirement age is 50, while the
-,
ATENEO CENTRAL
BAR OPERATIONS 2019
mandatory retirement age is now 60. (R.A. No.
10757, Sec. 2)
Amount of Retirement Pay
The minimum retirement pay shall be equivalent
to one-half (1/2) month salary for every year of
service, a fraction of at least six (6) months being
considered as one whole year.
For the purpose of computing retirement pay,
"one-half month salary" shall include all of the
following:
3. Fifteen (15) days salary based on the latest
salary rate;
4. Cash equivalent of five (5) days of service
incentive leave;
5. One-twelfth (1/12) of the 13th month pay.
(1/12 x 365/12:;: .083x30.41 = 2.52 days)
Total: 22.5 days
Thus, "one-half month salary" is equivalent to
22.5 days. (Capitol Wireless, Inc. vs Sec.
Confessor, G.R. No. 117174, 1996; Rogelio
Reyes v. NLRC, G.R. No; 160233, 2007)
Other benefits may be included in the
computation of the retirement pay upon
agreement of the ER and the EE or if provided in
the CBA.
' should not be less than the total retirement
PAGE 212 OF 244
LABOR LAW
Retirement pay under RA 7641 vis-a-vis
retirement benefits under SSS and GSIS laws
RA 7641 mandates payment of retirement
benefits. All private sector employees regardless
of their position, designatior:i or status and
irrespective of the method by which their wages
are paid are entitled to retirement benefits upon
compulsory retirement at the age of sixty-five (65)
or upon optional retirement at sixty (60) or more
but not 65. The minimum retirement pay due
covered employees shall be equivalent to one-
half month salary for every year of service, a
fraction of at least six (6) months being
considered as one whole year. The benefits
under this law are other than those granted by
the SSS or the GSIS.
Retirement Benefits under a CBA or
Applicable Contract
Any employee may retire or be retired by his/her
employer upon reaching the age established in
the CBA or other applicable agreement/contract
and shall receive the retirement benefits granted
therein; provided, however, that such retirement
benefits shall not be less than the retirement pay
required under R.A. No. 7641, and provided
further that if such retirement benefits under the -i
agreement are less, the employer shall pay the
difference.
Where both the employer and the employee
contribute to a retirement fund pursuant to the .-.
\ . i·
applicable agreement, the employer's total
contributions and the accrued interest thereof
benefits to which the employee would have been
,"·
entitled had there been no such retirement
benefits' fund. If such total portion from the
employer is less, the employer shall pay the
t.J
deficiency.
· .. ...::
 ATENEO CENTRAL
BAR OPERATIONS 2019
Retirement Benefits of Workers Who Arn Paid
By Results
For covered workers who are paid by result and
do not have a fixed monthly salary rate, the basis
for the dstermlnatlon of the salary for 15 days
shall be their average daily salary (ADS). The
ADS is derived by dividing the total salary or
earning for the last 12 months reckoned from the
date of retirement by the. number of actual
working days in that particular period, provided
that the determinatior, of rates of payment by
results are in accordance With established
regulations. (Ru/es Implementing R.A. No. 7641,
Sec. 5.3)
Retirement Benefit of Part-Time Workers
Part-time workers are also entitled to retirement
pay of "one-month salary" for every year of
. service under RA 7641 after satisfying the
following conditions precedent for optional
retirement:
1. There is no retirement plan between the
i
'- . employer and the employee; and
2. The employee should have reached the age
of 60 years, and should have rendered at least
5 years of service with the employer.
The components of retirement benefit of part-
time workers may likewise be computed at least
in proportion to the salary and related benefits
. due them. (DOLE Handbook on Workers'
, ' Statutory Monetary Benefits, 2014 ed.)
l_ ;
- Taxablllty
General Rule: Any provrsion of law to the
contrary notwithstanding, the retirement benefits
' ,;·
i
received by officials and employees of private
firms, whether individual or corporate, in
accordance with a reasonable private benefit plan
maintained by the employer shall be exempt from
all taxes and shall not be liable to attachment,
garnishment, levy or seizure by or under any legal
/ ~
\ .. » or equitable process whatsoever (Intercontinental
Broadcasting Corp. (/BC) v. Aniorilla, G.R. No.
{ .
\ i 16277.5, 2006)
l -_ .
_; Exception: Except to pay a debt of the official or
I -,
employee concerned to the private benefit plan or
\_J that arising from liability imposed in a criminal
I
action.
\_ .·
PAGE 213 OF 244
ii ... ·
LABOR LAW
Additional conditions
1. The benefit plan must be approved by the
Bureau of Internal Revenue;
2. The retiring official or employee has been in
the service of the same employer for at least
ten ( 1 O) years and is not less than fifty years
of age at the time of his retirement;
3. The retirement benefits shall be availed of by
an official or employee only once; and,
4. In case of separation of an official or
' employee from the service of the employer
due to death, sickness or other physical
~isability or for any cause beyond the control
of the said official or employee, any amount
received by him or by his heirs from the
employer as a consequence of such
separation shall likewise be exempt as
hereinabove provided .
Reasonable private benefit plan
A pension, gratuity, stock bonus or profit sharing
plan maintained by an employer for the benefit of
some or all of his officials and employees,
wherein contributions are made by · such.
employer or officials and employees, or both, for .
the purpose of distributing to such officials and
employees the earnings and principal of the fund
thus accumulated, and wherein it is provided in
said plan that at no time shall any part of the
corpus or income of the fund be used for, or be
diverted to, any purpose other than for the
exc!usive benefit of the said officials and
employees.
Retirement Benefits and Separation Pay May
be Simultaneously Granted; When Not
Granted
Yes. (University of the East v. UE Faculty
Association, G.R. No. 74007, 1987)
Separation pay is i'equired in the cases
enumerated in Articles (298) and [299] of the
Labor Code. It is a statutory right designed to
provide the employee with the wherewithal during
the period that he is looking for another
employment.
Retirement benefits, where not mandated by
law, may be granted by agreement of - the
employees and their employer or as a voluntary
act on the part of the employer. Retirement
benefits are intended to help the employee enjoy
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

the remaining years of his life, lessening the

burden of worrying for his financial support, and VII. MANAGEMENT PREROGATIVE
are a form of reward for his loyalty and service to
the employer. (Aquino v. NLRC & Otis Elevator, TOPIC OUTLINE UNDER THE SYLLABUS
G.R. No. 87653, 1992)
A. Discipline
However: Company policy or CBA may make B. Transfer of employees
separation pay and retirement benefits mutually C. Productivity standard
exclusive. (Aquino v. NLRC & Otis Elevator, G.R.
D. Bonus
E. Changeof wotklng hours
No. 87653, 1992) F. Bona Fide Occupational Qualifications
G. Post-employment ban
Gratuity Pay distinguished .frorn Retirement
Benefit
Gratuity Pay is paid to the beneficiary for the past
services or favor rendered purely out of the
generosity of the giver or grantor. Gratuity,
therefore, is not intended to pay a worker for
actual services rendered or tor actual
performance. It is a money benefit or bounty
given to the .worker, the purpose of which is to
reward employees who have rendered
satisfactory service to the company.
l .~

Retirement Benefits are intended to help the

employee E:njoy the remaining. years of his life,
releasing him from the burden of worrying for his
financial support, and are a form of reward for his
loyalty to the employer. (Sta. Catalina College v.
NLRC and Tercero, G.R. No. 144483, 2003)

---end of topic--~
f·-.,
'' .
t)
\ ,

{ l
•....,,•

.. 'z;
\. T

'

PAGE 214 OF 244

~
·...
,
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

Labor Secretary had assumed jurisdiction over

Overview of Management Prerogative
The law in protecting the rights of the employees
authorizes neither oppression nor self-destruction
of the employer. It should t.e made clear that
when the law tilts the scale of justice in favor of
labor, it is but a recognition of the inherent
economic inequality between labor and
rnanaqement. Never should the scale be so tilted
if the result is an injustice to {he employer.
(Panuncil/o v, CAP, G.R. No. 161305, 2007)
the dispute and enjoined the parties from "any
acts which might exacerbate the situation."
The Court disagreed with the company's defense,
stating that the privilege is not absolute but
subject to limitations imposed by law. In this case,
it is limited by Sec. 236(g), which gives the
Secretary the power to assume jurisdiction and
resolve labor disputes involving industries
indispensable to national interest.

