University of the Cordilleras College of Law

 As an act: Exertion by human beings of

physical or mental efforts, or both, towards
the production of goods and services.
 As a sector of society: That sector or group in
a society, which derives its livelihood chiefly
from rendition of work or services in
exchange for compensation under managerial
direction (Mendoza, 2001).
 Refers to workers, whether agricultural or
non-agricultural
 The Labor Code articles cited here are those
that are numbered according to the Codal of
Rex Bookstore, 2013 edition. The
renumbering accommodated the revisions
introduced to the Code by RA 10151. If you
are using an older codal version, just subtract
six from the article number (e.g., ULP of
employers in the 2013 Rex codal is Art. 254.
Old number is Art. 248)
Constitutional Mandates on
Labor, Labor Law
Labor Legislation, Social
Legislation
The State shall protect and promote the interests of the
Filipino Laborer:

Art. II, 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 improved quality of life for all.

Art. II, Sec. 18. The State affirms labor as a primary

social economic force. It shall protect the rights, of
workers and promote their welfare.
The State shall protect and promote the interests of the Filipino
Laborer:

Art. XII, Sec. 12. The State shall promote the preferential use of
Filipino labor, domestic materials and locally produced goods,
and adopt measures that help make them competitive.

Art XIII, Sec. 14. The State shall protect women by providing
safe and healthful working conditions, taking into account their
maternal functions, and such facilities and opportunities that
will enhance their welfare and enable them to realize their full
potential in the service of the nation.

Art. XV, Sec. 8. The State shall, from time to time, review to
upgrade the pensions and other benefits due to retirees of both
the government and the private sectors.
Rights of Workers
Art. Ill, Sec. 8. The right of the people, including
those employed in the public and private sectors, to
form unions, associations, or societies for purposes
not contrary to law, shall not be abridged. (formation
of labor organizations)

Art. Ill, 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.
Protection to Labor Clause

Art. XIII, 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. They shall also participate in policy and
decision-making process affecting their rights and
benefits as may be provided by law.
 Phrase included in the 1987 constitution to
highlight worker’s participation in policy-
making;
 Added in the Labor Code
◦ Article 217, Declaration of Policy
◦ Article 261, Exclusive Bargaining Representation
and Worker’s Participation in Policy and Decision-
Making
Protection to Labor Clause

Art. XIII, Sec. 3 , cont.

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 enforce their
mutual compliance therewith to foster industrial peace.

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 of investments, and
to expansion and growth.
Defines rights of workers under Labor Standards and
Labor Relations:
Under Labor Standards Under Labor Relations
 Security of Tenure;  Self-organization

 Living wage;  Collective bargaining

and negotiations
 Share in the fruits of
 Peaceful concerted
production; and
activities, including
 Humane conditions of
strike;
work.
 Participation in policy
and decision-making
processes.
 Constitutional provisions on labor are not self-executory,
hence the need for Social Legislation, Labor Legislation
and Welfare Legislation
 Social Legislation - Laws that provide particular kinds of
protection or benefits to society or segments thereof in
furtherance of social justice.
 Labor Legislation - Statutes, regulations and jurisprudence
governing the relations between capital and labor. It
provides for certain employment standards and a legal
framework for negotiating, adjusting and administering
those standards and other incidents of employment.
 Welfare Legislation - Provides for the minimum economic
security, of the worker and his family in case, of loss of
earnings due to death, old age, disability, dismissal, injury
or disease.
 Labor Legislation Social Legislation
Governs the effects of
Effect to Employment Directly affects employment
employment

Designed to meet the daily

Purpose Involves long range benefits
needs of workers

Covers employment for Covers employment for profit

Coverage
profit or gain
Effect to Employee Affects work of employee
Benefits are paid by the
Payor
worker’s employer
and non-profit
Affects life of employee
Benefits are paid by
government agencies

Social legislation encompasses labor legislation, thus is broader in scope

than the latter. All labor laws are social legislations but not all social
legislations are labor laws.
 The law governing the rights and duties of
employers and employees with respect to Labor
Standards and Labor Relations.
 Labor Standards Law deals with the minimum
standards as to wages, hours of work and other
terms and conditions of employment that
employers must provide their employees.
 Labor Relations Law defines the status, rights
and duties as well as the institutional
mechanisms that govern the individual and
collective interactions between employers,
employees and their representatives.
 Presidential Decree No. 442
◦ Deals with Labor Standards and Labor Relations
◦ Became effective November 1, 1974
 Special Laws:
a. Laws on Social Security (SSS Law, GSIS Law, Limited Portability
Law (RA 7699)
b. National Health Insurance Act
c. Paternity Leave Act
d. Retirement Pay Law
e. Home Mutual Development Fund Law
f. Anti-Sexual Harassment Act
g. Anti-Child Labor Act
h. 13th Month Pay Law
i. Migrant Workers and Overseas Filipinos Act of 1995 (R.A. No.
8042, as amended by RA 10151)
j. Expanded Comprehensive Agrarian Reform Law
k. Magna Carta for Public Health Workers
 Labor-related provisions in Other Laws

Civil Code
a. Art. 1700. The relation between capital and labor are not merely
contractual. They are so impressed with public interest that
labor contracts must yield to the common good. Therefore,
such contracts are subject to the special laws on labor unions,
collective bargaining, strikes and lockouts, closed shop, wages,
working conditions, hours of labor and similar subjects.
b. Art. 1701. Neither capital nor labor shall act oppressively
against the other, or impair the interest or convenience of the
public.
c. Art. 1702. In case of doubt, all labor legislations and all labor
contracts shall be construed in favor of the safety and decent
living for the laborer.
d. Art. 1703. No contract which practically amounts to involuntary
servitude, under any guise whatsoever, shall be valid.
 Labor-related provisions in Other Laws

Revised Penal Code

a. Art. 289. Formation, maintenance and prohibition of
combination of capital or labor through violence or
threats. — The penalty of arresto mayor and a fine not
exceeding 300 pesos shall be imposed upon any
person who, for the purpose of organizing,
maintaining or preventing coalitions of capital or labor,
strike of laborers or lock-out of employees, shall
employ violence or threats in such a degree as to
compel or force the laborers or employers in the free
and legal exercise of their industry or work, if the act
shall not constitute a more serious offense in
accordance with the provisions of this Code.
 Attainment of Social Justice
◦ Balance the interest of labor and capital (eliminate
oppression)
◦ Labor is afforded a greater measure of protection
 There is greater supply of labor than demand for their
services;
 Those who have less in life should have more in law;
 The need for employment by labor comes from vital,
and even desperate necessity (survival);
Preliminary Discussions on the
Labor Code
 The state shall afford full protection to labor,
promote full employment, equal work
opportunities without bias or discrimination,
regulate the relations of employers and
employees, and assure workers rights (refer
to protection to labor clause Art. XIII, Sec. 3,
1987 Const. & Art. 3, Labor Code);
 The relation of capital and labor are
impressed with public interest, hence
employment contracts are not ordinary
contracts (Art. 1700, NCC);
 In case of doubt or ambiguity, labor laws and
rules are to be construed in favor of labor (Art. 4,
Labor Code, Art. 1702, Civil Code)
◦ IF THERE IS DOUBT as to the meaning of the legal and
contractual provision, the above-mentioned applies.
◦ IF THE PROVISION IS CLEAR AND UNAMBIGUOUS, it must
be applied in accordance with its express terms.
(Meralco v. NLRC, GR No. 78763, July 12, 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 Medical Center Employee's
Assoc, v. NLRC, GR No. 162053, March 7, 2007).
 Comes from acknowledgement that capital
wields more power than labor;
 (Sanchez v. Harry Lyons Construction Inc., GR
No. L-2779, October 18, 1950).
 There is greater supply than demand for labor;
 Those who have less in life should have more in law;
and
 The need for employment by labor comes from vital,
and even desperate necessity (survival)
General Rule: The Code applies to all workers, whether agricultural
or non-agricultural, including employees in a government
corporation incorporated under the corporation code;

Exceptions:
1. Government employees;
2. Employees of government Corporations created by special or
original charter;
3. Foreign governments;
4. International Agencies, employees of intergovernmental or
international organizations;
5. Corporate officers/Intra-corporate disputes which fall under
PD 902-A and now fall under the jurisdiction of, the Regular
Courts pursuant to the Securities Regulation Code; and
6. Local water districts except where NLRC jurisdiction is invoked.
 Government employees;
 Employees of government Corporations created by special or
original charter (Juco v. NLRC, GR No. 98107, August 18, 1997);
 Foreign governments (JUSMAG-Philippines v. NLRC, GR No.
108813, December 15, 1994);
 International Agencies (Lasco v. UNRFNRE, GR Nos. 109095-
109107, February 23, 1995), employees of intergovernmental or
international organizations (SEAFDEC-AQD v. NLRC, GR No.
86773, February 14, 1992);
 Corporate officers / Intra-corporate disputes which fall under PD
902-A and now fall under the jurisdiction of, the Regular Courts
pursuant to the Securities Regulation Code (Nacpil v. IBC, GR No.
144767, March 21, 2002); and
 Local water districts (Tanjay Water District v. Gabaton, GR Nos.
63742 and 84300, 17 April 1989) except where NLRC
jurisdiction is invoked (Zamboanga City Water District v. Buat, GR
No. 104389, May 27, 1994).
 Law recognizes management rights. The
employer has the right to
◦ Conduct business;
◦ Prescribe rules;
◦ Select and hire employees;
◦ Transfer or discharge employees;
◦ Discipline of employees, and
◦ Return of investment and expansion of business.
 Rural Bank of Cantilan . v. Julve, GR No. 169750,
February 27, 2007.
◦ Under the doctrine of management prerogative, every
employer has the inherent right to regulate, according to
his own discretion and judgment, all aspects of
employment, including hiring, work" assignments, working
methods, the time, place and manner of work, work
supervision, transfer of employees, lay-off of workers, and
discipline, dismissal, and recall of employees
 Mendoza v. Rural Bank of Lucban, GR No. 155421,
July 7, 2004.
◦ Management prerogatives, however, are subject to
limitations provided by
 law,
 contract or collective bargaining agreements and
 general principles of fair play and justice
The Whys and Hows
 Article 217, Labor Code

◦ Promote and emphasize the primacy of free collective

bargaining and negotiations, including voluntary
arbitration, mediation and conciliation, as modes of
settling labor or industrial disputes;
◦ Promote free trade unionism as an instrument for the
enhancement of democracy and the promotion of social
justice and development;
◦ Foster the free and voluntary organization of a strong
and united labor movement;
◦ Promote the enlightenment of workers concerning their
rights and obligations as union members and as
employees;
 Article 217, Labor Code

◦ Provide an adequate administrative machinery for the

expeditious settlement of labor or industrial disputes;
◦ Ensure a stable but dynamic and just industrial peace;
and
◦ Ensure the participation of workers in decision and
policy-making processes affecting their rights, duties
and welfare.
◦ Prohibit courts or administrative agencies or officials
from setting or fixing wages, rates of pay, hours of work
or other terms and conditions of employment, except as
otherwise provided under the Labor Code.
 Workers organize as a union or some other
form of association (registered or
unregistered)
 Effect of registration with the State:
Acquisition of legally demandable rights, e.g.
right to demand collective bargaining
 Organization must have rules and
mechanisms that respect member rights
 No employer influence or interference (See
Article 261, Labor Code)
 Self Advancement
 Job Security
 Upholding the rule of law over arbitrary
exercise of power by capital
 Provide employees a sense of participation in
the enterprise
 There can be many labor organizations in the
workplace, but
◦ Only one recognized representative for workers in
Collective Bargaining
◦ Selected by the workers themselves by way of
election (with or without intervention of the
government)
 All persons employed in commercial,
industrial and in religious, charitable, medical
or educational institutions (profit or non-
profit)
 Includes the right to
◦ Form
◦ Join
◦ Assist
Labor organizations of their own choosing
 Presentation of proposals and counter-
proposals by the parties
 If capital and labor agree on substantially all
points, a labor contract is forged (Collective
Bargaining Agreement)
 If both parties do not agree on material
points, this results in a deadlock
◦ Parties are obliged to avoid or break the impasse
◦ Failure to resolve a deadlock may result in work
stoppage
 Strike
 Lockout
 While a legal right, strike or lockout is not an
ideal solution to compel a party to agree to a
proposal
 Considered as measures of last resort
 Strikes and lockouts are heavily regulated
◦ Purpose
◦ Manner of implementation
◦ Violation of established rules will merit sanctions
(admin, civil and criminal)
 Parties are allowed to introduce means and
methods that will expedite bargaining
◦ Subject to compliance to legal standards
 Parties are primarily responsible for dealing
with problems arising out of their relations
(Inter-party relationship)
◦ Voluntary modes of settling disputes are preferred
over compulsory processes
◦ Grievance machinery: In-house problem solving
structure
◦ State steps in only when
 Parties fail to agree
 Rights are violated
 SSS Employees Association vs. CA, 175 SCRA 686: ―The
principle behind labor unionism in private industry is that
industrial peace cannot be secured through compulsion by
law. Relations between private employers and their
employees rest on an essentially voluntary basis. … the
terms and conditions of employment in the unionized
private sector are settled through the process of collective
bargaining…‖

 But, when dispute

transgresses legal
boundaries, the injuctive
powers of the state may
be invoked, especially
when national interest is
involved.
 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
an employer.
 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 Labor
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 he has not obtained
any other substantially
equivalent and regular
employment.
 Managerial employees
 Supervisory employees
 Rank-and-file employees
 If there is no such relationship, there is no
basis for exercising the right of self-
organization for purposes of collective
bargaining.
 Note also that Labor Arbiters cannot exercise
jurisdiction where Er-Ee Relationship does
not exist. (subj. to exception)
 Four-Fold Test
1. the selection and engagement of the employee;
2. the payment of wages;
3. the power of dismissal; and
4. the power to control the employee’s conduct, or the
so-called ―control test.‖
 Two-tiered test of employment relation ship
1. Control test – the employer’s power to direct the
employee (the manner, means and methods) by which
work is accomplished;
2. Economic reality test – economic reality of the
relationship; the question of economic dependency of
the worker on his employer. (Read Orozco vs. CA, GR
155207, April 29, 2005)
 A stipulation stating expressly that there is no
Er-Ee relationship is not controlling (Chavez vs.
NLRC, GR No. 146530, Jan. 2005)
 Jeepney and taxi drivers (Paguio Transport Corp.
vs. NLRC GR No. 119500, August 1998)
 Bus, auto-calesa drivers (R. Transport Corp. vs.
Ejandra, GR No. 148508, May 2004)
 Fishermen (Ruga vs. NLRC, Jan. 1990)
 Stevedores
 Lawyers, doctors, nurses, dentists, public
relations practioners, other professionals
 Employees of cooperatives
 Insurance agents (salaried)
 Commission salesmen
 Agents of prinicipal (who are not employees
in other respects)
 Working scholars (See Section 14, Rule X,
Book III, IRR, Labor Code)
 Consultants
 Visiting Physicians
 Independent contractors
 Labor disputes: Includes any controversy or
matter concerning terms or conditions of
employment or the association or representation
of persons in negotiating, fixing, maintaining
changing or arranging the terms and conditions
of employment, regardless of whether the
disputants stand in the proximate relation of
employer and employee.
 Nature: arises from Er-Ee relationship,
regardless of whether the disputants stand in
the proximate relation of employer and
employee;
◦ SMCEU-PTGWO vs. Bersamira & SMC, GR No. 87700,
June 1990)
 Involves issue of SMC’s exclusion of temporary,
probationary & contractual employees in scope of CBA
with union
 Subject Matter
◦ Terms and conditions of employment
◦ Association or Representation of persons
 Standards-related
◦ Compensation
◦ Benefits
◦ Working Conditions
 Relations Disputes
◦ Organizational rights/ULP
◦ Representation
◦ Bargaining
◦ Contract administration
◦ Personnel policy
◦ Employment tenure disputes
 Grievance procedure – CBA-prescribed, in-house
mechanism for addressing complaints.
 Conciliation – involves third person who meets
with both parties and, by assuaging hurt feelings
and cooling tempers, aids in reaching agreement.
 Mediation – third person offers suggested
solutions to dispute.
 Arbitration – dispute is submitted to impartial
third person who renders decision based on
evidence, law and jurisprudence. Decision is
enforceable.
◦ Voluntary – by agreement of parties
◦ Compulsory – directed by law. Primarily done by labor
arbiters of the NLRC
 Enforcement/Compliance Order – dispute
arises from concern uncovered by the
exercise of enforcement/visitorial power of
SOLE, or adjudicatory powers of the DOLE
Regional Directors (Articles 128, 129, Labor
Code)
 In case of labor disputes that may affect an
industry indispensable to the national
interest, the following apply:
◦ Assumption of jurisdiction by DOLE
◦ Certification to the NLRC for compulsory arbitration
Jurisdiction, Case Flow,
Appeals, Cases
 Precursor: Court of Industrial Relations
 NLRC was created by the Labor Code
◦ attached to the DOLE
◦ Under EO 204, s. 2005, DOLE exercises
administrative supervision over the commission
◦ Under RA 9347, several changes to the composition
of the divisions, rank equivalence, and reverted to
the old version of NLRC’s attachment to DOLE
(program and policy coordination)
◦ Equal representation from workers, employers &
public sector
 NLRC exercises adjudicatory powers and
other functions through its divisions (not the
individual commissioners);
 En banc decisions pertain only to
◦ Promulgation of rules governing hearing and
disposition of cases in the divisions (e.g., 2011
NLRC Rules);
◦ Recommending Labor Arbiters to the President
◦ Allowing a division to hear and decide a case under
the jurisdiction of another division
 Original and exclusive jurisdiction to hear and
decide the following cases involving all workers,
whether agricultural or non-agricultural (Art.
223, LC, Rule V Section 1, 2011 NLRC Rules):
1. Unfair labor practice cases; ULP Means "Unfair labor
practice" means any unfair labor practice as expressly
defined by the Code (Art. 218(K), Art. 254, Art. 255).
2. Termination disputes;
3. If accompanied with a claim for Reinstatement, those
cases that workers may file involving wages, rates of
pay, hours of work and other terms and conditions of
employment;
4. Claims for actual, moral, exemplary and other forms
of Damages arising from the employer-employee
relations;
5. Cases arising from any Violation of Article 270 of
this Code, including questions involving the legality
of strikes and lockouts; and
6. Except claims for Employees Compensation, Social
Security, Medicare and maternity benefits, all other
Claims arising from employer-employee relations,
including those of persons in domestic or
household service, involving an amount exceeding
five thousand pesos (P5,000.00) regardless of
whether accompanied with a claim for
reinstatement (Article 223, Labor Code, as
amended).
7. Original and exclusive jurisdiction over money claims
arising out of employer-employee relationship or by
virtue of any law or contract, involving Filipino workers
for Overseas deployment, including claims for actual,
moral, exemplary and other forms of damages (Section
10, Republic Act No. 8042, as amended by Republic Act
No. 10022).
8. Wage distortion disputes in unorganized establishments
not voluntarily settled by the parties pursuant to
Republic Act No. 6727.
9. Enforcement of compromise agreements when there is
non-compliance by any of the parties or if there is prima
facie evidence that the settlement was obtained through
fraud, misrepresentation or coercion (Article 233, Labor
Code, as amended).
10. Other cases as may be provided by law.
 The jurisdiction of labor arbiters, as well as of the
NLRC, is limited to disputes arising from an
employer-employee relationship which can only be
resolved by reference to the Labor Code, other labor
statutes, or their collective bargaining agreement. U-
Bix's complaint was one to collect sum of money
based on civil laws – on obligations and contract, not
to enforce rights under the Labor Code, other labor
statutes, or the collective bargaining agreement. (U-
Bix Corporation, et al. vs. Valerie Anne H. Hollero,
G.R. No. 177647, October 31, 2008)
 The jurisdiction of labor courts extends only to cases
where an employer-employee relationship exists.
(Jaguar Security & Investigation Agency vs. Rodolfo
Sales, et. al., G.R. No. 162420, April 22, 2008)
 Exception to the rule that Er-Ee relationship
is necessary for Labor Arbiters to acquire
jurisdiction:
◦ ―The jurisdiction of Labor Arbiters is not limited to
claims arising from Employer-Employee
relationships under Sec. 10 of RA 8042, which cover
money claims arising out of an employer-employee
relationship or by virtue of any law or contract
involving Filipino workers for overseas deployment,
including claims for…damages.‖ Santiago vs. CF
Sharp Crew Management, Inc. (GR No. 162419, July
2007)
Corporate Officers
 Nacpil vs. IBC (GR No. 144767, March 21,
2002) – Officers designated by the board are
corporate officers
 Prudential Bank and Trust Company (GR No.
141093, Feb. 20, 2001) - One rising from the
ranks is not a mere corporate officer
 Rural Bank of Coron vs. Cortes, (GR No.
164888, Dec. 6, 2006) – A corporate officer
who is also an employee may file an illegal
dismissal case with the labor arbiter.
See also
 Okol vs. Slimmers World International (GR No.
160146, December 11, 2009)
 Gomez vs. PNOC Development and
Management Corporation (GR No. 174044,
November 27, 2009)
 Atty. Virgilio R. Garcia vs. Eastern
Telecommunications Philippines (GR No.
173115, April 16, 2009)
 Renato Real vs. Sangu Philippines, Inc. et al.,
G.R. No. 168757, 1/19/2011
 Case may be filed in the RAB having
jurisdiction over the workplace of
complainant or petitioner
 Where two or more RABs have jurisdiction,
venue resides in the RAB which first acquired
it
 No objection to venue before the filing of
position papers, issue is deemed waived
 May be by written agreement, or by motion
for meritorious cases
 Option of the worker
 Mandatory Amicable
Settlement
Start Conference ?

Submit Position
File Complaint Papers/Memoranda

Receive, docket and Clarificatory Hearing Issue Order

subscribe complaint
Evaluate pleadings
Raffle and assign and evidence End
cases
Issue Order
Set case for submitting case for
mandatory decision Issue,
conference/issue promulgate and
summons release decision
Prepare decision
Significant changes from 2005 Rules (as discussed by Atty.
Ruben Del Rosario)

1. Service of Notices, Resolutions, Orders and Decisions by

Private Courier (Section 4, Rule III). Under the 2005 Rules,
service of notices such as summons, notice of conference,
resolutions, orders and decisions is made through the
NLRC’s messenger or sent by registered mail only. In the
2011 Rules, service can be done by private courier also.
2. Authority of the Labor Arbitration Associate to Conduct
Conciliation and Mediation Conference (Section 8a, Rule V).
The 2005 Rules state that ―the Labor Arbiter shall personally
preside over and take full control of the proceedings‖. The
2011 Rules state that the Labor Arbiter may be assisted by
the Labor Arbitration Associate in the conduct of the
proceedings.
 En Banc Resolution 11-12 amended the 2011 NLRC
Rules of Procedure.
 Venue: When venue is not objected to before the first
scheduled mandatory conference, such issue or
objection will be deemed waived. (Rule IV, Section 1,
par. c)
 Confidentiality of Commission Records: access to
pleadings and other documents filed by parties to a
case are restricted. Reports, drafts of decisions,
records of deliberations, and other documents
involving private rights are made confidential.
Nevertheless, decisions, resolutions and orders of the
NLRC are open to the parties and their counsel or
authorized representative during office hours. (Rule
XIII, Section 8)
 Manila Hotel Corporation vs. NLRC (GR No.
120077, October 13, 2000) – The NLRC has no
jurisdiction when the main aspects of the case
transpired in foreign jurisdictions and the only
link that the Philippines has with the case is that
the employee is a Filipino citizen.
 PNB vs. Cabansag (GR No. 157010, June 21,
2005) – when the employee is directly hired in a
foreign country but nonetheless secures a (POEA)
employment certificate, she is an OFW and thus
the case falls under the jurisdiction of the labor
arbiter.
 Banez vs. Valdevilla (GR No. 128024, May 9,
2000) – Art. 217 (now 223) is comprehensive
enough to include claims for all forms of
damages arising from Er-Ee relations,
including Er’s claims for actual damages
against a dismissed Ee.
 Domondon vs. NLRC (GR No. 154376, Sept.
30, 2005)
 Two kinds
◦ Original Jurisdiction
 Injunction in ordinary labor disputes;
 Injunction in strikes and lockouts under Article 270,
LC;
 Certified labor disputes in industries indispensable to
the national interest, where work stoppage is likely or
has already occurred.
◦ Exclusive Appellate Jurisdiction
 Cases decided by the labor arbiters;
 Cases decided by DOLE regional directors under Article
129;
 NLRC has exclusive appellate jurisdiction on
all cases decided by the labor arbiters.
 NLRC does not have original jurisdiction on
the cases over which labor arbiters have
original and exclusive jurisdiction.
 If the labor arbiter does not exercise original
and exclusive jurisdiction over a case, the
NLRC has no appellate jurisdiction over it.
 Labor Arbiters’ decisions – ordinary appeal to
the NLRC, w/in 10 calendar days from
receipt. NLRC’s decision on appeal is
elevated to the CA by way of special civil
action (Rule 65), and then under ordinary
appeal (Rule 45) to the SC
 DECISION (Supreme Court)

Petition for Grounds: Questions of

Review Law from Decision of CA
(Rule 45)

DECISION (Court of Appeals)

Grounds: determination of whether or

not the NLRC acted without or in excess Petition for
of its jurisdiction or with grave abuse of Certiorari
discretion in rendering its decision. (Rule 65)

DECISION on APPEAL (NLRC)

Requisites for Perfection:

Grounds: Section 2, Rule
Section 4, Rule VI, 2011
VI, 2011 NLRC Rules of
Appeal NLRC Rules of Procedure,
Procedure, as amended
as amended

DECISION (Labor Arbiter)