General Rule: An. employer is free to regulate, The company's management prerogatives are
according to his own discretion and judgment, all not being unjustly curtailed but duly tempered by
aspects of employment, including hiring; work the limitations set by law, taking into account its
assignments, working methods, time, place and special character and the particular
manner of work, tools to be used, processes to be circumstances in the case at bench. (Metro/ab
followed, supervision of workers, working Industries, Inc. v. Roldan-Confesor, G.R. No.
regulations, transfer of employees, work 108855, 2013)
supervision, lay-off of workers and the discipline,
dismissal and recall of workers (Peckson v. 4. Colsectlve Bargaining
Robinson's Supermarket Corporation, G.R. No. The CBA provisions agreed upon by the
198534, 2013) -, Company and the Union delimit the free exercise
of management prerogative. The parties in a CBA
Limits to Management Prerogative ma; establish such stipulations, clauses, terms
1. Good Faith
and conditions as they may deem convenient
So long as a company's management
provided these are not contrary to law, morals,
prerogatives are exercised in good faith for the
good customs, public order or public policy.
advancement of the employer's interest and not
Where the CBA is clear and unambiguous, it
for the purpose of defeating or circumventing the
becomes the law between the parties and
rights of the employees under special laws or
compliance therewith is mandated by the express
under valid agreements, this Court will uphold
. I policy of the law. (Goya v. Goya Employees
t .; them. Even as the law is solicitous of the welfare
Union-FFW, G.R. No. 170054, 2013)
of the employees, it must also protect the right of
(·1 an employer to exercise what are clearly
5. Equity and/or Substantial Justice
management prerogatives. The free will of
The Court recognized the inherent right of the
. \ ·' management to conduct its own business affairs
employer to discipline its employees but it should .
to achieve its purpose cannot be denied.
still ensure that the employer exercises the
() (Ymbong v. ABS-CBN, G.R. No. 184885, 2012)
prerogative to discipline humar.ely and
considerately, and that the sanction imposed is
f,.,; 2. Grave abuse of discretion
com, nensurate to the offense involved and to the
The managerial prerogative to transfer personnel
degree of the infraction. The discipline exacted by
must be exercised without grave abuse of
the employer should further consider the
· discretion, bearing in mind the basic elements of
employee's length of service and the number of
justice and fair play. Having the right should not
infractions during his employment. (Dongon v .
. be confused with the manner in which the right is
Rapid Movers and Forwarders Co., G.R. No.
LJ exercised. (Tinio v. CA, G.R. No. 171764; 2007)
163431, 2013)
3. Law
The exercise of management prerogatives is not
A pharmaceutical company defended its
I unlimited. A line must be drawn between
i termination of rank and file employees during a
\. management prerogatives regarding business
bargaining deadlock, as an exercise of
operations per se and those which affect the
management prerogative. This was after the
~-
PAGE 215 OF 244
ATENEO CENTRAL
BAR OPERATIONS 2019
rights of employees. In treating the latter,
management should $.ee to it that its employees
are at least properly informed of its decisions and
modes of action. (PAL v. NLRC, G.R. No. 85985,
1993)
The law on unfair labor practices is not intended
. to deprive the employer of his fundamental right
to prescribe and enforce such rules as long as it
is not exercised in violation of the Act and its
several prohibitions.
Where, however, an employer does violate the
Act and is found guilty of the commission of an
unfair labor practice, it is no excuse that his
conduct was unintentional and innocent.
Management has the prerogative to discipline its
employees and to impose appropriate penalties
on erring workers, pursuant to company rules and
regulations (Artificio v. NLRC, G.R. No. 172988,
2010)
Although the right of employers to shape their
own work force, is recognized, this manaqement
prerogative must not curtail the basic right of
employees to security of tenure. (Alert Security
Investigation Agency v. Saidali Pasawilan, G.R.
No. 182397 (2011)
B. TRANSFER OF EMPLOYEE
An employee's right to security of tenure does not
give him such a vested right In his position as
would deprive the company of its prerogative to
change his assignment or transfer him where he
will be most useful.
The employer has the right to transfer or assign
employees from one area of operation to another,
or one office to another or in pursuit of its
legitimate business interest, Provided there ls no
demotion in rank or diminution of salary, benefits
and other privileges and not motivated by
discrimination or made in bad faith, or effected as
a form of punishment or demotion without
sufficient cause. (Westin Phil. Ploze Hotel v.
NLRC, G.R. No. 121621, 1999)
When the transfer is not unreasonable, or
inconvenient, or prejudicial to the employee, and
it does not involve a demotion in rank or
PAGE 216 OF 2~4
' LABOR I_AW
dlmtnution of salaries, benefits, ar.d other
privileges, the employee may not complain that it
amounts to a constructive dismissal. (Bisig ng
Manggagawa sa TRYCO v. NLRC, G. R. No.
151309, 2008)
It is management prerogative for employers to
transfer employees on just and valid grounds
such as genuine business necessity. (William
Barroga v. Data Center College of the
Philippines, G.R. No. 174158, 20'/1)
Re-assignments made by management pending
investigation of irregularities allegedly committed
by an employee fall within the ambit of
management prerogative. The purpose of
reassignments is no different from that of
preventive suspension which management could
validly impose as a disciplinary measure for the
protection of the company's property pending
investigation of any alleged malfeasance or
misfeasance committed by the employee. (Ruiz
v. v. Wendel Osaka Realty, G.R. No. 189082,
2012)
In cases of a transfer of an employee, the
employer is charged with the burden of proving
that its conduct and action are for valid and
legitimate grounds such as genuine business
necessity and that the transfer is not
unreasonable, lnconvenient or prejudicial to the
employee. If the employer cannot overcome this -.
burden of proof, the employee's transfer shall be
tantamount to unlawful constructive dismissal.
(Jonathan Morales v. Harbor Centre Port
Terminal, G.R. No. 174208, 2012)
C. PRODUCTIVITY STANDARD
The employer has the right to demote and
1 )
transfer an employee who has failed to observe \../
proper diligence in his work and incurred habitual ( -,
tardiness and absences and indolence in his
assigned work. (Petrophil Corporation v. NLRC,
G.R. No. L-64048, 1986)
As a general concept, "poor performance" is
equivalent to inefficiency and incompetence in
the performance of official duties. Under Art. 282
'
\.J~
of the Labor Code, an unsatisfactory rating can
be a just cause for dismissal only if it amounts to
gross and habitual neglect of duties. Thus, the
fact that an employee's performance is found to
be poor or unsatisfactory does not necessarily
 ATENEO CENTRAL
BAR OPERATIONS 2019
mean that the employee is grossly and habitually
negligent of his duties. Gross neglignnce implies
a want or absence of or failure to exercise slight
care of diligence, or the entire absence of care. It
evinces a thoughtless disregard of consequences
without exerting any effort to avoid them.
(Universal Staffing Services, Inc. vs. NLRC, G.R.
No. 177576, 2008)
The imposition of productivity standards is an
allowable exercise of company rights. An
, employer is entitled to impose productivity
standards for its workers and non-compliance
may be visited with a penalty even more severe
than demotion. (Leonardo v. NLRC, G.R. No.
125303, 2000)
D.BONUS
The granting of bonus is a management
prerogative, something given in addition to what
is ordinarily received by or strictly due the
"\ .. recipient. (Producers Bani< of the Philippines v.
NLRC, G.R. No. 100701, 2001)
There is unfair and unjust discrimination in the
granting of salary adjustments where the
evidence shows that
1. The management paid the employees of .
-. the unionized branch;
2. here salary adjustments were granted to
employees of one of Its non - unionized
branches . although it was losing in its
operations; and
3. The total salary adjustments given every
ten of its unionized employees would not
i even equal to the salary adjustments given
\ ,;..
to one employee in the non - unionized
branch. (Manila Hotel Company v. Pines
Hotel Employees Associalion(CUGCO)
and CIR, G.R. No. L-30818, 1972)
E. CHANGE OF WORKING HOURS
Management retains the prerogative, whenever
exigencies of the service so require, to change
the working hours of its employees. So long as
such prerogative is exercised in good faith for the
advancement of the employer's interest and not
for the purpose of defeating or clrcurnventinq the
rights of the employees under special laws or
r
i
\. i under valid agreements, this Court wUI uphold
PAGE 217 OF 244
·,
~ ...
LABOR LAW
such exercise. (Sime Darby Pilipinas, Inc. v.
NLRC, G.R. No. 119205, 1998)
' Except as limited by special laws, an employer is
free to regulate, according to his own discretion
and, judgment, all aspects of employment,
including hiring, work assignments, working
methods, time, place and manner of work, tools
to be used, processes to be followed, supervision
of workers, wotking regulations, transfer of
employees, work supervision, lay-off o1 workers
and discipline, dismissal and recall of workers.
(San Miguel Brewery v. Opie, G.R. No. L-53515,
1989)
F. Bona Fide Occupational Qualifications
Employment in particular jobs may not be
limited to persons of a particular sex, religion,
or national origin UNLESS, the employer can
show that sex, religion, or national origin is
an actual qualification for performing the job.
The qualification is called a bona fide
occupational qualification (BFOQ).
BFOQ is valid "provided it reflects · an
inherent quality reasonably necessary for
satisfactory job performance."
Weight standards of PAL show its effort to ·
comply with the exacting obligations imposed
upon it by law by virtue of being a common
carrier. On board an aircraft, the body weight
and size of a cabin attendant are important
factors to consider in case of emergency.
The job · of a cabin attendant during
emergencies is to speedily get the
passengers out of the aircraft safely. Being
overweight necessarily impedes mobility.
Indeed, in an emergency situation, seconds
are what cabin attendants are dealing with,
not minutes. Hence, separation from service
for failure to meet weight standards of PAL is
justified. (Yrasuegi v. PAL, G.R. No.168081)
It is unlawful for an employer to require as. a
condition of employment or continuation of
employment that:
1. A woman employee shall not get married,
or
2. To stipulate expressly or tacitly that upon
gett:ng married a woman employee shall be
deemed resigned or separated; or
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

3. To actually dismiss, discharge, companies upon its employees was held

discriminate or otherwise prejudice a reasonable under the circumstances because
woman employee merely by reason of her relationships of that nature might compromise the
marriage. (Labor Code, Art. 136) interests of the company.

Relevant Jurisprudence In laying down the assailed company policy, the

employer only aims to protect its interests against
Philippine Telegraph and Telephone the possibility that a competitor company will gain
Company v. NLRC (G.R. No.118978, 1997) access to its secrets and procedures.
The company policy of not accepting or ).

considering as disqualified from work any woman G. POST-EMPLOYMENT BAN

worker who contracts marriage runs afoul of the
test of, and the right against, discrimination
afforded all women workers by our labor laws and
by no less than the Constitution.
Star Paper Corp. v. Simbol, Comia and
Estrella (G.R. No. 164774, 2006)
The following policies were struck down as invalid
for violating the standard of reasonableness
Which is being followed in our jurisdiction, called
the "Reasonable Business Necessity Rule":
1. New applicants will not be allowed to be ·
hired if in case heishe has (a) relative, up
to (the) 3rd degree of relationship, already
employed by the company.
2. In case of two of our employees (both
singles (sic), one male and another fernale)
developed a friendly relationship during the
course of their employment and then
decided to get married, one of them should
resign to preserve the policy stated above."
A post-retirement competitive employment
restriction is designed to protect the employer
against competition by former employees who
may retire and obtain retirement or pension
benefits and, at the same time, engage in.
competitive employment. (Rivera v. Solidbank,
G.R. No. 163269, 2006)
r ·-._
Petitioner retired under the Special Retirement
Program and received P963,619.28 from
respondent. However, petitioner is · not . . ,..,
proscribed, by waiver or estoppel, from assailinq
the post-retirement competitive employment ban
since under Article 1409 of the New Civil Code,
those contracts whose cause, object or purpose
is contrary to law, morals, good customs, public
order or public policy are inexistent or void from
the beginning. Estoppal cannot give validity lo an
act that is prohibited by law or to one that is
against public policy. (Rivera v. Solidbank, G.R.
No. 163269, 2006)