 Prima facie evidence of abuse of discretion on
the part of the labor arbiter
 Decision, order or award was secured through
fraud or coercion, including graft and
corruption
 Purely on questions of law
 Serious errors in the findings of facts which
would cause grave or irreparable damage or
injury to appellant
 Filed within reglementary period (ten days
from receipt of decision by party seeking
appeal)
 Under oath
 Appeal fee
 Posting of cash or surety bond (where
judgment involves monetary award)
 Proof of service to adverse party
 Note the following:
◦ Labor arbiter loses jurisdiction upon perfection of
appeal
◦ Lack of verification is not fatal nor jurisdictional
◦ Appeal is still valid despite failure to pay docket
fee, but refusal to pay despite directive is fatal
◦ Raising new issues or changing theory on appeal is
not allowed.
 Reinstatement is immediately executory even
pending appeal
 Pioneer Texturizing Corporation vs. NLRC –
employer is duty-bound to inform employee
of reinstatement
 An employer may not stay execution of
reinstatement, even when he has posted a
bond
 Roquero vs. PAL (GR No. 152329, April 2003)
- Labor arbiter has ministerial duty to
implement reinstatement order
 Actual reinstatement of the employee to his
work under the same terms and conditions
prior to dismissal or separation, or
 Reinstatement in the payroll of the company,
without requiring actual return to work
 Pursuant to E.O. 126, the National Conciliation
and Mediation Board (NCMB) has absorbed the
conciliation, mediation and voluntary arbitration
functions of the BLR.
 The BLR functions, as it now stands are confined
largely to union matters, collective bargaining
and labor education.
 Jurisdiction over labor-management problems or
disputes is also exercised by other offices such
as the DOLE regional offices, the Office of the
Secretary of Labor, NLRC, POEA, OWWA, SSS-ECC,
the regional wage and productivity boards,
NWPC, and even the regular courts over intra-
corporate disputes.
 To act on its own initiative or upon the
request of either or both parties on all:
◦ INTRA-union conflicts;
◦ INTER-union conflicts; and
◦ OTHER RELATED Labor Relations Disputes
 Shall include any conflict between a labor
organization and the employer or any
individual, entity, or group that is NOT a
labor organization or worker’s association.
 This includes:
 Cancellation of registration of unions and
worker’s associations; and
 A petition for interpleader.
 A proceeding brought by a party against two
or more parties with conflicting claims,
compelling the claimants to litigate between
and among themselves their respective rights
to the claim, thereby relieving the party so
filing from suits they may otherwise bring
against it. (Sec. 1 (Par. ―z‖), Rule I, DO 40-03)
 removed from the jurisdiction of the BLR ―all‖
labor-management disputes. The effect of
E.O. 251 is to transfer to the NCMB the
mediation, conciliation, and arbitration
functions of the BLR.
 The parties may, by agreement, settle their
differences by submitting their case to a
voluntary arbitrator rather than taking the
case to the BLR.
 This category of labor relations disputes as
the name suggests is related to inter/intra
union disputes to differentiate it from other
labor-management disputes, such as those
under
◦ Article 128: Visitorial and enforcement power
◦ Article 129: recovery of wages, simple money
claims and other benefits
◦ Article 223: Jurisdiction of the LA and NLRC
◦ Article 273: Jurisdiction of VA
◦ Article 277(g): Secretary of Labor, on possibility of
strikes and lockouts
 Sec. 16. Bureau of Labor Relations – The BLR
shall:
◦ Set policies, standards, and procedures on the
registration and supervision of legitimate labor union
activities including denial, cancellation, and revocation
of labor union permits;
◦ Set policies, standards and procedures relating to
collective bargaining agreements, and the examination
of financial records of accounts of labor organization to
determine compliance with relevant laws;
◦ Provide proper orientation to workers on their schemes
and projects for improvement of the standards of living
of workers and their families.
 Intra-Union Disputes (Sec. 1(bb)) – refer to any
conflict between and among union members,
including
1. grievances arising from any violation of the rights and
conditions of membership,
2. violation of or disagreement over any provision of the
union’s constitution and by-laws, or
3. disputes arising from chartering or affiliation.
 Inter-Union Disputes (Sec. 1(x)) – refer to any conflict
between and among legitimate labor organizations
involving:
1. representation questions for purposes of collective
bargaining or
2. any other conflict or dispute between legitimate labor
organizations based on any violations of their rights as
labor organizations.
 Cancellation of registration of a labor organization
filed by its members or by any other labor
organization;
 Conduct of election of union and worker’s
association officers/nullification of election of
union and worker’s association officers;
 Audit/accounts examination of union or worker’s
association funds;
 De-registration of CBA;
 Validity/invalidity of union affiliation or
disaffiliation;
 Validity/invalidity of acceptance/non-acceptance
for union membership;
 Validity/invalidity of
impeachment/expulsion of union and
worker’s association officers;
 Validity/invalidity of voluntary recognition;
 Opposition to application for union and CBA
registration;
 Violations of or disagreements over any
provision in a union or worker’s association
constitution and by-laws;
 Disagreements over chartering or registration of
labor organizations and CBAs;
 Violations of the rights and conditions of union or
worker’s association membership;
 Violations of the rights of legitimate labor
organizations, except interpretation of CBAs; and
 Such other disputes or conflicts involving the rights
to self-organization, union membership, and
collective bargaining –
◦ Between and among legitimate labor organizations; and
◦ Between and among members of a union or worker’s
association.
 DOLE Regional Office - where the labor
organization is registered;
 Bureau of Labor Relations – where the
complaint involves a federation or
industry/national union;
 Involving Entire Membership
 The complaint must be signed by at least 30% of the
entire membership of the union; and
 It must also show exhaustion of administrative
remedies.
 Involving a Member Only
◦ In such case, only the affected member may file
the complaint. Redress must first be sough within
the union itself in accordance with its
constitution and by-laws EXCEPT under any of the
following circumstances:
 Futility of intra-union remedies;
 Improper expulsion procedure;
 Undue delay in appeal as to constitute substantial
injustice;
 The action is for damages;
 Involving a Member Only
◦ In such case, only the affected member may file the
complaint. Redress must first be sough within the
union itself in accordance with its constitution and
by-laws EXCEPT under any of the following
circumstances:
 Lack of jurisdiction of the investigating body;
 Action of the administrative agency is patently illegal,
arbitrary, and oppressive;
 Issue is purely a question of law;
 Where the administrative agency had already prejudged
the case; and
 Where the administrative agency was practically given the
opportunity to act on the case but did not.
 The rights, relationships and obligations of
the part-litigants against each other and
other parties-in-interest prior to the
institution of the petition shall continue to
remain during the pendency of the petition
and until the date of finality of the decision
rendered therein. Thereafter, the rights,
relationships and obligations of the party
litigants against each other and other
parties-in-interest shall be governed by the
decision so ordered.
 The filing or pendency of any inter/intra-
union disputes is not a prejudicial question to
any petition for certification election and shall
not be a ground for the dismissal of a
petition for certification election or
suspension of proceedings for certification
election.
How: Formal 1. Under Oath
requirements 2. Consist of a memorandum of appeal
3. Based on either of the following grounds:
a. Grave abuse of discretion
b. Gross violation of the rules
4. With supporting arguments and evidence
Period: Within ten days from receipt of decision
To whom appealable 1. Bureau of Labor Relations – if the case originated from
Med-Arbiter/Regional Director;
2. Secretary of DOLE in case decision originated from BLR

Where filed Regional office or to the BLR where the complaint originated
(records transmitted to the BLR or Sec. within 24 hours from
receipt of the memorandum on appeal
Who:
 For grounds under Section 1: any LLO members
thereof specially concerned
 For grounds under Section 2: any party-in-interest

Where
 RO that issued its certificate of registration or
certificate of creation of chartered local – if it
involves labor unions with independent
registration, chartered locals, workers association,
its officers or members.
 Directly with the BLR if it involves a
federation/national union/industry union, its
officers or members
Formal requirements
 In writing
 Verified under oath
 Contains:
◦ Name, address and other personal circumstances of the
complainant or petitioner
◦ Name, address and other personal circumstances of the
respondent or person charged
◦ Nature of complaint or petition
◦ Facts and circumstances surrounding complaint or petition
◦ Causes of action
◦ Statement on exhaustion of Administrative Remedies
◦ Reliefs prayed for
◦ Certification of non-forum shopping
◦ Other relevant matters
 Regulation and registration of labor unions
 Keeping of registry of labor unions
 Maintenance of a file of CBA’s
 Maintenance of a file of all settlements or final
decisions of the SC, CA, NLRC and other
agencies on labor disputes

 BLR has no jurisdiction over implementation or

interpretation of CBAs, which shall be subject
of grievance procedure and/or Voluntary
arbitration.
 ANY Compromise Settlement (labor standards
or labor relations law) voluntarily agreed
upon by the parties with the assistance of the
BLR or DOLE-RO shall be final and binding
upon the parties.
 NLRC has no jurisdiction except:
◦ Noncompliance with compromise agreement
◦ Prima facie evidence that settlement was obtained
through fraud, misrepresentation or coercion.
 Purpose: Parties agree to
◦ Avoid litigation, or
◦ Put an end to one already in place
 How: making reciprocal concessions
◦ Win-win
 Substantial requirements
◦ Voluntary, devoid of coercion
◦ Not contrary to law, morals, public policy
◦ Reasonable
 Formal requirements
◦ In writing
◦ Signed in the presence of person before whom case is
filed
 When effected:
◦ At any stage of the proceedings, even when there is
already a final & executory judgment
◦ EXCEPT when judgment is in process of execution
 Validity: Valid and binding on both parties,
with or without DOLE assistance
 Repudiation:
◦ If done without DOLE assistance
◦ In case of non-compliance with agreement
◦ Prima facie evidence of fraud, misrepresentation,
coercion
 Options when agreement is violated:
◦ Enforce compliance
◦ Regard as rescinded, revert to original demand
 Quitclaim: A formal renunciation or
relinquishing of a claim
◦ Usually integral in compromise agreements
 Cases:
◦ Mindoro Lumber vs. Baay, et.al., GR No. 158753,
June 2005
◦ Veloso and Liguaton vs. DOLE, Noah’s Ark Sugar
Carriers, GR No. 87297, Aug. 1991
◦ JAG & Haggar Jeans vs. NLRC, GR No. 105710, Feb.
1995
◦ Magbanua vs. Uy, GR No.161003, May 2005
―Dire necessity is not an acceptable ground for
annulling the releases especially since it has
not been shown that the employees had been
forced to execute them. It has not even been
proven that the considerations for the
quitclaims were unconscionably low and that
the petitioners had been tricked into accepting
them. … no deception has been established on
the part of the private respondent that would
justify the annulment of the petitioners’
quitclaims.‖
Labor Organizations
 "Labor organization" means any union or association
of employees which exists in whole or in part for the
purpose of collective bargaining or of dealing with
employers concerning terms and conditions of
employment.

 "Legitimate labor organization" means any labor

organization duly registered with the Department of
Labor and Employment, and includes any branch or
local thereof.

 "Bargaining representative" means a legitimate labor

organization whether or not employed by the
employer.
 "Chartered Local" refers to a labor organization in the
private sector operating at the enterprise level that
acquired legal personality through the issuance of a
charter certificate by a duly registered federation or
national union, and reported to the Regional Office in
accordance with Rule III, Section 2-E of these Rules.
 "Exclusive Bargaining Representative" refers to a
legitimate labor union duly recognized or certified as
the sole and exclusive bargaining representative or
agent of all the employees in a bargaining unit.
 "Independent Union" refers to a labor organization
operating at the enterprise level that acquired legal
personality through independent registration under
Article 234 of the Labor Code and Rule III, Section 2-
A of these Rules.
 "Labor Organization" refers to 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 Relations Division" refers to the (1) Labor
Organization and CBA Registration Unit and (2) Med-
Arbitration Unit in the Regional Office. The Labor
Organization and CBA Registration Unit is in charge
of processing the applications for registration of
independent unions, chartered locals, workers
associations and collective bargaining agreements,
maintaining said records and all other reports and
incidents pertaining to labor organizations and
workers' associations.
 "Legitimate Labor Organization" refers to any
labor organization in the private sector
registered or reported with the DOLE in
accordance with Rules III and IV of these Rules.
 "Legitimate Workers' Association" refers to an
association of workers organized for mutual aid
and protection of its members or for any
legitimate purpose other than collective
bargaining registered with the DOLE in
accordance with Rule III, Sections 2-C and 2-D of
these Rules.
 Dealing with the Employer – interaction
between employers and employees
concerning
◦ Grievances
◦ Wages
◦ Hours
◦ Other terms and conditions of employment
 Applies even without registration
 Collective Bargaining – is a right acquired
through registration, and recognition or
certification as the exclusive bargaining
representative
 At the National Level
◦ National Union/Federation
◦ Industry Union
◦ Trade Union Center
◦ Alliance
◦ Company Union
 Enterprise Level
◦ Independent Labor Union
◦ Chapter
 AN ACT STRENGTHENING THE WORKERS'
CONSTITUTIONAL RIGHT TO SELF-
ORGANIZATION, AMENDING FOR THE
PURPOSE PRESIDENTIAL DECREE NO. 442, AS
AMENDED, OTHERWISE KNOWN AS THE
LABOR CODE OF THE PHILIPPINES
 Amended Articles 240, 244, 245, 261, 262 &
263
 20% membership of employees in bargaining
unit required only for independent unions
 Chapters acquire legal personality (for
purposes of certification election) upon
receiving their charter certificate
 Grounds of cancellation revised. Some
grounds were removed as they were not
promotive of self organization rights
 Petition for Certification Election will continue
to be heard despite petition to cancel
registration
 Cancellation may be effected by vote of two-
thirds of membership, with application to
cancel submitted to DOLE by the
organization’s board
 Reportorial requirements
 Supervisors Union and Rank and File Unions
may join same Federation
 Commingling of supervisors and rank & file
employees no longer a ground for
cancellation
 PCEs filed by a federation on behalf of its
chapter need not identify the chapter’s
officers and members
 Employer cannot oppose a petition for
certification election; he is considered a
bystander
 Legal personality
 Enjoy the rights given to legitimate labor
organization.
◦ Petition for certification election
◦ Bargaining rights
◦ Right to strike
 Non-registered unions are not illegitimate or
illegal
 Union registration refers to the process of
determining whether the application for
registration of a labor union organized for
collective bargaining complies with the
documentary requirements prescribed under
Rule 3 and 4 of DOLE Department Order No.
40—03and the rules implementing Book V of
the Labor Code, as amended.
 All labor unions whose members are employed in
commercial, industrial and agricultural enterprises,
and employees of government-owned and controlled
corporations without original charters established
under the Corporation Code, including religious,
charitable, medical or educational institutions
whether operating for profit or not which exist in
whole and in part for collective bargaining.
 Alien employees with valid working permits issued by
DOLE may exercise their right to self-organization
and join or assist labor unions for purposes of
collective bargaining if they are nationals of a country
which grants the same or similar rights to Filipino
workers, as certified by the Department of Foreign
Affairs.
 Duly accomplished and notarized Application
Form;
 Charter certificate issued by the federation or
national union indicating the creation or
establishment of the local/chapter;
 The names of the local/chapter’s officers, their
addresses and principal office of the
local/chapter; and,
 The local/chapter’s constitution and by-laws,
provided that where the local/chapter’s
constitution and by-laws is the same as that of
the federation or national union, this fact shall be
indicated accordingly.
 Duly accomplished and notarized Application
Form;
 Minutes of Organizational Meeting and
Attendance Sheet
 List of Members
 Financial Report if in existence for at least
one (1) year
 If less than 1 year, and has not collected any
amount, a certification to this effect.
 Constitution and by-laws accompanied by the
names and signatures of ratifying members.
 Minutes of adoption or ratification of the
constitution and by-laws, date/s when
ratification was made and list of ratifying
members.
 Minutes of adoption or ratification is not
required if it is done simultaneously with the
organizational meeting including the date/s
when ratification was made and list of
ratifying members.
 Statement that it is not reported as a
chartered local or any federation.
 List of members comprising at least 20% of
the employees of the bargaining unit.
 The independent union’s act of entering into
an agreement of affiliation with a federation
or national union, or
 A chartered local’s act of maintaining its ties
to a federation or national union despite its
subsequent independent registration
 Report of affiliation of independently
registered labor union;
◦ Resolution of LU board approving affiliation
◦ Total number of members, and names of those
approving affiliation
◦ Certificate of affiliation
◦ Written notice to the employer concerned if the
affiliating union is the bargaining agent
 Independent Chartering
Registration
How obtained Registration on its Through charter
own accord under Art. certificate issued by
240 National
Union/Federation
Effect of disaffiliation Retains legal Loses legal personality
personality
 May only occur on the grounds of disloyalty
or such grounds specified in the constitution
& by-laws;
 Effected by serving a verified notice to the
local/chapter, copy the BLR
 Effect
◦ revocation of legal personality, except if local
chapter has acquired independent registration.
◦ If covered by CBA, local chapter may be given
opportunity to register independently
 Act on all applications within 30 days from
filing, provided all documents and papers
required have been submitted;
 When DOLE refuses to register a labor
organization which has complied with the
requirements, mandamus is the proper
remedy
 Approval – Order and Certificate of
Registration
 Disapproval – Decision which states clearly
reasons for denial
 BLR has jurisdiction
 Only for grounds in Article 245
 Petition for cancellation will not suspend PCE
proceedings
 Union may still seek just and equitable
remedies in appropriate courts
 Misrepresentation, false statements or fraud
in connection with the adoption or ratification
of the constitution and by-laws or
amendments thereto, minutes of ratification
and list of members who took part
 Misrepresentation, false statements or fraud
in connection with the election of officers,
minutes of the election of officers and list of
voters
 Voluntary dissolution by members
 Ten grounds in Article 245 prior to RA 9481
have been reduced to three
 Examples of removed grounds
◦ Failure to submit reportorial requirements
◦ Illegal strike
◦ Engaging in ―cabo‖ system
 May be done by members themselves
 2/3 of general membership votes during a
meeting called for the purpose of dissolving
organization
 Application to cancel registration submitted
by the board, attested by the president
 Article 247
a. Arbitrary or excessive initiation fees
b. Full and detailed reports
c. Direct election of officers
d. Determination of major policy affecting entire
membership of organization
e. Exclusion of subversive persons from membership
f. Exclusion of convicted member as union officer
g. Collection or disbursement only by authorized
officers
h. Receipts for all payments
 Article 247
i. Funds for authorized use only
j. Ban on unauthorized compensation on officers
k. True and correct accounting of funds
l. Inspection of records of organization
m. No unauthorized special levy or assessment of
fees
n. Check – off
o. Information on the Constitution and by-laws
 Article 247can be best grouped into four
basic classifications
1. Political rights – right to vote and be voted for
2. Deliberation and decision-making. Right to
participate in deliberations on major policy
questions and decide by secret ballot
3. Money matters
4. Information
1. Constitution and By-laws
2. Collective Bargaining Agreement
3. Labor Laws
 Cancellation of union registration, OR
 Expulsion from office of a union officer.
 30% of all members (if affecting entire
membership) must concur re filing of
complaint with the BLR
 Only affected member/members may file a
complaint pertaining to a violation of which
they are affected
 Ang Malayang Manggagawa ng Ang Tibay
Enterprises, et al. vs. Ang Tibay, et al., G.R.
No. L-8259, December 1957:
◦ The relationship of the union and the members is
governed by their mutual agreement, the terms and
conditions of which are set forth in the union
constitution and by laws and binding on the
members as well as the organization itself
 Non-employees (247(c))
 Subversives (247(e))
 What about persons convicted of crimes
involving moral turpitude?
◦ Allowed as members, not eligible for election as
officer (247(f))
 The labor organization cannot compel employees
to become members of their labor organization if
they are already members of a RIVAL UNION
 The persons mentioned in Art 247[e]
(SUBVERSIVES) of the Labor Code are prohibited
from becoming a member of a labor organization
 The members of RELIGIOUS ORGANIZATION
whose religion forbids membership in labor
organization could not be compelled into union
membership (Victoriano v. Elizalde Rope Workers
Union, L-25246 September 1974)
 Tancino vs. Pura Ferrer-Calleja, G.R. 78131,
Jan. 1988
◦ Only members of the union have the eligibility to
take part in the election of union officers. Eligibility
to vote may be determined through the use of the
applicable payroll period and the status of the
employees during the applicable period. This
pertains to 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 operation,
in case of employees in seasonal industries.
 Written resolution;
 Approved by a majority of all members; and
 Approval obtained at a general membership
meeting duly called for that purpose.
 Secretary of the organization shall record the
minutes of the meeting, which shall be
attested to by the President.
◦ list of all members present
◦ votes cast; and
◦ purpose of the assessment or fees
 (Palacol et aa. v Ferrer-Galleja, et al, GR No.
85222, February 6, 1990) - Substantial
compliance with the aforementioned
procedure is not enough – the requirements
must be strictly complied with
 A method of deducting from an employee’s
pay at prescribed period, the amounts due to
the union for fees, fines or assessments
 Union dues are the lifeblood of the union. 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

(Art. 283 [a])

 General Rule: NO special assessment,
attorney’s fees, registration fees or any other
extraordinary fees may be checked off from
any amount due an employee without an
individual written authorization duly signed
by the employee
 The Authorization should specifically state
the:
◦ Amount; and
◦ Purpose and the beneficiary of the deduction
 For mandatory activities provided under the
Code; and
 When non-members of the union avail of the
benefits of the CBA:
◦ Said non-members may be assessed union dues
equivalent to that paid by members;
◦ Only by a board resolution approved by majority of
the members in a general meeting called for the
purpose
 Eduardo J. Marino, Jr. et al. vs. Gil Y. Gamilla,
et al., G.R. No. 149763, July 7, 2009: The
individual written authorization duly signed
by the employee is an additional requirement
in order that a special assessment may be
validly checked-off. In case of check-off
another requisite is necessary in addition to
the requirements for special assessment,
enumerated above and this is, individual
written authorization for check-off duly
signed by the employee concerned.
 Being an intra-union conflict, the Regional
Director of DOLE has jurisdiction over check
off disputes.
 Regular monthly contributions paid by the
members to the union in exchange for the
benefits given to them by the CBA and to
finance the activities of the union in
representing them.
 Dues equivalent to union dues charged from
the non-union members who were benefited
by the CBA provisions.
 The relationship between the non-union
employees and the Union that is the
bargaining representative is that of principal
– agent
 Since the union was able to secure better
terms and conditions of employment for all
employees, it is proper that they be
compensated for their representation
 The employee is part of the bargaining unit,
 He is not a member of the union; and
 He partook of the benefits of the CBA
 Written authorization is not necessary for
collection
Union Dues
Applies to Union Members
Paid by reason of their
membership
Written authorization is required
for dues to be deducted from
salaries (Check-Off)
Agency Fees
Applies to Non Members of the
Union
Paid by reason of the benefits they
enjoyed under the CBA
Written authorization is NOT
required
 NAIBAILU v. San Miguel Brewery Inc.,
GR No. 18170, August 31, 1963 –
◦ Agency Fee cannot be imposed on employees
already in the service and are members of
another union. If a closed shop agreement cannot
be applied to them, neither may an agency fee, as
a lesser form of union security, be imposed to
them.
◦ Payment by non-union members of agency fees
does not amount to an unjust enrichment
basically because the purpose of such dues is to
avoid discrimination between union and non-
union members.
 Members of a rival union are NOT
Considered Free Riders
 When the union bids to be the bargaining
agent, it voluntarily assumes the
responsibility of representing all employees
in the appropriate bargaining unit.
ART.248 RIGHTS OF
LEGITIMATE LABOR
ORGANIZATIONS
 Undertake activities for benefit of members;
 Sue and be sued;
 Exclusive representative of all employees;
 Represent union members;
 Be furnished audited financial statements by
employers;
 Own properties; and
 Be exempted from taxes.
1. Constitution and by-laws, or amendments
thereto, minutes of ratification, and the list
of members who took part in the
ratification of the constitution and by-laws
or amendments thereto;
2. List of officers, minutes of the election of
officers and list of voters within 30 days
from election;
3. Annual financial report within 30 days after the
close of every fiscal year; and
4. List of members at least once a year or
whenever required by the Bureau

 Failure to comply with the above-mentioned

requirements shall not be a ground for
cancellation of union registration
 Erring officers or members to be suspended,
expelled from membership, or otherwise
sanctioned.
Art. 249: Coverage and
Employees’ Right to Self-
Organization
 Art. III, Sec. 8. The right of the people,
including those employed in the public or
private sectors, to form unions, associations,
or societies for purposes not contrary to law
shall not be abridged.
 Art. XIII, Sec. 3. The State 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.
 To form, join and assist labor organizations
for the purpose of collective bargaining
through representatives of their own
choosing; and
 To engage in lawful concerted activities for
the same purpose or for their mutual aid and
protection (Art. 252)
 All persons employed in commercial,
industrial and agricultural enterprises and in
religious, charitable, medical, or educational
institutions
 Ambulant, intermittent and itinerant workers,
self-employed people, rural workers and
those without definite Employers may form
labor organizations for their mutual aid and
protection.
 Art. 250 : Rights of Employees in the public
service
◦ Employees of government corporations established
under the Corporation Code shall have the right to
organize and bargain collectively with their
respective ER’s.
◦ All other EE’s in the civil service shall have the right
to form associations for the purposes not contrary
to law.
 Art. 251 :
◦ Managerial employees are not eligible to join,
assist, or form any labor organization.
◦ Supervisory employees shall not be eligible for
membership in a labor organization of the rank-
and-file EE’s but may join, assist or form separate
labor organizations of their own.
1. Rey’s Hair Salon refused to bargain with the
union of the barbershop composed of eight
barbers on the ground that the shop was a
service establishment and the number of the
barbers was less than ten. Is the contention
tenable?
 No. The law does not fix the minimum
number of employees for the exercise of the
right to self-organization and the right
extends to all types of establishments.
2. Faculty members of a non-profit school
converted their club into a labor union. Is this
allowed?
 Yes. Even employees in non-profit or
religious organizations are entitled to
exercise this right.
3. Is a religious sect’s directive to its
congregation not to join a labor union a bar for
members to form their own union?
 The right of the members of a sect not to join
a labor union for being contrary to their
religious beliefs does not bar the members of
that sect from forming their own union.
(Kapatiran vs. Calleja)
 Those, who, in the interest of the ER, effectively
recommend such managerial actions if in the
exercise of such authority is not merely
routinary or clerical in nature but requires the
use of independent judgment. (Art. 218)
 The criterion which determines whether a
particular employee is within the definition of a
statute is the character of the work performed
rather than the title or nomenclature of position
held. (NSRC vs. NLRC)
 If the recommendation of the teacher area supervisor
is subject to evaluation, review and final approval of
the principal, is the teacher a supervisory employee?
No. This is merely ineffective or clerical
recommendation. ( Laguna Colleges vs. CIR )
 Supervisors were given the job of ―either to assist the
foreman if the effective dispatch of manpower and
equipment‖ or ―execute and coordinate work plans
emanating from his supervisors.‖ Are these
―supervisors‖ supervisory personnel? No. They only
execute approved and established policies leaving
little or no discretion at all whether to implement the
said policies or not. (Southern Philippines Federation
vs. Calleja)
 ―…assist and act in a confidential capacity to, or
have access to confidential matters of persons
who exercise managerial functions in the field of
labor relations.‖ – Philips Industrial Development
vs. NLRC, GR No. 88957, 6/25/1992;
 ―…those who, by reason of their positions or
nature of work are required to assist or act in a
fiduciary manner to managerial employees and
hence, are likewise privy to sensitive and highly
confidential records.‖ – Metrolab Industries vs.
Confesor, et. Al., GR No. 108855, 2/28/1996
 Exempt from membership in the rank and file
bargaining unit;
 They are not eligible to form, join or assist
labor organizations;
 Because of the distinct nature of their work,
confidential employees are a separate
category. In this regard, there is no
discrimination against them;
 Art. 252 speaks of the illegality of the
following acts with respect to the exercise to
the right of self-organization
◦ Restraint
◦ Coercion
◦ Discrimination
◦ Undue interfere with employees and the workers in
their exercise of self-organization right
 Alexander Reyes vs. Cresenciano Trejano , GR
No. 84433, June 1992. The right to self-
organization includes the right not to form or
join a union
 Airtime Specialists vs. Ferrer- Calleja, (180 SCRA
179). The intendment of the law is to grant to
bona-fide employees of a bargaining unit,
whether members of a labor organization or not,
the right to vote in certification elections
 However, by virtue of the operation or
enforcement of a closed shop clause in a CBA, an
employee may be compelled under pain of
dismissal, to become a member of a labor union.
 May an ER impose as condition for
employment that the applicant shall not join
a labor organization or shall withdraw from
the one he belongs to?
 No. Such a condition partakes of the nature
of a ―yellow dog contract‖ and constitutes an
unfair labor practice. It is interference with
the individual’s right to self-organization.
 SPFL v. Calleja, 179 SCRA 127, GR No. 80882,
April 1989. The right to self-organization
must be upheld in the absence of express
provision of law to the contrary. It cannot be
curtailed by a Collective Bargaining
Agreement
 Art. 253 – concept of ULP and procedure for
prosecution
 Art. 254 – ULP by employers
 Art. 255 – ULP by labor organizations
 Art. 267 – CBA violations which are gross in
character
 Art. 270(c) – union busting involving
dismissal of union officers which threatens
existence of union
 Concurrence of BOTH
1. There should exist an employer-employee
relationship between the offended party and
offender
2. Act complained of must be EXPRESSLY
mentioned and defined in the Labor Code
 Interference, restraint, coercion of employees
in the exercise of their right to self
organization;
 Yellow dog contract
 Contracting out services or functions
performed by union members, that interfere,
restrain or coerce employees in the exercise
of their right
 Company union
 Initiate, dominate, assist or otherwise
interfere with the formation or administration
of any labor organization
 Includes giving of financial or other support
to it or its organizers or supporters
 Discrimination
◦ Wages, hours of work, terms and conditions of
employment
◦ Except with respect to Union Security Clauses
 Dismissal or prejudice or discrimination by
reason of testimony
 Violation of duty to bargain
 Payment of Negotiation or Attorney’s Fees to
the Union, its officers or agents
 Violate CBA
 Restraint or coercion of employees in the
exercise of their right
 Causing or attempting to cause employer to
discriminate against an employee
 Violate duty, or refuse to bargain collectively
with employer
 Causing or attempting to cause employer to
pay or deliver any money or other things of
value for services which are not performed,
including demand for union negotiation fees
(Feather-bedding)
 Ask for or accept negotiation or attorney’s
fees from employers as part of settlement of
any issue in collective bargaining or any other
dispute
 Violation of a CBA
 Only officers or agents of corporations,
associations or partnerships who actually
participated in, authorized or ratified ULPs to
be held criminally liable
 On the part of the Union, its officers,
members of governing boards,
representatives or agents
 Expressions of opinion by an employer,
though innocent in themselves, may be
constitutive of ULP because of the
circumstances under which they are uttered,
the history of the employer’s labor relations
or anti-union bias or because of their
connection with an established collateral plan
of coercion or interference.
 Stipulation in the CBA where management
recognizes membership of employees in the
union which negotiated said agreement
should be maintained or continued as a
condition of employment or retention of
employment
 Purpose is to safeguard and ensure continued
existence of the union
 Closed shop
 Maintenance of membership agreement
 Union shop agreement
 Modified union shop
 Exclusive Bargaining Agreement
 Bargaining for members only agreement
 Agency shop agreement
 Preferential hiring agreement
 Employer must still afford employee due
process
 A process by which the representatives of an
employer and its employees to discuss and
negotiate concerning wages, hours of work,
benefits and other terms and conditions of
employment for the purpose of concluding a
contract that is mutually acceptable to the
parties.
 A democratic framework to stabilize Er-Ee
relations, to create a climate of sound and
stable industrial peace
 A mutual responsibility & legal obligation of
the employer and the union
 Collective bargaining denotes negotiations
looking forward to a collective agreement,
however, it is a continuous process.
 Negotiation of wages, hours & terms,
conditions of employment
 Execution of written contract embodying
terms
 Negotiation of issues arising out of
interpretation or application of agreement
 Negotiation of terms of new contract, or
proposed modifications.
 System of collective bargaining consists of:
◦ Negotiation of contracts (legislative phase)
◦ Administration of contract (executive phase)
◦ Interpretation or application (judicial phase)
Party seeking negotiation Engaged Party makes reply
serves written notice & thereto within 10 calendar
statement of proposals days from receipt of notice