Duncan .4ss'n of Detailman-PTGWO v. Glaxo Respondent, as employer, is burdened to

Welcome Philippines (G.R. No. 162994, 2004) establish that a restrictive covenant barring an
In this case, the prohibition against marriage employee from accepting a competitive ~-
embodied in the following stipulation in the employment after retirement or resignation is not
l f

employment contract was held valid: unreasonable or oppressive, or not an undue or

"You agree to disclose to management any -, unreasonable restraint of trade, thus,
existing or future relationship you may have, unenforceable for being repugnant to public I l
either by consanguinity or affinity with co- policy. (Rivera v. Solidbank, G.R. No. 163269, v
employees or employees of competing drug zooe;
companies. Should it pose a possible conflict of
. interest in management discretion, you agree to Two principal grounds on which the doctrine
.l. .:.
resign voluntarily from the Company as a matter is founded that a contract in restraint of trade \ f
of Company policy." is void as against public policy.
1. The injury to the public by being deprived ()
SC ruled that the dismissal based on this of the restricted party's industry; and
stipulation in the employment contract is a valid 2. The injury to the party himself by being (l
\j
exercise of management prerogative. precluded from pursuing his occupation, -,,
and thus being prevented from supporting i
--7
'.
The prohibition against personal or marital himself and his family.
relationships with employees of competitor
PAGE 2·1s OF244
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

In cases where an employee assails a contract

containing a provision prohibiting him or her from
accepting competitive employment as against
I. VIII. JURISDICTION AND RELIEFS J
public policy, the employer has to adduce TOPIC OUTLINE UNDER THE SYLLABUS
evidence to prove that the restriction is
reasonable and not greater than necessary to A. LABOR ARBITER
protect the employer's legitimate business
interests. The restraint may not be unduly harsh B. NATIONAL LABOR RELATIONS
or oppressive in curtailing the employee's COMMISSION
legitimate efforts to earn a livelihood and must be
reasonable in light of sound public policy. C. JUDICIAL REVIEW OF LABOR RULINGS

In determining whether the contract is D. BUREAU OF LABOR RELATIONS

reasonable or not, the trial court should
consider the following factors: E. NATIONAL CONCILIATION AND MEDIATION
1. Whether the covenant protects a legitimate , BOARD
business interest of the employer;
2. Whether the covenant creates an undue F. DOLE REGIONAL DIRECTORS
burden on the employee;
3. Whether the covenant is injurious to the G. !:>OLE SECRETARY
public welfare;
4. Whether the time and territorial limitations H. GRIEVANCE MACHINERY
·, _. contained in the covenant are reasonable;
and I. VOLUNTARY ARBITRATION
· 5. Whether the restraint is reasonable from
J. PRESCRIPTION OF ACTIONS
the standpoint of public policy. (Rivera v.
1. Money Claims
So/idbank Corporation, G.R. No. 163269,
2. Illegal Dismissal
2006) ·
3. Unfair Labor Practice
4. Offenses under the Labor Code
--- end of topic--·- 5. Illegal Recruitment

(_)
r "
\J

f :
t ,... '
\)
t -,
I :.
~J

r
l I

PAGE 2~9 OF 244

ATENEO CENTRAL
BAR OPERATIONS 2019
A. LABOR ARBITER
1. Jurisdiction
In order that the causes of action under Art.
224(a) may prosper (and inferentially, In order
that a LA can exercise jurisdiction over cases
thereon), an indispensable precondition must be
met - the prior existence of an EER between the
parties. (Palomado v. NLRC, (G.R. No. 96520,
1996)
(1) ULP (PRIORITY, RESOLVED WITHIN 30
CALENOAR DAYS FROM SUBMISSION FOR
DECISION)
The LA has jurisdiction over the civil aspect of
ULP. The criminal aspect is lodqed with the
regular courts. (Labor Godo, Art. 258)
Violations of the CBA are not ULP unless the
same are gross vlolatlons. (Labor Code, Art. 274)
The test of whether an employer has interfered
with and coerced employees within the meaning
of Art. 259 (a) is whether the employer has
engaged in conduct which it may reasonably be
said tends to Interfere with the free exercise of an
employee's rights, and it is not necessary that
there be direct evidence that any employee was
in fact intimidated or coerced by statements of
threats of the employer If there is a reasonable
. inference that anti-union conduct of the employer
does not have an adverse effect on self-
organization and collective bargaining.
(Francisco Labor Laws, 1956, Vol. II p 323)
(2) TERMINATION DISPUTES
Resolving Questions of Jurisdiction Between
Labor Arbiter and Voluntary Arbitrator
General Rule: Complaints for illenal dismissal
are within the original and exclusive jurisdiction of
the LA.
Exception: The parties may submit the question
of termination to voluntary arbitration but this
must be expressed in unequivocal language in
their CBA. (Ace Navigation Co. v. Fernandez,
G.R. No. 197309, 2012)
-,
PAGE 220 OF 2,:,1
LABOR LAW
Termination of Corporate Officers
The LA has jurisdiction over the termination of
corporate employees.
The RTC acting as a Special Commercial Court
has jurisdiction over termination of corporate
officers.
A person is a corporate officer If:
• The creation of the position is under the
corporation's charter or by-laws; and
• The election of the officer is by the directors
or stockholders.
The better policy in determining which body has
jurisdiction over a case would be to consider not
only the status or relationship of the parties but
also the nature of the question that is the subject
of their controversy. (Matting v. Cores, GR· No.
157802, 2010)
However: In Prudential1Bank v. Reyes (GR. No.
141093, 2001), it was held that an employee who
rose from the ranks is a regular employee and not
a mere corporate officer.
Award of Nominal Damages
An employer who terminates an employee for a
valid cause but does so through invalid procedure
is liable to pay the latter nominal damages. (J .PB:
Abbott Laboratories v. Alcaraz, 2013)
(3) CLAIMS FOR WAGES, RATES OF PAY, ·-·
' ~
HOURS OF WORK AND OTHER TERMS AND
CONDITIONS OF EMPLOYMENT IF
ACCOMPANIED WITH A CLAIM FOR
REINSTATEMENT
The Li\ has jurisdiction to award not only the
reliefs provided by labor laws, but also damages
governed by the Civil Code. The employee need
only include his claim for damages in the illegal ( '\
dismissal suit filed with the LA. (Kawachi .v. Del u·
Quero, G.R. No. 163738, 2007)
(4) . CLAIMS FOR ACTUAL, MORAL,
EXEMPLARY AND OTHER FORMS OF
(j
DAMAGES ARISING FROM EER
 ATENEO CENTRAL
BAR OPERATIONS 2G 19
(5) CASES ARISING FROM PROHIBITED
ACTIVITIES DURING STRIKES, INCLUDING
QUESTIONS INVOLVING THE LEGALITY OF
STRIKES AND LOCKOUTS
LA vs. DOU: Secretary/NLRC Jurisdiction
General Rule: LA has jurisdiction (NCMB Primer
on Strike, Picketing, and Lockout, No. 22)
Exception: In labor disputes involving industries
indispensable to the national interest, the DOLE
Secretary or NLRC (if certified by the Secretary)
has Jurisdiction.
industries Indlspens able to the National
Interest
a. Hospital sector;
b. Electric power industry;
c. Water supply services, to exclude small
water supply services such as bottling
and refilling stations;
d. Air traffic control; and
\. .I e. Such other industries as may be
recommended by the National Tripartite
Industrial Peace Council.
(6) ALL OTHER CLAIMS ARISING FROM EER
INVOLVING AN AMOUNT EXCEEDING P;5000
REGARDLESS OF WHETHER ACCOMPANIED
BY A CLAIM FOR REINSTATEMENT EXCEPT
CLAIMS FOR ECG, SSS, MEDICARE, &
MATERNITY BENEFITS
'
I . "
Monetary claims arising from EER which do not
exceed Php5,000 fall within the jurisdiction of the
. DOLE Regional Director. (LC, Art. 129)
NOTE: A kesembehey's claim, regardless of the
() amount, falls within the jurisdiction of the DOLE
Regional Office, and not the NLRC. (Batas
f ;
".,,. ;
..... .
Kasambahay, Sec. 37)
. -
'-.JI Art. 306 provides that "all money claims arising
from EER shall be filed within 3 years from the
time the cause bf action accrued, before the labor
arbiter.
But this prescriptive period is subject
interruption through:
1. Filing of an action;
2. Written extrajudicial demand;
. PAGE 221 OF 244
i. . . :
LABOR LAW
3. Written acknowledgement of
indebtedness. (/BC v. Panganiban, G.R.
No. 151407, 2007)
A judgment in the form of a wage order for money
claims which has become final and executory
prescribes in 1 O years, pursuant to Art. 1144 of
the Civil Code on prescription of judgments. (JK
Mercado & Sons v. Sto Tomas, G.R. No. 158084,
2008)
DOLE certification that all mandatory wage
increases and other monetary benefits were all
complied with by the employer is not sufficient
proof to conclude payment of the monetary
claims of the employee, especially if the
certification was Issued based only on documents
submitted by the employer. (Dansart Security v.
Bagoy, G.R. No. 168495, 2010)
(7) WAGE DISTORTION CASES IN
UNORGANIZED ESTABLISHMENTS
Note: In Organized Establishments: The
Voluntary Arbitrator (VA) has jurisdiction
(8) ALL MONET ARY CLAIMS OF OFWS
" ARISING FROM EER OR BY VIRTUE OF-ANY
LAW OR CONTRACT INVOLVING FILIPINO
WC,RKERS FOR OV!=RSEAS DEPLOYMENT,
INCLUDING CLAIMS FOR ACTUAL, MORAL,
EXEMPLARY AND OTHER FORMS OF
DAMAGES (RA 8042)
For the LA to have jurisdiction over money claims
of OFWs, a EER is not necessary, as the article
also refers to "law" or "contract." (see Santiago v.
C.F. Sharp, G.R. No. 162419, 2007)
In order for the LA to assume jurisdiction over the
money claim, the OFC must have ~ certification
from the POEA (PNB v. Cabansag, G. R. No..
157010, 2005)
to
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

(9) ENFORCEMENT OF COMPROMISE "Exclusive and Original" Jurisdiction subject

AGREEMENTS WHEN THERE IS NON· to Articles 274 and 275
COMPLIANCE BY ANY OF THE PARTIES , A case under Art 224 may be lodged with the VA.
PURSUANT TO ART. 233 OF THE CODE (SEC. The policy of the law is to give primacy to
1, RULE V, 2005 NLRC RULES) voluntary modes of settling dispute.