Conciliation proceedings
by NCMB to resolve Request for conference
dispute, either motu within 10 calendar days to
proprio or upon request address differences in
proposals
 A contract
 executed upon request of either the employer
or the exclusive bargaining representatives
 Incorporating all agreements reached during
negotiations
◦ With respect to wages, hours of work and other
terms and conditions of employment
◦ Including proposals for adjusting any grievance or
questions under such agreement
 Azucena:
―It is more than a contract; it is a
generalized code to govern a myriad cases
which the draftsmen cannot wholly anticipate.
It covers the whole employment relationship
and prescribes the rights and duties of the
parties. It is a system of industrial self-
government with the grievance machinery at the
very heart of the system.‖
 Management may only be compelled to deal
and negotiate when the following juridical
preconditions are present:
1. Possession of status of majority representation by
the Ee’s representative, in accordance with Art.
266-271 of the Labor Code
2. Proof of majority representation
3. Demand to bargain
 ALU vs. Ferrer-Calleja, 173 SCRA 178
 Employer Where there is no
relationship, there
is no duty to
bargain,

Where there is no
duty to bargain,
refusal to bargain
violates no right. Employees (thru SEBA)
 Bargaining Representative
◦ Refers to the Legitimate Labor Organization
selected or designated by the employes. Does not
refer to its officers.
◦ How selected is discussed under Articles 266-271
of Labor Code
◦ See Phil. Diamond Hotel & Resort vs. MDHEU G.R.
No. 158075, June 30, 2006: Only LOs designated
or selected by the majority of the employees in an
appropriate bargaining unit may engage the
employer for collective bargaining
 Manifestation of workers’ participatory right
 PAL vs. NLRC (GR No. 85985, Aug. 1993) – ―The
CBA may not be interpreted as cession of
employees’ right to participate in the deliberation
of matters which may affect their rights and the
formulation of policies relative thereto.‖
 May be exercised by a Labor-Management
Council, aside from or instead of a union (dealing
with the employer vs. collective bargaining)
 Does not preclude the exercise of an individual
employee’s right to raise his own grievance.
 That group of jobs and jobholders
represented by the recognized or certified
union when it bargains with the employer.
 May comprise all of the supervisors or,
separately, all the rank-and-file population of
the company.
 The law favors having only one grouping per
category (following the ―united-we-stand,
divided we fall‖ logic), but does not prohibit
sub-groups that are ―appropriate.‖
 Refers to 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.
 BLR’s primary function, considering all legally
relevant factors.
 Bargaining Unit may be determined following
the four recognized modes:
1. Substantial Mutual Interests principle or
community or mutuality of interests rule
2. Will of the Employees (Globe Doctrine)
3. Collective Bargaining History
4. Employment Status
 Employees sought to be represented must
have substantial mutual interests in terms of
employment and working conditions
 Characterized by similarity of employment
status, same duties and responsibilities and
substantially similar compensation and
working conditions.
 There must be a logical basis for the
formation of a bargaining unit.
 Adherence to the adage ―Strength in
Numbers‖
 Geographical location can be completely
disregarded if communal or mutual interests
of the employees are not sacrificed.
 However, if employers in two plants are
clearly distinct, each group of employees in
the plants are treated as separate units
(Diatagon vs. Ople)
 SMC Employees Union vs. Confesor, (GR No.
111262, Sep. 1996)
 Philtranco Service Enterprises vs. BLR, (GR No.
85343, Jun. 1989)
 SMC vs. Laguesma (GR No. 100485, Sep.
1994)
 SMC Supervisors and Exempt Employees
Union vs. Laguesma (GR No. 110399, Aug.
1997)
 St. James School of Quezon City vs.
Samahang Manggagawa sa St. James School
of Quezon City (GR No. 151326, Nov. 23,
2005)
 Globe Machine and Stamping Co., 3 N.L.R.B. 294
(1937),
A petitioning union claimed that there were
three separate bargaining units in the plant,
whereas an intervening union argued for treating
the plant as one overall unit.
The US NLR Board found that either
arrangement would result in appropriate bargaining
units, and concluded that the question was so
evenly balanced that the determining factor should
be the desire of the employees themselves.
 Globe Machine and Stamping Co., 3 N.L.R.B. 294
(1937),
Each of the three separate units was given the
opportunity to vote for the petitioning union (and
representation as a separate unit), the intervening
union (and representation as an overall unit), or no
union.
The Globe procedure thereby allows
employees "to determine the scope of a unit by
allowing them to cast a vote for each of several
potential units which the Board has determined are
appropriate."
 US Case: Globe Machine & Stamping Co. (3
NLRB 294, 1937)
 In defining the appropriate bargaining unit,
… the determining factor is the desire of the
workers themselves. Consequently, a
certification election should be held
separately to choose which representative
union will be chosen by the workers.
 Prior collective bargaining history and affinity
of employees should be considered in
determining the appropriate bargaining unit.
 The existence of a prior collective bargaining
history is neither decisive nor conclusive in
the determination of what constitutes an
appropriate bargaining unit (see SMC vs.
Laguesma, NAFTU vs. Mainit Lumber Devt.
Company Workers Union)
 NAFTU vs. Mainit – SC applied mutuality of
interest among workers in sawmill division
and logging division, despite the history of
divisions being treated as separate units and
geographical distance (see also SMC vs.
Laguesma)
 Casual employees and those employed on
day-to-day basis – must be considered
separate because there is no mutuality of
interest (Philippine Land-Air-Sea Labor Union
vs. CIR, GR No. L-14656, Nov. 1960)
 Confidential employees cannot be allowed to
be included in rank-and-file bargaining units
 Belyca Corporation vs. Ferrer-Calleja (GR No.
77395, Nov. 1988)
 Certification Election
 Consent Election
 Voluntary Recognition
 Process of determining by secret ballot the
sole and exclusive bargaining agent of the
employees in an appropriate bargaining unit,
for purposes of collective bargaining.
 No longer necessary under the following
circumstances
◦ Voluntary recognition of the employer
◦ Employees designate the union as the bargaining
representative
 Organized establishments
◦ Petition questioning the majority status of the
incumbent bargaining agent is filed with the DOLE
during the 60-day freedom period
◦ Verification of Petition necessary
◦ Support of at least 25% of all employees in
bargaining unit
 In unorganized establishments, certification
election shall be ―automatically‖ conducted
upon the filing of a petition by a legitimate
labor organization
 Legitimate labor organization, or
 Employer, when requested by a labor
organization to bargain and status of
organization is in doubt.
 Note: Art. 264-A – Employer is a bystander in
petitions of certification election. Employer’s
participation limited to:
◦ Being notified or informed of petitions of such
nature
◦ Submitting list of employees to Med-Arbiter during
pre-election conference
 May be filed at any time in the absence of a
CBA, except:
◦ Certification year-bar rule
◦ Bargaining deadlock bar rule
◦ Contract bar rule
 Certification year-bar rule – A certification
election may not be filed within one year from
the date of a valid certification, consent or
run-off election, or one year from the date of
voluntary recognition.
 Bargaining deadlock-bar rule.
◦ Before the filing of a petition for certification
election, the duly recognized or certified union has
commenced negotiations with the employer within
the one-year period from the date of a valid
certification, consent or run-off election or
voluntary recognition.
◦ A bargaining deadlock to which an incumbent or
certified bargaining agent is a party had been
submitted to conciliation or arbitration or become
the subject of a valid notice of strike or lockout.
 Kaisahan ng Manggagawang Pilipino (Kampil-
Katipunan) vs. Trajano (GR No. 75810, Sept.
1991)
 Capitol Medical Center Alliance of Concerned
Employees-USFW vs. Laguesma (GR No.
118915, Feb. 1997)
 The BLR shall not entertain any petition for
certification election or any other action
which may disturb the administration of duly
registered existing collective bargaining
agreements affecting the parties.
 60-day Freedom Period
 CBA is not registered with the BLR
 CBA contains provisions lower than statutory
standards
 Falsified, fraudulent or misrepresented
documents
 Incomplete CBA
 Collective bargaining and negotiations entered
into prior to the 60-day freedom period
 Internal strife in the union resulting in an
industrial dispute which does not foster
industrial peace.
 Petitioner is not listed in DOLE’s registry of
legitimate labor organizations, or whose
registration is revoke or cancelled with
finality
 Petition filed outside of freedom period,
provided that the 60 day period based on the
original CBA shall not be affected by any
amendment, extension or renewal of the CBA
 Failure to submit 25% support requirement
for filing of petition
 Voluntarily agreed upon by the parties with or
without the intervention of the DOLE
 Certification Election – to determine the sole
and exclusive bargaining agent of all the
employees in an appropriate bargaining unit
for the purpose of collective bargaining;
 Consent Election – to determine the issue of
majority representation of all workers in the
appropriate collective bargaining unit mainly
for the purpose of determining the
administrator of the CBA; not for the purpose
of determining the bargaining agent for
purposes of collective bargaining.
 Process whereby the employer recognizes a
labor organization as the exclusive
bargaining representative of the employees in
the appropriate bargaining unit after a
showing that the labor organization is
supported by at least a majority of the
employees in the bargaining unit.
 Available only in unorganized establishments.
1. What is Certification Election? - Certification
election is a process of determining through
secret ballot the sole and exclusive bargaining
agent (SEBA) of all the employees in an
appropriate bargaining unit for the purpose of
collective bargaining.
2. Where does a union file a petition for certification
election (PCE)? - A PCE is filed at the Regional
Office which issued the certificate of petitioning
union’s certificate of registration/certificate of
creation of chartered local.
3. What are the requirements in filing a PCE? - Among the
important requirements are the following:
a. A statement indicating any of the following:
◦ That the bargaining unit is unorganized or that there is no
registered CBA covering the employees in the bargaining unit;
◦ If there exists a duly registered CBA, that the petition is filed
within the sixty-day freedom period of such agreement;
◦ If another union had been previously recognized voluntarily or
certified in a valid certification, consent or run-off election, that the
petition is filed outside the one-year period from entry of voluntary
recognition or conduct of certification or run-off election and no
appeal is pending thereon.
b. In an organized establishment, the signature of at least twenty-
five (25%) percent of all employees in the appropriate
bargaining unit shall be attached to the petition at the time of its
filing (Section 4, Rule VIII, of the Department Order No. 40-03).
4. What happens after receipt of the PCE? - The petition will be
raffled to the Med-Arbiter for preliminary conference to
determine, among others, the bargaining unit to be
represented, the contending unions, and the possibility of
consent election.
5. What happens upon approval of the conduct of certification
election by the Mediator-Arbiter? - The PCE will be endorsed
to an election officer for the conduct of pre-election conference
wherein the date, time and place of election will be identified,
the list of challenged and eligible voters will be made, as well
as the number and location of polling places.
6. May a PCE be denied? - Yes, if:
a. filed before or after the freedom period of a registered CBA;
b. the petitioner union is not listed in the DOLE Registry of legitimate
labor organization; or
c. the legal personality of the petitioner-union has been revoked or
cancelled with finality.
7. Who conducts CEs? - The DOLE Regional Office
through the election officer conducts the certification
election.
8. How is the SEBA determined? - The union that
garners majority of the valid votes cast in a valid
certification election shall be certified as the SEBA.
9. May election protest be entertained? - Yes, but
protest should have been first recorded in the
minutes of the election proceedings.
10. What happens if the petitioner union fails to garner
the majority of the valid votes cast? - There will be
no SEBA, but another PCE may be filed one year
thereafter.
11. What are the requisites for certification election in
organized establishments? - Certification election in
organized establishments requires that:
a. a) a petition questioning the majority status of the incumbent
bargaining agent is filed before the DOLE within the 60-day
freedom period;
b. b) such petition is verified; and
c. c) the petition is supported by the written consent of at least
twenty-five percent (25%) of all employees in the bargaining
unit.
12. What is the requirement for certification election in
unorganized establishments? - Certification election in
unorganized establishments shall “automatically” be
conducted upon the filing of a petition for certification
election by an independent union or a federation in behalf
of the chartered local or the local/chapter itself.
13. May an employer file a PCE? - Yes, the employer may
file a PCE if it is requested to bargain collectively.
14. May an employer extend voluntary recognition to a
legitimate labor organization without filing a PCE? - Yes,
management may voluntarily recognize a union if there is
no other union in the company and if other requirements
are complied with (Sec. 2, Rule 7 of D.O. 40-03).
15. What is the role of employer in certification election? -
The employer shall not be considered a party to a petition
for certification election, whether it is filed by an employer
or an LLO, and shall have no right to oppose it. Its
participation shall be limited only to being notified or
informed of petition for certification election and
submitting the certified list of employees or where
necessary, the payrolls (Employer as Bystander Rule).
 A negotiated contract between a legitimate
labor organization and the employer
concerning wages, hours of work and all
other terms and conditions of employment in
a bargaining unit
 Deemed as the law between the parties
during its lifetime
 Provisions are construed liberally
 A proposal not embodied in the CBA is not part
thereof
 Minutes of CBA negotiation have no effect if not
incorporated in the CBA
 Making a promise during the CBA negotiation is not
considered bad faith
 Adamant stance resulting in impasse is not bad faith
 No terms and conditions may be imposed by the
DOLE or any other agency which the law and the
parties did not intend to reflect in the CBA
 Signing bonus is not demandable under the law
 Allegations of bad faith are erased with the signing of
the CBA
 Single Enterprise
◦ Between on certified labor union and one employer
 Multi-Employer Bargaining
◦ Between and among several certified labor unions
and employers
◦ Conditions
 Only LLOs that are the SEBA may participate and
negotiate
 Only employers with counterpart LLOs which are
incumbent bargaining agents may participate
 Employers must consent to multi-enterprise
bargaining may participate
 Where there is yet no CBA:
◦ Compliance to Article 256, LC
◦ Er and union must MEET, CONVENE and CONFER for
collective bargaining purposes
◦ Requisites of collective bargaining must be
complied with
 Er-Ee relationship
 Majority status of bargaining union
 Demand to negotiate
◦ Advantage where the negotiations have no
precedent CBA: Clean slate, unencumbered by
previous agreements
 Where there exists a CBA
◦ Neither party shall terminate nor modify such
agreement during its lifetime.
◦ Parties may serve notice to terminate or modify
agreement during freedom period
◦ Parties to keep the status quo during freedom
period until new agreement is reached.
 Posting of CBA
◦ Posted in two conspicuous places in the work
premises, at least five days prior to ratification
◦ Mandatory requirement; non-compliance will result
in ineffectiveness of CBA (ATU vs. Trajano, 1988)
◦ Employer responsible for posting (ALU vs. Ferrer-
Calleja, May 1989)
 Ratification by Majority of Employees in
Bargaining Unit
 Registration of CBA
 Ignoring all notices for negotiation and
requests for counter-proposals
 Refusing to bargain anew on economic terms
of the CBA, using flimsy excuses such as
questioning union
 Not serving an answer
 All the above are indications of bad faith
 Employer who violates the duty to bargain
collectively loses its statutory right to
negotiate or renegotiate terms and conditions
of the draft CBA; and may impose the
adoption of the proposals of the union as the
CBA
 Cases
◦ General Milling Corporation vs. CA,
◦ Kiok Loy vs. NLRC
◦ Divine Word University of Tacloban vs. SOLE
 Representation aspect – 5 years, meaning no
petition questioning the majority status of
the incumbent agent shall be entertained by
DOLE
 Economic and non-economic provisions
except representation renegotiated not later
than three years after its execution
 New CBA concluded by negotiation
◦ The CBA or other provisions of such agreement
entered into within 6 months from expiration of
term shall retroact to the day immediately following
date of expiration
◦ If entered into beyond 6 months, parties shall agree
on effectivity
 CBA concluded through arbitral award
◦ LMG Chemicals Corporation vs. Secretary of DOLE,
(GR No. 127422, April 2001)
 Conciliation and Mediation with NCMB, DOLE
 Declaration of Strike or Lockout
 Referral to conciliation or voluntary
arbitration
 Any question by Er or union regarding
◦ interpretation or application of the CBA, or
◦ company personnel policies, or
◦ Any claim by either party that the other party is
violating the CBA or company personnel policies.
 Complaint or dissatisfaction arising from the
interpretation or implementation of CBA and
those arising from interpretation or
enforcement of personnel policies.
 Refers to mechanism for the adjustment and
resolution of grievances arising from the
interpretation or implementation of a CBA
and those arising from the interpretation and
enforcement of company personnel policies.
 Internal rules of procedure established by the
parties in their CBA with voluntary arbitration
as the terminal step.
 Refers to the system of grievance settlement
at the plant level as provided in the CBA.
 Consists of successive steps starting at
complainant and his immediate supervisor,
up to the level of top union and company
officials
 All grievances submitted to the grievance
machinery that are not settled in seven
calendar days from submission shall be
referred to Voluntary Arbitration prescribed in
the CBA
 Voluntary Arbitrators shall be named and
designated in advance, or include a
procedure for selection of VAs.
 In case parties fail to select VA, NCMB shall
designate
 Mode of settling labor-management disputes
 Parties select a competent, trained and
impartial third person
 Decision based on merits of the case
 Decision is final and executory
Voluntary Arbitration
Proceedings may be Informal
Precedents set by other arbitration
not obligatory on VAs
Rules on evidence are not
imposed, hence arbitrator
determines what is admissible
Arbitrators are highly specialized
Courts of Law
Proceedings are Formal
Doctrine of Stare Decisis
Rules on evidence outline points of
admissibility of evidence
Judges considered as generalists
 Contract-negotiation disputes
◦ Terms and conditions of contracts
◦ Collective bargaining issues
◦ Known as arbitration of ―interest‖
 Contract interpretation disputes
◦ Arises out of existing CBAs
◦ Known as arbitration of ―grievance‖ or ―rights‖
 Jurisdiction of LA – Article 223
 Jurisdiction of VA- Article 267, 268
 Interpretation or implementation of CBA are
disposed of by LAs by referring the matter to
the grievance machinery, of which the
terminal step is voluntary arbitration
 Under Article 268, VAs may, upon voluntary
agreement of the parties hear and decide ALL
other labor disputes including ULP and
bargaining deadlocks
 Termination disputes may fall within the
jurisdiction of VAs, provided that the parties
had agreed in unequivocal language that the
termination dispute would be referred to the
grievance machinery and voluntary
arbitration.
 San Jose vs. NLRC & Ocean Terminal Services
(GR 121227, Aug. 1998)
 San Miguel Corporation vs. NLRC
 Sanyo Philippines Workers Union vs.
Canizares, GR No. 101619, July 1992
 Any person accredited by NCMB as such, or
 Any person named or designated in the CBA
as such, or
 One appointed by the NCMB in case either
party refuses to submit to voluntary
arbitration