Cooperatives For the VA to have jurisdiction over a subject

Termination of members of cooperatives is not matter under the LA's jurisdiction (such as
cognizable by the LA (members are not termination disputes), the parties must express
employees) this in unequivocal language in their CBA. (see
Ace Navigation Co. v. Fernandez, G.R. No.
LA has jurisdiction over illegal dismissal cases 197309, 2012)
involving employees of cooperatives
a) LABOR ARBITER VERSUS REGIONAL
LA does NOT have jurisdiction over DIRECTOR
1. Intra-corporate disputes
2. Cases involving corporate officers Jurisdiction over Money Claims
(because they are not employees); A money claim arising from employer-employee
3. Cases involving GOCCs with original relations, except SSS, ECC/Meciicare claims, is
charters; within the jurisdiction of:
4. Cases involving entities immune from · .- : REGIONAL
suit (except when the entity performs ' ~~BO ARBITER I • DIRECTOR
proprietary functions); Claim, regardless of Money claim is not ',
,,
5. Local water districts (since they are amount, is accompanied by
quasi-public corporations); accompanied with a reinstatement AND
6. Actions based on tort; claim of
7. Claim of a seaman for damages is under reinstatement; or Claim does not
torts (regular court has jurisdiction). exceed PS,000 (Labor
Claim exceeds Code, Art. 129)
(Tolosa v. NLRC, G.R. No. 149578,
P5,000, whether or
2003) not there is a claim for
reinstatement.
Money Claims:. LA vs. VA's Jurisdiction
1. Money claims arose from EER; and Jurisdiction over Contr-sted Cases Forwarded
2. Money claims arose from law or contracts other from Regional Director to Labor Arbiter f~.·.
\_I
than a CBA 1. The employer contests the findings of the
labor regulations officer and raises issues
NOTE: EER Is a jurisdictional requisite, absent of thereon;
which, the NLRC has no jurisdictiou to hear and 2. In order to resolve such issues, there is a
decide the case. (Hawaiian-Philippine Company
v. Gulmatico, G.R. No. 106231, 1994)
need to examine evidentiary matters; and
3. Such matters are not verifiable in the
normal course of inspection.
.
l
\,j
. " .
•

If all requisites are present, the labor standard

case falls under the exception clause under Art.
128(b ), and the RD will need to endorse the case
to the appropriate LA (Ex-Bataans Veterans
Security Agency v. Secretary, G.R. No. 162396,
2007)

PAGE 222 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 2019
2. REQUIREMENTS TO APPEAL TO NLRC
Appeal of LA's Decision
Appeal from the decision of the LA is brought by
ordinary appeal to the NLRC within 1 O calendar
days from receipt of the decision. (Vir-jen
Shipping and Marine Services v. NU?C, G.R. No.
58011-12, 1982j
The 10-day period is reckoned from receipt by
counsel of the final decision, order or award. This
applies to both appeals from the 1...A to NLRC and
. NLRC to CA. (Sy. v. Fairland Knitcraft, G.R. No. ·
182915, 2011)
This 10-day period is both mandatory and
jurisdictional iil · nature. (Charter Cbemicei &
Coating Corp v. Tan, G.R. No. 163891, 2009)
NOTE: There is no appeal from the decision of
the NLRC. The only way to e!evate the case to
the CA is by way of special civil action of
certiorari under Rule 65, Rules of Court.
From the ruling of the CA. it may be elevated to
the SC by petition for review on certiorari under
Rule 45 of the Rules of Civil Procedure. (St.
Martin Funeral Home v. NLRC, et al., G.R. No.
130866, 1998)
t -
Grounds
1. Prima facie evidence of abuse of
discretion on the part of LA;
'-·"J'"- 2. The decision, order or award was
secured through fraud or coercion
including graft and corruption;
3. Pure questions of low; and
4. Raised serious errors in the findings of
facts which could cause grave or
{..... .,1 irreparable damage or injury to the
appellant.
Additional Requirement: In case of judgment
involving a monetary award, employer (appellant)
may perfect the appeal of the LA's decision only
'\.}'. upon the posting of a cash or surety bond
issued by a reputable bonding company duly
accredited by the NLRC in the amount equivalent
;
to the monetary award in the judgment appealed
.{-c . ' from .
i..
PAGE 223 OF 244
i .
LABOR LAW
Effect of self-executing order of reinstatement
on back wages
The law intends the award of backwages and
similar benefits to accumulate past the date of the
l.A's decision until the dismissed employee is
actually reinstated. (Siemens Philippines v.
Domingo, G.R. No. 150488, 2008)
However, if reinstatement is no longer possible,
backwages shall be computed from the time of
illegal dismissal until the date the decision
becomes final. (Javellana v. Belen, G.R. No.
181913 and 182158, 2010)
Note: If there was implementation of
reinstatement pendiny appeal, either through
actual or payroll reinstatement, and the employee
received his/her salary for the period of such
reinstatement, the said amount received shall be
deducted from the total amount of backwages
due the employee, assuming the final decision of
the case awarded backwaqes to the employee.
An employee who was dismissed on the ground
of AWOL due to incarceration, is entitled to
reinstatement and under the prmciple of "no work,
no pay", his full backwages shall only commence
from the time he is refused work after acquittal.
(Standard Electric v. Standard Electric
employees Union, G.R. No. 166111, 2005).
Determination of Employer's Liability After
Finality of the Case
After finality of the case, the records will have to
be remanded to the LA to determine the actual
liability of the employer to each and every
employee. Both parties will have a chance to
submit further proof and argument in support of
' their respective proposed computations,
Fo;, the guidance of the LA, as well as th8 parties,
jurisprudence had laid down the following
yardsticks in the computation of the final amount
of liability:
1 . Employees who have been re -
employed without loss of seniority rights
shall be paid backwages but only up to
actual reinstatement;
2. Employees who have been re -
employed as new hires shall be restored
their seniority and other preferential
rights. However, their backwages shall
ATENEO CENTRAL
BAR OPERATIONS 2019
be computed only to date of actual re-
hiring;
3. Employees who shall have reached
compulsory age of retirement shall
receive backwages up to their retirement
only. The same is true as regards the
heirs of those who have passed away;
4. Employees who have not been
reemployed plus those who have
executed quitclaims and received
separation pay of financial assistance
shall be reinstated without loss of
seniority rights and paid full backwages,
after deduction of whatever amounts
already received; and
5. Employees who had obtained
substantially equivalent or even more
lucrative employment elsewhere in 1998
or thereafter are deemed to have
severed their employment with their
previous employer, and shall be entitled
to full backwages from the date of their
retrenchment only up to the date they
found gainful employment elsewhere.
(FASAP v. PAL, G.R. No. 172013,
October 2, 2009)
Requisites for Perfection of Appeal
1. Filed within the reqlementary period;
2. Memorandum of Appeal uncer oath;
3. Appeal fee;
4. Cash, property, or surety bond, if
· judgment involves monetary award; and
5. Proof of service to the adverse party.
Procedure
1. File Memorandum of Appeal within 10
calendar days, counted from receipt of
decision;
. 2. Other party can file an Answer within 10
calendar davs from receint of
Memorandum of Appeal;
3. NLRC decides within 20 calendar years;
4. NLRC decision becomes final and
executory 10 days after it is rendered.
(subject to MR)
Failure to Serve Copy of Memorandum of
Appeal Not Jurisdictional
The mere failure of a party to serve his
Memorandum of Appeal upon the opposinq party
does not bar the NLRC from giving due course to
an appeal. Such failure: is only treated as a formal
PAGE 2L4 OF 244
LABOR LAW
lapse, an excusable neglect, and, hence, not a
jurisdictional defect warranting the dismissal-of an
appeal. Instead, the NLRC should require the
appellant to provide the opposing party copies of
the notice of appeal and memorandum of appeal.
(J. PB: Fernandez v. Botica Claudio, G.R. No.
205870, 2014)
Appeal by Employer Involving Monetc1ry
Award
A bond equivalent to monetary award should be
posted within the 10-day period for filing of
appeal.
If no bond is filed, appeal is not perfected. (see
' Catubay v. NLRC, G.~. No. 119289, 2000).
Rei·, iedy in case of failure to post bond, remedy is
to file a motion to dismiss.
No monetary award, no appeal bond required
If LA's decision does not provide for a
computation of the monetary award, no appeal
bond is required to be filed.
Justifications for Non-Posting of Bond
1. No monetary award (Aba v. NLRC, G.R.
No. 122627, 1999);
2. Monetary award is not specified in the.
decision (Orozco v. CA, G.R. No.
155207, 2005);
3. In case of conflict between body and fa/lo .- ... ·
of the decision, the latter should prevail l_j
(Mendoza Jr. v. San Miguel Foods, GR.
No. 158684, 2005)
Motion to Reduce Bond .
i '":
·'
General Rule: Motion to reduce bond does not
toll the running of the period to perfect appeal.
C}ll;t:f.1Liu11; stjtj iieiaw (ivid5urnie v. l,ji:Jf/LUII,
G.R. Nos. 178034 & 173117, 2013)
McBurnie v. Ganzon Guidelines In Reduction
'·
of Appeal Bond l.J
1. The filing of a motion to reduce appeal bond
shall be entertained by the NLRC subject to r.
the following conditions:
o There is meritorious ground; and
o A bond in a reasonable amount is posted;
'. .. .J
2. For purposes of compliance with the second
condition - bond in reasonable amount - a
 ATENEO CENTRAL
BAR OPERATIONS 2019
motion shall be accompanied by the posting of
a provisional cash or surety bond equivalent
to (10%) of the monetary award subject of the
appeal, exclusive of damages and attorney's
fees;
3. Compliance with the foregoing conditions shall
suffice to suspend the running of the 1 O·day
reglementary period to perfect an appeal from
the labor arbiter's decision to the NLRC;
4. The NLRC retains its authority and duty to
resolve the motion to reduce bond and
determine the final amount of bond that shall
be posted by the appellant, still in accordance
with the standards of meritorious grounds and
reasonable amount; and
5. In the event that the NLRC denies the motion
to reduce bond, or requires a bond that
exceeds the amount of the provisional bond,
the appellant shall be given a fresh period of
10 days from notice of !he NLRC order within
r which to perfect the appeal by posting the
required appeal bond.
NOTE: A substantial monetary award, even if it
runs into millions, does not necessarily give the
employer-appellanta 'meritorious case' and does
not automatically warrant a reduction of the
· appeal bond. (Calabash Garments v. NLRC, G.R.
I. ,. No. 110827, 1996)
l..J
Examples of Meritorious Grounds
1. Fundamental consideration of substantial
justice;
2. Prevention of rnlscarriaqe of justice or of
unjust enrichment; or
3. Special circumstances of the case
combined with its legal merits and the
{ ; amount and issue involved. (Garcia v. KJ
'--'
Commercial, G.R. No. 196830, 2012)
t . ',-
/
10% Appeal Bond is Provisional
i .
'<. , The 10% requirement in McF3urnie pertains to the
reasonable amount which the NLRC would
accept as the minimum of the bond that should
accompany the motion to reduce bond in order to
suspend the period to perfect an appeal under the
NLRC rules. The 10% is based on the judgment
r
\ ' award and should in no case be construed as the
-,
minimum amount of bond to be posted in order to
perfect appeal. There is no room for a different·
PAGE 225 OF 2A,4
LABOR LAW
interpretation when McBurnie made it clear that
the percentage of bond set is provisional. ( Sara
Lee v. Macatlang, G.R. No. 180147, 2015)
Enforcement
Any law enforcement agency may be deputized
by the DOLE Secretary or the NLRC.
Issuance of writ of execution on a judgment within
5 years from date it becomes final and executory
motu proprio or in motion of any interested party.
3. REINSTATEMENT PENDING APPEAL
If reinstatement is ordered in an illegal
dismissal case, it is immediately executory
even pending appeal. This means that the
perfection of an appeal shall stay the execution of
the decision of the LA except execution of the
reinstatement pending appeal.
Self - executing with no need for a writ of
execution - only applicable to order issued by
Labor Arbiter.
Writ of execution required when reinstatement is
ordered by NLRC on appeal, or subsequently by
the CA or SC, as the case may be.
Either admitted back to work under the same
terms and conditions prevailing prior to his
dismissal or separation or merely reinstated in the
payroll (at the · option of the employer, i.e.
confidential employee, but the choice must be
communicated to the employee by the employer)
Posting of a bond shall not stay the execution of
reinstatement.
The unjustified refusal of tho employer to
reinstate an illegally dismissed employee entitles
the employee to payment of his salaries.
Reinstatement Pending Appeal (A1t. 229) vs.
Order of Reinstatement (Art. 294)
' , A T.229 I ART.294 '
Order of The order of
reinstatement by the reinstatement
LA is immediately presupposes the
executory pending award thereof is
appeal. pursuant to a final
and executory
It is similar to a return- judgment, and not
to-work order. ~~~-'-~~~~~~~--'
while the case for
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