 Note that VAs are not part of DOLE or any

government agency. His authority to render
arbitral awards are vested by law.
 Article 268-A: Upon motion of any interested
party, the VA may issue a writ of execution
requiring the sheriff of the NLRC or regular
courts or public officials whom the parties
may designate in the submission agreement
 People planning and acting together
 One undertaken by two or more employees,
or by one on behalf of others.
 Temporary stoppage of work by the
concerted action of the employees as a result
of an industrial or labor dispute.
 Consists not only of concerted work
stoppages but also sitdowns, mass leaves,
slowdowns, attempts to damage, destroy or
sabotage plant equipment or facilities and
similar activities.
 Cessation of work by employee in an effort to
get more favorable terms for employment
 Concerted refusal by employees to do any
work for their employer, or work at their
customary rate of speed until the object of
strike is attained by employer’s concession
 Established relationship between strikers and
persons against whom the strike is called
 Relationship must be of employer-employe
 Existence of dispute between the parties and
the utilization by labor of the weapon of
concerted refusal to work as a means of
persuading or coercing compliance to
demands
 Even though work cessation is by ―belligerent
suspension,‖ Employment relations still
continue
 Work stoppage is temporary
 Concerted action by employees
 Striking group is a LLO, and in the case of
bargaining deadlock, the sole bargaining
representative
 Temporary stoppage of work by reason of
refusal of an employer to furnish work as a
result of an industrial or labor dispute
 An employer’s means of protecting his
bargaining position
 Employer must show that his act is primarily
defensive, and not an act of hostility to
collective bargaining or of discriminaiton.
 To forestall threatened acts of sabotage (Rizal
Cement Workers Union vs. Madrigal Co.)
 In anticipation of a threatened strike where
motivated by economic considerations
 In response to unprotected strike or walkout
 In response to a whipsaw strike
 A right given to workers to peacefully march
to and from before an establishment involved
in a labor dispute accompanied by the
carrying and display of signs, placards and
banners intended to inform the public about
the dispute.
 Included in the constitutional guarantee
◦ to engage in concerted activities for purposes of
collective bargaining for their mutual benefit and
protection
◦ Freedom of speech principle
 Can be performed by persons even in the
absence of Er-Ee relationship
 Right to peaceful picketing should be
exercised with due respect to the right of
others; coercion, intimidation or acts of
violence are strictly prohibited
 Picketers cannot rightfully prevent employees
of another company which is not their
employer from entering or leaving their
rented premises (innocent bystander)
 Extent
◦ General – occur over a whole community, province,
state or country. An extended form of sympathetic
strike; many workers stop working to put pressure
on government or paralyze economic & social
systems
◦ Local or Particular – applies only in a particular
enterprise or locality
 Nature of the Act
◦ Sitdown Strike – Possession, trespass and
prevention of access and operation
◦ Slowdown – reduction of production output
◦ Partial or quickie strike – intermittent, unannounced
work stoppage; used interchangeably with wildcat
strike
 Employee Interest
◦ Primary Strike – declared by employees who have a
direct and immediate interest in the subject of the
dispute between them and the Er
◦ Secondary Strike – Coercive measure adopted by
workers against an employer connected by product
or employment with alleged unfair labor conditions
or practices
◦ Sympathetic Strike – striking employees have no
demands or grievances of their own, but strike to
directly or indirectly aid others without direct
relation to the advancement of the interest of the
strikers.
 Economic Strike – one intended to force wage
and other concessions from the employer,
which he is not required by law to grant.
 Unfair Labor Practice Strike – called against
the ULP of the employer, usually for the
purpose of making him desist from further
committing such practices. Called for mutual
protection, and for the discontinuance of
employer abuses.
 Parties must first exhaust measures or
remedies that will avoid the strike, akin to the
doctrine of Exhaustion of Administrative
Remedies.
 Only when non-disruptive alternatives have
proved unsuccessful may strikes be deemed
justified.
 Jumping the gun on the grievance
procedure/voluntary arbitration of a dispute
will mean that the strike is PREMATURE, thus
illegal
 Once an issue has been submitted for
conciliation, mediation or compromise, the
employees cannot resort to a strike.
 Discussions during conciliation proceedings
are confidential and treated as privileged
information
 Parties can enter into compromise
agreements to avoid a strike, which
compromise shall be immediately final and
executory.
 Art. 260 – Not subject to labor injunction or
restraining order
 Art. 254 – No discrimination against striker in
the exercise of the right
 Art. 270(a) – Preservation of employment
relationship
 Art. 270(c) – Prohibition on Strike-breakers
First requisite: Valid and factual ground
 (1) CBA Deadlock; and
 (2) Unfair labor practice (ULP).

Second Requisite: Notice (of Strike or Lockout)

 (1) CBA Deadlock - 30 days from intended
date of strike
 (2) Unfair labor practice (ULP) – 15 days.
Third requisite: Notice to NCMB-DOLE at least
24 hours prior to the taking of the strike or
lockout vote (secret ballot)
 Decision to conduct vote
 Date, time and place

Fourth Requisite: Strike or Lockout Vote

 Majority approval required
 Must be implemented even in cases of union-
busting
Fifth requisite: Strike/Lockout Vote Report
 Submitted at least seven days prior to strike/lockout
 If report submitted during cooling off period, seven
day waiting period begins on the day following the
cooling off period
 If for union busting, cooling period may be dispensed
with