illegal dismissal is Exclusive Appellate Jurisdiction

pending O'l appeal. 1. All cases decided by the LAs, including
Issued by the LA Issued by the NLRC, contempt cases;
CA, or SC 2. Cases decided by the DOLE Regional
Generally, no need for Requires the Directors or his duly authorized hearing
the issuance of a writ issuance of a writ of officers involving recovery of wages, simple
of execution. execution. money claims and other benefits not
exceeding P5,000 and not accompanied by
Jurisprudence a claim for reinstatement.
If despite several writs of execution, the employer
still refuses to reinstate the employee, the remedy Jurisdiction to Determine EER
is not the grant of additional backwages to serve The NLHC has jurisdiction to determine,
as damages but to file a motion to cite the preliminarily, the parties' rights over a property,
employer for contempt. (Christian Literature when it is necessary to determine an issue related
Crusade v. NLRC, G.R. No. ?9106, 1989) to rights or claims arising from a EER (Milan v.
NLRC, G.R. No. 202961, 2015)
An order for reinstatement entitles an employee
to receive his accrued backwagos from the Jurisdiction to hear cases over company-
moment the reinstatement order was issued up to owned property
the date when the same was reversed by a higher Both the LA and the NLRC have jurisdiction to
court without fear of refunding what he had hear cases over company-owned property
received. (Garcia v. Philippine Airlines, Inc., G.R. although the LA has primary jurisdiction. ·
\...,
No.164856, 2009)
In Yu,oangco Cotton vs. CA (G.R. 126322, 2002),
the Court held a third party whose property has
8. NATIONAL LABOt~ RELATIONS been levied upon by a sheriff to enforce a
COMMIS$10N (NLRC) , decision against a judgment debtor is afforded
with several alternative remedies to protect its
1. JURISDICTION interests. The third party may avail himself of
alternative remedies cumulatively, and one will
Original Jurisdiction not preclude the. third party from availing himself
1. Injunction in ordinary labor disputes to of the other alternative remedies in the event he ,--..
enjoin or restrain any actual or threatened failed in the remedy first availed of.
'
'I; ~ '
JI

commission of any or all prohibited or

unlawful acts or to require the performance Thus, a third party may avail himself of the
of a particular act in any labor dispute following alternative remedies:
which, If not restrained

damage to any party;

or performed
forthwith, may cause grave or irreparable

2. Injunction in strikes or lockouts under Art.

a. File a third party claim with the sheriff of
the Labor Arbiter, and
b. If the third party claim is denied, the third
party may appeal the denial to the NLRC.
.
.~·;
279;
3. Certified labor dispute causing or likely to Even if a third party claim was denied, a third .
cause a strike or lockout in an industry party may still file a proper action . with a
indispensable to the national interest, competent court to recover ownership of the
certified to it by the DOLE Secretary for property illegally seized by the sheriff.
compulsory arbitration;
\..)
- '
4. Contempt cases; and Ocular Inspection by LA & NLRC at any time
5. Petition to annul or modify the order or during working hours
resolution of the LA; The Chairman, any Commissioner, LA, or their
duly authorized representatives, may at any time
during work hours, conduct ocular inspection.
(2011 NLRC Rules of Procedure, Rule X, Sec. 5)
-- i't

PAGE 226 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 2019
Injunction from the NLRC is NOT the proper
remedy against employee dismissal
The NLRC's power to issue an injunction
originates from a 'labor dispute' before the LA.
(PAL v. NLRC, G.R. No. 120567, 1998)
C. JUDICIAL REVIEW OF LABOR RULINGS
1. COURT OF APPEALS
RULE 65, RULES OF COURT
Rule 65, Rules of Court
Section 1. Petition for certiorari. ~ When any
tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in
excess its or his jurisdiction, or 'Nith grave
abuse of discretion amounting to lack or
excess of jurisdiction, and there is no appeal,
or any plain, speedy, and adequate remedy in
the ordinary course of law, a person aggrieved
l, thereby may file a verified petition in the proper
court, alleging the facts with certainty and
praying that judgment be rendered annulling or
modifying the proceedings of such tribunal,
board or officer, and granting such incidental
reliefs as law and justice may require.
General Rule: The only mode by which a labor
case decided by any of the following labor
authorities/tribunals tnay reach the Court of
Appeals is through a Rule 65 petition for
certiorari.
1. the DOLE Secretary;
2. the NLRC; and
3. the Director of the Bureau of Labor
Relations (BLR) in cases decided by him
() in his appellate jurisdiction (as
distinguished from those he decides in
his original jurisdiction which are
appealable to the DOLE Secretary).
Exception: Decisions, orders or awards issued
by the VA or panel of VAs which may be
elevated to the CA by way of an ordinary appeal
lJ under a Rule 43 petition for review.
Requisites before filing a Petition for Review
under Rule 65
A Motion for Reconsideration must have been
filed before the DOLE Secretary, NLRC, or BLR
'- PAGE 227 OF 244
.. ;
LABOR LAW
Director, as the case may be. This is mandatory
and jurisdictional.
, A motion for reconsideration should be filed even
though it is not required or even prohibited by the
concerned government office. This was the rule
enunciated in the 2014 case of Philtranco Service
Enterprises, Inc. v. PWU- AGLO (G.R. No.
180962, 2014).
Failure to file a motion for reconsideration within
the 10-day reglementary period prior to the filing
of a petition for certiorari renders the NLRC
decision final and executory. (J. PB: Michelin Asia
Pacific Application Support System v. Ortiz, GR.
No. 189861, 2014)
Thus, while a government office may prohibit
altogether the filing of a motion for
reconsideration with respect to its decisions or
orders, the fact remains that certiorari inherently
requires the filing of a motion for reconsideration
which is the tangible representation of the
opportunity given to the office to correct itself.
Simply put, regardless of the proscription against
the filin9 of a motion for reconsideration, the same
may be filed on the assumption that rectification
of the decision or order must be obtained and
before a petition for certiorari may be instituted.
NOTE: A second motion for reconsideration is
prohibited under the NLRC Rules. (G.R. No.
189861, 2014)
When Filing of a Motion for Reconsideration
Not Necessary
Q: A labor dispute between X and Y was pending
before the NLRC. The NLRC ruled partly in favor
of Y. Dissatisfied with the decision, Y filed a
motion for reconsideration which was denied. In
the denial, the NLRC stated that "No further
motion of similar import shall be entertained."
Without filing a motion for reconsideration, X filed
a petition for certiorari before the CA. Was the
action taken by X proper?
A: Yes. The resolution explicitly warned the
litigating parties that the NLRC shall no longer
entertain any further motions for reconsideration.
This circumstance gave X the impression that
moving for reconsideration before the NLRC
would only be an exercise in futility in light of the
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

tribunal's aforesaid warning. (Genpact Services 2. SUPREME COURT

v. Santos-Falceso, G ..I=?. No. 227695, 2017)
When Appeal Bond May Be Reduced
While the posting of a cash or surety bond is
indispensable to the perfection of an appeal in
cases involving monetary awards from the
decision of the LA, the Rules of Procedure of the
NLRC nonetheless allows the reduction. of the
bond upon a showing of:
1. The existence of a meritorious ground for
reduction, and
2. The posting of a bond in a reasonable
amount in relation to the monetary
award. (Philippine Tourlsiers, Inc. and/or
Alejancko R. Yague, Jr. v. Mas Transit
Workers Union-Anglo-Kmu and its
members, G.R: No. 201237, 2014).
SimultaneotJs filing of the motion to reduce
bond and the posting of the reduced amounts
to substantial compliance with Art. 223
While the bond requirement on appeals involving
a monetary award has been relaxed in certain
cases, this can only be done where there was
substantial compliance with the rules or where
the appellants, at the very least, exhibited
willingness to pay by posting a partial bond.
(Magdaia Multipurpose v. KMLMS, G.R. 191138-
39, 2011).
LA, NLRC, or CA MAY validly award attorney's
fees in favor of a complainant even if not
claimed or proven in the proceeding.
The provision on attorney's fees In Article 111
RULE 45, RULES OF COURT
Rule 45, Rules of Court
Section 1. Filing of petition with Supreme
Court. -- A party desiring to appeal by
certiorari from a judgment or final order or
resolution of the Court of Appeals, the
Sandiganbayan, the Regional Trial Court or
other courts whenever 1'3uthorized by law, may
file with the Supreme Court a verified petition
for review on certiorari. The petition shall raise
only questions of law which must be distinctly
set forth.
All references in the amended Section 9 of B.P.
No. 129 to supposed appeals from the NLRC to
the Supreme Court are interpreted and hereby
declared to mean and refer to petitions for
certiorari under Rule 65.
Consequently, all such petitions should hence
forth be initially filed in the Court of Appeals in ' ,,
strict observance of the doctrine on the hierarchy
of courts as the appropriate forum for the relief
desired. (St. Martin Funeral Home vs. NLRC,
1998)
Appeal from CA to SC should be under Rule 45
(Petition for Review on Certiorari) and not Rule 65
(Special Civil Action for Certiorari). (Sea Power
Shipping Enterprises, Inc. vs. CA, 2001) .. "
Li
0. BUREAU OF LABOR RELATIONS
,,,
1:t.

envisions a situation where there is a judicial or

administrative proceeding for recovery of wages. 1. JURISDICTION

Upon the termination of the proceedinqs, the law Jurisdiction of BLR

allows a deduction for attorney's fees of 10% from -, 1. Inter-union conflicts
the total amount due to the winning party. 2. All disputes, grievances or problems
arising from or affecting labor-
(Vengco v. Trajano, G.R. No. 74453, 1989).
management relations in all workplaces
EXCEPT those arising from the
Hence, even if there is no claim and proof, implementation or interpretation of the l z,
attorney's fees not more than 10% of the amount CBA which shall be the subject of
t. ,,,.:

entitled may be awarded. The court has also a

liberty of decreasing it if the questions involved in
grievance procedure and/or voluntary
arbitration u
the litigation are neither novel nor difficult. (D.M. 3. Complaint involving federations, national
Consunji v. NLRC, G.R. No. 71459, 1986). unions, industry unions, its officers or
member organizations

PAGE 228 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 2019

Note: Unlike the NLRC which is explicitly vested

Cases involving Cases involving with the jurisdiction over claims for actual, moral,
Federations and independent unions exemplary and other forms of damages, the BLR
National Unions and local chapters is not specifically empowered to adjudicate
claims of such nature arising from intra-union or
inter-union disputes. (Marino, Jr., et. al. v.
' MODE OF REVIEW l
Gemili«; et. al.,G.R. No. 132400, January 31,
~INAL . APPE LLATE 2005)
JURISDICTIQN I .JURfS lCTION •
Decision is
Power to Issue Subpoena
immediately
When relevant to a labor dispute under its
executory upon
jurisdiction either at the request of any interested
issuance of entry of
Appeal to DOLE party or at its own initiative
final judgment; can be
Secretary
reviewed by the CA in
, Compromise Agreements
a petition for
If voluntarily agreed upon by the parties with the
certiorari under Rule
assistance of the SLR or the regional office of
65.
DOi'..E '7 final and binding upon the parties
Within 10 days to the
DOLE Secretary The only time NLRC or any courts can assume
Grounds:
jurisdiction over issues involved therein:
Grave abuse of
1. In case of non-compliance thereof
discretion 2. If there is prims facie evidence that the
. settlement was obtained through fraud,
Gross incomoetence
misrepresentation or coercion

Appeal of BLR's Decision As long as the agreement is voluntarily entered

1. Denial of application for registration of a into and has a reasonable award, it is valid.
union
a. Denial by the Regional Office, appeal to It must be approved by the LA (NLRC Rules).
the BLR
b. Denial is originally made by the SLR,
At the DOLE Secretary's level, the Secretary
appeal may be had to the DOLE
must approve.
Secretary
2. Cancellation of registration of a union
On appeal, the NLRC must approve· the
a. Cancellation by the Regional Office,
agreement.
appeal to the BLR.
b. Cancellation by the BLR in a petition filed
c·... »' directly, appeal to DOLE Secretary by
An offer to settle is not proof that something is due
to the employee.
ordinary appeal
3. Decision of the BLR rendered in its original
Art. 233 of the Labor Code states that any
jurisdiction may be appealed to the DOLE
compromise settlement, including those involving
Secretary whose decision thereon may only
labor standard laws, voluntarily agreed upon by
be elevated to the CA by way of certiorari
the parties with the assistance of the Bureau or
under Rule 65.
the Regional Office of the Department of Labor
4. Decision of the BLR rendered in its appellate
shall be final and bindin!J upon the parties.
jurisdiction may not be appealed to the DOLE
Secretary but may be elevated directly to the
Note: The assistance of the BLR or the regional
CA by way of certiorari under Rule 65.
office of the DOLE in the execution of a
(Abbott Laboratories Philippines, Inc. v.
( Abbott Laboratories Employees Union, et al.,
compromise settlement is a basic requirement.
Without it, there can be no valid compromise
G.R. No. 131374, 2000)
\,_
settlement. Mere appearance before BLR or the
PAGE 229 OF .244
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

regional office of the DOLE to file the already Privileged Communication

executed compromise settlement is not the
"assistance" required by the law. (Mindoro
Lumber and Hardware v. Eduardo D. Bacay, et.
al., G.R. No. 158753, 2005)
Jurisdi.ction of the POEA
1. Cancellation/Suspension of License of
Authority to recruit of Recruitment
Agencies (until phase out within 5 years
as provided in RA 8042)
2. Disciplinary Action against OFWs
Appeal to Secretary of DOU: within 1 O
calendar days-s
cancellation/revocation/supervision of
license or authority
Appeal of POEA Decision to NLRC w/in 10
calendar days in cases of:
1. Violation cf overseas employment
contracts.
2. Disciplinary cases filed against overseas
· contract workers.
E. NATIONAL CONCILIATION AND MEDIATION
BOARD
Information and statements made at conciliation
meetings shall NOT be used as evidence in the
NLRC. Conciliators and similar officials shall not
testify in any court or body regarding any matters
taken up at conciliation proceeding conducted by
them.
2. PREVENTIVE MEDIATION
NCMB Manual of Procedures Section 1, (24 ).
refers to Preventive Mediation cases as labor
disputes which are the subject Of a formal or
informal request for conciliation and mediation
assistance sought by either or both parties or
upon the initiative of the NCMB.
Only a certified or duly recognized bargaining
agent may file a notice or request for preventive
mediation.
NCMB has no jurisdiction to entertain any notice
filed by the.federation in 1i:>ehalf of individual union
members of its local. (Insular Hotel Employees
Union-NFL v. Waterfront Insular Hotel Davao,
G.R. No. 174040-41, 2010)
F. DOLE REGIONAL DIRECTORS

Jurisdiction of the NCMB Jurisdiction of DOLE RDs

1. Conciliation 1. Visitorial power. (Art. 128, Labor Code)
2. Mediation 2. Simple Money Claims not exceeding Php
3. Voluntary arbitration cases 5,000. (Art. 129, Labor Code) ·
3. Violation of the constitution & by - laws
and rights & conditions membership.
1. CONCILIATION, MEDIATION 4. Inter-union and intra-union disputes 0
Conciliation - Mediation refers to the process of involving independent unions and
dispute management conducted by a Conciliator chartered locals.
- Mediator with the end in view of facilitating
amicable settlement of the labor dispute. (NCMB 1. Recovery and Adjudicatory Power
Manual of Procedures r~ule tu.
Section 1, (4))
Requisites for RD to Decide Small Money
ORGANIZED . . · UNO'R ANIZED Claims
ESTABLISHM6NT ESTABLI HMENTS 1. Claim is presented by an employee, or a
' WITH CBA ·. ANDJIVIT: OUTCBA person employed in domestic or
Submit the issue household service, or employer;
Submit issue before
before NCMB for 2. The claim arises from an EER;
the grievance
machinery. If
conciliation. If not 3. The claimant does not seek ()
fruitful in 10 days, reinstatement; and
unresolved, refer to
refer to NLRC for 4. The aggregate money claim of each
( i
voluntary arbitration 11;; ••• "'

arbitration claimant does not exceed PhP 5,000 ....

f ... J
'
PAGE 230 OF 244
-,

l,
 ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

Notes: In the absence of any of the above 3. Order Work Stoppage I Suspension of
requisites, the LA will have jurisdiction over the Operations when non-compliance with
case, pursuant to ART. 224. the law or IRR poses grave or imminent
danger to the health and safety of the
The claimant need not be an employee at the time . workers in the workplace
the complaint has been filed; it is enough that the 4. Conduct hearings within 24 hours to
claim arises from employment determine whether:
a. An order for stoppage of work I
Appeal from the RD's Decision suspension of operations shall
The Complainant may appeal to the I\JLRC within be lifted or not; and
10 calendar days from a receipt of a copy of the b. Employee shall pay the
Regional Director's decision I resolution. employees concerned their
salary in case the violation is
G, DOLE SECRET ARY attributable to his fault