Sixth Requisite: Cooling Off Period

 Reckoned from filing of notice of strike/lockout
 30 days for deadlock, 15 for ULP
 If strike is for union-busting, period is dispensed
with
Seventh requisite: Waiting period
 Seven days from submission of strike vote
report
1. Failure to comply with requisites will render the strike or
lockout illegal.
2. A strike or lockout based on non-strikeable issues is illegal
3. A strike or lockout is illegal if the issues involved are
already subject of compulsory or voluntary arbitration or
conciliation or the steps in grievance machinery are not
exhausted.
4. A strike or lockout is illegal if unlawful means were
employed or prohibited acts or practices were committed
(e.g., Use of force, violence, threats, coercion, etc.;
Barricades, blockades and obstructions of ingress to
[entrance] or egress from [exit] the company premises).
5. A strike or lockout is illegal if the notice of strike or notice
of lockout is already converted into a preventive mediation
case.
6. A strike or lockout is illegal if staged in violation of
the ―No-Strike, No-Lockout‖ clause in the collective
bargaining agreement.
7. A strike or lockout is illegal if staged in violation of
a temporary restraining order or an injunction or
assumption or certification order.
8. A strike is illegal if staged by a minority union.
9. A strike or lockout is illegal if conducted for
unlawful purpose/s (e.g.: Strike to compel dismissal
of employee or to compel the employer to
recognize the union or the so-called ―Union-
Recognition Strike‖)
10. The local union and not the federation is liable to
pay damages in case of illegal strike.
 The NCMB has the authority to convert a notice of
strike filed by the union into a preventive mediation
case if it finds that the real issues raised therein are
non-strikeable in character.
 NCMB has duty to exert all efforts at mediation and
conciliation to enable parties to settle the dispute
amicably and in line with the state policy of favoring
voluntary modes of settling labor disputes.
 Once a notice of strike/lockout is converted into a
preventive mediation case, it will be dropped from
the docket of notices of strikes/lockouts.
 Once dropped therefrom, a strike/lockout can no
longer be legally staged based on the same notice.
The conversion has the effect of dismissing the
notice.
1. Those that are expressly prohibited by law
2. Does not comply with statutory requirements
3. Declared for an unlawful purpose
4. Employs unlawful means
5. In violation of an existing injunction
6. In violation of assumption or certification order
7. Violation of no-strike, no-lockout clause
8. Minority union calls strike
9. Strike by a non-registered union
10. Premature strike
 Occurs when labor dispute that caused or
may cause strike is in an industry
indispensable to the national interest
 DOLE Secretary assumes jurisdiction and
◦ May decide the case, or
◦ Certify the same to the NLRC for compulsory
arbitration
 The power of assumption of jurisdiction over
labor disputes in these industries is in the
nature of the POLICE POWER measure
 Automatically enjoins intended or impending
strike or lockout
 All striking or locked out employees shall
return to work immediately
◦ Note that striking employees are not considered to
have abandoned their employment, but only ceased
from their labor
 Employer shall resume operations and admit
all workers under same conditions pre-strike
 No Motion for Reconsideration will stay the
assumption order
 No work, no pay rule applied
 Exceptions
◦ ULP strike
◦ Unconditional and voluntary offer to return to work
is refused by employer
◦ Employees are discriminated against despite a
RTWO
◦ Non-participating employees were locked out by
employer
◦ Reinstatement no longer possible
 Article 270 - Note prohibitions on:
◦ Labor Organizations
◦ Third Persons
◦ Employers
◦ Public Officials or Employees
◦ Picketers
 Enjoins striking workers to RETURN TO WORK
 Defiance of RTWO is considered an illegal act
 Strike becomes illegal
 Defiant strikers may be sanctioned with
disciplinary measures, e.g. dismissal or loss
of employment status or criminal prosecution
 NCMB shall conduct a referendum by secret
ballot on or before 30th day of the strike;
 If majority of union members accept offer
◦ Striking workers shall return to work immediately
◦ Employer readmits striking workers upon signing of
agreement
 Initiated when EMPLOYER makes an offer that
is, in his opinion, better than his previous
stance in the labor dispute
 NCMB shall conduct a referendum by secret
ballot on or before 30th day of the lockout;
 If majority of board members, trustees or
directors accept offer
◦ Locked out workers shall return to work
immediately
◦ Employer readmits workers upon signing of
agreement
 Initiated when STRIKERS make an offer that is,
in their opinion, more acceptable than their
previous stance in the labor dispute
Security of Tenure
Management Prerogatives
Termination of Employment
 Defined: The constitutional right granted the
employee that the employer shall not
terminate the services of an employee except
for JUST CAUSE, or when AUTHORIZED BY
LAW.
 It extends to regular (rank and file,
managerial) as well as non-regular
employment (probationary, seasonal, project)
 Applies as protection from unwarranted and
unconsented demotion and transfer
 Article 294 (280)
◦ Regular
◦ Casual
◦ Project
◦ Seasonal
 Other forms
◦ Fixed Period
◦ Probationary
 Employee has been engaged to perform
activities which are usually necessary or
desirable in the usual business or trade of the
employer;
 One year of service has been rendered,
whether continuous or broken, with respect
to the activity in which he is employed;

Employee must be allowed to work after probationary

period in both instances.
 Nature of Work Test – Whether or not there is
reasonable connection between the particular
activity performed by the employee in relation
to the usual business or trade of the
employer
 Period of Service Test – Employee’s length of
service is at least one year, whether
continuous or broken
 Probationary Employee Test – Whether or not
the employee is allowed to work after the
lapse of the probationary period.
 ABS-CBN vs. Marlyn Nazareno (26 Sept. 2006)
 Fabela vs. SMC, (Feb. 28, 2007)
 De Leon vs NLRC, (176 SCRA 615)
 Hacienda Fatima, (Jan. 28., 2003)
 Employee has been engaged to perform
activities which are NOT necessary or
desirable in the usual trade or business of the
employer
 Once a casual employee has rendered at least
one year of service, his status becomes
REGULAR; no appointment or declaration
necessary
The purpose of this rule is to honor the
constitutional guarantee of security of tenure and
right to self-organization
 Conti vs. NLRC
 Baguio Country Club vs. NLRC
 Employee has been engaged for a SPECIFIC
project or undertaking
 the completion or termination of the project has
been determined at the time of engagement of
the employee
 REGULAR STATUS vested when
◦ Continuous re-hiring of project employees even after the
cessation of a project for the same tasks or nature of
tasks (Tomas Lao Const. vs. NLRC, 276 SCRA)
◦ Tasks performed by project employee are vital,
necessary and indispensable to the usual business or
trade of the employer
 Exodus International Construction Corporation, et al.
v. Guillermo Biscocho, et al., G.R. No. 166109, Feb.
2011:
◦ Two types of employees in the construction industry:
 Project employees or those employed in connection with a
particular construction project or phase thereof and such
employment is coterminous with each project or phase of the
project to which they are assigned.
 Non-project employees or those employed without reference to
any particular construction project or phase of a project; when
one project is completed, employees are automatically
transferred to the next project awarded to employer. There was
no employment agreement given employees which clearly
spelled out the duration of their employment and the specific
work to be performed and there is no proof that they were made
aware of these terms and conditions of their employment at the
time of hiring.
 No dismissal before completion of project,
except for just or authorized cause;
 Must comply with procedural requirements;
 No need for notice of termination upon the
expiration of project period;
 Prior to dismissal, report must be made to
the nearest employment office of the
termination of services every time project is
completed.
 Employment is for a pre-determined period
established at the time of engagement (Read
St. Theresa’s School of Novaliches vs. NLRC,
289 SCRA 110)
 Employee’s duties are usually necessary and
desirable to the usual business or trade of the
employer
1. 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;
or
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. (Lynvil
Fishing Enterprises, Inc. vs. Andres G. Ariola, et
al., G.R. No. 181974, Feb. 2012)
 Employer required to inform the probationary
employee of such reasonable standards at the time of
his engagement, not at any time later; else, the latter
shall be considered a regular employee. (Section 6,
Implementing Rules of Book VI, Rule VIII-A, Labor
Code)
 Purpose:
◦ Employer observes the fitness, propriety and efficiency of a
probationer to ascertain whether he is qualified for
permanent employment,
◦ Employee seeks to prove he has the qualifications to meet
the reasonable standards for permanent employment.
 Length of time the probation depends on the parties’
agreement, but not to exceed six (6) months under
Article 295 (281) of the Labor Code.
 Cases
◦ Canadian Opportunities Unlimited, Inc. vs. Bart Q.
Dalangin, Jr., G.R. No. 172223, February 6, 2012.
◦ Armando Ailing vs. Jose B. Feliciano, Manuel F. San
Mateo III, et al., G.R. No. 185829. April 25, 2012.
 Work or service is seasonal in nature and the
employment is for the season’s duration
 Considered as regular if re-engaged after one
season
 Seasonal employees not laid off during the
end of season, simply on leave w/o pay until
re-employment
 Relationship is only suspended, not severed
 Work or service is seasonal in nature and the
employment is for the season’s duration
 Considered as regular if re-engaged after one
season
 Seasonal employees not laid off during the
end of season, simply on leave w/o pay until
re-employment
 Relationship is only suspended, not severed
 Our laws recognize and respect the exercise by
management of certain rights and prerogatives. For this
reason, courts often decline to interfere in legitimate
business decisions of employers. In fact, labor laws
discourage interference in employers’ judgment
concerning the conduct of their business. (Philippine
Industrial Security Agency Corporation vs. Aguinaldo, G. R.
No. 149974, June 15, 2005; Mendoza vs. Rural Bank of
Lucban, G.R. No. 155421, July 7, 2004).
 An employer can regulate, generally without restraint,
according to its own discretion and judgment, every aspect
of its business. (Deles, Jr. vs. NLRC, G. R. No. 121348,
March 9, 2000).
 This privilege is inherent in the right of employers to
control and manage their enterprise effectively. (Mendoza
vs. Rural Bank of Lucban, G.R. No. 155421, 07 July 2004).
 regulate and control all aspects of employment in
their business organizations. Such aspects of
employment include hiring, work assignments,
working methods, time, place and manner of work,
tools to be used, processes to be followed,
supervision of workers, working regulations, transfer
of employees, work supervision, lay-off of workers
and the discipline, dismissal and recall of workers.
(Philippine Airlines, Inc. vs. NLRC, G. R. No. 115785,
Aug. 4, 2000).
 Management retains the prerogative … to change the
working hours of its employees. (Sime Darby
Pilipinas, Inc. vs. NLRC, G.R. No. 119205, 15 April
1998, 289 SCRA 86).
 A transfer means a movement (1) from one position
to another of equivalent rank, level or salary, without
a break in the service; or (2) from one office to
another within the same business establishment.
(Sentinel Security Agency, Inc. vs. NLRC, G. R. No.
122468, Sept. 3, 1998).
 Prerogative of management to transfer an employee
from one office to another within the business
establishment upheld, provided
1. There is no demotion in rank or diminution of salary,
benefits, and other privileges, and;
2. Action is not motivated by discrimination, made in bad
faith, or effected as a form of punishment or demotion
without sufficient cause. (Mendoza vs. Rural Bank of
Lucban, G. R. No. 155421, July 7, 2004; Benguet Electric
Cooperative vs. Fianza, G. R. No. 158606, March 9, 2004).
1. Must be exercised without grave abuse of
discretion
2. Basic elements of justice and fair play adhered
to.
3. Employer must be able to show that the
transfer is not unreasonable, inconvenient or
prejudicial to the employee, otherwise, the
employee’s transfer is tantamount to
constructive dismissal. (The Philippine
American Life and General Insurance Co. vs.
Gramaje, G. R. No. 156963, Nov. 11, 2004;
Globe Telecom, Inc. vs. Florendo-Flores, G. R.
No. 150092, Sept. 27, 2002).
 William Endeliseo Barroga vs. Data Center College
of the Philippines, et al., G.R. No. 174158, June
2011
◦ Constructive dismissal is quitting because continued
employment is rendered impossible, unreasonable or
unlikely, or because of a demotion in rank or a
diminution of pay. It exists when there is a clear act of
discrimination, insensibility or disdain by an employer
which becomes unbearable for the employee to continue
his employment.
◦ It is management prerogative for employers to transfer
employees on just and valid grounds such as genuine
business necessity, e.g. financial constraints
 An employee has a right to security of tenure,
but this does not give her such a vested right
in a position as would deprive the employer
of its prerogative to change employee
assignments or transfers where the
employee’s service will be most beneficial to
the employer’s client.
 Cases
◦ OSS Security & Allied Services, Inc., vs. NLRC, G. R.
No. 112752, Feb. 9, 2000
◦ Tan vs. NLRC, 299 SCRA 169, 180 [1998]
◦ Chu vs. NLRC, G. R. No. 106107, June 2, 1994
 Transfer directed by employer under
questionable circumstances
◦ Transfer ordered during height of union activities
◦ Used as a subterfuge to get rid of an undesirable
employee
◦ Transfer is patently whimsical or vindictive
 Cases
◦ Union activities - Yuko Chemical Industries vs.
Ministry of Labor & Employment (GR No. 75656,
May 28, 1990)
◦ No notice of transfer as condition for training -
Zafra vs. Court of Appeals (GR No. 139013,
September 17, 2002)
◦ Whimsical or vindictive transfer - Damasco vs. NLRC
(GR No. 115755, December 4, 2000)
 In general, transfers not characterized by
grave abuse of discretion or bad faith are all
valid. The worker cannot refuse for any of
the following grounds:
◦ Additional expense and travel time (Genuino Ice
Company vs. Magpantay, GR No. 147790, June 27,
2006)
◦ Parental obligations (Tinio vs. CA, GR No. 171764,
2007)
◦ Anxiety
◦ ―Home‖ base (PT&T Corp. vs. Laplana, GR No.
76645, July 23, 1991)
 Those directed
◦ By contractual stipulation (Abbott Labs vs. NLRC, GR
No. 76959, Oct. 12, 1987)
◦ Standard Operating Procedure
◦ Company Policy
◦ Order of the Government (Bisig Manggagawa ng.
Tryco vs. NLRC, GR No. 151309, Oct. 15, 2008)
◦ Guidelines of Government Organs (BSP Circular
mandating rotation of bank employees
 To avoid conflict of interest (Duncan
Association of Detailman – PTGWO vs. Glaxo
Wellcome Phils., GR No.162994, September
17, 2004)
 By reason of abolition of position (Beneco vs.
Fianza, 158606, March 9, 2004)
 Advancement from one position to another,
involving an increase in duties and
responsibilities authorized by law AND
increase in compensation and benefits.
 Mere increase in salary should not be
determinative of promotion, as the increase is
merely incidental.
 Promotion involves a scalar ascent in rank or
position
 Transfer involves lateral movement to the
same rank and salary
 A promotion can be refused, and it will not
result in punishment
 A transfer directed in good faith and in the
exercise of management prerogative cannot
be refused without pain of sanction
 A promotion that results from a transfer
requires the consent of the employee
 Agabon vs. NLRC (GR No. 158693, Nov. 27,
2004)
◦ Constitutional due process protects the individual
against the government
◦ Statutory due process protects the worker from
unjust termination of employment except for just
cause after notice and hearing
 Substantive Due Process: Valid Causes
◦ Just Cause
◦ Authorized by Law
 Procedural Due Process:
◦ Written notice of the charge/s
◦ Opportunity to be heard
 Hearing
 Conference
◦ Written notice of termination
 Skippers United Pacific, Inc. and Skippers Maritime
Services, Inc. Ltd. vs. Nathaniel Doza, et al. (GR No.
175558, Feb. 2012)
◦ Substantive due process - Legality of the act of dismissal.
◦ Procedural due process - Legality of the manner of
dismissal. consists of twin requirements: notice and
hearing.
◦ Employer must furnish employee with two written notices
before termination of employment:
 1st notice apprises the employee of the particular acts or
omissions for which his dismissal is sought;
 2nd notice informs the employee of the employer’s decision to
dismiss him.
 Before issuance of second notice, a hearing must be complied
with by giving the worker an opportunity to be heard.
 Substantive due process requires that
dismissal by the employer be made based on
a just or authorized cause under Articles 282
(296) to 284 (298) of the Labor Code.
 Notice issued prior to commission of offense does
not satisfy requirement (Janssen Pharmaceutica vs.
Silayro, GR 172528, Feb. 26, 2008)
 Service of notice is a mandatory requirement
 Notice must be in writing (no form necessary)
◦ Must not only state the policy violated, but the
corresponding penalty of dismissal imposable thereon
(Cruz vs. Coca-Cola, GR No. 165586)
◦ Must state that dismissal is sought
◦ Charges stated in general terms invalid
 Employee must be dismissed on same grounds stated
in first notice
 Changing of ground for dismissal indicates lack of
basis
 Warning letters (Skippers United Pacific vs.
Maguad, GR No. 166363, August 15, 2006)
 Affidavit narrating incident (Asian Terminals
vs. Marbella, GR No. 149074, August 10,
2006)
 First notice pertains to a different incident
from the offense for which employee is
dismissed (Wah Yuen Restaurant vs. Jayona,
GR No. 159448, Dec. 16, 2005)
 Employee’s admission
 Termination due to abandonment
 Employer has burden of proof in showing
dismissal was not illegal (Limketkai Sons
Milling vs. Llamera, GR No. 152514, July 12,
2005)
 Substantial proof, not clear and convincing
evidence.
Substantial Evidence Clear and Convincing Evidence
That amount of relevant A medium level of burden of
evidence which a reasonable proof which is a more rigorous
mind might accept as adequate standard to meet than the
to justify a conclusion preponderance of evidence
standard, but less than proof
beyond reasonable doubt.
 Lynvil Fishing Enterprises v. Andres Ariola, et
al., GR No. 181974, February 1, 2012
 Armando Ailing vs. Jose Feliciano, Manuel F.
San Mateo III, et al., GR No. 185829, April 25,
2012
1. Serious Misconduct
2. Wilful Disobedience
3. Fraud or Breach of Trust
4. Gross Negligence
5. Analogous Causes
 Philippine Long Distance Telephone Company
v. Bolso, G.R. No. 159701, August 17, 2007
1. Improper or wrong conduct
2. Transgression of some established and definite
rule of action.
3. Dereliction of duty, wilful in character
4. Implies wrongful intent, not merely an error in
judgment
 Marival Trading vs. NLRC, GR No. 169600,
June 26, 2007
a) it must be serious;
b) it must relate to the performance of the
employee’s duties; and
c) it must show that the employee has become
unfit to continue working for the employer.
 Joeb M. Aliviado, et al., vs. Procter & Gamble
Philippines, Inc., GR No. 160506, June 6,
2011
 One of the fundamental duties of an
employee is to obey all reasonable rules,
orders and instructions of the employer.

 Disobedience, to be a just cause for

termination, must be willful or intentional,
willfulness being characterized by a wrongful
and perverse mental attitude rendering the
employee’s act inconsistent with proper
subordination.
 Willful and intentional disobedience
 Where such rule, order or instruction violated
is:
1. reasonable and lawful
2. sufficiently known to the employee, and
3. connected with the duties which the
employee has been engaged to discharge.
 NATHANIEL N. DONGON, Petitioner, v. RAPID
MOVERS AND FORWARDERS CO., INC.,
AND/OR NICANOR E. JAO, JR., G.R. No.
163431, August 28, 2013
◦ Must be attended by a wrongful and perverse
mental attitude rendering the employee’s act
inconsistent with proper subordination
◦ Constitutes harmful behavior against the business
interest or person of his employer
◦ Impliedly, the erring employee obtains undue
advantage detrimental to the business interest of
the employer.
Gold City Integrated Port Services vs. NLRC, GR
No. 86000, September 21, 1990
 Not always punishable with dismissal
 Reasonable proportionality between the act of
insubordination and penalty imposed
therefore
 If insubordination is not an effective threat to
his co-workers or the safety of the customers
dealing with his employer, or to the goodwill
of his employer, suspension is more
proportionate penalty
 Kakampi and its members vs. Kingspoint
Express and Logistics and/or Mary Ann Co,
GR No. 194813, April 25, 2012
 Refers to any fault or culpability on the part
of the employee in the discharge of his duty
rendering him absolutely unworthy of trust
and confidence demanded by his position
 Mabeza vs. NLRC, G.R. No. 118506. April 18,
1997:
◦ Loss of confidence as a just cause for dismissal was
never intended to provide employers with a blank
check for terminating their employees. Such a
vague, all-encompassing pretext as loss of
confidence, if unqualifiedly given the seal of
approval by this Court, could readily reduce to
barren form the words of the constitutional
guarantee of security of tenure.
 Mabeza vs. NLRC, G.R. No. 118506. April 18,
1997:
◦ Loss of confidence should ideally apply only to cases
involving employees occupying positions of trust and
confidence or to those situations where the employee is
routinely charged with the care and custody of the
employer's money or property.
 managerial employees - those vested with the powers or
prerogatives to lay down management policies and/or to
hire, transfer, suspend, lay-off, recall, discharge, assign or
discipline employees or effectively recommend such
managerial actions;
 those who, in the normal and routine exercise of their
functions, regularly handle significant amounts of money or
property.
 Loss of trust must be based on willful breach
 Person committing breach must hold a
position of responsibility, trust and
confidence.
 Act complained of must be "work-related"
such as would show the employee concerned
to be unfit to continue working for the
employer.
 James Ben L. Jerusalem vs. Keppel Monte
Bank, et al, GR No. 169564, April 6, 2011
 Want or absence of or failure to exercise
slightest care or diligence, or entire absence
of care;
 An absence of that diligence that an
ordinarily prudent man would use in his own
affairs.
 Abel vs. Philex Mining Corp., GR No. 178976,
July 31, 2009
1. Want or absence of or failure to exercise
slight care or diligence;
2. Thoughtless disregard of consequences
without exerting effort to avoid them;
3. Negligence is not only gross but also
habitual.
◦ Habitual neglect implies repeated failure to perform
one's duties for a period of time, depending upon
the circumstances.
 Dr. Danilo T. Ting And Mrs. Elena Ting VS.
Court Of Appeals, G.R. No. 146174, July 12,
2006
◦ While we are not unmindful that no material injury
need be shown to sustain a finding of gross
negligence,
◦ Employee acted without bad faith
◦ There was reasonable basis for the act committed
◦ Employee is burdened by some condition that
would excuse error in judgment
 Elements similar to those found in Labor
Code
◦ Abandonment
◦ Immoral Conduct
◦ Sleeping on the Job
◦ Tardiness
◦ Unexplained Absences
◦ ―Attitude Problem‖
◦ Dishonesty
 Nissan Motors Phils. vs. Victorino Angelo,
G.R. No. 164181, September 2011
 PGA Employee Labor Union and Sandy T.
Vallota vs. NLRC, PRUDENTIAL GUARANTEE
AND ASSURANCE INC., and/or Jocelyn
Retizos, G.R. No. 185335, June 13, 2012
 Roberto Gonzales vs. NLRC & Pepsi Cola
Products, Philippines, Inc., G.R. No. 131653,
March 26, 2001
 Employer may place worker concerned under
preventive suspension if continued employment
poses serious and imminent threat to life or
property of employer and co-workers.
 Period must be definite, but not longer than 30
days
 Done during investigation
 Employee not entitled to wages during preventive
suspension, but if period is extended, he is
entitled to wages for the time he is suspended
beyond the original 30-day period
 See discussion on suspension as penalty
1. Retrenchment
2. Redundancy
3. Installation of Labor-Saving Devices
4. Closure of Business
5. Disease
 Reduction of personnel for the purpose of
cutting down operation costs in terms of
salaries and wages
 Resorted to because of losses in operation of
business
◦ Lack of work
◦ Reduction in volume of business
1. Necessary to prevent losses, which are
established
2. Written notice to DOLE and employee at least
one month prior to termination
◦ Employer’s lapse of belated furnishing of DOLE with the
one-month notice is only a procedural infirmity and
does not render the retrenchment illegal
◦ BUT DOLE nonetheless still required to be given notice
3. Payment of separation pay
4. Employer exercises prerogative for
advancement of its interest
5. Use of fair and reasonable criteria in
ascertaining who would be dismissed
 Losses should be substantial, not merely de
minimis;
 Substantial losses sought to be averted must
be imminent;
 To effectively prevent substantial losses,
retrenchment is reasonably necessary;
 Alleged losses already suffered and imminent
losses sought to be forestalled must be
proved by sufficient and convincing evidence.
 Bonifacio Anino vs. NLRC, GR No. 123226,
May 21, 1996
 Plastimer Industrial Corporation & Teo Kee
Bin vs. Natalia C. Gopo, GR No. 183390, Feb.
16, 2011
 International Management Services/Marilyn
Pascual vs. Roel P. Logarta, GR No. 163657,
Apr. 18, 2012
 Exists where the service capability of the
workforce is greater than what is reasonably
required to meet the demands of the
business enterprise;
 Position is redundant when it is rendered
superfluous by:
◦ Overhiring of workers
◦ Decrease in volume of business
◦ Dropping of a particular product or service
1. Good faith of the employer in abolishing
redundant position
2. Fair and reasonable criteria in ascertaining
what positions are to be declared redundant
◦ Preferred status
◦ Efficiency
◦ Seniority
3. Evidence to substantiate redundancy, e.g.:
◦ Adoption of new staffing pattern
◦ Feasibility studies on viability of new positions
◦ Job description and approval of management of
restructuring
 Related to redundancy
 Installation of machinery to effect economy
and efficiency in its method of production
 Employer not precluded from adopting a new
policy conducive to more economical and
effective management
 DOLE Philippines vs. NLRC, Sep. 13, 2001
 Nelson A. Culili vs. Eastern Telecoms, GR No.
165381, Feb. 9, 2011
 Edgar Agustilo vs. Court of Appeals, San
Miguel Corporation, Francisco Manzon, Jr., GR
No. 142875, Sep. 7, 2001
 Closure of business or undertaking due to
business losses
 Relocation of employer’s plant from one
location to another
◦ Take note, however of runaway shops which are
considered as ULP
 Determined by management. No business
can be required to continue operating at a
loss simply to maintain the workers in
employment
 Alabang Country Club, Inc., et al vs. NLRC, GR
No. 157611, Aug. 9, 2005
 Cheniver Deco Print Technics Corporation vs.
NLRC, et al, GR No. 122876, Feb. 17, 2000
 Me Shurn Corporation vs. Me-Shurn Workers
Union-FSM, GR No. 156292, Jan. 11, 2005
 Article 298: Employer shall not terminate the
service of employee suffering from any
disease unless there is a certification by a
competent public health authority that the
disease is incurable within a period of six
months even with proper medical treatment
 Employee suffering from a disease
 Employee’s continued employment is
prohibited by law or prejudicial to his health
or health of co-workers
 Certification by competent public health
authority
Just Cause
Implies that employee concerned
has committed or is guilty of some
violation against the employer, as
in serious misconduct, fraud or
neglect of duties;
Dismissal process initiated by
employee
As a rule, separation pay is not
required
Nominal damages to be paid if
employer overlooks procedural
due process is P30,000.00
Authorized Cause
Does not imply delinquency or
culpability on the part of the
employee;
Dismissal process initiated by
employer
Law requires separation pay
Nominal damages to be paid if
employer overlooks procedural
due process is P50,000.00
 DISMISSAL VALID IF:
◦ Dismissal is for Just Cause (Art 296) or Authorized
Cause (Art 297-298)
◦ Procedural requirements complied
 Substantial & Procedural Due Process present
 DISMISSAL INVALID IF:
◦ Dismissal is NOT for Just Cause (Art 296) or
Authorized Cause (Art 297-298)
◦ Procedural requirements complied
 Substantial Due Process absent
 DISMISSAL INVALID IF:
◦ Dismissal is NOT for Just Cause (Art 296) or
Authorized Cause (Art 297-298)
◦ Procedural requirements NOT complied
 Both Substantial & Procedural Due Process
absent
 DISMISSAL VALID:
◦ Dismissal is for Just Cause (Art 296) or Authorized
Cause (Art 297-298)
◦ Procedural requirements not complied
 Substantial Due Process present but
Procedural Due Process is wanting
 Employer liable to pay indemnity in
the form of nominal damages
 Pre WENPHIL Case: If just cause existed but
procedural due process not followed, dismissed
employee entitled to reinstatement & backwages
 Wenphil Doctrine: If the dismissal was for a just
or authorized cause but done without due
process, termination is valid but employer
sanctioned with payment of indemnity
 However, Serrano vs. NLRC termed the
termination ineffectual, not illegal, and penalty
imposed on employer is full backwages plus
nominal and moral damages
 Abandoned Serrano ruling and reverted to
Wenphil Doctrine. Backwages and moral
damages deleted, nominal damages limited
to those in Agabon and Jaka cases
 AGABON RULING: Dismissal will be held valid
and legal but employer should be sanctioned
for failure to afford due process to employee
 If dismissal is for Just Cause
◦ P30,000.00 (Agabon Case)
 If dismissal is for Authorized Cause
◦ P50,000.00 (Jaka Food Processing Corp. vs.
Pacot)
 DISMISSAL NOT EFFECTIVE:
◦ If dismissal is for Cause proven to be nonexistent
 Ex. See the following cases:
◦ Magtoto vs. NLRC, GR No. 6370, Nov. 18, 1985
◦ Standard Electric Manufacturing Corp. vs. Standard
Electric Employees Union, GR No. 166111, August
25, 2005
◦ Asian Terminals Inc. vs. NLRC, GR No 158458, Dec.
19, 2007
 Imposed when dismissal is too harsh a
penalty due to certain mitigating factors such
as absence of malice, or employee is a first
offender
 Reinstatement without loss of seniority rights
and other privileges
 Full backwages and allowances
 Other benefits or their equivalent in cash
 Damages
 Attorney’s fees
 Legal interest on separation pay