1. Visitorlal and enforcement powers Note: EER must still exist at the time of the
initiation of the action fbr the Secretary or his
Visitorial Power authorized representative to exercise
Power of the Secretary of Labor or his duly Enforcement Power
authorized representative, including labor.
regulation officers to: When Enforcement Power Cannot be Used
1. Have access to employer's records and 1. Case does not arise from exercise of
(., premises at any time of the day or night visitorial power
whenever work is being undertaken 2. When EER ceased to exlst at the time of
therein inspection
2. Right to copy records
3. If employer contests finding of the labor
3. To question any employee
officer and such contestable issue is not
4. Investigate any fact, condition, or matter
verifiable in the normal course of
which may be necessary to determine
inspection
violations or w:1ich may be necessary to
aid in enforcement of the Labor Code or
Compliance Order
any labor law or order
Must observe due process in administrative
(i proceedings:
Enforcement Power
1. Alleged violator must first be heard and
() Power of the Secretary of Labor or his duly
given adequate opportunity to present
authorized representative, including labor evidence on his behalf.
{ . regulation officers to:
·. r 2. Evidence presented duly considered
'1. Issue compliance orders to give effect to before any decision reached.
() labor legislation based on the findings of 3. Decision is based on substantial .
employment and enforcement officers or evidence.
() industrial safety engineers made in the 4. Decision based on evidence presented in
course of inspection the hearing, or at least contained in the
r> 2. Issue writs of execution to the
\..., record and disclosed to the parties.
appropriate authority for the enforcement 5. Decision should explain the issues
( . of their orders, EXCEPT in cases where
\. j involved and the reasons for the
the employer contests the findings of the decisions rendered.
lJ labor employment and enforcement '
officer and raises issues supported by Appeal
f\ documentary proofs which were not .
L: If crder issued by duly authorized representative
considered in the course or inspection - of DOLE Secretary - appeal to the latter
in the latter case, the case will have to be
forwarded to a Labor Arbiter If order involves monetary award - an appeal by
the employer may be perfected upon only upon
PAGE 231 OF 244
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

posting of CASH or SURETY bond in the amount

equivalent to the monetary award in the order
appealed from
Stoppage of Work/Suspension of Operations
The Secretary may order stoppsqe of work OR
suspension of any unit or department where non-
compliance with the law or implementing rules
and regulations poses grave and imminent
danger to the health and safety of workers in the
workplace.
a
Within 24 hours - hearing shall be conducted to
determine whether an order for the stoppage of
work or suspension of operations shall belifted
If violation is attributable to fault of the employer,
he shall pay the employees concerned their
salaries or wages during the period of such
stoppage of work or suspension of operations.
Comparison: Enforcement PoWM under Art.
128 vs. Adjudicatory Power under Art. 129
Before the DOLE may exercise its power under
Art. 128, two important things must be resolved:
1. Does the employer - employee relationship
still exist, or alternatively, was there ever an
employer - employee relationship to speak
of; and
2. Are there violations of the Labor Code or any
of the labor laws?
Note: The existence of EER is a statutory
prerequisite to a limitation on the power of the
Secretary of Labor, on which the legislative
branch is entitled to impose,
Art. 128's grant of vlsitorlal and enforcement
powers is for the purpose of determining
violations of, and enforcing, the Labor Code and
any labor law, wage order, or rules and
regulations. If there is no employer-employee
relationship in the first place, the duty of the
, employer to adhere to labor standards with
respect to the non-employees is questionable.

DOLE can Determine, Prima Facie, the

Inspection of Existence of an EER
establishments and If there is a prima facie showing of the absence of
issuance . of Adjudication of employer-employee relationship, the Secretary is
compliance orders monetary claims precluded from exercising the visitorial and
with labor standards, (labor standards)
enforcement powers. (People's Broadcasting v.
wage orders, or other
Secretary of Labor, G.R. No. 179652, May 8,
labor laws
2009)

Under Art. 128(b) of the Labor Code, as amended

by RA 7730, the DOLE is fully empowered to
make a determination as to the existence of an
employer-employee relationship in the exercise
of its visitorial and enforcement power, subject to
Employees must still judicial review, not review by the NLRC.
be in the service
(hence, there is an If a complaint is brought before the DOLE to give
existing. EER)
effect to the labor standards provisions of the
Labor Code or other labor legislation, and there is
a finding by the DOLE that there is an existing
employer-employee relationship, the DOLE
exercises jurisdiction to the exclusion of the
NLRC. u
If the DOLE finds that there is no employer-
(_}
employee relationship, the jurisdiction is properly
with the NLRC.

PAGE 232 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 20'19
If a complaint is filed with the DOL,E, and it is
accompanied by a claim for reinstatement, the
jurisdiction is properly with the Labor Arbiter,
under Art. 217(3) of the Labor Code, which
provides that the Labor Arbiter has original and
exclusive jurisdiction over those cases involving
wages, rates of pay, hours of work, and other
terms and conditions of employment, if
accompanied by a claim for reinstatement.
If a complaint is filed wilh the NLRC, and there is
still an existing EER, the jurisdiction is properly
with the DOLE.
The findings of the DOLE, however, may still be
questioned through a petition for certiorari under
Rule 65 of the Rules of Court. (People's
Broadcasting v. Secretary of Labor, G.R. No.
179652, 2012)
[ '
Unlawful Activities
1. For any person or entity to obstruct,
impede, delay or otherwise render
ineffective the orders of the Sec. or his
authorized representatives issued
pursuant to the authority under Art. 128.
2. No inferior court shall issue temporary or
permanent injunction or restraining order
or otherwise assume jurisdiction over any
case involving the enforcement orders.
2. POWER TO SUSPEND EFFECTS OF
Cl- TERMINATION
() Miscellaneous Provlslons
The Secretary of Labor and Employment may
suspend the effects of the termination pending
resolution of the dispute in the event of a prima
0 facie finding by the appropriate official of the
Department of Labor and Employment before
() whom such dispute is pending . that the
termination may cause a serious labor dispute or
is in implementation of a mass lay-off. {Labor
Code, Art. 292[b])
Conditions under which Secretary of Labor or
lJ his duly authorized representative MAY
Inquire into the financial activities of
legitimate labor organizations
The Secretary of Labor and Employment or his
duly authorized representative is hereby
empowered to inquire into tile financial activities
of legitimate labor organizations upon the filing of
PAGE 233 OF 214
' LABOR LAW
a complaint under oath and duly supported by the
written consent of at least 20% of the total
membership of the labor organization concerned
and to examine their books of accounts and other
records to determine compliance or non-
compliance with the law and to prosecute any
violations of the law and the union constitution
and by-laws:
Provided, That such inquiry or examination shall
not be conducted during the
60-day freedom period nor within the 30 days
immediately preceding the date of election cf
union officials. (Labor coae, Art. 289)
SOLE generally has NO jurisdiction over
appeals
In The Heritage Hotel vs. National Union of
Workers (G.R. 178296, 2011), the Supreme
Court ruled that jurisdiction remained with the
BLR despite the Bt.RDlrector's inhibition.
"When the DOLE Secretary resolved the appeal,
she merely stepped into the shoes of the BLR
Director and performed a function that the latter
could not himself perform."
SOLE has the power td give arbitral awards in
the exercise of his authority to assume
jurisdiction over labor dispute
The arbitral award given by the Secretary of
Labor can be considered as an approximation of
a collective bargaining agreement. While the
award cannot per se be categorized as an
agreement between the parties (because of the
Secretary's interference), it still has the force and
effect of a valid contract obligation between the
parties, as is stated in (Cirtek Employees vs.
Clrtek Electronics, G.R. 190515, 2011).
3. REMEDIES
Decisions of the DOLE Secretary are appealable
to the NLRC within 5 calendar days.
Remedy where no EER exists
Where no employer-employee relation exists
between the parties and no Issue is involved
which may be resolved by reference to the Labor
Code, other labor statutes, or any collective
-,
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

bargaining agreement, it is the RTC that has The show steward, the employee and his
jurisdiction. immediate supervisor shall exert efforts
to settle the grievance at their level.
The RTC has jurisdiction over the claim of an c. If no settlement is reached, the grievance
independent contractor to adjust the shall be refe11red to the grievance
committee which shall have 10 days to
contractor's fee. (Urbanes v. Secretary of Labor,
decide the case.
G.R. No. 122791, 2003)
I. VOLUNTARYARalTRATORS
H. GRIEVANCE MACHINERY

Purpose 1. JURISDICTION (ART. 274)

1. Grievances arising from the
The parties to a CBA shall establish a machinery
implementation or interpretation of CBAs
for the adjustment and resolution of grievances
2. Arising from interpretation or
arising from the interpretation of implementation
enforcement of company personnel
of their CBA and those arising from the
policies .
interpretation or enforcement of company
3. Wage distortion issues arising from the
policies. (LC, Art. 2i'3)
application of any wage orders in
organized establishments
Absence of Grievance Machinery Provision in
4. Arising from interpretation and
CBA .• l
implementation of the productivity
In the absence of applicable provision in the CBA,
incentive programs under R.A 6971
a grievance committee shall be created within 10
5, Any other labor disputes upon agreement '-·-'
days from signing of the CBA. The committee
by the parties.
shall be composed of at least two (2)
representatives each from · the members of the
NOTE: The parties may choose to submit the
bargaining unit and the employer, unless
dispute to voluntary arbitration proceedings
otherwise agreed upon by the parties. The
before or at stage of the compulsory arbitration
representatives from among the members of the
proceedings.
bargaining unit shall be designated by the union.
(Rule XIX, Section 1 (2), D. 0. 40-03) Issues/ controversies which may be the
subject of voluntary arbitration
By-passing Grievance Machinery is ULP ... ").
1. Article 261 of the Labor Code provides lJ
The failure or refusal of any party to the CBA to that VA shall have original and exclusive
adhere to the grievance procedure amounts to an jurisdiction over unresolved grievances
unfair labor practice. Collective bargaining does arising from the interpretation or
not end with the execution of an agreement. It is implementation of the CSA and those
a continuous process. (Republic Savings Bank v. arising from the interpretation or ( .)
CIR, G.R. No. L~20303, 1967) enforcement of company personnel
policies
Procedure in Handling Grievances 2. Violations of the CBA which are not gross
In the absence of a specific provision in the
in character if not resolved through the ()
grievance machinery.
collective bargaining agreement or existing
3. All other labor disputes including ULP
company practice prescribing for the procedures
and bargaining deadlock upon
in handling grievance, the following shall apply: agreement of the parties (Labor Code,
a. An employee shall present his grievance Art. 262)
or complaint orally or in writing to the
shop steward, Upon receipt thereof, the Submission agreement
shop steward shall verify tile facts and
determine whether or not the grievance is Note: it is mandatory for parties to refer their
valid. controversy to a grievance machinery and
b. If the grievance is valid, the shop steward voluntary arbitrators for the adjustment or
shall Immediately bring the complaint to resolution of grievances arising from the
the employee's immediate supervisor.
PAGE 234 OF 244
 ATENEO CENTRAL
BAR OPERATIONS 2019
interpretation or implementation of their CBA and
those ansmg from the interpretation or
enforcement of company personnel policies.
(Sanyo Philippines Workers Union-PSSLU v.
Canizares, G.R. No. 101619, 1992)
A VA is confined to the interpretation and
application of the CBA. He does not sit to
dispense his own brand of industrial justice and
his award is legitimate only insofar as it draws its
' impractical;
essence form the CBA.
While the VA ls.confined to the interpretation and
the application of the CBA in resolvinq the issue/s .
submitted for its resolution, he is not expected to
merely rely.on the cold and cryptic words on the
face of the CBA. He is mandated to discover the
intentions of the parties and gaps may likewise be
filled by reference to the practices of the industry,
f ' such that the parties' contemporaneous and
subsequent acts should be considered. (Veloso,
Labor Reviewer, pp 415-416 (2011))
',.,
A dispute settled through voluntary
\ ' arbitration IS NOT inconsistent with Article
217 of the Labor Code
The SC in The University of Immaculate
Concepcion vs. NLRC (GR. 181146, 2011),
stated that Article 262 provides of an exception,
and "for the exception to apply, there must be
..
I
agreement between the parties clearly conferring
jurisdiction to the voluntary arbitrator. Such
agreement may be stipulated in a collective
bargaining agreement. However, in the absence
of a collective bargaining aqreernent, it is enough
that there is evidence on record showing the
parties have agreed to resort to voluntary
arbitration."
Effect of failure to resort to barangay
conciliation to the labor case
Labor disputes are the exception to PD 1508.
Under Art. 226 of the Labor Code, motions to
dismiss before the LA are only allowed on
grounds of lack of jurisdiction, improper venue
and bar by prior judgment or prescription. Hence,
failure to resort to baranqay conciliation is not a
valid ground to defeat the labor case
, varies the award and/or is irregularly issued.
l (DBP v. Union Bank, GR No. 155838, 2004)
PAGE 235 OF 244
LABOR LAW
2. REMEDIES
VA or panel of VAs may grant the same reliefs
and remedies granted by Labor Arbiters under
Article 279 of the Labor Code, such as:
1. In illegal dismissal cases:
a. Actual reinstatement;
b. Separation pay in lieu of
reinstatement, in case
reinstatement becomes
impossible, non-feasible or
c. Full backwages;
d. Moral and exemplary damages;
and
e. Attorney's fees.
2. Monetary awards in monetary claims
cases in which case, the decision should
specify the amount granted and the
formula used in tho computation thereof.
Rule 43, §1, Rules of Court. The decision of
a Voluntary Arbitrator or panel of Voluntary
Arbitrators is appealable by ordinary appeal
under Rule 43 of the Rules of Civil Procedure
directly to the Court of Appeals.
Appeal of VA's Decision
Appealable by ordinary appeal under Rule 43 of
the Rules of Civil Procedure directly to the .CA.
From the CA, the case may be elevated to the SC
by way of ordinary appeal under the same Rule
45. (Luzon Development Bank v. Association of
Luzon Development Bank Employees, et e'; G.R
No. 120319, 1995)
Instances when an order of execution may be
appealed
1. When execution becomes impossible or
unjust, it may be modified or altered on
appeal to harmonize the same with justice
and the facts (Tories vs. NLRC, GR No.
107014, 2000).
2. Supervening events may warrant
modification in the execution of judgment, as
when reinstatement is no longer possible
because the position was abolished as a
cost-cutting measure due to losses. (Abalos
vs. Phi/ex Mining Corp, G.R. 140374, 2002),
3. Where the writ is found defective, exceeds or
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

Execution of a labor judgment: which on J, PRESCRIPTION OF ACTIONS

appeal, had become final and executory
By filing a motion for execution and servinq a writ All money claims arising from
of execution to be served by the sheriff or such employer- employee relations
law enforcement agency as may be deputized by accruing during the effectivity
the DOLE or NLRC. It may also be issued motu of this Code shall be filed
propio by the Labor Arbiter. (Labor Code, Arts. within 3 years from the time
223 & 224) the cause of action accrued;
otherwise they shall be forever
barred.
An action for reinstatement
prescribes in 4 years, for the
injury to the employee's rights
as provided under Art. 1146 of
the Civil Code. (Cal/anta v.
Carnation Philippines, G.R.
No. 70615, 1986)
1 year from accrual of such
unfair labor practice.
Simple illegal recruitment - 5
years
Economic sabotage - 20
years
General Rule: 3 years from
the time the cause of action
accrued

Exception: ULP cases

prescribe within 1 year from
accrual of such unfair labor
practice
A complaint or petition for
audit or examination of funds
and books of accounts
prescribes within three (3)
years:
from the date of submission
of the annual financial
report to the DOLE; or
1. from the date the same
should have been
submitted as required by
law, whichever comes
earlier.
()
-,
This provision on the
prescriptive period applies
only to a legitimate labor
organization which has
submitted the financial report
required under the Labor
Code.

PAGE 236 OF 244

 ATENEO CENTRAL
BAR OPERATIONS 2019
SUMMARY OF PROCEDURE: tABOR CASES
The rules of evidence prevailing in courts of law
or equity shall not be controlling.
It is the spirit and intention ol this Code which
shall be used as reasonable means to ascertain
the facts in each case, without reqard to
technicalities of law and procedure all in the
interest of due process.
Parties may be represented by legal counsel but
it shall be the duty of the Chairman, any presiding
Commissioner or. any labor arbiter to exercise
complete control of the proceedings at all stages.
General Rule: The only way to acquire
jurisdiction is to serve summons.
.t . . _ Exceptlon:Voluntary appearance of the lawyer
\ amounts to voluntary submission to the
jurisdiction of the LA. (Santos v. NLi~C, G.R No.
101699, 1996)
i
Failure to implead a substitute party is not a fatal
' jurisdiction - CA, certiorari under Rule
defect. (Chu v. Pasajo, 2003)
Payment of docket fees is not required in labor
standards claims under Art. 2e2(d).
Except: In case of bargaining deadlock, the fees
are shared by the parties.
(l Sec. 3, Rule V of the NLRC Rules allows parties
to submit position papers wit'.1 attachments and
() they can be made basis of the LA's decision,
Holding of trial on the merits is discretionary on
the part of the LA.
Due process in Art. 292(b). termination disputes
t· i
\.)' 7 end line is hearing with representative of own
choice
Due process in Art.·2277 opportunity to be heard
It is wrong to apply opportunity be heard in due
process under Art. 292(b).
Verification and Certification of Non-Forum
Shopping are required BUT Art. '2.27 can be
invoked.
PAGE 237 OF 244
LABOR LAW
NLRC Rules provide that before deciding, LA
must inform parties that the case has been
submitted for decision. If this is not complied with,
decision is still valid because of Art. 227.
Art. 21 B(c) cannot be invoked to support a faulty
decision of the LA. The provision refers to a
power of the NLRC and not the LA.
Summary
1. Decision of the Voluntary Arbitrator -
appeal to CA under Rule 43 (Luzon Dev't
Bank)
2. Decision of the DOLE and other attached
aqencles (including NLRC) should be
brought to the CA under Rule 6.5 (St.
Martin Funeral Homes)
3. Decision of the DOLE Secretary -
certiorari to the CA under Rule 65
(NAFLU v. Laguesma)
4. Order of the Med-Arbiter GRANTING the
Petition for CE in an UNORGANIZED
establishment - not appealable under
' DO 40-03 (2003). Thus, the recou: se is
certiorari under Rule 65.
·5. Decisions of the BLR in its appellate
65 .. (UST Faculty Union v. Bitonio, G.R.
No. 131235, 1999)
6. Certiorari is not a substitute for lost
app~al.
7. 10 days to perfect appeal by filing a
Memorandum of Appeal
8. Property bond is now allowed. (UERM-
Memorial Medical Center v. NLRC, G.R.
No.110419, 1997)
9. Appeal bond must be strictly complied
with.
10. NLRC cannot resuscitate a lost appeal.
11. Only 1 MR is allowed.
12. LA cannot entertain an MR or a petition
for relief of judgment. After the decision
has become final and executory, the writ
of execution is NOT appealable.
13. To stay writ of execution, ask for an
injunction under Art. 218 (e).
14. Period to appeal cannot be extended
BUT in a number of cases, SC
entertained appeals filed out of time
under the interest of justice rule (esp. if
the appellants are the employees)
15. Doctrine of supervening· event (i.e.
closure of company) requires payment of
separation pay and full backwages up to
the time of the closure of the company.
'

·'
..
. . . ....
~
u,
0
co
(')
N
w
o
-c
a.

~-,.
'· ·'

·,
\. J

()
I
I-
..J
{.)

()
rv
\...I

( s
t)
u
\...
( .,
R

'
l._.,
"'N"'""
LL
0
0)
M
N
w
o
~

i
\

(J
()
(j

0
(J

lJ
I\.j '

.'\.,
ATENEO CENTRAL
BAR OPERATIONS 2019 LABOR LAW

'

(J

.·'
l i

l)

()
(._J
I 1
v
()

PAGE 240 OF 244